-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PbDn7BJhmVr01hwAV+qEJU8xl7dR0ERnFPJ4aMu5OuVfUWrmDAH5PoDN+uOwkSO4 4qYslYXviwPhIe1EQm995A== 0001047469-98-029129.txt : 19980805 0001047469-98-029129.hdr.sgml : 19980805 ACCESSION NUMBER: 0001047469-98-029129 CONFORMED SUBMISSION TYPE: S-3/A PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 19980803 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: WALT DISNEY CO/ CENTRAL INDEX KEY: 0001001039 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS AMUSEMENT & RECREATION [7990] IRS NUMBER: 954545390 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: S-3/A SEC ACT: SEC FILE NUMBER: 333-52659 FILM NUMBER: 98676324 BUSINESS ADDRESS: STREET 1: 500 SOUTH BUENA VISTA ST CITY: BURBANK STATE: CA ZIP: 91521 BUSINESS PHONE: 8185601000 MAIL ADDRESS: STREET 1: 500 SOUTH BUENA VISTA ST CITY: BURBANK STATE: CA ZIP: 91521 FORMER COMPANY: FORMER CONFORMED NAME: DC HOLDCO INC DATE OF NAME CHANGE: 19950918 S-3/A 1 FORM S-3/A AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 3, 1998 REGISTRATION NO. 333-52659 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------------- AMENDMENT NO. 1 TO FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 -------------------------- THE WALT DISNEY COMPANY (Exact name of registrant as specified in its charter) DELAWARE 95-4545390 (State or other jurisdiction (I.R.S. employer of identification incorporation or organization) number)
500 SOUTH BUENA VISTA STREET BURBANK, CALIFORNIA 91521 (818) 560-1000 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) DAVID K. THOMPSON SENIOR VICE PRESIDENT--ASSISTANT GENERAL COUNSEL THE WALT DISNEY COMPANY 500 SOUTH BUENA VISTA STREET BURBANK, CALIFORNIA 91521 (818) 560-1000 (Name, address, including zip code, and telephone number, including area code, of agent for service) -------------------------- COPY TO: RICHARD A. BOEHMER O'Melveny & Myers LLP 400 South Hope Street Los Angeles, California 90071 (213) 430-6000 -------------------------- APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to time after this Registration Statement becomes effective. -------------------------- If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. / / If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. /X/ If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / / If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / / If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. /X/ -------------------------- THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BY ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. SUBJECT TO COMPLETION DATED AUGUST 3, 1998 PROSPECTUS THE WALT DISNEY COMPANY SECURITIES ---------------- The Walt Disney Company may offer from time to time the following types of securities ("Securities"): - debt securities, which may be senior debt securities, senior subordinated debt securities or subordinated debt securities, in each case consisting of notes or other unsecured evidences of indebtedness; - shares of preferred stock, which may be issued in the form of depositary receipts representing a fraction of a share of preferred stock; - shares of common stock; or - warrants to purchase debt securities, preferred stock or common stock. The Securities will have an aggregate initial offering price of up to $5,000,000,000 or an equivalent amount in U.S. dollars if any Securities are denominated in a currency other than U.S. dollars. The Securities may be offered separately or together in any combination and as separate series. The amounts, prices, form, designation, specific terms and offering terms of each issuance of Securities will be determined at the time of sale and will be set forth in a Prospectus Supplement. Where applicable, the Prospectus Supplement will also contain information about certain material United States Federal income tax considerations relating to the Securities and any listing of the Securities on a national securities exchange. ------------------------ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. -------------------------- The Securities may be sold directly, through agents designated from time to time or to or through underwriters or dealers. See "Plan of Distribution." If any agents or underwriters are involved in the sale of any Securities, their names and any applicable commissions or discounts will be set forth in a Prospectus Supplement. The net proceeds to the issuer from the sale of Securities also will be set forth in a Prospectus Supplement. ------------------------ , 1998 AVAILABLE INFORMATION The Walt Disney Company ("Disney") is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith, files reports, proxy and information statements and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy and information statements and other information can be inspected and copied at the public reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549; 7 World Trade Center, 13th Floor, New York, New York 10048; and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can be obtained at prescribed rates from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. Such reports, proxy and information statements and other information may also be inspected at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005 and the Pacific Exchange, 115 Sansome Street, Suite 1104, San Francisco, California 94104. In addition, the Commission maintains a Web site (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding registrants, such as Disney, that file electronically with the Commission. Disney has filed with the Commission in Washington, D.C. a registration statement on Form S-3 (including all amendments thereto, the "Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act"), with respect to the Securities offered hereby. As permitted by the rules and regulations of the Commission, this Prospectus does not contain all of the information set forth in the Registration Statement and the exhibits and schedules thereto. Such additional information is available for inspection and copying at the offices of the Commission. Statements contained in this Prospectus, in any Prospectus Supplement or in any document incorporated by reference herein or therein as to the contents of any contract or other document referred to herein or therein are not necessarily complete, and in each instance reference is made to the copy of such contract or other document filed as an exhibit to, or incorporated by reference in, the Registration Statement, each such statement being qualified in all respects by such reference. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents previously filed by Disney (File No. 1-11605) with the Commission under the Exchange Act are incorporated herein by reference: (a) Disney's Annual Report on Form 10-K for the fiscal year ended September 30, 1997 (as amended by two Form 10-K/As filed June 29, 1998); and (b) Disney's Quarterly Reports on Form 10-Q for the quarters ended December 31, 1997 and March 31, 1998. All documents filed by Disney pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of the offering of the Securities made hereby, shall be deemed to be incorporated by reference into this Prospectus and to be a part hereof from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes hereof to the extent that a statement contained herein (or in any other subsequently filed document that is or is deemed to be incorporated by reference herein) modifies or supersedes such previous statement. Any statement so modified or superseded shall not be deemed to constitute a part hereof except as so modified or superseded. Disney will provide without charge to each person to whom a copy of this Prospectus has been delivered, on the written or oral request of such person, a copy of any or all of the documents referred to above which have been or may be incorporated by reference in this Prospectus other than exhibits to such documents, unless such exhibits are also specifically incorporated by reference herein. Requests for such copies should be directed to The Walt Disney Company, 500 South Buena Vista Street, Burbank, California 91521, Attention: Corporate Secretary; telephone number (818) 560-1000. ------------------------ Unless otherwise indicated, currency amounts in this Prospectus and any Prospectus Supplement are stated in United States dollars ("$," "dollars," "U.S. dollars" or "U.S.$"). ------------------------ 2 THE COMPANY The Walt Disney Company, a Delaware corporation ("Disney" or the "Company"), is a diversified international entertainment company with operations in the businesses of Creative Content, Broadcasting and Theme Parks and Resorts. On February 9, 1996, the Company completed its acquisition of ABC, Inc. ("ABC"), which resulted in a new parent company, with the name "The Walt Disney Company", replacing the old parent company of the same name. For convenience, unless the context otherwise requires, the terms "Company" and "Disney" are used in this Prospectus to refer to both the old and the new parent company and to refer collectively to the parent company and the subsidiaries through which its various businesses are actually conducted. The Company's principal executive offices are located at 500 South Buena Vista Street, Burbank, California 91521, and its telephone number is (818) 560-1000. CREATIVE CONTENT The Company produces and acquires live-action and animated motion pictures for distribution to the theatrical, home video and television markets. The Company also produces original television programming for the network and first-run syndication markets. The Company distributes its filmed product through its own distribution and marketing companies in the United States and most foreign markets. The success of the Company's Creative Content operations is heavily dependent upon public taste, which is unpredictable and subject to change. In addition, filmed entertainment operating results fluctuate due to the timing and performance of theatrical and home video releases. Release dates are determined by several factors, including timing of vacation and holiday periods and competition. The Company licenses the name "Walt Disney," as well as the Company's characters, visual and literary properties and songs and music, to various consumer manufacturers, retailers, show promoters and publishers throughout the world. The Company also engages in direct retail distribution principally through The Disney Stores, and produces books and magazines for the general public in the United States and Europe. In addition, the Company produces audio products for all markets, as well as film, video and computer software products for the educational marketplace. Operating results for the licensing and retail distribution business are influenced by seasonal consumer purchasing behavior and by the timing and performance of animated theatrical releases. BROADCASTING The Company operates the ABC Television Network, which has affiliated stations providing coverage to U.S. television households. The Company also owns television and radio stations, most of which are affiliated with the ABC Television Network and the ABC Radio Networks. The Company's cable and international broadcast operations are principally involved in the production and distribution of cable television programming, the licensing of programming to domestic and international markets and investing in joint ventures in foreign-based television operations and television production and distribution entities. The primary domestic cable programming services, which operate principally through joint ventures, are ESPN, the A&E Television Networks, Lifetime Television and E! Entertainment Television. The Company provides programming for and operates Disney Channel, a cable and satellite television programming service. THEME PARKS AND RESORTS The Company operates the Walt Disney World Resort-Registered Trademark- in Florida, and Disneyland Park-Registered Trademark-, the Disneyland Hotel and the Disneyland Pacific Hotel in California. The Walt Disney World Resort includes the Magic Kingdom, Epcot and the Disney-MGM Studios, thirteen resort hotels and a complex of villas and suites, a nighttime entertainment complex, a shopping village, conference centers, campgrounds, golf courses, water parks and other recreational facilities. The Company earns royalties generated by the Tokyo Disneyland-Registered Trademark- theme park near Tokyo, Japan, which is owned and operated by an unrelated Japanese corporation. The Company also has an investment in Euro Disney S.C.A., a publicly held French corporation that operates Disneyland Paris. The Company's Walt Disney Imagineering unit designs and develops new theme park concepts and attractions, as well as resort properties. The Company also manages and markets vacation ownership interests in the Disney Vacation Club. Included in Theme Parks and Resorts are the Company's National Hockey League franchise, the 3 Mighty Ducks of Anaheim, and its ownership interest in the Anaheim Angels, a Major League Baseball team. Historically, the theme parks and resorts business experiences fluctuations in park attendance and resort occupancy resulting from the nature of vacation travel. Peak attendance and resort occupancy generally occur during the summer months when school vacations occur and during early-winter and spring holiday periods. USE OF PROCEEDS Unless otherwise indicated in an accompanying Prospectus Supplement, Disney intends to use the net proceeds from the sale of the Securities for general corporate purposes. RATIOS OF EARNINGS TO FIXED CHARGES Set forth below are the consolidated ratios of earnings to fixed charges for Disney for the six-month periods ended March 31, 1998 and 1997 and for each of the years in the five-year period ended September 30, 1997:
SIX MONTHS ENDED YEAR ENDED MARCH 31, SEPTEMBER 30, -------------------- ------------------------------------------ 1998 1997 1997 1996 1995 1994 --------- --------- --------- --------- --------- --------- Ratio of Earnings to Fixed Charges (1)(2)(3)...................... 5X 5X 5X 4X 9X 9X 1993 --------- Ratio of Earnings to Fixed Charges (1)(2)(3)...................... 7X
- ------------------------ (1) For purposes of these ratios, earnings are calculated by adding to (subtracting from) income from continuing operations before income taxes and cumulative effect of accounting changes, the following: fixed charges, excluding capitalized interest; and losses and (undistributed earnings) recognized with respect to less than 50% owned equity investments. Fixed charges consist of interest on borrowings, that portion of rental expense that approximates interest and amortized debt expense, if any. (2) The Company's acquisition of ABC was consummated on February 9, 1996. Accordingly, the ratios set forth above for periods before and after the acquisition are not comparable. (3) Disney's ratios of earnings to combined fixed charges and preferred stock dividends for the periods indicated above is the same as the ratios of earnings to fixed charges set forth above because Disney had no shares of preferred stock outstanding during the periods indicated and currently has no such shares outstanding. 4 CERTAIN FINANCIAL INFORMATION The following table sets forth selected historical consolidated financial information of Disney and has been derived from and should be read in conjunction with Disney's audited consolidated financial statements and unaudited interim consolidated financial statements, including the notes thereto, which are incorporated by reference in this Prospectus. Unaudited interim data reflect, in the opinion of Disney's management, all adjustments considered necessary for a fair presentation of results for such interim periods. Results of operations for unaudited interim periods are not necessarily indicative of results which may be expected for any other interim or annual period. During the quarter ended June 30, 1998, Disney effected a three-for-one stock split by means of a stock dividend. All per share data have been restated to reflect the stock split.
SIX MONTHS ENDED YEAR ENDED MARCH 31, SEPTEMBER 30, -------------------- ----------------------------------------------------- 1998 1997(1) 1997(1) 1996(2) 1995 1994 1993(3) --------- --------- --------- --------- --------- --------- --------- (IN MILLIONS, EXCEPT PER SHARE DATA) INCOME STATEMENT DATA: Revenues.................................. $ 11,581 $ 11,759 $ 22,473 $ 18,739 $ 12,151 $ 10,090 $ 8,531 Operating income.......................... 2,341 2,426 4,447 3,033 2,466 1,972 1,722 Income before cumulative effect of accounting changes...................... 1,139 1,082 1,966 1,214 1,380 1,110 671 Earnings per share before cumulative effect of accounting changes(4) Diluted................................. 0.55 0.53 0.95 0.65 0.87 0.68 0.41 Basic................................... 0.56 0.53 0.97 0.66 0.88 0.69 0.42 Cash dividends per share.................. 0.10 0.08 0.17 0.14 0.12 0.10 0.08 BALANCE SHEET DATA (AT END OF PERIOD): Total assets.............................. $ 39,317 $ 39,137 $ 37,776 $ 36,626 $ 14,606 $ 12,826 $ 11,751 Borrowings................................ 11,450 12,848 11,068 12,342 2,984 2,937 2,386 Stockholders' equity...................... 18,626 16,857 17,285 16,086 6,651 5,508 5,031 Book value per share...................... 9.14 8.34 8.59 7.96 4.23 3.50 3.13
- ------------------------ (1) 1997 results include a $135 million gain from the Company's sale of KCAL-TV. The diluted earnings per share impact of the gain was $0.04. (2) 1996 results include a $300 million non-cash charge pertaining to the implementation of SFAS 121 ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS TO BE DISPOSED OF, and a $225 million charge for costs related to the acquisition of ABC. The diluted earnings per share impacts of these charges were $0.10 and $0.07, respectively. (3) In 1993, the Company changed its accounting policy for project-related pre-opening costs, adopted SFAS 106 EMPLOYERS' ACCOUNTING FOR POSTRETIREMENT BENEFITS OTHER THAN PENSION and adopted SFAS 109 ACCOUNTING FOR INCOME TAXES. The cumulative effect of these accounting changes on the 1993 results follows:
DILUTED EARNINGS BASIC EARNINGS NET INCOME PER SHARE PER SHARE ----------- ----------------- --------------- Expense pre-opening costs as incurred................. $ (271) $ (.17) $ (.17) Adopt SFAS 106........................................ (130) (.08) (.08) Adopt SFAS 109........................................ 30 .02 .02 ----- ----- ----- $ (371) $ (.23) $ (.23) ----- ----- ----- ----- ----- -----
Operating and net income for 1993 also reflect a $350 million charge to fully reserve the Company's outstanding receivables from Euro Disney S.C.A. and the Company's commitment to provide certain financing to Euro Disney S.C.A. for a limited period. The diluted earnings per share impact of the charge, net of income tax benefit, was $.13. (4) During the quarter ended December 31, 1997, earnings per share for each fiscal year presented were restated for the adoption of SFAS 128 EARNINGS PER SHARE. In addition, in compliance with the rules and regulations of the Commission pertaining to the provision of separate financial statements of significant acquired businesses, Disney hereby incorporates by reference its Current Report on Form 8-K dated March 30, 1996 that was previously filed with the Commission, which report contains the audited consolidated financial statements of Capital Cities/ABC, Inc. for the three years ended December 31, 1995. 5 DESCRIPTION OF THE DEBT SECURITIES The following description sets forth certain general terms and provisions of the debt securities (the "Debt Securities") of Disney to which any Prospectus Supplement may relate. The particular terms of the Debt Securities offered by any Prospectus Supplement and the extent, if any, to which such general provisions may apply to the Debt Securities so offered will be described in the Prospectus Supplement relating to such Debt Securities. The Debt Securities may be issued, from time to time, in one or more series, and will constitute either senior debt securities (the "Senior Debt Securities"), senior subordinated debt securities (the "Senior Subordinated Debt Securities") or subordinated debt securities (the "Subordinated Debt Securities"). Senior Debt Securities may be issued from time to time under the Indenture, dated as of March 7, 1996 (the "Senior Debt Securities Indenture"), between Disney and Citibank, N.A., a national banking association, as trustee (the "Senior Debt Securities Trustee"). Senior Subordinated Debt Securities may be issued from time to time under an Indenture (the "Senior Subordinated Debt Securities Indenture") to be entered into between Disney and Chase Manhattan Bank and Trust Company, National Association, as trustee (the "Senior Subordinated Debt Securities Trustee"). Subordinated Debt Securities may be issued from time to time under an Indenture (the "Subordinated Debt Securities Indenture") to be entered into between Disney and The First National Bank of Chicago, as trustee (the "Subordinated Debt Securities Trustee"). The Senior Debt Securities Indenture, the Senior Subordinated Debt Securities Indenture, and the Subordinated Debt Securities Indenture are referred to herein individually as an "Indenture" and, collectively, as the "Indentures," and the Senior Debt Securities Trustee, the Senior Subordinated Debt Securities Trustee and the Subordinated Debt Securities Trustee are referred to herein individually as the "Trustee" and collectively as the "Trustees." The forms of the Indentures are filed, or incorporated by reference, as exhibits to the Registration Statement. Capitalized terms used in this section which are not otherwise defined in this Prospectus shall have the meanings set forth in the Indentures to which they relate. The following summaries of certain provisions of the Debt Securities and the Indentures do not purport to be complete and are subject to, and are qualified in their entirety by express reference to, all the provisions of the Indentures, including the definitions therein of certain terms. As used in this section of the Prospectus, "Disney" does not include its subsidiaries. GENERAL The Debt Securities will be direct, unsecured obligations of Disney. The Indentures do not limit the aggregate principal amount of Debt Securities that may be issued thereunder and provide that Debt Securities may be issued thereunder from time to time in one or more series. Under the Indentures, Disney will have the ability to issue Debt Securities with terms different from, or the same as, those of Debt Securities previously issued, without the consent of the holders of previously issued series of Debt Securities, in an aggregate principal amount determined by Disney. Securities may be issued as Discount Securities, which may be sold at a discount below their principal amount. Even if Securities are not issued at a discount below their principal amount, such Securities may, for United States Federal income tax purposes, be deemed to have been issued with "original issue discount" ("OID") because of certain interest payment characteristics. Special United States Federal income tax considerations applicable to Securities issued with original issue discount, including Discount Securities, will be described in more detail in any applicable Prospectus Supplement. In addition, special United States Federal tax considerations or other restrictions or terms applicable to any Debt Securities which are issuable in bearer form, offered exclusively to Non-United States Holders or denominated in a currency other than United States dollars will be set forth in a Prospectus Supplement relating thereto. The applicable Prospectus Supplement or Prospectus Supplements will describe, among other things, the following terms of the Debt Securities offered thereby (the "Offered Debt Securities"): (a) the title of the Offered Debt Securities; (b) any limit on the aggregate principal amount of the Offered Debt Securities; 6 (c) whether the Offered Debt Securities are to be issuable as registered securities or bearer securities or both and whether the Offered Debt Securities may be represented initially by a Debt Security in temporary or permanent global form, and if so, the initial Depositary with respect to such temporary or permanent global Debt Security and whether and the circumstances under which beneficial owners of interests in any such temporary or permanent global Debt Security may exchange such interests for Debt Securities of such series and of like tenor of any authorized form and denomination; (d) the price or prices at which the Offered Debt Securities will be issued; (e) the person to whom any interest will be payable on any Offered Debt Security that is a registered security, if other than the person in whose name the Offered Debt Security is registered at the close of business on the Regular Record Date for the payment of such interest; (f) the manner in which, or the person to whom, any interest on any Offered Debt Security that is a bearer security will be payable, if other than upon presentation and surrender of the coupons appertaining thereto, and the extent to which, or the manner in which, any interest payable on a temporary or definitive global security on an Interest Payment Date will be paid; (g) the date or dates on which the principal of the Offered Debt Securities is payable or the method of determination thereof; (h) the rate or rates at which the Offered Debt Securities will bear interest or the method of calculating such rate or rates, if any, the date or dates from which such interest, if any, will accrue, the Stated Maturities (as defined below) of installments of interest (the "Interest Payment Dates"), if any, on which any interest on the Offered Debt Securities will be payable and the Regular Record Dates for any interest payable on any Offered Debt Securities which are registered securities; (i) the place or places where and the manner in which the principal of and premium, if any, and interest, if any, on such Offered Debt Securities will be payable and the place or places where such Offered Debt Securities may be presented for transfer and, if applicable, conversion or exchange and notices and demands to or upon Disney in respect of the Offered Debt Securities may be served; (j) the period or periods within which, the price or prices at which and the terms and conditions upon which, Offered Debt Securities may be redeemed, in whole or in part, at the option of Disney; (k) the obligation, if any, of Disney to redeem or purchase Offered Debt Securities pursuant to any sinking fund or analogous provisions or at the option of a holder thereof, the conditions, if any, giving rise to such obligation, and the period or periods within which, the price or prices at which and the terms and conditions upon which Offered Debt Securities shall be redeemed or purchased, in whole or part, and any provisions for the remarketing of such Offered Debt Securities; (l) the denominations in which any Offered Debt Security that is a registered security shall be issuable, if other than denominations of $1,000 and any integral multiple thereof, and the denominations in which any Offered Debt Security that is a bearer security shall be issuable, if other than denominations of $5,000 and $100,000; (m) the currency or currencies, including composite currencies, of payment of principal of and interest, if any, on the Offered Debt Securities, if other than U.S. dollars, and, if other than U.S. dollars, whether the Offered Debt Securities may be satisfied and discharged other than as provided in the Indenture; (n) if the amount of payments of principal of and interest, if any, on the Offered Debt Securities is to be determined by reference to an index, formula or other method, or based on a coin or currency or currency unit other than that in which the Offered Debt Securities are stated to be payable, the manner in which such amounts are to be determined and the calculation agent, if any, with respect thereto; (o) if other than the principal amount thereof, the portion of the principal amount of the Offered Debt Securities which will be payable upon declaration or acceleration of the maturity thereof pursuant to an Event of Default; (p) whether such Offered Debt Securities are convertible or exchangeable into other debt or equity securities, and, if so, the terms and conditions upon which such conversion or exchange will be effected including the initial conversion or exchange price or rate and any adjustments thereto, the conversion or exchange period and other conversion or exchange provisions; 7 (q) any terms applicable to such Offered Debt Securities issued at an issue price below their stated principal amount, including the issue price thereof and the rate or rates at which such original issue discount will accrue; (r) any deletions from, modifications of or additions to the Events of Default or covenants of Disney with respect to such Offered Debt Securities, whether or not such Events of Default or covenants are consistent with the Events of Default or covenants set forth herein; (s) any special United States Federal income tax considerations applicable to the Offered Debt Securities; (t) if the Offered Debt Securities may be issued or delivered (whether upon original issuance or upon exchange of a temporary Security of such series or otherwise), or any installment of principal or any interest is payable only, upon receipt of certain certificates or other documents or satisfaction of other conditions in addition to those specified in the Indenture, the form and terms of such certificates, documents or conditions; (u) if Disney has agreed to pay any additional amounts on any of the Offered Debt Securities to any holder who is a United States Alien in respect of any tax, assessment or governmental charge withheld or deducted, the circumstances and procedures under which such payments will be made; and (v) any other terms of the Offered Debt Securities not inconsistent with the provisions of the applicable Indenture. The applicable Prospectus Supplement will also describe the following terms of any series of Subordinated or Senior Subordinated Debt Securities offered hereby in respect of which this Prospectus is being delivered: (i) the rights, if any, to defer payments of interest on the Subordinated or Senior Subordinated Debt Securities of such series by extending the interest payment period, and the duration of such extension; and (ii) the subordination terms of the Subordinated or Senior Subordinated Debt Securities of such series. The foregoing is not intended to be an exclusive list of the terms that may be applicable to any Offered Debt Securities and shall not limit in any respect the ability of Disney to issue Debt Securities with terms different from or in addition to those described above or elsewhere in this Prospectus provided that such terms are not inconsistent with the applicable Indenture. Any such Prospectus Supplement will also describe any special provisions for the payment of additional amounts with respect to the Offered Debt Securities. CONSEQUENCES OF HOLDING COMPANY STATUS The operations of Disney are conducted almost entirely through subsidiaries. Accordingly, the cash flow and the consequent ability to service debt of Disney, including the Debt Securities, are dependent upon the earnings of its subsidiaries and the distribution of those earnings to Disney, whether by dividends, loans or otherwise. The payment of dividends and the making of loans and advances to Disney by its subsidiaries may be subject to statutory or contractual restrictions, are contingent upon the earnings of those subsidiaries and are subject to various business considerations. Any right of Disney to receive assets of any of its subsidiaries upon their liquidation or reorganization (and the consequent right of the holders of the Debt Securities to participate in those assets) will be effectively subordinated to the claims of that subsidiary's creditors (including trade creditors), except to the extent that Disney is itself recognized as a creditor of such subsidiary, in which case the claims of Disney would still be subordinate to any security interests in the assets of such subsidiary and any indebtedness of such subsidiary senior to that held by Disney. FORM, EXCHANGE, REGISTRATION AND TRANSFER The Debt Securities of a series may be issued solely as registered securities, solely as bearer securities (with or without coupons attached) or as both registered securities and bearer securities. Debt Securities of a series may be issuable in whole or in part in the form of one or more global Debt Securities, as described below under "Global Debt Securities." Unless otherwise indicated in an applicable Prospectus Supplement, registered securities will be issuable in denominations of $1,000 and integral multiples thereof, and bearer securities will be issuable in denominations of $5,000 and $100,000. 8 Registered securities of any series will be exchangeable for other registered securities of the same series of any authorized denominations and of a like aggregate principal amount and tenor. In addition, if Debt Securities of any series are issuable as both registered securities and as bearer securities, at the option of the holder, subject to the terms of the applicable Indenture, bearer securities (accompanied by all unmatured coupons, except as provided below, and all matured coupons in default) of such series will be exchangeable for registered securities of the same series of any authorized denominations and of a like aggregate principal amount and tenor. Unless otherwise indicated in an applicable Prospectus Supplement, any bearer security surrendered in exchange for a registered security between a Regular Record Date or a Special Record Date and the relevant date for payment of interest will be surrendered without the coupon relating to such date for payment of interest and interest will not be payable in respect of the registered security issued in exchange for such bearer security, but will be payable only to the holder of such coupon when due in accordance with the terms of the applicable Indenture. Bearer securities may not be issued in exchange for registered securities. Debt Securities may be presented for exchange as provided above, and unless otherwise indicated in an applicable Prospectus Supplement, registered securities may be presented for registration of transfer, at the office or agency of Disney designated as registrar or co-registrar with respect to any series of Debt Securities, without service charge and upon payment of any taxes, assessments or other governmental charges as described in the applicable Indenture. Such transfer or exchange will be effected on the books of the registrar or any other transfer agent appointed by Disney upon such registrar or transfer agent, as the case may be, being satisfied with the documents of title and identity of the person making the request. Disney intends to initially appoint the Trustee as registrar and the name of any different or additional registrar designated by Disney with respect to the Offered Debt Securities will be included in the Prospectus Supplement relating thereto. If a Prospectus Supplement refers to any transfer agents (in addition to the registrar) designated by Disney with respect to any series of Debt Securities, Disney may at any time rescind the designation of any such transfer agent or approve a change in the location through which any such transfer agent acts, except that, if Debt Securities of a series are issuable only as registered securities, Disney will be required to maintain a transfer agent in each Place of Payment for such series and, if Debt Securities of a series are issuable as bearer securities, Disney will be required to maintain (in addition to the registrar) a transfer agent in a Place of Payment for such series located outside the United States. Disney may at any time designate additional transfer agents with respect to any series of Debt Securities. In the event of any partial redemption of Debt Securities of any series, Disney will not be required to (i) issue, register the transfer of or exchange Debt Securities of that series during a period beginning at the opening of business 15 days before any selection of Debt Securities of that series to be redeemed and ending at the close of business on (a) if Debt Securities of the series are issuable only as registered securities, the day of mailing of the relevant notice of redemption, and (b) if Debt Securities of the series are issuable as bearer securities, the day of the first publication of the relevant notice of redemption or, if Debt Securities of the series are also issuable as registered securities and there is no publication, the mailing of the relevant notice of redemption; (ii) register the transfer of or exchange any registered security, or portion thereof, called for redemption, except the unredeemed portion of any registered security being redeemed in part; or (iii) exchange any bearer security called for redemption, except to exchange such bearer security for a registered security of that series and of like tenor and principal amount that is immediately surrendered for redemption. COVENANTS Unless otherwise indicated in an applicable Prospectus Supplement, the Indentures do not include covenants limiting the amount of indebtedness that may be incurred or otherwise restricting Disney's ability to enter into a highly leveraged transaction, including a reorganization, restructuring, merger or similar transaction involving Disney that may adversely affect the holders of the Debt Securities, if such transaction is a permissible consolidation, merger or similar transaction. In addition, unless otherwise specified in an applicable Prospectus Supplement, the Indentures do not afford the holders of the Debt Securities the right to require Disney to repurchase or redeem the Debt Securities in the event of a highly leveraged transaction. See "Mergers and Sale of Assets." 9 PAYMENT AND PAYING AGENTS Unless otherwise indicated in an applicable Prospectus Supplement, payment of principal of and interest, if any, on registered securities will be made at the office of such paying agent or paying agents as Disney may designate from time to time, except that at the option of Disney payment of principal or interest may be made by check or by wire transfer to an account maintained by the payee. Unless otherwise indicated in an applicable Prospectus Supplement, payment of any installment of interest on registered securities will be made to the person in whose name such registered security is registered at the close of business on the Regular Record Date for such interest. Unless otherwise indicated in an applicable Prospectus Supplement, payment of principal of and interest, if any, on bearer securities will be payable, subject to any applicable laws and regulations, at the offices of such paying agents outside the United States as Disney may designate from time to time, or by check or by transfer to an account maintained by the payee outside the United States. Unless otherwise indicated in an applicable Prospectus Supplement, any payment of interest on any bearer securities will be made only against surrender of the coupon relating to such interest installment. Unless otherwise indicated in an applicable Prospectus Supplement, the Trustee will be designated as Disney's sole paying agent for payments with respect to Debt Securities which are issuable solely as registered securities and as Disney's paying agent in the Borough of Manhattan, The City of New York, for payments with respect to Debt Securities (subject to any limitations described in any applicable Prospectus Supplement) which are issuable as bearer securities. Any paying agents outside the United States and any other paying agents in the United States initially designated by Disney for the Offered Debt Securities will be named in an applicable Prospectus Supplement. Disney may at any time designate additional paying agents or rescind the designation of any paying agent or approve a change in the office through which any paying agent acts, except that, if Debt Securities of a series are issuable only as registered securities, Disney will be required to maintain a paying agent in each Place of Payment for such series and, if Debt Securities of a series are issuable as bearer securities, Disney will be required to maintain (i) a paying agent in the Borough of Manhattan, The City of New York for payments with respect to any registered securities of the series (and for payments with respect to bearer securities of the series in the circumstances described in the Indenture, but not otherwise), and (ii) a paying agent in a Place of Payment located outside the United States where Debt Securities of such series and any related coupons may be presented and surrendered for payment. All moneys paid by Disney to a paying agent for the payment of principal of or interest, if any, on any Debt Security which remains unclaimed at the end of two years after such principal or interest shall have become due and payable will be repaid to Disney, and the holder of such Debt Security or any coupon will thereafter look only to Disney for payment thereof. GLOBAL DEBT SECURITIES The Debt Securities of a series may be issued in whole or in part in global form. A Debt Security in global form will be deposited with, or on behalf of, a Depositary, which will be identified in an applicable Prospectus Supplement. A global Debt Security may be issued in either registered or bearer form and in either temporary or permanent form. A Debt Security in global form may not be transferred except as a whole to the Depositary for such Debt Security or to a nominee or successor of such Depositary. If any Debt Securities of a series are issuable in global form, the applicable Prospectus Supplement will describe the circumstances, if any, under which beneficial owners of interests in any such global Debt Security may exchange such interests for definitive Debt Securities of such series and of like tenor and principal amount in any authorized form and denomination, the manner of payment of principal of and interest, if any, on any such global Debt Security and the specific terms of the depositary arrangement with respect to any such global Debt Security. MERGERS AND SALES OF ASSETS Each Indenture provides that Disney may not consolidate with or merge into any other person or convey, transfer or lease its properties and assets substantially as an entirety to another person, unless, among other things, (i) the resulting, surviving or transferee person (if other than Disney) is a corporation, partnership or trust organized and existing under the laws of the United States, any state thereof or the District of Columbia 10 and such person expressly assumes all obligations of Disney under the applicable Debt Securities and the Indenture, and (ii) immediately after giving effect to such transaction, no event which is, or after notice or passage of time or both would be, an Event of Default (any such event, a "Default") or Event of Default shall have occurred or be continuing under the Indenture. Upon the assumption of Disney's obligations by a person to whom such properties or assets are conveyed or transferred, Disney shall be discharged from all obligations under the applicable Debt Securities and the applicable Indenture. EVENTS OF DEFAULT Each Indenture provides that, if an Event of Default specified therein shall have occurred and be continuing, with respect to each series of the Debt Securities outstanding thereunder individually, the Trustee or the holders of not less than 25% in aggregate principal amount of the outstanding Debt Securities of such series may declare the principal amount (or, if any of the Debt Securities of such series are Discount Securities, such portion of the principal amount of such Debt Securities as may be specified by the terms thereof) of the Debt Securities of such series to be immediately due and payable. Under certain circumstances, the holders of a majority in aggregate principal amount of the outstanding Debt Securities of such series may rescind such a declaration. Under each Indenture, an Event of Default is defined as, with respect to each series of Debt Securities outstanding thereunder individually, any of the following: (i) default in payment of the principal of any Debt Security of such series; (ii) default in payment of any interest on any Debt Security of such series when due, continuing for 30 days; (iii) failure by Disney to comply with its other agreements in the Debt Securities of such series or such Indenture for the benefit of the holders of Debt Securities of such series upon the receipt by Disney of notice of such Default by the Trustee or the holders of at least 25% in aggregate principal amount of the outstanding Debt Securities of such series and Disney's failure to cure such Default within 60 days after receipt by Disney of such notice; (iv) certain events of bankruptcy or insolvency; and (v) any other Event of Default set forth in an applicable Prospectus Supplement. The Trustee shall give notice to holders of the Debt Securities of any continuing Default known to the Trustee within 90 days after the occurrence thereof; PROVIDED, that the Trustee may withhold such notice, as to any Default other than a payment Default, if it determines in good faith that withholding the notice is in the interests of the holders. The holders of a majority in principal amount of the outstanding Debt Securities of any series may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee with respect to the Debt Securities of such series; PROVIDED that such direction shall not be in conflict with any law or the Indenture and subject to certain other limitations. Before proceeding to exercise any right or power under the Indenture at the direction of such holders, the Trustee shall be entitled to receive from such holders reasonable security or indemnity satisfactory to it against the costs, expenses and liabilities which might be incurred by it in complying with any such direction. With respect to each series of Debt Securities, no holder will have any right to pursue any remedy with respect to the Indenture or the Debt Securities, unless (i) such holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Debt Securities of such series; (ii) the holders of at least 25% in aggregate principal amount of the outstanding Debt Securities of such series shall have made a written request to the Trustee to pursue such remedy; (iii) such holder or holders have offered to the Trustee reasonable indemnity satisfactory to the Trustee; (iv) the holders of a majority in aggregate principal amount of the outstanding Debt Securities of such series have not given the Trustee a direction inconsistent with such request within 60 days after receipt of such request; and (v) the Trustee shall have failed to comply with the request within such 60-day period. Notwithstanding the foregoing, the right of any holder of any Debt Security or coupon to receive payment of the principal of and interest in respect of such Debt Security or payment of such coupon on the date specified in such Debt Security or coupon representing such installment of interest as the fixed date on which an amount equal to the principal of such Debt Security or an installment of principal thereof or interest thereon is due and payable (the "Stated Maturity" or "Stated Maturities") or to institute suit for the enforcement of any such payments shall not be impaired or adversely affected without such holder's consent. The holders of at least a 11 majority in aggregate principal amount of the outstanding Debt Securities of any series may waive an existing Default with respect to such series and its consequences, other than (i) any Default in any payment of the principal of, or interest on, any Debt Security of such series or (ii) any Default in respect of certain covenants or provisions in the Indenture which may not be modified without the consent of the holder of each outstanding Debt Security of such series affected as described in "Modification and Waiver," below. Each Indenture provides that Disney shall deliver to the Trustee within 120 days after the end of each fiscal year of Disney an officers' certificate stating whether or not the signers know of any Default that occurred during such period. MODIFICATION AND WAIVER Disney and the applicable Trustee may execute a supplemental indenture without the consent of the holders of the Debt Securities or any related coupons (i) to add to the covenants, agreements and obligations of Disney for the benefit of the holders of all the Debt Securities of any series or to surrender any right or power conferred in the applicable Indenture upon Disney; (ii) to evidence the succession of another corporation to Disney and the assumption by it of the obligations of Disney under the applicable Indenture and the Debt Securities; (iii) to provide that bearer securities may be registrable as to principal, to change or eliminate any restrictions (including restrictions relating to payment in the United States) on the payment of principal of or interest, if any, on bearer securities, to permit bearer securities to be issued in exchange for registered securities, to permit bearer securities to be issued in exchange for bearer securities of other authorized denominations or to permit the issuance of Debt Securities in uncertificated form; (iv) to establish the form or terms of Debt Securities of any series or coupons as permitted by the applicable Indenture; (v) to provide for the acceptance of appointment under the applicable Indenture of a successor Trustee with respect to the Debt Securities of one or more series and to add to or change any provisions of such Indenture as shall be necessary to provide for or facilitate the administration of the trusts by more than one Trustee; (vi) to cure any ambiguity, defect or inconsistency; (vii) to add to, change or eliminate any provisions (which addition, change or elimination may apply to one or more series of Debt Securities), PROVIDED that any such addition, change or elimination neither (a) applies to any Debt Security of any series created prior to the execution of such supplemental indenture and is entitled to the benefit of such provision nor (b) modifies the rights of the holder of any such Debt Security with respect to such provision; (viii) to secure the Debt Securities; or (ix) to make any other change that does not adversely affect the rights of any Securityholder. Each Indenture provides that, with the consent of the holders of not less than a majority in aggregate principal amount of the outstanding Debt Securities of the series affected by such supplemental indenture, Disney and the Trustee may also execute a supplemental indenture to add provisions to, or change in any manner or eliminate any provisions of, the Indenture with respect to such series of Debt Securities or modify in any manner the rights of the holders of the Debt Securities of such series and any related coupons under such Indenture; PROVIDED that no such supplemental indenture will, without the consent of the holder of each such outstanding Debt Security affected thereby (i) change the stated maturity of the principal of, or any installment of principal or interest on, any such Debt Security or any premium payable upon redemption thereof, or reduce the amount of principal of any Debt Security that is a Discount Security and that would be due and payable upon declaration of acceleration of maturity thereof; (ii) reduce the principal amount of, or the rate of interest on, any such Debt Security; (iii) change the place or currency of payment of principal or interest, if any, on any such Debt Security; (iv) impair the right to institute suit for the enforcement of any payment on or with respect to any such Debt Security; (v) reduce the above-stated percentage of holders of Debt Securities of any series necessary to modify or amend such Indenture; (vi) modify the foregoing requirements or reduce the percentage in principal amount of outstanding Debt Securities of any series necessary to waive any covenant or past default; or (vii) in the case of Senior Subordinated or Subordinated Debt Securities, amend or modify any of the provisions of such Indenture relating to subordination of the Debt Securities in any manner adverse to the holders of such Debt Securities. Holders of not less than a majority in principal amount of the outstanding Debt Securities of any series may waive certain past Defaults and may waive compliance by Disney with certain of the restrictive covenants described above with respect to the Debt Securities of such series. 12 DISCHARGE AND DEFEASANCE Unless otherwise indicated in an applicable Prospectus Supplement, each Indenture provides that Disney may satisfy and discharge obligations thereunder with respect to the Debt Securities of any series by delivering to the Trustee for cancellation all outstanding Debt Securities of such series or depositing with the Trustee, after such outstanding Debt Securities have become due and payable, cash sufficient to pay at Stated Maturity all of the outstanding Debt Securities of such series and paying all other sums payable under the Indenture with respect to such series. In addition, unless otherwise indicated in an applicable Prospectus Supplement, each Indenture provides that: Disney (a) shall be discharged from its obligations in respect of the Debt Securities of such series ("defeasance and discharge"), or (b) may cease to comply with certain restrictive covenants ("covenant defeasance") including those described under "Mergers and Sales of Assets" and any such omission shall not be an Event of Default with respect to the Debt Securities of such series, in each case at any time prior to the Stated Maturity or redemption thereof, when Disney has irrevocably deposited with the Trustee, in trust, (i) sufficient funds in the currency or currency unit in which the Debt Securities are denominated to pay the principal of (and premium, if any) and interest to Stated Maturity (or redemption) on, the Debt Securities of such series, or (ii) such amount of direct obligations of, or obligations the principal of (and premium, if any) and interest on which are fully guaranteed by, the government which issued the currency in which the Debt Securities are denominated, and which are not subject to prepayment, redemption or call, as will, together with the predetermined and certain income to accrue thereon without consideration of any reinvestment thereof, be sufficient to pay when due the principal of (and premium, if any) and interest to Stated Maturity (or redemption) on, the Debt Securities of such series. Such defeasance and discharge and covenant defeasance are conditioned upon, among other things, Disney's delivery of an opinion of counsel to the effect that (i) in the case of covenant defeasance, the holders of the Debt Securities of such series will not recognize income, gain or loss for United States Federal income tax purposes as a result of such defeasance, and will be subject to tax in the same manner as if no covenant defeasance had occurred and (ii) in the case of defeasance and discharge, either the Company has received from, or there has been published by, the Internal Revenue Service a ruling or there has been a change in applicable federal income tax law, and based thereon, the holders of the Debt Securities of such series will not recognize income, gain or loss for United States Federal income tax purposes as a result of such defeasance. Upon such defeasance and discharge, the holders of the Debt Securities of such series shall no longer be entitled to the benefits of the Indenture, except for the purposes of registration of transfer and exchange of the Debt Securities of such series and replacement of lost, stolen or mutilated Debt Securities and shall look only to such deposited funds or obligations for payment. THE TRUSTEES The Senior Debt Securities Trustee is a national banking association, is a participating lender under various credit arrangements with Disney's subsidiary, Disney Enterprises, Inc., and its subsidiaries and is also the fiscal agent with respect to certain debt securities of Disney Enterprises, Inc. The Senior Debt Securities Trustee is also an affiliate of the administrative agent under Disney's credit agreements. Each of the Trustees is a lender under Disney's credit agreements. Each Trustee will be permitted to engage in other transactions with Disney, Disney Enterprises, Inc., and each of their respective subsidiaries; HOWEVER, if any Trustee acquires any conflicting interest, it must eliminate such conflict or resign. DESCRIPTION OF PREFERRED STOCK Disney may issue, from time to time, shares of one or more series or classes of its preferred stock (the "Preferred Stock"). The following description sets forth certain general terms and provisions of the Preferred Stock to which any Prospectus Supplement may relate. The particular terms of any series of Preferred Stock and the extent, if any, to which such general provisions may apply to the series of Preferred Stock so offered will be described in the Prospectus Supplement relating to such Preferred Stock. The following summary of certain provisions of the Preferred Stock does not purport to be complete and is subject to, and is qualified in its entirety by express reference to, the provisions of Disney's Restated Certificate of Incorporation (the "Disney Certificate of Incorporation") and the Certificate of Designation relating to a specific series of the Preferred Stock (the "Certificate of Designation"), which will be in the form filed as an exhibit to, or incorporated by 13 reference in, the Registration Statement of which this Prospectus is a part at or prior to the time of issuance of such series of Preferred Stock. GENERAL Under the Disney Certificate of Incorporation, Disney has the authority to issue 100,000,000 shares of Preferred Stock. As of the date hereof, there have been reserved for issuance 7,000,000 shares of Preferred Stock designated as Series R Preferred Stock that may be issued solely pursuant to the Disney Rights Plan. See "Description of Common Stock--Rights Plan." No shares of Series R Preferred Stock are currently outstanding. The Board of Directors of Disney is authorized to issue shares of Preferred Stock, in one or more series or classes, and to fix for each such series voting powers and such preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions as are permitted by the Delaware General Corporation Law. The Board of Directors of Disney shall be authorized to determine for each series of Preferred Stock, and the Prospectus Supplement shall set forth with respect to such series: (i) the designation of such shares and the number of shares that constitute such series, (ii) the dividend rate (or the method of calculation thereof), if any, on the shares of such series and the priority as to payment of dividends with respect to other classes or series of capital stock of Disney, (iii) the dividend periods (or the method of calculation thereof), (iv) the voting rights of the shares, (v) the liquidation preference and the priority as to payment of such liquidation preference with respect to other classes or series of capital stock of Disney and any other rights of the shares of such series upon any liquidation or winding-up of Disney, (vi) whether or not and on what terms the shares of such series will be subject to redemption or repurchase at the option of Disney, (vii) whether and on what terms the shares of such series will be convertible into or exchangeable for other debt or equity securities, (viii) whether depositary shares representing shares of such series of Preferred Stock will be offered and, if so, the fraction of a share of such series of Preferred Stock represented by each depositary share (see "Description of Depositary Shares" below), (ix) whether the shares of such series of Preferred Stock will be listed on a securities exchange, (x) any special United States Federal income tax considerations applicable to such series, and (xi) the other rights and privileges and any qualifications, limitations or restrictions of such rights or privileges of such series. DIVIDENDS Holders of shares of Preferred Stock shall be entitled to receive, when and as declared by the Board of Directors of Disney out of funds of Disney legally available therefor, an annual cash dividend payable at such dates and at such rates, if any, per share per annum as set forth in the applicable Prospectus Supplement. Unless otherwise set forth in the applicable Prospectus Supplement, each series of Preferred Stock will rank junior as to dividends to any preferred stock that may be issued in the future that is expressly senior as to dividends to such Preferred Stock. If at any time Disney has failed to pay accrued dividends on any such senior shares at the time such dividends are payable, Disney may not pay any dividend on the junior Preferred Stock or redeem or otherwise repurchase shares of junior Preferred Stock until such accumulated but unpaid dividends on such senior shares have been paid or set aside for payment in full by Disney. Unless otherwise set forth in the applicable Prospectus Supplement, no dividends (other than in common stock or other capital stock ranking junior to the Preferred Stock of any series as to dividends and upon liquidation) shall be declared or paid or set aside for payment, nor shall any other distribution be declared or made upon the common stock, or any other capital stock of Disney ranking junior to or on a parity with the Preferred Stock of such series as to dividends, nor shall any common stock or any other capital stock of Disney ranking junior to or on a parity with the Preferred Stock of such series as to dividends be redeemed, purchased or otherwise acquired for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any shares of any such stock) by Disney (except by conversion into or exchange for other capital stock of Disney ranking junior to the Preferred Stock of such series as to dividends) unless (i) if such series of Preferred Stock has a cumulative dividend, full cumulative dividends on the Preferred Stock of such series have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof set apart for all past dividend periods and the then current dividend period and (ii) if such series of Preferred Stock does not have a cumulative dividend, full dividends on the Preferred Stock of such series have 14 been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof set apart for payment for the then current dividend period; provided, however, that any monies theretofore deposited in any sinking fund with respect to any preferred stock in compliance with the provisions of such sinking fund may thereafter be applied to the purchase or redemption of such preferred stock in accordance with the terms of such sinking fund, regardless of whether at the time of such application full cumulative dividends upon shares of the Preferred Stock outstanding on the last dividend payment date shall have been paid or declared and set apart for payment; and provided, further, that any such junior or parity preferred stock or common stock may be converted into or exchanged for stock of Disney ranking junior to the Preferred Stock as to dividends. The amount of dividends payable for the initial dividend period or any period shorter than a full dividend period shall be computed on the basis of a 360-day year of twelve 30-day months. Accrued but unpaid dividends will not bear interest. CONVERTIBILITY No series of Preferred Stock will be convertible into, or exchangeable for, other securities or property except as set forth in the applicable Prospectus Supplement. REDEMPTION AND SINKING FUND No series of Preferred Stock will be redeemable or receive the benefit of a sinking fund except as set forth in the applicable Prospectus Supplement. LIQUIDATION RIGHTS Unless otherwise set forth in the applicable Prospectus Supplement, in the event of any liquidation, dissolution or winding up of Disney, the holders of shares of each series of Preferred Stock are entitled to receive out of assets of Disney available for distribution to stockholders, before any distribution of assets is made to holders of (i) any other shares of preferred stock ranking junior to such series of Preferred Stock as to rights upon liquidation, dissolution or winding up and (ii) shares of common stock, liquidating distributions per share in the amount of the liquidation preference specified in the applicable Prospectus Supplement for such series of Preferred Stock plus any dividends accrued and accumulated but unpaid to the date of final distribution; but the holders of each series of Preferred Stock will not be entitled to receive the liquidating distribution of, plus such dividends on, such shares until the liquidation preference of any shares of Disney's capital stock ranking senior to such series of the Preferred Stock as to the rights upon liquidation, dissolution or winding up shall have been paid (or a sum set aside therefor sufficient to provide for payment) in full. If upon any liquidation, dissolution or winding up of Disney, the amounts payable with respect to the Preferred Stock, and any other Preferred Stock ranking as to any such distribution on a parity with the Preferred Stock are not paid in full, the holders of the Preferred Stock and such other parity preferred stock will share ratably in any such distribution of assets in proportion to the full respective preferential amount to which they are entitled. Unless otherwise specified in a Prospectus Supplement for a series of Preferred Stock, after payment of the full amount of the liquidating distribution to which they are entitled, the holders of shares of Preferred Stock will not be entitled to any further participation in any distribution of assets by Disney. Neither a consolidation or merger of Disney with another corporation nor a sale of securities shall be considered a liquidation, dissolution or winding up of Disney. VOTING RIGHTS Holders of Preferred Stock will not have any voting right except as set forth below or in the applicable Prospectus Supplement or as otherwise from time to time required by law. Whenever dividends on any applicable series of Preferred Stock shall be in arrears for the equivalent of six quarterly dividend periods, whether or not consecutive, the holders of shares of such series of Preferred Stock (voting separately as a class with all other series of preferred stock then entitled to such voting rights) will be entitled to vote for the election of two of the authorized number of directors of Disney at the next annual meeting of stockholders and at each subsequent meeting until all dividends accumulated on such series of Preferred Stock shall have been fully paid or set apart for payment. The term of office of all directors elected by the holders of such Preferred Stock shall 15 terminate immediately upon the termination of the right of the holders of such Preferred Stock to vote for directors. Unless otherwise set forth in the applicable Prospectus Supplement, holders of shares of Preferred Stock will have one vote for each share held. So long as any shares of any series of Preferred Stock remain outstanding, Disney shall not, without the consent of holders of at least two-thirds of the shares of such series of Preferred Stock outstanding at the time, voting separately as a class with all other series of preferred stock of Disney upon which like voting rights have been conferred and are exercisable, (i) issue or increase the authorized amount of any class or series of capital stock ranking prior to the outstanding Preferred Stock as to dividends or upon liquidation or (ii) amend, alter or repeal the provisions of Disney's Certificate of Incorporation or of the resolutions contained in the Certificate of Designation relating to such series of Preferred Stock, whether by merger, consolidation or otherwise, so as to materially adversely affect any power, preference or special right of such series of Preferred Stock or the holders thereof; PROVIDED, HOWEVER, that any increase in the amount of the authorized common stock or authorized preferred stock or any increase or decrease in the number of shares of any series of preferred stock or the creation and issuance of other series of common stock or preferred stock ranking on a parity with or junior to Preferred Stock as to dividends and upon liquidation, dissolution or winding up shall not be deemed to materially adversely affect such powers, preferences or special rights. MISCELLANEOUS The holders of Preferred Stock will have no preemptive rights. The Preferred Stock, upon issuance against full payment of the purchase price therefor, will be fully paid and nonassessable. Shares of Preferred Stock redeemed or otherwise reacquired by Disney shall resume the status of authorized and unissued shares of preferred stock undesignated as to series, and shall be available for subsequent issuance. There are no restrictions on repurchase or redemption of the Preferred Stock while there is any arrearage on sinking fund installments except as may be set forth in an applicable Prospectus Supplement. Payment of dividends on any series of Preferred Stock may be restricted by loan agreements, indentures and other transactions entered into by Disney. Any material contractual restrictions on dividend payments will be described or incorporated by reference in the applicable Prospectus Supplement. NO OTHER RIGHTS The shares of a series of Preferred Stock will not have any preferences, voting powers or relative, participating, optional or other special rights except as set forth above or in the applicable Prospectus Supplement, the Disney Certificate of Incorporation or the applicable Certificate of Designation or as otherwise required by law. TRANSFER AGENT AND REGISTRAR The transfer agent and registrar for each series of Preferred Stock will be designated in the applicable Prospectus Supplement. 16 DESCRIPTION OF DEPOSITARY SHARES GENERAL Disney may, at its option, elect to offer fractional shares rather than full shares of the Preferred Stock of a series. In the event such option is exercised, Disney will issue receipts for Depositary Shares, each of which will represent a fraction (to be set forth in the Prospectus Supplement relating to a particular series of Preferred Stock) of a share of a particular series of Preferred Stock as described below. The shares of any series of Preferred Stock represented by Depositary Shares will be deposited under one or more Deposit Agreements (each, a "Deposit Agreement") among Disney, a depositary to be named in the applicable Prospectus Supplement (the "Depositary"), and the holders from time to time of depositary receipts issued thereunder. Subject to the terms of the applicable Deposit Agreement, each holder of a Depositary Share will be entitled, in proportion to the applicable fraction of a share of Preferred Stock represented by such Depositary Share, to all the rights and preferences of the Preferred Stock represented thereby (including, as applicable, dividend, voting, redemption, subscription and liquidation rights). The Depositary Shares will be evidenced by depositary receipts issued pursuant to the Deposit Agreement ("Depositary Receipts"). Depositary Receipts will be distributed to those persons purchasing the fractional shares of the related series of Preferred Stock. The following description sets forth certain general terms and provisions of the Depositary Shares to which any Prospectus Supplement may relate. The particular terms of the Depositary Shares to which any Prospectus Supplement may relate and the extent, if any, to which such general provisions may apply to the Depositary Shares so offered will be described in the applicable Prospectus Supplement. The forms of Deposit Agreement and Depositary Receipt are or will be filed as exhibits to the Registration Statement. The following summary of certain provisions of the Depositary Shares and Deposit Agreement does not purport to be complete and is subject to, and is qualified in its entirety by express reference to, all the provisions of the Deposit Agreement and the applicable Prospectus Supplement, including the definitions therein of certain terms. Immediately following Disney's issuance of shares of a series of Preferred Stock that will be offered as fractional shares, Disney will deposit such shares with the Depositary, which will then issue and deliver the Depositary Receipts to the purchasers thereof. Depositary Receipts will only be issued evidencing whole Depositary Shares. A Depositary Receipt may evidence any number of whole Depositary Shares. Pending the preparation of definitive engraved Depositary Receipts, the Depositary may, upon the written order of Disney, issue temporary Depositary Receipts substantially identical to (and entitling the holders thereof to all the rights pertaining to) the definitive Depositary Receipts but not in definitive form. Definitive Depositary Receipts will be prepared thereafter without unreasonable delay, and such temporary Depositary Receipts will be exchangeable for definitive Depositary Receipts at Disney's expense. DIVIDENDS AND OTHER DISTRIBUTIONS The Depositary will distribute all cash dividends or other cash distributions received in respect of the related series of Preferred Stock to the record holders of Depositary Shares relating to such series of Preferred Stock in proportion to the number of such Depositary Shares owned by such holders. In the event of a distribution other than in cash, the Depositary will distribute property received by it to the record holders of Depositary Shares entitled thereto in proportion to the number of Depositary Shares owned by such holders, unless the Depositary determines that such distribution cannot be made proportionately among such holders or that it is not feasible to make such distributions, in which case the Depositary may, with the approval of Disney, adopt such method as it deems equitable and practicable for the purpose of effecting such distribution, including the sale (at public or private sale) of the securities or property thus received, or any part thereof, at such place or places and upon such terms as it may deem proper. The amount distributed in any of the foregoing cases will be reduced by any amounts required to be withheld by Disney or the Depositary on account of taxes or other governmental charges. 17 REDEMPTION OF DEPOSITARY SHARES If any series of the Preferred Stock underlying the Depositary Shares is subject to redemption, the Depositary Shares will be redeemed from the proceeds received by the Depositary resulting from any redemption, in whole or in part, of such series of the Preferred Stock held by the Depositary. The redemption price per Depositary Share will be equal to the applicable fraction of the redemption price per share payable with respect to such series of the Preferred Stock. If Disney redeems shares of a series of Preferred Stock held by the Depositary, the Depositary will redeem as of the same redemption date the number of Depositary Shares representing the shares of Preferred Stock so redeemed. If less than all the Depositary Shares are to be redeemed, the Depositary Shares to be redeemed will be selected by lot or substantially equivalent method determined by the Depositary. After the date fixed for redemption, the Depositary Shares so called for redemption will no longer be deemed to be outstanding and all rights of the holders of the Depositary Shares will cease, except the right to receive the moneys payable upon such redemption and any money or other property to which the holders of such Depositary Shares were entitled upon such redemption, upon surrender to the Depositary of the Depositary Receipts evidencing such Depositary Shares. Any funds deposited by Disney with the Depositary for any Depositary Shares that the holders thereof fail to redeem will be returned to Disney after a period of two years from the date such funds are so deposited. VOTING THE UNDERLYING PREFERRED STOCK Upon receipt of notice of any meeting at which the holders of any series of the Preferred Stock are entitled to vote, the Depositary will mail the information contained in such notice of meeting to the record holders of the Depositary Shares relating to such series of Preferred Stock. Each record holder of such Depositary Shares on the record date (which will be the same date as the record date for the related series of Preferred Stock) will be entitled to instruct the Depositary as to the exercise of the voting rights pertaining to the number of shares of the series of Preferred Stock represented by such holder's Depositary Shares. The Depositary will endeavor, insofar as practicable, to vote or cause to be voted the number of shares of Preferred Stock represented by such Depositary Shares in accordance with such instructions, provided the Depositary receives such instructions sufficiently in advance of such meeting to enable it to so vote or cause to be voted the shares of Preferred Stock, and Disney will agree to take all reasonable action that may be deemed necessary by the Depositary in order to enable the Depositary to do so. The Depositary will abstain from voting shares of the Preferred Stock to the extent it does not receive specific instructions from the holders of Depositary Shares representing such Preferred Stock. WITHDRAWAL OF STOCK Upon surrender of the Depositary Receipts at the corporate trust office of the Depositary and upon payment of the taxes, charges and fees provided for in the Deposit Agreement and subject to the terms thereof, the holder of the Depositary Shares evidenced thereby is entitled to delivery at such office, to or upon his or her order, of the number of whole shares of the related series of Preferred Stock and any money or other property, if any, represented by such Depositary Shares. Holders of Depositary Shares will be entitled to receive whole shares of the related series of Preferred Stock, but holders of such whole shares of Preferred Stock will not thereafter be entitled to deposit such shares of Preferred Stock with the Depositary or to receive Depositary Shares therefor. If the Depositary Receipts delivered by the holder evidence a number of Depositary Shares in excess of the number of Depositary Shares representing the number of whole shares of the related series of Preferred Stock to be withdrawn, the Depositary will deliver to such holder or upon his or her order at the same time a new Depositary Receipt evidencing such excess number of Depositary Shares. AMENDMENT AND TERMINATION OF A DEPOSIT AGREEMENT The form of Depositary Receipt evidencing the Depositary Shares of any series and any provision of the applicable Deposit Agreement may at any time and from time to time be amended by agreement between Disney and the Depositary. However, any amendment that materially adversely alters the rights of the holders of Depositary Shares of any series will not be effective unless such amendment has been approved by the holders of 18 at least a majority of the Depositary Shares of such series then outstanding. Every holder of a Depositary Receipt at the time such amendment becomes effective will be deemed, by continuing to hold such Depositary Receipt, to be bound by the Deposit Agreement as so amended. Notwithstanding the foregoing, in no event may any amendment impair the right of any holder of any Depositary Shares, upon surrender of the Depositary Receipts evidencing such Depositary Shares and subject to any conditions specified in the Deposit Agreement, to receive shares of the related series of Preferred Stock and any money or other property represented thereby, except in order to comply with mandatory provisions of applicable law. The Deposit Agreement may be terminated by Disney at any time upon not less than 60 days prior written notice to the Depositary, in which case, on a date that is not later than 30 days after the date of such notice, the Depositary shall deliver or make available for delivery to holders of Depositary Shares, upon surrender of the Depositary Receipts evidencing such Depositary Shares, such number of whole or fractional shares of the related series of Preferred Stock as are represented by such Depositary Shares. The Deposit Agreement shall automatically terminate after all outstanding Depositary Shares have been redeemed or there has been a final distribution in respect of the related series of Preferred Stock in connection with any liquidation, dissolution or winding up of Disney and such distribution has been distributed to the holders of Depositary Shares. CHARGES OF DEPOSITARY Disney will pay all transfer and other taxes and the governmental charges arising solely from the existence of the depositary arrangements. Disney will pay the charges of the Depositary, including charges in connection with the initial deposit of the related series of Preferred Stock and the initial issuance of the Depositary Shares and all withdrawals of shares of the related series of Preferred Stock, except that holders of Depositary Shares will pay transfer and other taxes and governmental charges and such other charges as are expressly provided in the Deposit Agreement to be for their accounts. RESIGNATION AND REMOVAL OF DEPOSITARY The Depositary may resign at any time by delivering to Disney written notice of its election to do so, and Disney may at any time remove the Depositary, any such resignation or removal to take effect upon the appointment of a successor Depositary, which successor Depositary must be appointed within 60 days after delivery of the notice of resignation or removal and must be a bank or trust company having its principal office in the United States and having a combined capital and surplus of at least $50,000,000. MISCELLANEOUS The Depositary will forward to the holders of Depositary Shares all reports and communications from Disney that are delivered to the Depositary and which Disney is required to furnish to the holders of the related Preferred Stock. The Depositary's corporate trust office will be identified in the applicable Prospectus Supplement. Unless otherwise set forth in the applicable Prospectus Supplement, the Depositary will act as transfer agent and registrar for Depositary Receipts and if shares of a series of Preferred Stock are redeemable, the Depositary will act as redemption agent for the corresponding Depositary Receipts. DESCRIPTION OF COMMON STOCK Disney may issue, from time to time, shares of its common stock (the "Common Stock"), the general terms and provisions of which are summarized below. This summary does not purport to be complete and is subject to, and is qualified in its entirety by express reference to, the provisions of the Disney Certificate of Incorporation, Disney's Bylaws and the applicable Prospectus Supplement. AUTHORIZED SHARES Under the Disney Certificate of Incorporation, Disney has the authority to issue 3,600,000,000 shares of Common Stock. 19 DIVIDENDS Subject to any preferential rights of any series of preferred stock, holders of shares of Common Stock will be entitled to receive dividends on such stock out of assets legally available for distribution when, as and if authorized and declared by Disney's Board of Directors. The payment of dividends on the Common Stock will be a business decision to be made by Disney's Board of Directors from time to time based upon the results of operations and financial condition of Disney and such other factors as Disney's Board of Directors considers relevant. Payment of dividends on the Common Stock may be restricted by loan agreements, indentures and other transactions entered into by Disney from time to time. The applicable Prospectus Supplement will describe any material contractual restrictions on dividend payments. VOTING RIGHTS Holders of Common Stock are entitled to one vote per share on all matters voted on generally by the stockholders, including the election of directors, and, except as otherwise required by law or except as provided with respect to any series of preferred stock, the holders of such shares possess all voting power. The Disney Certificate of Incorporation does not provide for cumulative voting for the election of directors. As a result, under the Delaware General Corporation Law, the holders of more than one-half of the outstanding shares of Common Stock generally will be able to elect all the directors of Disney then standing for election and holders of the remaining shares will not be able to elect any director. LIQUIDATION RIGHTS Subject to any preferential rights of any series of preferred stock, holders of shares of Common Stock are entitled to share ratably in the assets of Disney legally available for distribution to its stockholders in the event of its liquidation, dissolution or winding up. ABSENCE OF OTHER RIGHTS Holders of Common Stock have no preferences, preemptive, conversion or exchange rights. MISCELLANEOUS The Common Stock, upon issuance against full payment of the purchase price therefor, will be fully paid and nonassessable. TRANSFER AGENT AND REGISTRAR The principal transfer agent and registrar for the Common Stock is Disney. RIGHTS PLAN In November 1995, Disney adopted a stockholders' rights plan (the "Disney Rights Plan") and, in connection therewith, entered into a Rights Agreement dated as of November 8, 1995, between Disney and The Bank of New York, as rights agent (the "Disney Rights Agreement"). To implement the Disney Rights Plan, Disney's Board of Directors authorized the issuance of one Disney Right (as defined below) (one-third of one Disney Right following the stock split effected by Disney in June 1998) for each share of Common Stock issued at or following the effective time of the Company's acquisition of ABC, Inc. and until the earlier of the Distribution Date (as defined below) or the date on which the Disney Rights expire or are redeemed. Each "Disney Right" entitles the registered holder thereof to purchase from Disney one one-hundredth (1/100) of a share of Disney's Series R Preferred Stock at an initial purchase price of $350.00, subject to adjustment. All terms and conditions of the Disney Rights and the Series R Preferred Stock are contained in the Disney Rights Agreement and the Disney Certificate of Incorporation. The Distribution Date is defined as the earlier to occur of (i) the tenth day following a public announcement that a person or group of affiliated or associated persons (each, an "Acquiring Person") has acquired, or obtained the right to acquire, beneficial ownership of 25% or more of the outstanding Common Stock (the "Stock Acquisition Date") or (ii) a date fixed by Disney's Board of Directors which is not later than 20 the nineteenth business day after the commencement by any person or group of, or the first public announcement of the intent of any person or group to commence, a tender or exchange offer which would result in that person or group owning 25% or more of the outstanding Common Stock. Until the close of business on the Distribution Date, the Disney Rights will be represented by and transferred only with the Common Stock, and the Disney Rights are not exercisable until the Distribution Date. The Disney Rights will expire at the close of business on June 30, 1999, unless redeemed earlier as described below. The Series R Preferred Stock will be nonredeemable and, unless otherwise provided in connection with the creation of a subsequent series of Preferred Stock, subordinate to all other series of Preferred Stock. The Series R Preferred Stock may not be issued except upon exercise of the Disney Rights. Each share of Series R Preferred Stock will be entitled to receive, when, as and if declared by Disney's Board of Directors, (i) a cash dividend in an amount per share equal to 400 times the aggregate per share amount of all cash dividends declared or paid on the Common Stock and (ii) a quarterly dividend in an amount equal to $1.00 per share less the per share amount of all cash dividends declared on the Series R Preferred Stock pursuant to the preceding clause (i) since the last quarterly dividend. In addition, the Series R Preferred Stock is entitled to 400 times any other cash or non-cash distribution declared on the Common Stock (other than cash dividends payable pursuant to the immediately preceding sentence and distributions of Disney's equity securities or debt securities convertible into equity securities of Disney), payable to the holders of Series R Preferred Stock in like kind. In the event of liquidation, the holders of Series R Preferred Stock will be entitled to receive a liquidation payment in an amount equal to the greater of $100.00 per share (plus an amount equal to accumulated and unpaid dividends and distributions) and 400 times the liquidation payment made per share of Common Stock. Each share of Series R Preferred Stock will have 400 votes and shall be entitled to vote together with the Common Stock and not as a separate class unless otherwise required by law or the Disney Certificate of Incorporation. In the event of any merger, consolidation or other transaction in which common shares are exchanged, each share of Series R Preferred Stock will be entitled to receive 400 times, subject to adjustment, the amount received per share of Common Stock. The rights of the Series R Preferred Stock as to dividends, voting rights and liquidation are protected by antidilution provisions. In addition, the Purchase Price payable and the number of shares of Series R Preferred Stock or other securities or property issuable upon exercise of the Disney Rights are subject to adjustment from time to time to prevent dilution in the event of a stock dividend on, or a subdivision, split, reverse split, combination, consolidation or reclassification of, the Series R Preferred Stock. If (i) any person becomes the beneficial owner of 25% or more of the then outstanding shares of Common Stock, other than pursuant to a purchase or series of related purchases of shares of Common Stock that Disney's Board of Directors, taking into account the long-term value of Disney and all other factors that Disney's Board of Directors considers relevant, determines to be fair and otherwise in the best interests of the holders of Common Stock (a "Permitted Transaction"), or (ii) any Acquiring Person or any of its affiliates or associates engages in one or more "self-dealing" transactions as described in the Disney Rights Agreement, then each holder of a Disney Right, other than the Acquiring Person, will have the right to receive, upon payment of the Purchase Price, in lieu of Series R Preferred Stock, a number of shares of Common Stock having a market value equal to twice the Purchase Price. To the extent that insufficient shares of Common Stock are available for the exercise in full of the Disney Rights, holders of Disney Rights will receive upon exercise shares of Common Stock to the extent available and then cash, assets or other securities of Disney (which may be accompanied by a reduction in the Purchase Price), in proportions determined by Disney, so that the aggregate net value received is equal to twice the Purchase Price. Disney Rights are not exercisable following the acquisition of shares of Common Stock by an Acquiring Person as described in this paragraph until the expiration of the period during which the Disney Rights may be redeemed as described below. In addition, after the occurrence of an event described in the first sentence of this paragraph, Disney Rights that are (or, under certain circumstances, Disney Rights that were) beneficially owned by an Acquiring Person will be null and void. Unless the Disney Rights are redeemed earlier, if, after the Stock Acquisition Date, Disney is acquired in a merger or other business combination (in which Disney is not the surviving corporation or in which any shares of Common Stock are converted or exchanged) or more than 50% of the assets or earning power of Disney and its 21 subsidiaries (taken as a whole) are sold or transferred in one transaction or a series of related transactions, the Disney Rights Agreement provides that proper provision shall be made so that each holder of record of a Disney Right will from and after that time have the right to receive, upon payment of the Purchase Price, that number of shares of common stock of the acquiring company which has a market value at the time of such transaction equal to twice the Purchase Price. Fractions of shares of Series R Preferred Stock may, at the election of Disney, be evidenced by depositary receipts. Disney may also issue cash in lieu of fractional shares of Series R Preferred Stock which are not integral multiples of one one-hundredth of a share. At any time until ten days following the Stock Acquisition Date (subject to extension by Disney's Board of Directors), Disney's Board of Directors may cause Disney to redeem the Disney Rights in whole, but not in part, at a price of $.01 per Disney Right, subject to adjustment to reflect any stock split, stock dividend or similar transaction. Immediately upon the action of Disney's Board of Directors authorizing redemption of the Disney Rights, the right to exercise the Disney Rights will terminate, and the holders of the Disney Rights will only be entitled to receive the redemption price without any interest thereon. As long as the Disney Rights are redeemable, Disney may, except with respect to the redemption price, the number of one one-hundredths of a share of Series R Preferred Stock for which a Disney Right is exercisable, or the date of expiration of the Disney Rights, amend the Disney Rights in any manner, including an amendment to extend the time period in which the Disney Rights may be redeemed. At any time when the Disney Rights are not redeemable, subject to the foregoing exceptions and except for certain limitations regarding amendments of time periods (including the time period during which the Disney Rights may be redeemed), Disney may amend the Disney Rights in any manner that does not adversely affect the interests of holders of the Disney Rights as such. Until a Disney Right is exercised, the holder, as such, will have no rights as a stockholder of Disney, including, without limitation, the right to vote or to receive dividends. The foregoing description of the Disney Rights does not purport to be complete and is qualified in its entirety by reference to the Disney Rights Agreement, which is incorporated by reference as an exhibit to the Registration Statement of which this Prospectus is a part. CERTAIN ANTI-TAKEOVER EFFECTS GENERAL. Certain provisions of the Disney Certificate of Incorporation and the Delaware General Corporation Law (the "DGCL") may have the effect of impeding the acquisition of control of Disney by means of a tender offer, a proxy fight, open market purchases or otherwise in a transaction not approved by Disney's Board of Directors. The provisions described below have the effect of reducing the vulnerability of Disney to an unsolicited proposal for the restructuring or sale of all or substantially all of the assets of Disney or an unsolicited takeover attempt which is unfair to Disney stockholders. The summary of such provisions set forth below does not purport to be complete and is qualified in its entirety by reference to the Disney Certificate of Incorporation and the DGCL. Disney's Board of Directors has no present intention to introduce additional measures that might have an anti-takeover effect; however, Disney's Board of Directors expressly reserves the right to introduce such measures in the future. CLASSIFIED BOARD UNTIL 2001. The Disney Certificate of Incorporation provides that Disney's Board of Directors shall consist of not less than nine nor more than 21 directors, with the exact number of directors to be determined from time to time by Disney's Board of Directors. Disney's Board of Directors is currently divided into three classes, and each director who was elected during the annual meeting of Disney's stockholders in 1998 or prior thereto will serve for the full three-year term for which he or she was elected. Following the annual meeting of Disney's stockholders in 1998, however, the Disney Certificate of Incorporation provides that each newly elected director shall serve only until the first annual meeting following the annual meeting at which he or she is elected, which will have the effect of phasing out the classification of Disney's Board of Directors. Commencing with the annual meeting of Disney's stockholders in 2001, Disney's Certificate of Incorporation 22 provides that the foregoing classification of Disney's Board of Directors shall cease, and all directors shall be of one class. BUSINESS COMBINATIONS. Section 203 of the DGCL restricts a wide range of transactions ("business combinations") between a corporation and an interested stockholder. An "interested stockholder" is, generally, any person who beneficially owns, directly or indirectly, 15% or more of the corporation's outstanding voting stock. Business combinations are broadly defined to include (i) mergers or consolidations with, (ii) sales or other dispositions of more than 10% of the corporation's assets to, (iii) certain transactions resulting in the issuance or transfer of any stock of the corporation or any subsidiary to, (iv) certain transactions resulting in an increase in the proportionate share of stock of the corporation or any subsidiary owned by, or (v) receipt of the benefit (other than proportionately as a stockholder) of any loans, advances or other financial benefits by, an interested stockholder. Section 203 provides that an interested stockholder may not engage in a business combination with the corporation for a period of three years from the time of becoming an interested stockholder unless (a) the board of directors approved either the business combination or the transaction which resulted in the person becoming an interested stockholder prior to the time such person became an interested stockholder; (b) upon consummation of the transaction which resulted in the person becoming an interested stockholder, that person owned at least 85% of the corporation's voting stock (excluding shares owned by persons who are directors and also officers and shares owned by certain employee stock plans); or (c) the business combination is approved by the board of directors and authorized by the affirmative vote of at least 66 2/3% of the outstanding voting stock not owned by the interested stockholder. The restrictions on business combinations with interested stockholders contained in Section 203 of the DGCL do not apply to a corporation whose certificate of incorporation contains a provision expressly electing not to be governed by the statute; however, the Disney Certificate does not contain a provision electing to "opt-out" of Section 203. SUPERMAJORITY REQUIREMENTS. In addition to the requirements of Section 203 of the DGCL, the Disney Certificate of Incorporation provides that the affirmative vote of four-fifths of the outstanding stock of Disney entitled to vote shall be required for (i) any merger or consolidation to which Disney, or any of its subsidiaries, and an Interested Person (as defined below) are parties; (ii) any sale or other disposition by Disney, or any of its subsidiaries, of all or substantially all of its assets to an Interested Person; (iii) any purchase or other acquisition by Disney, or any of its subsidiaries, of all or substantially all of the assets or stock of an Interested Person; and (iv) any other transaction with an Interested Person which requires the approval of the stockholders of Disney under the DGCL; except that the foregoing shall not apply to any transaction if (a) such transaction is authorized by a resolution of Disney's Board of Directors, provided that a majority of the members of Disney's Board of Directors voting for the approval of such transaction were duly elected and acting members of Disney's Board of Directors prior to the date that the person, firm or corporation, or any group thereof, with whom such transaction is proposed, became an Interested Person, or (b) the provision of a vote in excess of that required by the DGCL for such transaction violates the express provisions of the DGCL. An "Interested Person" is any person, firm or corporation, or any group thereof, acting or intending to act in concert, including any person directly or indirectly controlling or controlled by or under direct or indirect common control with such person, firm or corporation or group, which owns of record or beneficially, directly or indirectly, 5% or more of any class of voting securities of Disney. SPECIAL MEETINGS. Pursuant to the DGCL, a special meeting of stockholders may be called by the board of directors or by any other person authorized to do so in the certificate of incorporation or the bylaws. The Disney Certificate of Incorporation provides that special meetings of stockholders may only be called by Disney's Board of Directors, the Chairman of Disney's Board of Directors, or the President of Disney. RIGHTS PLAN. The Disney Rights issued under the Disney Rights Plan have certain anti-takeover effects because they will result in substantial dilution to a person or group that attempts to acquire, or merge with, Disney without conditioning the offer on the Disney Rights being rendered inapplicable. See "Description of Common Stock--Rights Plan." ADDITIONAL AUTHORIZED SHARES OF CAPITAL STOCK. The additional shares of authorized Common Stock and Preferred Stock available for issuance under the Disney Certificate of Incorporation could be issued at such times, under such circumstances and with such terms and conditions as to impede a change in control of Disney. 23 DESCRIPTION OF WARRANTS Disney may issue, together with other Securities or separately, warrants for the purchase of (i) Debt Securities ("Debt Warrants"), (ii) Preferred Stock ("Preferred Stock Warrants"), or (iii) Common Stock ("Common Stock Warrants" and, together with the Debt Warrants and the Preferred Stock Warrants, the "Warrants"). The Warrants will be issued under Warrant Agreements (as defined below) to be entered into between Disney and a bank or trust company, as warrant agent (the "Warrant Agent"), all to be set forth in the applicable Prospectus Supplement relating to any or all Warrants in respect of which this Prospectus is being delivered. Copies of the form of agreement for each Warrant (each a "Debt Securities Warrant Agreement", a "Preferred Stock Warrant Agreement" or a "Common Stock Warrant Agreement", as the case may be, or collectively the "Warrant Agreements"), including the forms of certificates representing the Warrants (the "Debt Warrant Certificates", the "Preferred Stock Warrant Certificates" or the "Common Stock Warrant Certificates", as the case may be, or collectively, the "Warrant Certificates"), and reflecting the provisions to be included in such agreements that will be entered into with respect to the particular offerings of each type of warrant, are or will be filed as exhibits to the Registration Statement of which this Prospectus forms a part. The following description sets forth certain general terms and provisions of the Warrants to which any Prospectus Supplement may relate. The particular terms of the Warrants to which any Prospectus Supplement may relate and the extent, if any, to which such general provisions may apply to the Warrants so offered will be described in the applicable Prospectus Supplement. The following summary of certain provisions of the Warrants, Warrant Agreements and Warrant Certificates does not purport to be complete and is subject to, and is qualified in its entirety by express reference to, all the provisions of the Warrant Agreements and Warrant Certificates, including the definitions therein of certain terms. GENERAL The Prospectus Supplement shall set forth the terms of the Warrants in respect of which this Prospectus is being delivered as well as the related Warrant Agreement and Warrant Certificates, including the following, where applicable: (a) the principal amount of Debt Securities and/or the number of shares of Preferred Stock or Common Stock, as the case may be, purchasable upon exercise of the Warrants; (b) the designation and terms of the Debt Securities or Preferred Stock, as the case may be, purchasable upon exercise thereof and of any related Debt Securities or Preferred Stock with which such Warrants are issued; (c) the procedures and conditions relating to the exercise of the Warrants; (d) the date, if any, on and after which such Warrants and the related Debt Securities or Preferred Stock, as the case may be, will be separately transferable; (e) the offering price of the Warrants, if any; (f) the principal amount of Debt Securities or the number of shares of Preferred Stock or Common Stock, as the case may be, purchasable upon exercise of each Warrant and the initial price at which such principal amount of Debt Securities or shares of Preferred Stock or Common Stock, as the case may be, may be purchased upon such exercise; (g) the date on which the right to exercise the Warrants shall commence and the date on which such right shall expire; (h) a discussion of any material United States federal income tax considerations applicable to the exercise of the Warrants; (i) whether the Warrants represented by the Warrant Certificates will be issued in registered or bearer form, and, if registered, where they may be transferred and registered; (j) call provisions of the Warrants, if any; (k) antidilution provisions of the Warrants, if any; and (l) any other material terms of the Warrants. EXERCISE OF WARRANTS Each Warrant will entitle the holder to purchase for cash such principal amount of Debt Securities or such number of shares of Preferred Stock or Common Stock, as the case may be, at such exercise price as shall in each case be set forth in, or be determinable as set forth in, the applicable Prospectus Supplement relating to the Warrants offered thereby. Unless otherwise specified in the applicable Prospectus Supplement, Warrants may be exercised at the corporate trust office of the Warrant Agent or any other office indicated in the applicable Prospectus Supplement at any time up to 5:00 p.m. New York City time on the expiration date set forth in the applicable Prospectus Supplement. After 5:00 p.m. New York City time on the expiration date, unexercised Warrants will become void. Upon receipt of payment and the Warrant Certificate properly completed and duly 24 executed, Disney will, as soon as practicable, issue the Debt Securities, Preferred Stock or Common Stock, as the case may be, purchasable upon such exercise. If less than all of the Warrants represented by such Warrant Certificate are exercised, a new Warrant Certificate will be issued for the remaining amount of Warrants. NO RIGHTS OF SECURITY HOLDER PRIOR TO EXERCISE Prior to the exercise of their Warrants, holders of Warrants will not have any of the rights of holders of the Debt Securities, Preferred Stock or Common Stock, as the case may be, purchasable upon such exercise and will not be entitled to (i) in the case of Debt Warrants, payments of principal of (and premium, if any) or interest, if any, on the Debt Securities purchasable upon such exercise or (ii) in the case of Preferred Stock Warrants and Common Stock Warrants, the right to vote or to receive dividend payments on the Preferred Stock or Common Stock, as the case may be, purchasable upon such exercise. EXCHANGE OF WARRANT CERTIFICATES Warrant Certificates will be exchangeable for new Warrant Certificates of different denominations at the corporate trust office of the Warrant Agent or any other office indicated in the applicable Prospectus Supplement. PLAN OF DISTRIBUTION Disney may sell Securities to one or more underwriters for public offering and sale by them or may sell Securities to investors directly or through agents or dealers. Any such underwriter or agent involved in the offer and sale of the Securities will be named in the applicable Prospectus Supplement. Securities offered pursuant to a particular Prospectus Supplement are referred to herein as "Offered Securities." The Company may also sell Offered Securities to an agent as principal. Underwriters may offer and sell the Offered Securities at a fixed price or prices, which may be changed, or from time to time at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices. Disney also may, from time to time, authorize underwriters acting as its agents to offer and sell the Offered Securities upon the terms and conditions set forth in any Prospectus Supplement. In connection with the sale of Offered Securities, underwriters may be deemed to have received compensation from Disney in the form of underwriting discounts or commissions and may also receive commissions from purchasers of Offered Securities for whom they may act as agent. If a dealer is utilized in the sale of the Offered Securities in respect of which this Prospectus is delivered, Disney will sell such Offered Securities to such dealer, as principal. The dealer may then resell such Offered Securities to the public at varying prices to be determined by such dealer at the time of resale. Any underwriting compensation paid by Disney to underwriters or agents in connection with the offering of Offered Securities, and any discounts, concessions or commissions allowed by underwriters to participating dealers, will be set forth in an applicable Prospectus Supplement. Underwriters, dealers and agents participating in the distribution of the Offered Securities may be deemed to be underwriters under the Securities Act, and any discounts and commissions received by them and any profit realized by them on resale of the Offered Securities may be deemed to be underwriting discounts and commissions under the Securities Act. Underwriters, dealers and agents may be entitled under agreements with Disney to indemnification against and contribution toward certain civil liabilities, including liabilities under the Securities Act, and to reimbursement by Disney for certain expenses. If so indicated in an applicable Prospectus Supplement, Disney will authorize dealers acting as its agents to solicit offers by certain institutions to purchase Offered Securities from Disney at the public offering price set forth in such Prospectus Supplement pursuant to Delayed Delivery Contracts ("Contracts") providing for payment and delivery on the date or dates stated in such Prospectus Supplement. Each Contract will be for an amount not less than, and the aggregate principal amount or offering price of Offered Securities sold pursuant to Contracts shall not be less nor more than, the respective amounts stated in such Prospectus Supplement. Institutions with whom Contracts, when authorized, may be made include commercial and savings banks, insurance companies, pension funds, investment companies, educational and charitable institutions and other institutions, but will in all cases be subject to the approval of Disney. 25 Offered Securities may also be offered and sold, if so indicated in the Prospectus Supplement, in connection with a remarketing upon their purchase, in accordance with a redemption or repayment pursuant to their terms, or otherwise, by one or more firms ("remarketing firms"), acting as principals for their own accounts or as agents for the Company. Any remarketing firm will be identified and the terms of its agreement, if any, with the Company and its compensation will be described in the Prospectus Supplement. Remarketing firms may be deemed to be underwriters in connection with the Offered Securities remarketed thereby. Remarketing firms may be entitled under agreements which may be entered into with the Company to indemnification by the Company against certain liabilities, including liabilities under the Securities Act. The Securities may or may not be listed on a national securities exchange or a foreign securities exchange. No assurances can be given that there will be a market for any of the Securities. LEGAL MATTERS Certain legal matters with respect to the legality of the Securities being offered hereby will be passed upon for Disney by O'Melveny & Myers LLP, Los Angeles, California. EXPERTS The consolidated financial statements and related schedules of Disney incorporated in this Prospectus by reference to Disney's Annual Report on Form 10-K for the year ended September 30, 1997 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting. The consolidated financial statements of Capital Cities/ABC, Inc. incorporated by reference in this Prospectus from Disney's Current Report on Form 8-K dated March 30, 1996 have been audited by Ernst & Young LLP, independent auditors, as set forth in their report thereon included therein and incorporated herein by reference. Such financial statements referred to above are incorporated herein by reference in reliance upon such report, given upon the authority of such firm as experts in accounting and auditing. 26 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION All expenses other than the Securities and Exchange Commission filing fees are estimated. SEC registration fee................................................. $1,268,500 Accountants' fees and expenses....................................... 20,000 Legal fees and expenses.............................................. 50,000 Printing and engraving expenses...................................... 75,000 Rating agencies' fees................................................ 750,000 Trustee's and registrar's fees and expenses.......................... 25,000 Miscellaneous........................................................ 61,500 --------- Total:............................................................. $2,250,000 ---------
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS The Registrant's Restated Certificate of Incorporation and Bylaws, as amended to date, provide that the Registrant shall indemnify to the full extent authorized or permitted by law (as now or hereafter in effect) any person made, or threatened to be made, a defendant or witness to any action, suit or proceeding (whether civil or criminal or otherwise) by reason of the fact that he, his testator or intestate, is or was a director or officer of the Registrant or by reason of the fact that such director or officer, at the request of the Registrant, is or was serving any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, in any capacity. Under Section 145 of the Delaware General Corporation Law, a corporation may indemnify a director, officer, employee or agent of the corporation (or a person who is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise) against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. In the case of an action brought by or in the right of a corporation, the corporation may indemnify a director, officer, employee or agent of the corporation (or a person who is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise) against expenses (including attorneys' fees) actually and reasonably incurred by him if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification may be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent a court finds that, in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as the court shall deem proper. The Registrant's Restated Certificate of Incorporation and Bylaws further provide that (i) Registrant may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of Registrant or is serving at the request of Registrant as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not Registrant would have the power to indemnify him against such liability under the provisions of law, and (ii) Registrant may create a trust fund, grant a security interest and/or use other means (including, without limitation, letters of credit, surety bonds and/or similar arrangements), as well as enter into contracts providing for indemnification to the full extent authorized or permitted by law and including as part thereof provisions with respect to any and all of the foregoing to ensure the payment of such amounts as may become necessary to effect indemnification as provided therein, or elsewhere. II-1 Registrant maintains an officer's and director's liability insurance policy insuring its officers and directors against certain liabilities and expenses incurred by them in their capacities as such, and insuring Registrant under certain circumstances, in the event that indemnification payments are made to such officers and directors. Registrant has also entered into indemnification agreements (the "Indemnification Agreements") with certain of its directors and officers (individually, the "Indemnitee"). The Indemnification Agreements, among other things, provide for indemnification to the fullest extent permitted by law against any and all expenses, judgments, fines, penalties and amounts paid in settlement of any claim. The Indemnification Agreements provide for the prompt advancement of all expenses to the Indemnitee and for reimbursement to Registrant if it is found that such Indemnitee is not entitled to such indemnification under applicable law. The Indemnification Agreements also provide that after a Change in Control (as defined in the Indemnification Agreements) of Registrant which is not approved by the Board of Directors of Registrant, all determinations regarding a right to indemnity and the right to advancement of expenses shall be made by independent legal counsel selected by the Indemnitee and approved by the Board of Directors. In addition, in the event of a Potential Change In Control (as defined in the Indemnification Agreements), the Indemnitee may require Registrant to establish a trust for his or her benefit and to fund such trust in amounts reasonably anticipated or proposed to be paid to satisfy Registrant's indemnification obligations under the Indemnification Agreements. The foregoing summaries are necessarily subject to the complete text of the statute, the Registrant's Restated Certificate of Incorporation and Bylaws, and the arrangements referred to above and are qualified in their entirety by reference thereto. II-2 ITEM 16. EXHIBITS
EXHIBIT NO. DESCRIPTION - --------- ------------------------------------------------------------------------------------------------------------- 1.1 Form of Underwriting Agreement with respect to Debt Securities. **1.2 Form of Underwriting Agreement with respect to Preferred Stock. **1.3 Form of Underwriting Agreement with respect to Common Stock. **1.4 Form of Underwriting Agreement with respect to Warrants. 1.5 Form of Distribution Agreement with respect to Debt Securities. 4.1 Restated Certificate of Incorporation of Registrant. *4.2 Amended Bylaws of Registrant. 4.3 Indenture, dated as of March 7, 1996, between Registrant and Citibank, N.A., a national banking association, as trustee, pertaining to the Senior Debt Securities (incorporated by reference from the Registrant's Current Report on Form 8-K dated March 7, 1996). *4.4 Form of Senior Subordinated Debt Securities Indenture. *4.5 Form of Subordinated Debt Securities Indenture. *4.6 Form of Debt Securities Warrant Agreement (including form of Debt Warrant Certificate). *4.7 Form of Preferred Stock Warrant Agreement (including form of Preferred Stock Warrant Certificate). *4.8 Form of Common Stock Warrant Agreement (including form of Common Stock Warrant Certificate). *4.9 Form of Deposit Agreement (including form of Depositary Receipts). *4.10 Specimen Common Stock Certificate. 4.11 Rights Agreement dated as of November 8, 1995 between Registrant and the Bank of New York, as rights agent (incorporated by reference from the Registration Statement on Form S-4 of Registrant under its former name, DC Holdco, Inc., filed on November 13, 1995). **4.12 Certificate of Designation of Preferred Stock. **4.13 Form of Preferred Stock Certificate. 5.1 Opinion of O'Melveny & Myers LLP regarding the Securities. *12.1 Computation of Ratio of Earnings to Fixed Charges. 23.1 Consent of O'Melveny & Myers LLP (included in their opinion filed as Exhibit 5.1). 23.2 Consent of Independent Accountants (PricewaterhouseCoopers LLP). 23.3 Consent of Independent Auditors (Ernst & Young LLP). *24 Powers of Attorney (included on the signature page hereto). *25.1 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of Citibank, N.A., as Trustee under the Senior Debt Securities Indenture. *25.2 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of Chase Manhattan Bank and Trust Company, National Association, as Trustee under the Senior Subordinated Debt Securities Indenture. *25.3 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The First National Bank of Chicago, as Trustee under the Subordinated Debt Securities Indenture.
- ------------------------ * Previously filed. ** To be filed by a post-effective amendment to the Registration Statement or incorporated by reference from a Current Report on Form 8-K. II-3 ITEM 17. UNDERTAKINGS (a) The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; Provided, however, that paragraphs (i) and (ii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the Registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement; (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; and (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. II-4 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Burbank, State of California, on the 3rd day of August, 1998. THE WALT DISNEY COMPANY By: /s/ THOMAS O. STAGGS ------------------------------------------ Thomas O. Staggs EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE - ------------------------------ -------------------------- ----------------- Chairman of the Board and /s/ MICHAEL D. EISNER* Chief Executive Officer - ------------------------------ (Principal Executive August 3, 1998 (Michael D. Eisner) Officer) /s/ ROY E. DISNEY* - ------------------------------ Vice Chairman of the Board August 3, 1998 (Roy E. Disney) Senior Executive Vice /s/ SANFORD M. LITVACK* President, Chief of - ------------------------------ Corporate Operations and August 3, 1998 (Sanford M. Litvack) Director Executive Vice President /s/ THOMAS O. STAGGS and Chief Financial - ------------------------------ Officer (Principal August 3, 1998 (Thomas O. Staggs) Financial and Accounting Officer) /s/ REVETA F. BOWERS* - ------------------------------ Director August 3, 1998 (Reveta F. Bowers) /s/ STANLEY P. GOLD* - ------------------------------ Director August 3, 1998 (Stanley P. Gold) /s/ IGNACIO E. LOZANO, JR.* - ------------------------------ Director August 3, 1998 (Ignacio E. Lozano, Jr.)
II-5
SIGNATURE TITLE DATE - ------------------------------ -------------------------- ----------------- /s/ GEORGE J. MITCHELL* - ------------------------------ Director August 3, 1998 (George J. Mitchell) /s/ THOMAS S. MURPHY* - ------------------------------ Director August 3, 1998 (Thomas S. Murphy) /s/ RICHARD A. NUNIS* - ------------------------------ Director August 3, 1998 (Richard A. Nunis) /s/ LEO J. O'DONOVAN, S.J.* - ------------------------------ Director August 3, 1998 (Leo J. O'Donovan, S.J.) /s/ SIDNEY POITIER* - ------------------------------ Director August 3, 1998 (Sidney Poitier) /s/ IRWIN E. RUSSELL* - ------------------------------ Director August 3, 1998 (Irwin E. Russell) /s/ ROBERT A.M. STERN* - ------------------------------ Director August 3, 1998 (Robert A.M. Stern) /s/ E. CARDON WALKER* - ------------------------------ Director August 3, 1998 (E. Cardon Walker) /s/ RAYMOND L. WATSON* - ------------------------------ Director August 3, 1998 (Raymond L. Watson) /s/ GARY L. WILSON* - ------------------------------ Director August 3, 1998 (Gary L. Wilson)
*By: /s/ DAVID K. THOMPSON ------------------------- David K. Thompson, ATTORNEY-IN-FACT II-6 EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION - --------- ------------------------------------------------------------------------------------------------------------- 1.1 Form of Underwriting Agreement with respect to Debt Securities. **1.2 Form of Underwriting Agreement with respect to Preferred Stock. **1.3 Form of Underwriting Agreement with respect to Common Stock. **1.4 Form of Underwriting Agreement with respect to Warrants. 1.5 Form of Distribution Agreement with respect to Debt Securities. 4.1 Restated Certificate of Incorporation of Registrant. *4.2 Amended Bylaws of Registrant. 4.3 Indenture, dated as of March 7, 1996, between Registrant and Citibank, N.A., a national banking association, as trustee, pertaining to the Senior Debt Securities (incorporated by reference from the Registrant's Current Report on Form 8-K dated March 7, 1996). *4.4 Form of Senior Subordinated Debt Securities Indenture. *4.5 Form of Subordinated Debt Securities Indenture. *4.6 Form of Debt Securities Warrant Agreement (including form of Debt Warrant Certificate). *4.7 Form of Preferred Stock Warrant Agreement (including form of Preferred Stock Warrant Certificate). *4.8 Form of Common Stock Warrant Agreement (including form of Common Stock Warrant Certificate). *4.9 Form of Deposit Agreement (including form of Depositary Receipts). *4.10 Specimen Common Stock Certificate. 4.11 Rights Agreement dated as of November 8, 1995 between Registrant and the Bank of New York, as rights agent (incorporated by reference from the Registration Statement on Form S-4 of Registrant under its former name, DC Holdco, Inc., filed on November 13, 1995). **4.12 Certificate of Designation of Preferred Stock. **4.13 Form of Preferred Stock Certificate. 5.1 Opinion of O'Melveny & Myers LLP regarding the Securities. *12.1 Computation of Ratio of Earnings to Fixed Charges. 23.1 Consent of O'Melveny & Myers LLP (included in their opinion filed as Exhibit 5.1). 23.2 Consent of Independent Accountants (PricewaterhouseCoopers LLP). 23.3 Consent of Independent Auditors (Ernst & Young LLP). *24 Powers of Attorney (included on the signature page hereto). *25.1 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of Citibank, N.A., as Trustee under the Senior Debt Securities Indenture. *25.2 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of Chase Manhattan Bank and Trust Company, National Association, as Trustee under the Senior Subordinated Debt Securities Indenture. *25.3 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The First National Bank of Chicago, as Trustee under the Subordinated Debt Securities Indenture.
- ------------------------ * Previously filed. ** To be filed by a post-effective amendment to the Registration Statement or incorporated by reference from a Current Report on Form 8-K. EX-1.1 2 EXHIBIT 1.1 EXHIBIT 1.1 FORM OF UNDERWRITING AGREEMENT - DEBT SECURITIES UNDERWRITING AGREEMENT [Date] The Walt Disney Company 500 South Buena Vista Street Burbank, California 91521 Dear Sirs: We (the "Representatives") are acting on behalf of the underwriters (including ourselves) named below (such underwriters being herein called the "Underwriters"), and we understand that The Walt Disney Company, a Delaware corporation (the "Company"), proposes to issue and sell [Currency and Principal Amount] aggregate principal amount of its [Full Title of Debt Securities](the "Debt Securities"). Subject to the terms and conditions set forth or incorporated by reference herein, the Company hereby agrees to sell and the Underwriters agree to purchase, severally and not jointly, the principal amount of Debt Securities set forth below opposite their names at a purchase price of [ ]% of the principal amount thereof plus accrued interest, if any, from [ ]:
PRINCIPAL AMOUNT OF NAME DEBT SECURITIES ---- ------------------- [Lead Underwriter] $[ ] [Syndicate List] ----------------- $[ ] ----------------- -----------------
The Underwriters will pay for the Debt Securities upon delivery thereof to The Depository Trust Company or its designated custodian at [ ] a.m. (New York time) on [ ] or at such other time, not later than [ ] a.m. (New York time) on [ ] as shall be designated by the Representatives. The time and date of such payment and delivery are hereinafter referred to as the "Closing Date." The Debt Securities shall have the terms set forth in the Prospectus dated [ ], as supplemented by the Prospectus Supplement dated [ ], including the following: 2
TERMS OF DEBT SECURITIES: Title: [ ] Aggregate Principal Amount: [ ] Initial Offering Price: [ ]% Purchase Price: [ ]% Currency of Payment: [ ] [Ratings of debt securities included in the Registration Statement: [ ] [ ] [ ]] Maturity Date: [ ] Interest Rate: [ ]% Redemption Provisions: [ ] Interest Payment Dates: [ ] and [ ] commencing [ ] (interest accrues from [ ]). Regular Record Dates: [ ] and [ ] Form and Denominations: [ ] Ranking: The Debt Securities will be senior/senior subordinated/subordinated indebtedness of the Company issued under the Senior/Senior Subordinated/Subordinated Indenture dated as of [ ] (the "Indenture") by and between the Company, as issuer and [ ], as trustee (the "Trustee"). Listing: [ ]
3 Please confirm your agreement by having an authorized officer sign a copy of this Agreement in the space set forth below. Very truly yours, [LEAD UNDERWRITER] [NAME OF OTHER LEAD MANAGERS], acting severally on behalf of themselves and the Underwriters named herein BY: [LEAD UNDERWRITER] [NAME OF OTHER LEAD MANAGERS] By: --------------------------------------------- Name: Title: Accepted: THE WALT DISNEY COMPANY By: ----------------------------------- Name: Title: 4 THE WALT DISNEY COMPANY UNDERWRITING AGREEMENT STANDARD PROVISIONS (DEBT SECURITIES) [Date] From time to time, The Walt Disney Company, a Delaware corporation (the "Company"), may enter into one or more underwriting agreements that provide for the sale of designated securities to the several underwriters named therein. The standard provisions set forth herein may be incorporated by reference in any such underwriting agreement (an "Underwriting Agreement"). The Underwriting Agreement, including the provisions incorporated therein by reference, is herein referred to as "this Agreement". Terms defined in the Underwriting Agreement are used herein as therein defined. The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement including a prospectus, which, among other things, relates to the Debt Securities and has filed with, or transmitted for filing to, or shall promptly hereafter file with or transmit for filing to, the Commission a prospectus supplement (the "Prospectus Supplement") specifically relating to the Debt Securities pursuant to Rule 424 under the Securities Act of 1933, as amended (the "1933 Act"), and/or a term sheet or an abbreviated term sheet (each, a "Term Sheet"), pursuant to Rule 434 of the rules and regulations of the Commission under the 1933 Act (the "1933 Act Regulations"), specifically relating to the Debt Securities. The term Registration Statement means the registration statement as amended to the date of this Agreement and shall include any related Registration Statement filed pursuant to Rule 462(b) of the 1933 Act Regulations. The term Basic Prospectus means the prospectus included in the Registration Statement at the time the Registration Statement was declared effective by the Commission. The term Prospectus means the Basic Prospectus together with the final Prospectus Supplement relating to the offering of the Debt Securities, each in the form furnished to the Underwriters by the Company for use in connection with the offering of the Debt Securities, as from time to time amended or supplemented in accordance with the 1933 Act, except that if any revised prospectus or prospectus supplement shall be provided to the Underwriters by the Company for use in connection with the offering of the Debt Securities which differs from the prospectus or prospectus supplement on file at the Commission (whether or not such revised prospectus or prospectus supplement is required to be filed by the Company pursuant to Rule 424 under the 1933 Act Regulations), the term "Prospectus" shall refer to the prospectus and prospectus supplement, as so revised, from and after the time it is first provided to the Underwriters for such use; provided, however, that if the Company elects to rely upon Rule 434 of the 1933 Act Regulations, then all references to the Prospectus shall be deemed to refer to the final or preliminary prospectus and the Term Sheet relating to the Debt Securities in the form furnished to the Underwriters by the Company in reliance upon Rule 434 of the 1933 Act Regulations (in which case, all references in this Agreement to the date of the Prospectus shall mean the date of such Term Sheet). The term preliminary prospectus means a preliminary prospectus supplement specifically relating to the Debt Securities together with the Basic Prospectus. Any reference herein to the Registration Statement or the Prospectus shall be deemed to refer to and include the documents, financial statements and schedules incorporated by reference therein or deemed to be incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, and any reference to any amendment or supplement to the Registration Statement or the Prospectus shall be deemed to 1 refer to and include any documents, financial statements and schedules filed by the Company with the Commission under the Securities Exchange Act of 1934, as amended (the "1934 Act") after the date hereof, and so incorporated by reference or deemed to be incorporated therein (such incorporated documents, financial statements and schedules being herein called the "Incorporated Documents"). Notwithstanding the foregoing, for purposes of this Agreement any prospectus, prospectus supplement, term sheet or abbreviated term sheet prepared or filed with respect to an offering pursuant to the Registration Statement of a series of securities other than the Debt Securities shall not be deemed to have supplemented the Prospectus. 1. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants to each of the Underwriters that: (a) The Company meets the requirements for use of Form S-3 under the 1933 Act. The Registration Statement has become effective under the 1933 Act and no stop order suspending the effectiveness of the Registration Statement has been issued under the 1933 Act and no proceedings for that purpose have been instituted or are pending or, to the knowledge of the Company, are contemplated by the Commission, and any request on the part of the Commission for additional information has been complied with. In addition, the Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended (the "1939 Act"). (b) The Registration Statement, at the time it became effective, complied in all material respects with the provisions of the 1933 Act and the 1933 Act Regulations and did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. At the date of the Underwriting Agreement and at the Closing Date, the Prospectus and any amendments and supplements thereto did not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. If the Company elects to rely upon Rule 434 of the 1933 Act Regulations, the Company will comply with the requirements of Rule 434. Notwithstanding the foregoing, this representation and warranty does not apply to statements or omissions in the Registration Statement, the Prospectus or any preliminary prospectus, or any amendment or supplement thereto, made in reliance upon information furnished to the Company in writing by or on behalf of the Underwriters expressly for use therein or to those parts of the Registration Statement which constitute the Trustee's Statement of Eligibility and Qualification on Form T-1 under the 1939 Act (the "Form T-1"). There is no contract or document of a character required to be described in the Registration Statement or the Prospectus or to be filed as an exhibit to the Registration Statement which is not described or filed as required. (c) The Incorporated Documents, when they became effective or were filed (or, if an amendment with respect to any such Incorporated Document was filed or became effective, when such amendment was filed or became effective) with the Commission, as the case may be, complied in all material respects with the requirements of the 1934 Act, and any Incorporated Documents filed subsequent to the date of the Underwriting Agreement and prior to the termination of the offering of the Debt Securities, will, when they are filed with the Commission, comply in all material respects with the requirements of the 1934 Act; no such Incorporated Document, when it became effective or was filed (or, if an amendment with respect to any such Incorporated Document was filed or became effective, when such amendment was filed or became effective) with the Commission, contained, and no Incorporated Document filed subsequent to the date of the Underwriting Agreement and prior to the 2 Closing Date will contain, an untrue statement of a material fact or omitted, or will omit, to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (d) This Agreement, the Indenture and the Debt Securities have been duly authorized by the Company and conform in all material respects to the descriptions thereof in the Prospectus. (e) The Indenture (assuming due execution and delivery thereof by the Trustee) is, and the Debt Securities (when executed by the Company and authenticated in accordance with the Indenture and delivered to and paid for by the Underwriters) will be, the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by (A) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to or affecting the enforcement of creditors' rights generally, (B) general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law), (C) requirements that a claim with respect to any Debt Securities denominated other than in United States dollars (or a judgment denominated other than in United States dollars in respect of such claim) be converted into United States dollars at a rate of exchange prevailing on a date determined pursuant to applicable law and (D) governmental authority to limit, delay or prohibit the making of payments outside the United States or in a foreign currency or composite currency. The Debt Securities (when executed by the Company and authenticated in accordance with the terms of the Indenture and delivered to and paid for by the Underwriters) will be entitled to the benefits of the Indenture (subject to the exceptions set forth in the preceding sentence). (f) The Company is a validly existing corporation in good standing under the laws of Delaware. The Company has full corporate power and authority to own, lease and operate its properties and to conduct its business as presently conducted and as described in the Prospectus; and the Company is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify would not have a material adverse effect on the consolidated financial condition or earnings of the Company and its subsidiaries considered as one enterprise. (g) Except as contemplated in the Prospectus or reflected therein by the filing of any amendment or supplement thereto or any Incorporated Document, since the date of the most recent consolidated financial statements included or incorporated by reference in the Registration Statement and the Prospectus there has not been any material adverse change in the consolidated financial condition or earnings of the Company and its subsidiaries, considered as one enterprise. (h) The Company is not in violation of its Restated Certificate of Incorporation or Bylaws, as amended. The execution and delivery of this Agreement by the Company, the issuance and sale of the Debt Securities and the performance by the Company of its obligations under this Agreement and the Indenture will not conflict with or constitute a breach of or a default (with the passage of time or otherwise) under (A) the Restated Certificate of Incorporation or Bylaws, as amended of the Company, (B) any contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Company is a party or by which it may be bound, or to which any of the properties or assets of the Company is subject, which breach or default would, singly or in the aggregate, reasonably be expected to have a material adverse effect on the consolidated financial condition or earnings of the Company and its subsidiaries, considered as one enterprise, or (C) any applicable law, administrative regulation 3 or administrative or court decree. Except for orders, permits and similar authorizations required under or by the securities or Blue Sky laws of certain jurisdictions, any securities exchange on which any of the Debt Securities might be listed or with respect to Debt Securities which are to be indexed or linked to any foreign currency, composite currency, commodity, equity index or similar index, no consent, approval, authorization or other order of any regulatory body, administrative agency or other governmental body is legally required for the valid issuance and sale of the Debt Securities. (i) To the best of the Company's knowledge, the accountants who have audited and reported upon the financial statements filed with the Commission as part of the Registration Statement and the Prospectus are independent accountants as required by the 1933 Act. The historical financial statements included in the Registration Statement or Prospectus or incorporated therein by reference fairly present the consolidated financial position and results of operations of the Company and its subsidiaries at the respective dates and for the respective periods to which they apply. Such financial statements have been prepared in accordance with generally accepted accounting principles consistently applied, except as set forth in the Registration Statement and Prospectus. The selected financial data and the summary historical financial information of Disney included in the Prospectus present fairly the information shown therein and have been compiled on a basis consistent with that of the audited financial statements of Disney incorporated by reference in the Registration Statement and the Prospectus. The unaudited pro forma financial statements, if any, together with the related notes and any supporting schedules included or incorporated by reference in the Registration Statements and the Prospectus, fairly present the information shown therein and have been compiled on a basis substantially consistent with the audited financial statements of Disney included or incorporated by reference in the Registration Statement and the Prospectus; the assumptions on which such unaudited pro forma financial statements have been prepared are reasonable; and such unaudited pro forma financial statements have been prepared, and the pro forma adjustments set forth therein have been applied, in accordance with the applicable accounting requirements of the 1933 Act and the 1933 Act Regulations (including, without limitation, Regulations S-X promulgated by the Commission), and such pro forma adjustments have been properly applied to the historical amounts in the compilation of such statements. (j) Each of Disney Enterprises, Inc., ABC, Inc. and Walt Disney World Co. (collectively, the "Significant Subsidiaries"), is a validly existing corporation in good standing in the state of its incorporation. Each of the Significant Subsidiaries has full corporate power and authority to own, lease and operate its properties and to conduct its business as presently conducted and as described in the Prospectus; and each of the Significant Subsidiaries is duly qualified as a foreign corporation to transact business and is in good standing in each United States jurisdiction in which such qualification is required whether by reason of the ownership or leasing of property or the conduct of business, except where a failure to so qualify would not have a material adverse effect on the consolidated financial condition or earnings of the Company and its subsidiaries, considered as one enterprise. (k) The Company has complied with, and is and will be in compliance with, the provisions of that certain Florida act relating to disclosure of doing business with Cuba, codified as Section 517.075 of the Florida statutes, and the rules and regulations thereunder or is exempt therefrom. Any certificate signed by any officer of the Company and delivered to any Underwriter or to counsel for the Underwriters in connection with the offering of the Debt Securities shall be deemed a representation and warranty by the Company to such Underwriter as to the matters covered thereby on the date of such certificate. 2. PUBLIC OFFERING. The Company is advised by the Representatives that the Underwriters propose to make a public offering of their respective portions of the Debt Securities as soon after this Agreement has been entered into as in the Representatives' judgment is advisable. The terms of the public offering of the Debt Securities have been provided by the Representatives to the Company and are in all material respects completely set forth in the Prospectus. 3. PURCHASE AND DELIVERY. Except as otherwise provided in this Section 3, payment for the Debt Securities shall be made by wire transfer, of immediately available funds, by the Underwriters to the order of 4 the Company, at the time set forth in the Underwriting Agreement, upon delivery to the Representatives for the respective accounts of the several Underwriters of the Debt Securities, registered in such names and in such denominations as the Representatives shall request in writing not less than two full business days prior to the date of delivery, with any transfer taxes payable in connection with the sale of the Debt Securities to the Underwriters duly paid. The Notes may be represented by one or more global notes which may be deposited with a custodian for, and registered in the name of, The Depository Trust Company or its nominee. 4. PAYMENT OF EXPENSES. The Company will pay all expenses incident to the performance of its obligations under this Agreement, including (i) the preparation, printing and filing of the Registration Statement (including financial statements and exhibits) as originally filed and of each amendment thereto, (ii) the printing and delivery to the Underwriters of this Agreement, any Underwriting Agreement, any Agreement among Underwriters, the Indenture and such other documents as may be required in connection with the offering, purchase, sale and delivery of the Debt Securities, (iii) the preparation, issuance and delivery of the Debt Securities and any certificates for the Debt Securities to the Underwriters, (iv) the fees and disbursements of the Company's counsel, accountants and other advisors or agents (including transfer agents and registrars), as well as the fees and disbursements of the Trustee and its counsel, (v) the qualification of the Debt Securities under state securities laws or the applicable laws of any foreign jurisdiction in which the Debt Securities are offered in accordance with the provisions of Section 6(g) hereof, including filing fees and the reasonable fees and disbursements of counsel for the Underwriters in connection therewith and in connection with the preparation, printing and delivery of the Blue Sky Survey and any Legal Investment Survey, and any amendment thereto, (vi) the printing and delivery to the Underwriters of copies of each preliminary prospectus, any Term Sheet, and the Prospectus and any amendments or supplements thereto, (vii) the fees charged by nationally recognized statistical rating organizations for the rating of the Debt Securities, and (viii) the fees and expenses incurred with respect to the listing of the Debt Securities on any securities exchange. 5. CONDITIONS TO CLOSING. The several obligations of the Underwriters hereunder are subject to the following conditions: (a) OPINION OF COUNSEL TO COMPANY. On the Closing Date, the Underwriters shall have received an opinion from O'Melveny & Myers LLP, counsel to the Company, dated as of the Closing Date and in form and substance satisfactory to counsel for the Underwriters to the effect that: (i) The Company and each of the Significant Subsidiaries is a corporation validly existing and in good standing under the laws of its state of incorporation. (ii) The Company has the corporate power and corporate authority to enter into and perform its obligations under this Agreement and the Indenture, to borrow money as contemplated in this Agreement and the Indenture and to issue, sell and deliver the Debt Securities. (iii) This Agreement has been duly authorized, executed and delivered by the Company. (iv) The Indenture has been duly authorized by all necessary corporate action on the part of the Company and duly executed and delivered by the Company and constitutes a valid and binding agreement of the Company enforceable against the Company in accordance with its terms, except (x) as may be limited by (A) bankruptcy, insolvency, reorganization, moratorium or similar laws 5 relating to creditors' rights generally (including, without limitation, fraudulent conveyance laws) and (B) general principles of equity including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance or injunctive relief, regardless of whether is considered in a proceeding at law or in equity and (y) the waiver contained in Section 6.12 of the Indenture may be deemed unenforceable and the provisions regarding jurisdiction contained in Section [12.9] [13.9] of the Indenture may not be honored by the courts included or excluded. (v) No consent or approval of any California, New York or United States federal governmental authority is required in connection with the issuance or sale of the Debt Securities other than registration thereof under the 1933 Act, qualification of the Indenture under the 1939 Act, and such registrations or qualifications as may be necessary under the securities or Blue Sky laws of the various United States jurisdictions in which the Debt Securities are to be offered or sold. (vi) The Debt Securities, when executed and authenticated in accordance with the terms of the Indenture and delivered to and paid for by the Underwriters, will constitute valid and binding obligations of the Company enforceable against the Company in accordance with their terms, except (x) as may be limited by (A) bankruptcy, insolvency, reorganization, moratorium or similar laws relating to creditors' rights generally (including, without limitation, fraudulent conveyance laws) and (B) general principles of equity including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance or injunctive relief, regardless of whether considered in a proceeding at law or in equity and (y) the waiver contained in Section 6.12 of the Indenture may be deemed unenforceable and the provisions regarding jurisdiction contained in Section [12.9] [13.9] of the Indenture may not be honored by the courts included or excluded. (vii) The Registration Statement has been declared effective under the 1933 Act and the Indenture has been qualified under the 1939 Act, and, to the best of such counsel's knowledge, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are pending or threatened by the Commission. (viii) The execution and delivery of this Agreement and the Indenture by the Company, the issuance and sale of the Debt Securities and the performance by the Company of its obligations under this Agreement and the Indenture will not (A) violate the Restated Certificate of Incorporation or Bylaws, as amended of the Company, (B) violate the Delaware General Corporation Law or any statute, law or regulation of the States of California or New York or the United States of America to which the Company or any of its properties may be subject or (C) breach or otherwise violate any obligation of or restriction on the Company under any judgment, decree or order, known to such counsel, of any court or governmental agency or authority entered in any proceeding to which the Company was or is now a party or by which it is bound; provided, that such counsel may state that (1) the opinion set forth in clause (B) of this paragraph (viii) is limited to such statutes, laws or regulations currently in effect which such counsel has, in the exercise of customary diligence, recognized as applicable to the Company or the transactions of the type contemplated by this Agreement, and (2) no opinion is expressed as to the securities or Blue Sky laws of the various jurisdictions in which the Debt Securities are to be offered and (3) no opinion is expressed with respect to such clause (B) with respect to Debt Securities which are indexed or linked to any foreign currency, composite currency, commodity, equity index or similar index. (ix) The Registration Statement, as of the date it became effective, and the Prospectus, as of the date of the Underwriting Agreement, appear on their face to comply in all material respects with the requirements as to form for registration statements on Form S-3 and the related rules and regulations then in effect, except that in each case such counsel need not express an opinion as to (i) the Incorporated Documents, (ii) the financial 6 statements and schedules and other financial data included or incorporated by reference therein or excluded therefrom or (iii) the Form T-1. (x) The statements in the Prospectus under the captions "Description of the Debt Securities" and "Description of the Notes," insofar as they purport to summarize certain provisions of documents specifically referred to therein, fairly present the information required by Form S-3. [(xi) Although the discussion set forth in the Prospectus under the heading "Certain United States Federal Tax Considerations" does not purport to discuss all possible United States Federal income tax consequences of the purchase, ownership, and disposition of the Debt Securities, in such counsel's opinion, such discussion constitutes, in all material respects, a fair and accurate summary of the United States Federal income tax consequences of the purchase, ownership, and disposition of the Debt Securities, based upon current law and subject to the qualifications set forth therein.] In rendering the opinions set forth above, such counsel may state that (1) with respect to paragraphs (iv) and (vi), such enforcement may be limited by (i) requirements that a claim with respect to any Debt Securities denominated other than in United States dollars (or a judgment denominated other than in United States dollars in respect of such claim) be converted into United States dollars at a rate of exchange prevailing on a date determined pursuant to applicable law and (ii) governmental authority to limit, delay or prohibit the making of payments outside the United States or in foreign currency or composite currency; and (2) with respect to paragraphs (iv), (v) and (vi), no opinion is expressed thereto with respect to any Debt Securities that are to be indexed or linked to any foreign currency or composite currency, commodity, equity index or similar index. In addition such counsel may state that, in connection with such counsel's participation in conferences in connection with the preparation of the Registration Statement and Prospectus, such counsel has not independently verified the accuracy, completeness or fairness of the statements contained therein, and the limitation inherent in such examination made by such counsel and the knowledge available to such counsel are such that such counsel is unable to assume, and does not assume, and responsibility for such accuracy, completeness or fairness (except as otherwise specifically stated in clauses (x) [and (xi)] above). However, such counsel shall state that, on the basis of such counsel's review and participation in conferences in connection with the preparation of the Registration Statement and the Prospectus, such counsel does not believe that the Registration Statement (excluding the Incorporated Documents) at its effective date, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading, and such counsel shall state that such counsel does not believe that the Prospectus (excluding the Incorporated Documents) as of the date of the Underwriting Agreement and as of the Closing Date contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, except that such counsel need express no opinion or belief with respect to (i) the Incorporated Documents, (ii) the financial statements, schedules and other financial data included or incorporated by reference in, or excluded from, the Registration Statement or the Prospectus or (iii) the exhibits to the Registration Statement, including the Form T-1. (b) OPINION OF COUNSEL EMPLOYED BY COMPANY. On the Closing Date, the Underwriters shall have received an opinion from David K. Thompson, Senior Vice President-Assistant General Counsel or from other counsel employed by the Company (provided that such counsel is at least a vice president of the Company), dated as of the date hereof and in form and substance satisfactory to counsel for the Underwriters, to the effect that: 7 (i) Except as set forth in the Prospectus (including the Incorporated Documents), there is not pending or, to the best of such counsel's knowledge, after reasonable inquiry, threatened any action, suit or proceeding against the Company or any of its subsidiaries before or by any court or governmental agency or body, which is likely (to the extent not covered by insurance) to have a material adverse effect on the consolidated financial condition or earnings of the Company and its subsidiaries, considered as one enterprise. (ii) To the best of such counsel's knowledge, after reasonable inquiry, there is no contract or document of a character required to be described in the Registration Statement or the Prospectus or to be filed as an exhibit to the Registration Statement which is not described or filed as required. (iii) To the best of such counsel's knowledge, after reasonable inquiry, the Company is not in violation of its Restated Certificate of Incorporation or Bylaws, as amended. (iv) To the best of such counsel's knowledge, after reasonable inquiry, the execution, delivery and performance of this Agreement and the Indenture will not conflict with or constitute a breach of, or default (with the passage of time or otherwise) under, any material contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Company is a party or by which it may be bound, or to which any of the property or assets of the Company or any of its subsidiaries is subject. (v) The Incorporated Documents, as of the date of the Underwriting Agreement, complied as to form in all material respects with the requirements of the 1934 Act, except that in each case such counsel need not express an opinion as to the financial statements and schedules and other financial data included or incorporated by reference therein. In addition, such counsel shall state that no facts have come to such counsel's attention that have led him to believe that the Registration Statement (including the Incorporated Documents) at the time such Registration Statement became effective, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus (including the Incorporated Documents) as of the date of the Underwriting Agreement and as of the Closing Date contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, except that such counsel need express no opinion or belief with respect to the financial statements, schedules and other financial data included or incorporated by reference in, or excluded from, the Registration Statement or Prospectus or with respect to the Form T-1. (c) OPINION OF UNDERWRITERS' COUNSEL. On the Closing Date, the Underwriters shall have received an opinion from counsel to the Underwriters, dated as of the Closing Date and in form and substance satisfactory to the Underwriters. (d) OFFICER'S CERTIFICATE. On the Closing Date the Underwriters shall have received a certificate signed by an officer of the Company, dated the Closing Date, to the effect that (i) the representations and warranties of the Company contained in Section 1 hereof are true and correct in all material respects with the same force and effect as though expressly made at and as of the date of such 8 certificate, (ii) the Company has complied with all agreements and satisfied all conditions required by this Agreement or the Indenture on its part to be performed or satisfied at or prior to the date of such certificate and (iii) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been initiated or, to the best of such officer's knowledge, threatened by the Commission. The Officer's Certificate shall further state that except as contemplated in the Prospectus or reflected therein by the filing of any amendment or supplement thereto or any Incorporated Document, at the Closing Date, there shall not have been, since the date of the most recent consolidated financial statements included or incorporated by reference in the Prospectus, any material adverse change in the consolidated financial condition or earnings of the Company and its subsidiaries considered as one enterprise. As used in this Section 5(d), the term "Prospectus" means the Prospectus (as defined herein) in the form first used to confirm sales of the Debt Securities. (e) COMFORT LETTERS. At the time of the execution of the Underwriting Agreement, the Underwriters shall have received letters from the Company's independent certified public accountants, dated as of the date of the Underwriting Agreement and in form and substance reasonably satisfactory to the Underwriters. (f) BRING-DOWN COMFORT LETTERS. On the Closing Date, the Underwriters shall have received letters from the Company's independent certified public accountants dated as of the Closing Date, to the effect that they reaffirm the statements made in the letter furnished pursuant to subsection (e) of this Section 5, except that the specified date referred to shall be a date not more than five business days prior to the Closing Date. (g) RATINGS. At the Closing Date, the debt securities included in the Registration Statement shall have the ratings accorded by any "nationally recognized statistical rating organization", as defined by the Commission for purposes of Rule 436(g)(2) of the 1933 Act Regulations, if and as specified in the Underwriting Agreement, and the Company shall have delivered to the Representatives a letter, dated as of such date, from each such rating organization, or other evidence satisfactory to the Representatives, confirming that the Debt Securities have such ratings. (h) OTHER DOCUMENTS. On the Closing Date, counsel to the Underwriters shall have been furnished with such documents and opinions as such counsel may reasonably require for the purpose of enabling such counsel to pass upon the issuance and sale of Debt Securities as herein contemplated and related proceedings, or in order to evidence the accuracy and completeness of any of the representations and warranties or the fulfillment of any of the conditions herein contained. If any condition specified in this Section 5 shall not have been fulfilled when and as required to be fulfilled, this Agreement may be terminated by the Representatives by notice to the Company at any time at or prior to the Closing Date, and such termination shall be without liability of any party to any other party, except that (i) the Company shall reimburse the Underwriters for all of their reasonable out-of-pocket expenses, including the reasonable fees and disbursements of counsel for the Underwriters and (ii) the covenants set forth in Section 6(f) hereof, the indemnity and contribution agreement set forth in Sections 7, 8, 9 and 10 hereof and the provisions of Section 18 hereof shall remain in effect. 9 6. COVENANTS OF THE COMPANY. In further consideration of the agreements of the Underwriters contained herein, the Company covenants as follows: (a) NOTICE OF CERTAIN EVENTS. The Company will notify the Representatives promptly of (i) the effectiveness of any post-effective amendment to the Registration Statement (other than a post-effective amendment relating solely to an offering of securities other than the Debt Securities), (ii) the transmittal to the Commission for filing of any supplement to the Prospectus (other than a supplement relating solely to an offering of securities other than the Debt Securities), (iii) the receipt of any comments from the Commission with respect to the Registration Statement or the Prospectus (other than any comments relating solely to an offering of securities other than the Debt Securities), (iv) any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for additional information (other than any such request relating solely to an offering of securities other than the Debt Securities) and (v) the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose. The Company will make every reasonable effort to prevent the issuance of any such stop order and, if any such stop order is issued, to obtain the lifting thereof at the earliest possible time unless the Company shall, in its sole discretion, determine that it is not in its best interest to do so. (b) NOTICE OF CERTAIN PROPOSED FILINGS. During the period from the date of the Underwriting Agreement to and including the Closing Date, at or prior to the filing thereof, the Company will give the Representatives notice of its intention to file any additional registration statement with respect to the registration of additional Debt Securities to be covered by this Agreement, any amendment to the Registration Statement or any amendment or supplement to the Prospectus (other than an amendment or supplement relating solely to an offering of securities other than the Debt Securities), whether by the filing of documents pursuant to the 1934 Act, the 1933 Act or otherwise, and will furnish the Underwriters with copies of any such amendment or supplement or other documents a reasonable amount of time prior to such proposed filing or use, as the case may be, and will not file or use any such document to which the Representatives or counsel to the Underwriters shall reasonably object, unless, in the judgment of the Company or its counsel, such amendment or supplement or other document is necessary to comply with law. (c) COPIES OF THE REGISTRATION STATEMENT AND THE PROSPECTUS. The Company will deliver to the Underwriters one copy of the Registration Statement (as originally filed) and of each amendment thereto (including the Incorporated Documents and any exhibits filed therewith or incorporated by reference therein) and the preliminary prospectus as the Representatives may reasonably request. The Company will furnish to the Underwriters as many copies of the Prospectus (as amended or supplemented) as the Representatives shall reasonably request so long as the Underwriters are required to deliver a Prospectus in connection with sales or solicitations of offers to purchase the Debt Securities. (d) REVISIONS OF REGISTRATION STATEMENT AND PROSPECTUS -- MATERIAL CHANGES. So long as the Underwriters are required to deliver a Prospectus in connection with sales of the Debt Securities, if any event shall occur or condition exist as a result of which it is necessary, in the opinion of counsel for the Company, after consultation with counsel for the Underwriters, to further amend or supplement the Prospectus in order that the Prospectus will not include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in light 10 of the circumstances existing at the time it is delivered to a purchaser, not misleading, or if it shall be necessary, in the opinion of counsel for the Company, to amend or supplement the Registration Statement or the Prospectus in order to comply with the requirements of the 1933 Act or the 1933 Act Regulations, prompt notice shall be given, and confirmed in writing, to the Representatives, and the Company will prepare and file as soon as practicable such amendment or supplement to the Registration Statement or Prospectus as may be necessary to correct such misstatement or omission or to make the Registration Statement or the Prospectus comply with such requirements and the Company will furnish to the Underwriters, without charge, such number of copies of such amendment or supplement as the Underwriters may reasonably request. The filing of any such amendment or supplement shall not constitute a waiver of any of the conditions set forth in Section (5) hereof or of Section 11 (i). (e) COMPLIANCE WITH 1934 ACT. The Company, during the period when the Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will comply, in a timely manner, with all applicable requirements under the 1934 Act relating to the filing with the Commission of the Company's reports pursuant to Section 13(a), 13(c) or 15(d) of the 1934 Act and, if then applicable, the Company's proxy statements pursuant to Section 14(a) of the 1934 Act. (f) EARNINGS STATEMENT. The Company will make generally available to its security holders, as soon as practicable but in any event not later than 15 months after the Closing Date, a consolidated earnings statement (which need not be audited) covering the twelve-month period beginning after the latest of (i) the effective date of the Registration Statement, (ii) the effective date of the most recent post-effective amendment to the Registration Statement to become effective or (iii) the Company's most recent annual report on Form 10-K filed with the Commission prior to the Closing Date, which earnings statement will satisfy the provisions of Section 11(a) of the 1933 Act. The Company may elect to rely upon Rule 158 under the 1933 Act and may elect to make such earnings statement available more frequently than once in any period of twelve months. (g) BLUE SKY QUALIFICATIONS. The Company will endeavor, in cooperation with the Underwriters, to qualify the Debt Securities for offering and sale under the applicable securities laws of such states in the United States as the Representatives may reasonably designate, and will maintain such qualifications in effect for as long as may be required for the distribution of the Debt Securities; provided, however, that the Company will promptly notify the Representatives of any suspension or termination of any such qualifications; and provided further, that the Company shall not be obligated to register or qualify as a foreign corporation or take any action which would subject it to general service of process in any jurisdiction where it is not now so subject. 7. INDEMNIFICATION OF THE UNDERWRITERS. The Company agrees to indemnify and hold harmless each Underwriter and each person, if any, who controls an Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows: (a) against any and all loss, liability, claim, damage and expense whatsoever (including, subject to the limitations set forth in Section 9 hereof, the reasonable fees and disbursements of counsel chosen by the Underwriters), as incurred, insofar as such loss, liability, claim, damage or expense arises out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading, or arises out of any untrue statement or alleged untrue statement of a material fact contained in the Prospectus (or 11 any amendment or supplement thereto) or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; (b) against any and all loss, liability, claim, damage and expense whatsoever (including, subject to the limitations set forth in Section 9 hereof, the reasonable fees and disbursements of counsel chosen by the Underwriters), as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever insofar as such loss, liability, claim, damage or expense arises out of any such untrue statement or omission, or any such alleged untrue statement or omission, if such settlement is effected with the written consent of the Company; and (c) against any and all expense whatsoever (including, subject to the limitations set forth in Section 9 hereof, the reasonable fees and disbursements of counsel chosen by the Underwriters), as incurred, reasonably incurred in investigating, preparing or defending against any litigation, or investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever, based upon any such untrue statement or omission, or any such alleged untrue statement or omission; PROVIDED, HOWEVER, that this indemnity shall not apply to any loss, liability, claim, damage or expense (A) to the extent arising out of or based upon any untrue statement or omission or alleged untrue statement or omission made in reliance upon the Form T-1 under the 1939 Act filed as an exhibit to the Registration Statement; or (B) to the extent arising out of any untrue statement or omission or alleged untrue statement or omission in the Prospectus if such untrue statement or alleged untrue statement or omission or alleged omission is corrected in all material respects in an amendment or supplement to the Prospectus and if, having previously been furnished by or on behalf of the Company with copies of the Prospectus, as so amended or supplemented, such Underwriter thereafter failed to deliver such Prospectus, as so amended or supplemented, if required to be delivered by such Underwriter prior to or concurrently with the sale of the Debt Securities to the person asserting such loss, liability, claim, damage or expense who purchased such the Debt Securities which are the subject thereof from such Underwriter; or (C) as to which such Underwriter may be required to indemnify the Company pursuant to the provisions of Section 8. 8. INDEMNIFICATION OF THE COMPANY. Each Underwriter severally (and not jointly) agrees to indemnify and hold harmless the Company, its directors, each of its officers who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of Section 7 hereof, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendment thereto) or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written information furnished to the Company by or on behalf of such Underwriter through the Representatives expressly for use in the Registration Statement or the Prospectus. 9. GENERAL. In case any action, suit or proceeding (including any governmental or regulatory investigation or proceeding) shall be brought against any Underwriter or any person controlling such Underwriter, based upon the Registration Statement or the Prospectus and with respect to which indemnity may be sought against the Company pursuant to Section 7, such Underwriter or controlling person shall promptly 12 notify the Company in writing, and the Company shall assume the defense thereof, including the employment of counsel (such counsel to be reasonably acceptable to such Underwriter) and payment of all expenses. Any such Underwriter or any such controlling person shall have the right to employ separate counsel in any such action, suit or proceeding and to participate in the defense thereof, but the fees and expenses of such separate counsel shall be at the expense of such Underwriter or such controlling person unless (A) the employment of such counsel shall have been specifically authorized in writing by the Company, (B) the Company shall have failed to assume the defense and employ counsel or (C) the named parties to any such action, suit or proceeding (including any impleaded parties) shall include both such Underwriter or such controlling person and the Company, and such Underwriter or such controlling person shall have been advised by counsel that there may be one or more legal defenses available to it which are different from, or additional to, those available to the Company (in which case, if such Underwriter or such controlling person notifies the Company in writing that it selects to employ separate counsel at the expense of the Company, the Company shall not have the right to assume the defense of such action, suit or proceeding on behalf of such Underwriter or such controlling person, it being understood, however, that the Company shall not, in connection with any one such action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) for all such Underwriters and such controlling persons, which firm shall be designated in writing by the Representatives on behalf of all of such Underwriters and such controlling persons). In case any action, suit or proceeding (including any governmental or regulatory investigation or proceeding) shall be brought against the Company, any of the Company's directors or officers, or any person controlling the Company, with respect to which indemnity may be sought against any Underwriter pursuant to Section 8, such Underwriter shall have the rights and duties given to the Company by this Section 9, and the Company, the Company's directors and officers and any such controlling person shall have the rights and duties given to the Underwriters by this Section 9. 10. CONTRIBUTION. In order to provide for just and equitable contribution in circumstances in which the indemnity agreement provided for in Sections 7 and 8 hereof is for any reason held to be unenforceable with respect to the indemnified parties although applicable in accordance with its terms, the Company and the Underwriters shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by said indemnity agreement incurred by the Company and the Underwriters, as incurred, in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other hand from the offering of the Debt Securities. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required pursuant to Section 9 hereof or pursuant to the last sentence of this Section 10, then the Company and the Underwriters shall contribute to such aggregate losses, liabilities, claims, damages and expenses incurred by the Company and the Underwriters, as incurred, in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and the Underwriters on the other hand in connection with the statements or omissions which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other hand in connection with the offering of the Debt Securities shall be deemed to be in the same proportion as the total net proceeds from the sale of the Debt Securities received by the Company (before deducting expenses) bear to the total commissions or other compensation or remuneration received by the Underwriters in respect thereof. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information 13 supplied by the Company or the Underwriters and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. Notwithstanding the provisions of this Section 10, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Debt Securities purchased by it exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 10, each person, if any, who controls an Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as such Underwriter, and each director of the Company, each officer of the Company who signed the Registration Statement and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as the Company. Any party entitled to contribution pursuant to the first sentence of this Section 10, will, promptly after receipt of notice of commencement of any action, suit or proceeding against such party in respect of which a claim for contribution may be made against another party or parties under this Section 10, notify such party or parties from whom contribution may be sought, but the omission to so notify such party or parties shall not relieve the party or parties from whom contribution may be sought, from any other obligation it or they may have otherwise than under this Section 10; PROVIDED, HOWEVER, that such notice need not be given if such party entitled to contribution hereunder has previously given notice pursuant to Section 9 hereof with respect to the same action, suit or proceeding. 11. TERMINATION. The Underwriters may terminate the Underwriting Agreement immediately upon notice to the Company, at any time prior to the Closing Date if (i) there has been, since the date of the Underwriting Agreement, any material adverse change in the consolidated financial condition or earnings of the Company and its subsidiaries, considered as one enterprise, (ii) there has occurred any material adverse change in the financial markets in the United States or any outbreak or escalation of hostilities or other calamity or crisis, the effect of which is such as to make it, in the reasonable judgment of the Representatives, impracticable to market the Debt Securities or to enforce contracts for the sale of the Debt Securities, (iii) trading in any securities of the Company has been suspended (other than pursuant to a request by the Company with respect to an announcement by the Company of certain information not constituting a material adverse change, since the date of the Underwriting Agreement, in the consolidated financial condition or earnings of the Company and its subsidiaries, considered as one enterprise), the effect of which is such as to make it, in the reasonable judgment of the Representatives, impracticable to market the Debt Securities or to enforce contracts for the sale of the Debt Securities, (iv) trading generally on the New York Stock Exchange has been suspended, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices for securities shall have been required, by such exchange or by order of the Commission or any other governmental authority, or if a banking moratorium has been declared by either Federal or New York authorities or if a banking moratorium has been declared by the relevant authorities in the country or countries of origin of any foreign currency or currencies in which the Debt Securities are denominated or payable or (v) after the date of the Underwriting Agreement, the rating assigned by any nationally recognized securities rating agency to any debt securities of the Company or its Significant Subsidiaries as of the date of the Underwriting Agreement shall have been lowered or any such rating agency shall have publicly announced that it has placed any debt securities of the Company or its Significant Subsidiaries on what is commonly termed a "watch list" with negative implications. As used in this Section 11, the term "Prospectus" means the Prospectus (as defined herein) in the form first used to confirm sales of the Debt Securities. 14 In the event of any such termination, no party will have any liability to any other party hereto, except that (i) the covenants set forth in Section 6(f) hereof, the indemnity and contribution agreement set forth in Sections 7, 8, 9 and 10 hereof and the provisions of Section 18 hereof shall remain in effect and (ii) if the Underwriting Agreement is terminated by the Underwriters in accordance with the provisions of Section 11(i) hereof, the Company shall reimburse the Underwriters for all of their out-of-pocket expenses, including the reasonable fees and disbursements of counsel for the Underwriters. 12. DEFAULTING UNDERWRITERS. If on the Closing Date any one or more of the Underwriters shall fail or refuse to purchase Debt Securities that it has or they have agreed to purchase on such date, and the aggregate amount of Debt Securities which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase is not more than one-tenth of the aggregate amount of the Debt Securities to be purchased on such date, the other Underwriters shall be obligated severally in the proportions that the amount of Debt Securities set forth opposite their respective names above bears to the aggregate amount of Debt Securities set forth opposite the names of all such non-defaulting Underwriters, or in such other proportions as the Representatives may specify, to purchase the Debt Securities which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase on such date. If on the Closing Date any Underwriter or Underwriters shall fail or refuse to purchase Debt Securities and the aggregate amount of Debt Securities with respect to which such default occurs is more than one-tenth of the aggregate amount of Debt Securities to be purchased on such date, and arrangements satisfactory to the Representatives and the Company for the purchase of such Debt Securities are not made within 36 hours after such default, this Agreement shall terminate without liability on the part of any non-defaulting Underwriter or the Company. In any such case either the Representative or the Company shall have the right to postpone the Closing Date but in no event for longer then seven days, in order that the required changes, if any, in the Registration Statement and in the Prospectus or in any other documents or arrangements may be effected. Any action taken under this paragraph shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement. [13. SELLING AND OTHER RESTRICTIONS. (a) Each Underwriter, on behalf of itself and each of its affiliates that participates in the initial distribution of the Debt Securities, severally represents to and agrees with the Company that: (i) (a) it has not offered or sold and will not offer or sell any of the Debt Securities to persons in the United Kingdom (the "U.K.") except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or otherwise in circumstances which have not resulted and will not result in an offer to the public in the U.K. within the meaning of the Public Offers of Securities Regulation 1995; (b) it has complied and will comply with all applicable provisions of the Financial Services Act 1986 with respect to anything done by it in relation to the Debt Securities in, from or otherwise involving the U.K.; and (c) it has only issued or passed on, and will only issue or pass on, in the U.K. any document received by it in connection with the issue of the Debt Securities to a person who is of a kind described in Article 11(3) of the Financial Services Act 1986 (Investment Advertisement) (Exemptions) Order 1995 or is a person to whom the document may otherwise lawfully be issued or passed on. (ii) it will not offer or sell any Debt Securities directly or indirectly in Japan or to or for the benefit of any Japanese person or to others, for re-offering or re-sale directly or indirectly 15 in Japan or to any Japanese person except under circumstances which will result in compliance with all applicable laws, regulations and guidelines promulgated by the relevant governmental and regulatory authorities in effect at the relevant time. For purposes of this subparagraph (ii), "Japanese person" shall mean any person resident in Japan, including any corporation or other entity organized under the laws of Japan. (iii) it has not distributed and will not distribute the preliminary prospectus or the Prospectus in Hong Kong other than to persons whose business involves the acquisition, disposal or holding of securities, whether as principal or as agent, unless such Underwriter is a person permitted to do so under the securities laws of Hong Kong. (b) In addition to the provisions of subparagraph (a)(i), (ii) and (iii) of this Section 13, each Underwriter severally represents to and agrees with the Company that it has not offered, sold or delivered and that it will not offer, sell or deliver, directly or indirectly, any of the Debt Securities or distribute the Prospectus, any preliminary prospectus or any other material relating to the Debt Securities, in or from any jurisdiction except under circumstances that will, to the best of its knowledge and belief, result in compliance with the applicable laws and regulations thereof and which will not impose any obligations on the Company except as contained in this Agreement. (c) Without prejudice to the other provisions of this Section 13 and except for registration under the 1933 Act and compliance with the 1933 Act Regulations and the qualification of the Debt Securities for offer and sale under the applicable securities laws of such jurisdictions within the United States as the Representatives may designate pursuant to Section 6(g), the Company shall not have any responsibility for, and each Underwriter severally agrees with the Company that each such Underwriter and its respective affiliates will obtain, any consent, approval or authorization required by them for the subscription, offer, sale or delivery by them of any of the Debt Securities under the laws and regulations in force in any jurisdiction to which they are subject or in or from which they make such subscription, offer, sale or delivery of any of the Debt Securities.] 14. NOTICES. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. 15. PARTIES. This Agreement shall inure to the benefit of and be binding upon the Company and the Underwriters and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the Underwriters and the Company and their respective successors and the controlling persons and officers and directors referred to in Sections 7 and 8 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the parties hereto and their respective successors, and said controlling persons and officers and directors and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Debt Securities from any Underwriter shall be deemed to be a successor by reason merely of such purchase. 16. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY. All representations, warranties and agreements contained in this Agreement or in certificates of officers of the Company submitted pursuant hereto shall remain operative and in full force and effect, regardless of any investigation made by or 16 on behalf of any Underwriter or controlling person, or by or on behalf of the Company, and shall survive delivery of and payment for the Debt Securities. 17. MISCELLANEOUS. The Underwriting Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto were upon the same instrument. 18. CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW. 19. HEADINGS. The headings of the sections of this Agreement have been inserted for convenience of reference only and shall not be deemed a part of this Agreement. 17 EX-1.5 3 EXHIBIT 1.5 EXHIBIT 1.5 FORM OF DISTRIBUTION AGREEMENT - DEBT SECURITIES THE WALT DISNEY COMPANY Medium-Term Notes Due Nine Months or More from Date of Issue DISTRIBUTION AGREEMENT [Date] [Investment Banks] Dear Ladies and Gentlemen: The Walt Disney Company, a Delaware corporation (the "Company"), confirms its agreement with each of [Investment Banks] (each an "Agent" and collectively, the "Agents") with respect to the issue and sale by the Company of its Medium-Term Notes (the "Notes"). The Notes are to be issued pursuant to the Indenture, dated as of March 7, 1996 (the "Indenture"), between the Company and Citibank, N.A., a national banking association, as trustee (the "Trustee"). As of the date hereof, the Company has authorized the issuance and sale of up to U.S. $5,000,000,000 aggregate initial offering price (or its equivalent, based upon the applicable exchange rate at the time of issuance, in such foreign currencies or composite currencies as the Company shall designate in the Notes at the time of issuance) of Notes directly or through the Agents pursuant to the terms of this Agreement. Such Notes are in addition to other Medium Term Notes of the Company outstanding at the date hereof. It is understood, however, that the Company may from time to time authorize the issuance of additional Notes and that, at the option of the Company, such Notes may be distributed through or sold to the Agents pursuant to the terms of this Agreement, all as though the issuance of such Notes were authorized as of the date hereof. This Agreement provides both for the sale of Notes by the Company directly to purchasers, in which case the Agents will act as agents of the Company in soliciting Note purchasers, and (as may from time to time be agreed to by the Company and one or more Agents) to such Agent or Agents as principal for resale to purchasers. The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-3 (No. 333- [ ] ) for the registration of debt securities and other securities, including the Notes, under the Securities Act of 1933, as amended (the "1933 Act"), and the offering thereof from time to time in accordance with Rule 415 of the rules and regulations of the Commission under the 1933 Act (the "1933 Act Regulations"). Such registration statement has been declared effective by the Commission and the Indenture has been qualified under the Trust Indenture Act of 1939, as amended (the "1939 Act"). Such registration statement (and any further registration statements that may be filed by the Company for the purpose of registering additional Notes and which the Company and the Agents agree is to be covered by this Agreement) and the prospectus constituting a part thereof, together with any prospectus supplement relating to the Notes, including, in each case, all Incorporated Documents (as hereinafter defined), as from time to time amended or supplemented by the filing of documents pursuant to the Securities Exchange Act of 1934, as amended (the "1934 Act"), or the 1933 Act or otherwise, are referred to herein as the "Registration Statement" and the "Prospectus," respectively, except that, if any revised prospectus shall be provided to the Agents by the Company for use in connection with the offering of the Notes which is not required to be filed by the Company pursuant to Rule 424(b) of the 1933 Act Regulations, the term "Prospectus" shall refer to such revised prospectus from and after the time it is first provided to the Agents for such use. The term "Prospectus" shall also include any term sheet or abbreviated term sheet as such terms are used in Rule 434 of the 1933 Act Regulations (each a "Terms Sheet"). The term "Registration Statement" shall also include any related registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations. In addition, any reference herein to the Registration Statement or the Prospectus shall be deemed to refer to and include the documents, financial statements and schedules incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, and any reference to any amendment or supplement to the Registration Statement or the Prospectus shall be deemed to refer to and include any documents, financial statements and schedules filed by the Company with the Commission under the 1934 Act after the date hereof, and so incorporated by reference or deemed incorporated by reference(such incorporated documents, financial statements and schedules being herein called the "Incorporated Documents"). Notwithstanding the foregoing, for purposes of this Agreement any prospectus or prospectus supplement or any Term Sheets prepared or filed with respect to an offering pursuant to the Registration Statement of securities other than the Notes shall not be deemed to have supplemented the Prospectus. 2 SECTION 1. REPRESENTATIONS AND WARRANTIES; ADDITIONAL CERTIFICATES (a) REPRESENTATIONS AND WARRANTIES. The Company represents and warrants to each Agent as of the date hereof, as of the date of each acceptance by the Company of an offer for the purchase of Notes (whether through an Agent as agent or from an Agent as principal), as of the date of each delivery of Notes by the Company to the purchasers (the date of each such delivery to an Agent as principal being hereafter referred to as a "Settlement Date"), and as of the dates referred to in Section 6(a) hereof (each of the dates referenced above being referred to hereafter as a "Representation Date"), as follows: (i) The Incorporated Documents, when they became effective or were filed (or, if an amendment with respect to any such Incorporated Document was filed or became effective, when such amendment was filed or became effective) with the Commission, as the case may be, complied in all material respects with the requirements of the 1934 Act, and any Incorporated Documents filed subsequent to the date hereof and prior to the termination of the offering of the Notes, will, when they are filed with the Commission, comply in all material respects with the requirements of the 1934 Act; no such Incorporated Document, when it became effective or was filed (or, if an amendment with respect to any such Incorporated Document was filed or became effective, when such amendment was filed or became effective) with the Commission, contained, and no Incorporated Document filed subsequent to the date hereof and prior to the termination of the offering of the Notes will contain, an untrue statement of a material fact or omitted, or will omit, to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (ii) The Registration Statement, at the time it became effective, complied in all material respects with the provisions of the 1933 Act and the 1933 Act Regulations; at the applicable Representation Date, the Registration Statement and the Prospectus, and any supplements or amendments thereto, will comply in all material respects with the provisions of the 1933 Act and the 1933 Act Regulations; and the Registration Statement and the Prospectus, and any such supplement or amendment thereto, at all such times did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; except that this representation and warranty does not apply to statements or omissions in the Registration Statement, the Prospectus or any preliminary prospectus, or any amendment or supplement thereto, made in reliance upon information furnished to the Company in writing by or on behalf of the Agents expressly for use therein or to those parts of the Registration Statement which constitute the Trustee's Statement of Eligibility and Qualification on Form T-1 under the 1939 Act (the 3 "Form T-1"). There is no contract or document of a character required to be described in the Registration Statement or the Prospectus or to be filed as an exhibit to the Registration Statement which is not described or filed as required. (iii) This Agreement, the Indenture, the Notes and any applicable Terms Agreement have been duly authorized by the Company and conform in all material respects to the descriptions thereof in the Prospectus. (iv) The Indenture (assuming due execution and delivery thereof by the Trustee) is, and the Notes (when executed by the Company and authenticated in accordance with the Indenture and delivered to and paid for by the purchasers thereof) will be, the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by (A) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to or affecting the enforcement of creditors' rights generally, (B) general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law), (C) requirements that a claim with respect to any Notes denominated other than in United States dollars (or a judgment denominated other than in United States dollars in respect of such claim) be converted into United States dollars at a rate of exchange prevailing on a date determined pursuant to applicable law and (D) governmental authority to limit, delay or prohibit the making of payments outside the United States or in a foreign currency or composite currency. The Notes (when executed by the Company and authenticated in accordance with the terms of the Indenture and delivered to and paid for by the purchasers thereof) will be entitled to the benefits of the Indenture (subject to the exceptions set forth in the preceding sentence). (v) The Company is a validly existing corporation in good standing under the laws of its state of incorporation. The Company has full corporate power and authority to own, lease and operate its properties and to conduct its business as presently conducted and as described in the Prospectus; and the Company is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify would not have a material adverse effect on the consolidated financial condition or earnings of the Company and its subsidiaries, considered as one enterprise. (vi) Each of Disney Enterprises, Inc., ABC, Inc. and Walt Disney World Co. (collectively, the "Significant Subsidiaries") is a validly existing corporation in good standing under the laws of its state of incorporation. Each of the Significant Subsidiaries has full corporate power and authority to own, 4 lease and operate its properties and to conduct its business as presently conducted and as described in the Prospectus; and each of the Significant Subsidiaries is duly qualified as a foreign corporation to transact business and is in good standing in each United States jurisdiction in which such qualification is required whether by reason of the ownership or leasing of property or the conduct of business, except where a failure to so qualify would not have a material adverse effect on the consolidated financial condition or earnings of the Company and its subsidiaries, considered as one enterprise. (vii) Except as contemplated in the Prospectus or reflected therein by the filing of any amendment or supplement thereto or any Incorporated Document, since the date of the most recent consolidated financial statements included or incorporated by reference in the Registration Statement and the Prospectus, unless the Company has notified the Agents as provided in Section 3(d) hereof, there has not been any material adverse change in the consolidated financial condition or earnings of the Company and its subsidiaries, considered as one enterprise. (viii) The Company is not in violation of its Restated Certificate of Incorporation or Bylaws, as amended. The execution and delivery of this Agreement by the Company, the issuance and sale of the Notes and the performance by the Company of its obligations under this Agreement, the Indenture and any applicable Terms Agreement will not conflict with or constitute a breach of or a default (with the passage of time or otherwise) under (A) the Restated Certificate of Incorporation or Bylaws, as amended, of the Company, (B) subject to the Company's compliance with any applicable covenants pertaining to its incurrence of unsecured indebtedness contained therein, any contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Company is a party or by which it may be bound, or to which any of the properties or assets of the Company is subject, which breach or default would, singly or in the aggregate, have a material adverse effect on the consolidated financial condition or earnings of the Company and its subsidiaries, considered as one enterprise, or (C) any applicable law, administrative regulation or administrative or court decree. Except for orders, permits and similar authorizations required under or by the securities or Blue Sky laws of certain jurisdictions, any securities exchange on which any of the Notes might be listed or with respect to Notes which are to be indexed or linked to any foreign currency, composite currency, commodity, equity index or similar index, no consent, approval, authorization or other order of any regulatory body, administrative agency or other governmental body is legally required for the valid issuance and sale of the Notes. As of the date of each acceptance by the Company of an offer for the purchase of Notes and as of the date of each delivery of Notes by the Company, the Company by such acceptance or delivery, as the case may be, shall be deemed to represent and warrant to the 5 Agents that, both immediately before and immediately after giving effect to such acceptance or delivery, the Company shall be in compliance with the requirements of any applicable covenants pertaining to its incurrence of unsecured indebtedness contained in the agreements or instruments referred to in clause (B) above. (ix) To the best of the Company's knowledge, the accountants who have audited and reported upon the financial statements filed with the Commission as part of the Registration Statement and the Prospectus are independent accountants as required by the 1933 Act. The historical financial statements included in the Registration Statement or Prospectus or incorporated therein by reference fairly present the consolidated financial position and results of operations of the Company and its subsidiaries at the respective dates and for the respective periods to which they apply. Such historical financial statements have been prepared in accordance with generally accepted accounting principles consistently applied, except as set forth in the Registration Statement and Prospectus. The unaudited pro forma financial statements, if any, together with the related notes and any supporting schedules included or incorporated by reference in the Registration Statements and the Prospectus, fairly present the information shown therein and have been compiled on a basis substantially consistent with the audited financial statements of Disney included or incorporated by reference in the Registration Statement and the Prospectus; the assumptions on which such unaudited pro forma financial statements have been prepared are reasonable; and such unaudited pro forma financial statements have been prepared, and the pro forma adjustments set forth therein have been applied, in accordance with the applicable accounting requirements of the 1933 Act and the 1933 Act Regulations (including, without limitation, Regulations S-X promulgated by the Commission), and such pro forma adjustments have been properly applied to the historical amounts in the compilation of such statements. (x) The Company has complied with, and is and will be in compliance with, the provisions of that certain Florida act relating to disclosure of doing business with Cuba, codified as Section 517.075 of the Florida statutes, and the rules and regulations thereunder or is exempt therefrom. (b) ADDITIONAL CERTIFICATIONS. Any certificate signed by any officer of the Company and delivered to an Agent or to counsel for the Agents in connection with an offering of Notes shall be deemed a representation and warranty by the Company to such Agent as to the matters covered thereby on the date of such certificate. SECTION 2. SOLICITATIONS AS AGENTS; PURCHASES AS PRINCIPALS (a) SOLICITATIONS AS AGENTS. Subject to the terms and conditions stated herein and subject to the reservation by the Company of the right to sell Notes directly on its own behalf and to any person, to sell Notes through others (provided that any other agent will execute an agreement with the Company which contains substantially the same terms and conditions contained herein), and to designate and select additional agents to become party to this Agreement, the Company hereby (i) appoints each Agent as an agent of the Company for the purpose of soliciting offers to purchase the Notes from the Company by others and (ii) agrees that whenever the Company determines to sell Notes directly to an Agent as principal for resale to others, it will enter into a Terms Agreement relating to such sale in accordance with the provisions of Section 2(b) hereof. Without the prior written consent of the Company, the Agents are not authorized to appoint sub-agents or to engage the services of any other broker or dealer in connection with the offer or sale of the 6 Notes; provided, that without the Company's consent, the Agents may solicit offers to purchase the Notes from other brokers or dealers. In connection with the solicitation of offers to purchase Notes, without the prior consent of the Company, the Agents are not authorized to provide any written information relating to the Company to any prospective purchaser other than the Prospectus and the Incorporated Documents. Each Agent will make reasonable efforts to assist the Company in obtaining performance by each purchaser whose offer to purchase Notes from the Company has been solicited by such Agent, as agent, and accepted by the Company, but such Agent shall not have any liability to the Company in the event any such purchase is not consummated for any reason. The Company reserves the right, in its sole discretion, to suspend the solicitation of offers to purchase the Notes through the Agents commencing at any time for any period of time or permanently. Upon receipt of instructions from the Company, the Agents will, as soon as possible, suspend the solicitation of offers to purchase the Notes from the Company until such time as the Company has advised the Agents that such solicitation may be resumed. The Company agrees to pay each Agent a commission, which such Agent is hereby authorized to deduct from the sales proceeds of each Note sold by the Company as a result of a solicitation made by such Agent, equal to the applicable percentage of the principal amount of each such Note, as set forth in Exhibit A hereto. Without the consent of the Company, no Agent, as an agent, may reallow any portion of the commission payable pursuant hereto to dealers or purchasers in connection with the offer and sale of any Notes. As an agent, each Agent is authorized, except during periods of suspension as provided in this Agreement, to solicit offers to purchase the Notes. Each Agent shall communicate to the Company, orally or in writing, each reasonable offer to purchase Notes received by such Agent, as agent. Each Agent shall have the right in its discretion reasonably exercised to reject any offer to purchase the Notes received by such Agent which it does not deem reasonable, and any such rejection shall not be deemed a breach of such Agent's agreements contained herein. The Company shall have the sole right to accept offers to purchase the Notes and may reject any such offer in whole or in part, and any such rejection shall not be deemed to be a breach of any agreement of the Company contained herein. The purchase price, interest rate, maturity date and other terms of the Notes agreed upon by the Company shall be set forth in a pricing supplement to the Prospectus to be prepared following each acceptance by the Company of an offer for the purchase of Notes (a "Pricing Supplement"). Except as may be otherwise provided in any Pricing Supplement, each Note will be issued in the denomination of U.S. $1,000 or any amount in excess thereof which is an integral multiple of U.S. $1,000. All Notes will be sold at 100% of their principal 7 amount unless otherwise agreed to by the Company. Each Agent acknowledges and agrees that any funds which such Agent receives in respect of a purchase of Notes, which purchase has been solicited by such Agent, as agent of the Company, will be received, held and disposed of by such Agent, as agent of the Company, subject to the right of such Agent to deduct from the sale proceeds the applicable commission as set forth on Exhibit A hereto. If requested by a prospective purchaser of Notes denominated in a currency other than U.S. dollars, the Agent soliciting the offer to purchase will use its reasonable efforts to arrange for the conversion of U.S. dollars into such currency to enable the purchaser to pay for such Notes. Such requests must be made on or before the third business day preceding the date of delivery of the Notes, or by such other dates as determined by such Agent. Each such conversion will be made by the relevant Agent on such terms and subject to such conditions, limitations and charges as such Agent may from time to time establish in accordance with its regular foreign exchange practice. All costs of exchange will be borne by purchasers of the Notes. (b) PURCHASES AS PRINCIPAL. Each sale of Notes to an Agent as principal shall be made in accordance with the terms contained herein and pursuant to a separate agreement which will provide for the sale of such Notes to, and the purchase and any reoffering thereof by, such Agent. Each such separate agreement (which may be an oral agreement if confirmed within 24 hours thereafter by an exchange of any standard form of written telecommunication (including facsimile transmission) between the Agent and the Company) is herein referred to as a "Terms Agreement." Unless the context otherwise requires, each reference contained herein to "this Agreement" shall be deemed to include any applicable Terms Agreement between the Company and the Agent. Each such Terms Agreement, whether oral (and confirmed in writing, which confirmation may be by facsimile transmission) or in writing shall be with respect to such information (as applicable) as is specified in Exhibit B hereto. An Agent's commitment to purchase Notes pursuant to any Terms Agreement shall be deemed to have been made on the basis of the representations and warranties of the Company herein contained and shall be subject to the terms and conditions herein set forth. The Agents may offer the Notes they have purchased as principal to other dealers. The Agents may sell Notes to any dealer at a discount and, unless otherwise specified in the applicable Terms Agreement, such discount allowed to any dealer will not be in excess of the discount to be received by such Agent from the Company. Unless otherwise specified in the applicable Terms Agreement, any Notes sold to an Agent as principal will be purchased by such Agent at a price equal to 100% of the principal amount thereof less a percentage equal to the commission applicable to any agency sale of a Note of identical maturity. 8 (c) ADMINISTRATIVE PROCEDURES. Administrative procedures with respect to the sale of Notes shall be agreed upon from time to time by the Agents and the Company (the "Procedures"). The Procedures initially agreed upon shall be those set forth in Exhibit C hereto. The Agents and the Company agree to perform the respective duties and obligations specifically provided to be performed by the Agents and the Company herein and in the Procedures. SECTION 3. COVENANTS OF THE COMPANY The Company covenants with each Agent as follows: (a) NOTICE OF CERTAIN EVENTS. The Company will notify the Agents promptly of (i) the designation and selection of additional agents to become party to this Agreement, (ii) the designation and selection of additional agents for the sale of Notes pursuant to any agreement other than this Agreement, (iii) the effectiveness of any post-effective amendment to the Registration Statement (other than a post-effective amendment relating solely to an offering of debt securities other than the Notes), (iv) the transmittal to the Commission for filing of any supplement to the Prospectus (other than a Pricing Supplement or a supplement relating solely to an offering of securities other than the Notes), (v) the receipt of any comments from the Commission with respect to the Registration Statement or the Prospectus (other than any comments relating solely to an offering of securities other than the Notes), (vi) any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for additional information (other than any such request relating solely to an offering of securities other than the Notes) and (vii) the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose. The Company will make every reasonable effort to prevent the issuance of any such stop order and, if any such stop order is issued, to obtain the lifting thereof at the earliest possible time unless the Company shall, in its sole discretion, determine that it is not in its best interest to do so. (b) NOTICE OF CERTAIN PROPOSED FILINGS. At or prior to the filing thereof, the Company will give the Agents notice of its intention to file any additional registration statement with respect to the registration of additional Notes to be covered by this Agreement, any amendment to the Registration Statement or any amendment or supplement to the Prospectus (other than a Pricing Supplement or an amendment or supplement relating solely to an offering of debt securities other than the Notes), whether by the filing of documents pursuant to the 1934 Act, the 1933 Act or otherwise, and will furnish the Agents with copies of any such amendment or supplement or other documents promptly after the filing thereof. 9 (c) COPIES OF THE REGISTRATION STATEMENT AND THE PROSPECTUS. The Company will deliver to the Agents one signed and as many conformed copies of the Registration Statement (as originally filed) and of each amendment thereto (including the Incorporated Documents and any exhibits filed therewith or incorporated by reference therein) as the Agents may reasonably request. The Company will furnish to the Agents as many copies of the Prospectus (as amended or supplemented) as the Agents shall reasonably request so long as the Agents are required to deliver a Prospectus in connection with sales or solicitations of offers to purchase the Notes. (d) REVISIONS OF PROSPECTUS -- MATERIAL CHANGES. So long as the Agents are required to deliver a Prospectus in connection with sales or solicitations of offers to purchase the Notes, if any event shall occur or condition exist as a result of which it is necessary, in the opinion of counsel for the Company, after consultation with counsel for the Agents, to further amend or supplement the Prospectus in order that the Prospectus will not include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances existing at the time it is delivered to a purchaser, not misleading, or if it shall be necessary, in the opinion of such counsel for the Company, to amend or supplement the Registration Statement or the Prospectus in order to comply with the requirements of the 1933 Act or the 1933 Act Regulations, prompt notice shall be given, and confirmed in writing, to the Agents to cease the solicitation of offers to purchase the Notes in their capacity as agents and to cease sales of any Notes the Agents may then own as principal. In addition, if any Agent holds Notes purchased for resale pursuant to a Terms Agreement and the Company has given notice to the Agents pursuant to this subsection (d) within 90 days after the date of execution of such Terms Agreement, the Company will prepare and file as soon as practicable an amendment or supplement to the Prospectus so that the Prospectus, as amended or supplemented, will not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein not misleading in light of the circumstances existing at the time it is delivered to the Agents. (e) COMPLIANCE WITH 1934 ACT; ACCOUNTANTS' CONSENTS. The Company will (i) comply, in a timely manner, with all applicable requirements under the 1934 Act relating to the filing with the Commission of the Company's reports pursuant to Section 13(a), 13(c) or 15(d) of the 1934 Act and, if then applicable, of the Company's proxy statements pursuant to Section 14 of the 1934 Act and (ii) use its best efforts to obtain the written consent of the Company's independent accountants as to the incorporation by reference in the Registration Statement of the audited financial statements reported on by them and contained in the Company's annual reports on Form 10-K under the 1934 Act. 10 (f) EARNINGS STATEMENTS. The Company will make generally available to its security holders, in each case as soon as practicable but in any event not later than 15 months after the acceptance by the Company of an offer to purchase Notes hereunder, a consolidated earnings statement (which need not be audited) covering the twelve-month period beginning after the latest of (i) the effective date of the Registration Statement, (ii) the effective date of the most recent post-effective amendment to the Registration Statement to become effective prior to the date of such acceptance and (iii) the date of the Company's most recent annual report on Form 10-K filed with the Commission prior to the date of such acceptance, which earnings statement will satisfy the provisions of Section 11(a) of the 1933 Act (and, at the option of the Company, Rule 158 of the 1933 Act Regulations). Nothing in this Section 3(f) shall require the Company to make such earnings statement available more frequently than once in any period of twelve months. (g) BLUE SKY QUALIFICATIONS. The Company will endeavor, in cooperation with the Agents, to qualify the Notes for offering and sale under the applicable securities laws of such states and other jurisdictions of the United States as the Agents may reasonably designate, and will maintain such qualifications in effect for as long as may be required for the distribution of the Notes; PROVIDED, HOWEVER, that the Company will promptly notify the Agents of any suspension or termination of any such qualifications, and PROVIDED, FURTHER, that the Company shall not be obligated to register or qualify as a foreign corporation or take any action which would subject it to general service of process in any jurisdiction where it is not now so subject. (h) SUSPENSION OF CERTAIN OBLIGATIONS. The Company shall not be required to comply with the provisions of subsections (b), (c), (d), (e) or (g) of this Section 3 during any period from the time the Agents shall have been notified to suspend the solicitation of offers to purchase the Notes in their capacity as agents or resales of Notes purchased pursuant to a Terms Agreement to the time the Company shall determine that the solicitation of offers to purchase the Notes through any Agent or Agents or resales as principal of Notes purchased pursuant to a Terms Agreement by any Agent or Agents should be resumed. Notwithstanding the foregoing, if any Agent holds Notes purchased for resale pursuant to a Terms Agreement the Company shall comply with the provisions of subsections (b), (c), (d), (e) and (g) of this Section 3 during the 90 day period from and including the date of execution of such Terms Agreement; PROVIDED, HOWEVER, that the Company shall have the right, in its reasonable business judgment, to suspend such compliance during such 90 day period for an aggregate of up to 45 days, in which event such 90 day period shall be extended by the greater of (i) the number of days included in any such period of suspension and (ii) 30 days. 11 SECTION 4. PAYMENT OF EXPENSES The Company will pay all expenses incident to the performance of its obligations under this Agreement, including: (a) The preparation and filing of the Registration Statement and all amendments thereto and the Prospectus and any amendments or supplements thereto and all Incorporated Documents; (b) The preparation, filing and printing of this Agreement; (c) The preparation, printing, issuance and delivery of the Notes; (d) The fees and disbursements of the Trustee and its counsel, of any calculation agent or exchange rate agent and of The Depository Trust Company; (e) The reasonable fees and disbursements of counsel to the Agents incurred in connection with the execution and delivery of this Agreement and in connection with the review of subsequent deliveries pursuant to this Agreement; (f) The qualification of the Notes under securities laws in accordance with the provisions of Section 3(g) hereof, including filing fees and the reasonable fees and disbursements of counsel to the Agents in connection therewith and in connection with the preparation of any Blue Sky survey; (g) The printing and delivery to the Agents in quantities as hereinabove stated of copies of the Registration Statement and any amendments thereto, and of the Prospectus and any amendments or supplements thereto, and the delivery by the Agents of the Prospectus and any amendments or supplements thereto in connection with solicitations of offers to purchase, or confirmations of sales of, the Notes; 12 (h) Any fees charged by rating agencies for the rating of the Notes; (i) Any advertising and other out-of-pocket expenses of the Agents incurred with the prior written approval of the Company; and (j) Reasonable fees and disbursements in connection with the subsequent delivery of legal opinions pursuant to Section 6(b) hereof. SECTION 5. CONDITIONS OF OBLIGATIONS The obligations of any Agent to solicit offers to purchase the Notes as agent of the Company and the obligations of any Agent to purchase Notes pursuant to any Terms Agreement will be subject at all times to the accuracy, as of the applicable Representation Date, of the representations and warranties on the part of the Company herein and to the accuracy, as of the date made, of the statements of the Company's officers made in any certificate furnished pursuant to the provisions hereof, to the performance and observance by the Company of all covenants and agreements herein contained on its part to be performed and observed, and to the following additional conditions precedent: (a) OPINION OF COUNSEL TO COMPANY. On the date hereof, the Agents shall have received an opinion from O'Melveny & Myers LLP, counsel to the Company, dated as of the date hereof and in form and substance satisfactory to counsel for the Agents to the effect that: (i) The Company and each of the Significant Subsidiaries is a corporation validly existing and in good standing under the laws of its state of incorporation. (ii) The Company has the corporate power and corporate authority to enter into and perform its obligations under this Agreement and the Indenture, to borrow money as contemplated in this Agreement and the Indenture, and to issue, sell and deliver the Notes. (iii) This Agreement has been duly authorized, executed and delivered by the Company. 13 (iv) The Indenture has been duly authorized by all necessary corporate action on the part of the Company and duly executed and delivered by the Company and constitutes a valid and binding agreement of the Company enforceable against the Company in accordance with its terms, except (x) as may be limited by (A) bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting creditors' rights generally (including, without limitation, fraudulent conveyance laws) and (B) general principles of equity including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance or injunctive relief, regardless of whether considered in a proceeding in equity or at law and (y) counsel may state that no opinion is expressed with respect to the enforceability or effect of the waiver contained in Section 6.12 of the Indenture and may advise that the provisions regarding jurisdiction contained in Section 12.9 of the Indenture may not be honored by the courts included or excluded. (v) No Governmental Approval is required in connection with the issuance or sale of the Notes other than registration thereof under the 1933 Act, qualification of the Indenture under the 1939 Act, and such registrations or qualifications as may be necessary under the securities or Blue Sky laws of the various United States jurisdictions in which the Notes are to be offered or sold. (vi) The Notes, when the final terms of a particular Note and its issuance and sale have been established in accordance with the provisions of the Indenture and when executed and authenticated in accordance with the terms of the Indenture and delivered to and paid for by the purchasers thereof in accordance with the terms of the Distribution Agreement, will constitute valid and binding obligations of the Company enforceable against the Company in accordance with their terms, except (x) as may be limited by (A) bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting creditors' rights generally (including, without limitation, fraudulent conveyance laws) and (B) general principles of equity including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance or injunctive relief, regardless of whether considered in a proceeding in equity or at law and (y) counsel may state that no opinion is expressed with respect to the enforceability or effect of the waiver contained in Section 6.12 of the Indenture and may advise that the provisions regarding jurisdiction contained in Section 12.9 of the Indenture may not be honored by the courts included or excluded. (vii) The Registration Statement has been declared effective under the 1933 Act and the Indenture has been qualified under the 1939 Act, and, to the best of such counsel's knowledge, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are pending or contemplated. 14 (viii) The execution and delivery of this Agreement and the Indenture by the Company, the issuance and sale of the Notes and the performance by the Company of its obligations under this Agreement and the Indenture will not (A) violate the Restated Certificate of Incorporation or Bylaws, as amended, of the Company, (B) violate any Applicable Laws or (C) breach or otherwise violate any obligation of or restriction on the Company under any judgment, decree or order, known to such counsel, of any court or Governmental Authority entered in any proceeding to which the Company was or is now a party or by which it is bound; provided, that such counsel may state that no opinion is expressed as to the securities or Blue Sky laws of the various jurisdictions in which the Notes are to be offered. (ix) The Registration Statement, as of its effective date, and the Prospectus, as of its date, appeared on their face to comply in all material respects with the requirements as to form for registration statements on Form S-3 and the related rules and regulations then in effect, except that in each case such counsel need not express an opinion as to (i) the Incorporated Documents, (ii) the financial statements, schedules and other financial data included or incorporated by reference therein or excluded therefrom or (iii) the exhibits to the Registration Statement, including the Form T-1. (x) The statements in the Prospectus under the captions "Description of the Debt Securities" and "Description of the Notes," insofar as they purport to summarize certain provisions of documents specifically referred to therein, fairly present the information required by Form S-3. In rendering the opinions set forth above, such counsel may state that (1) with respect to paragraphs (iv) and (vi), such enforcement may be limited by (i) requirements that a claim with respect to any Notes denominated other than in United States dollars (or a judgment denominated other than in United States dollars in respect of such claim) be converted into United States dollars at a rate of exchange prevailing on a date determined pursuant to applicable law and (ii) governmental authority to limit, delay or prohibit the making of payments outside the United States or in foreign currency or composite currency; and (2) with respect to paragraphs (iv), (v),(vi) and (viii), no opinion is expressed thereto with 15 respect to any Notes that are to be indexed or linked to any foreign currency or composite currency, commodity, equity index or similar index. In rendering the opinion set forth in paragraph (v) and clause (B) and (C) of paragraph (viii) above, the term "Applicable Laws" shall mean the Delaware General Corporation Law and those laws, rules and regulations of the States of California and New York and of the United States of America which such counsel has, in the exercise of customary diligence, recognized as applicable to the Company or the transactions of the type contemplated by this Agreement, the term "Governmental Authority" shall mean any California, New York, Delaware or federal executive, legislative, judicial, administrative or regulatory body and the term "Governmental Approval" shall mean any order, consent, permit or approval of any Governmental Authority pursuant to Applicable Laws. In addition such counsel may state that, in connection with such counsel's participation in conferences in connection with the preparation of the Registration Statement and Prospectus, such counsel has not independently verified the accuracy, completeness or fairness of the statements contained therein, and the limitation inherent in such examination made by such counsel and the knowledge available to such counsel are such that such counsel is unable to assume, and does not assume, and responsibility for such accuracy, completeness or fairness (except as otherwise specifically stated in clause (x) above). However, such counsel shall state that, on the basis of such counsel's review and participation in conferences in connection with the preparation of the Registration Statement and the Prospectus, such counsel does not believe that the Registration Statement (excluding the Incorporated Documents) at its effective date contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading, and such counsel shall state that such counsel does not believe that the Prospectus (excluding the Incorporated Documents) as of the date of this Agreement (and, if the opinion is being given pursuant to Section 6(b) hereof as a result of the Company having entered into a Terms Agreement, as of the Settlement Date with respect to such Terms Agreement) contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, except that such counsel need express no opinion with respect to (i) the Incorporated Documents, (ii) the financial statements, schedules and other financial data included or incorporated by reference therein or excluded therefrom or (iii) the exhibits to the Registration Statement, including the Form T-1. (b) OPINION OF COUNSEL EMPLOYED BY COMPANY. On the date hereof, the Agents shall have received an opinion from David K. Thompson, Senior Vice President-Assistant General Counsel or from other counsel employed 16 by the Company (provided that such counsel is at least a Vice President of the Company), dated as of the date hereof and in form and substance satisfactory to counsel for the Agents, to the effect that: (i) Except as set forth in the Prospectus (including the Incorporated Documents), there is not pending or, to the best of such counsel's knowledge, after reasonable inquiry, threatened any action, suit or proceeding against the Company or any of its subsidiaries before or by any court or governmental agency or body, which is likely (to the extent not covered by insurance) to have a material adverse effect on the consolidated financial condition or earnings of the Company and its subsidiaries, considered as one enterprise. (ii) To the best of such counsel's knowledge, after reasonable inquiry, there is no contract or document of a character required to be described in the Registration Statement or the Prospectus or to be filed as an exhibit to the Registration Statement which is not described or filed as required. (iii) To the best of such counsel's knowledge, after reasonable inquiry, the Company is not in violation of its Restated Certificate of Incorporation or Bylaws, as amended. (iv) To the best of such counsel's knowledge, after reasonable inquiry, (x) the execution and delivery and (y) the performance of this Agreement and the Indenture will not conflict with or constitute a breach of, or default (with the passage of time or otherwise) under, any material contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Company is a party or by which it may be bound, or to which any of the property or assets of the Company or any of its subsidiaries is subject. (v) The Incorporated Documents, as of the date of this Agreement, comply as to form in all material respects with the requirements of the 1934 Act, except that in each case such counsel need not express an opinion as to the financial statements, schedules and other financial data included or incorporated by reference therein or excluded therefrom. In addition, such counsel shall state that nothing has come to such counsel's attention that leads him to believe that either the Registration Statement (including the Incorporated Documents) at the time such Registration Statement 17 became effective contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or the Prospectus (including the Incorporated Documents) as of the date of this Agreement (and, if the opinion is being given pursuant to Section 6(b) hereof as a result of the Company having entered into a Terms Agreement, as of the Settlement Date with respect to such Terms Agreement) contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except that such counsel need express no opinion with respect to the financial statements, schedules and other financial data included or incorporated by reference therein or excluded therefrom or the exhibits to the Registration Statement, including the Form T-1. (c) OPINION OF AGENTS' COUNSEL. On the date hereof, the Agents shall have received an opinion from counsel to the Agents, dated as of the date hereof and in form and substance satisfactory to the Agents. (d) OFFICER'S CERTIFICATE. On the date hereof (and, if this certificate is being delivered pursuant to a Terms Agreement, as of the Settlement Date with respect to such Terms Agreement), the Agents shall have received a certificate signed by an officer of the Company, substantially in the form of Appendix I hereto and dated the date hereof, to the effect that (i) the representations and warranties of the Company contained in Section 1(a) hereof (other than Section 1(a)(vii)) are true and correct in all material respects with the same force and effect as though expressly made at and as of the date of such certificate, (ii) the Company has complied with all agreements and satisfied all conditions required by this Agreement or the Indenture on its part to be performed or satisfied at or prior to the date of such certificate, and (iii) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been initiated or, to the best of such officer's knowledge, threatened by the Commission. The officer's certificate shall further state that except as contemplated in the Prospectus or reflected therein by the filing of any amendment or supplement thereto or any Incorporated Document, at the date hereof and at each Settlement Date with respect to any Terms Agreement, there has not been, since the date of the most recent consolidated financial statements included or incorporated by reference in the Prospectus, any material adverse change in the consolidated financial condition or earnings of the Company and its subsidiaries, considered as one enterprise. (e) COMFORT LETTER. On the date hereof, the Agents shall have received a letter from the Company's independent certified public accountants, 18 dated as of the date hereof and in form and substance satisfactory to the Agents, to the effect that: (i) They are independent public accountants with respect to the Company and its subsidiaries within the meaning of the 1933 Act and the 1933 Act Regulations. (ii) In their opinion, the consolidated financial statements and supporting schedule(s) of the Company and its subsidiaries audited and reported upon by them and incorporated by reference in the Registration Statement comply as to form in all material respects with the applicable accounting requirements of the 1933 Act and the 1933 Act Regulations with respect to registration statements on Form S-3 and the 1934 Act and the published rules and regulations thereunder. (iii) They have performed specified procedures, not constituting an audit, including a reading of the latest available interim consolidated financial statements of the Company, a reading of the minute books of the Company since the end of the most recent fiscal year with respect to which an audit report has been issued, inquiries of and discussions with certain officials of the Company and certain of its subsidiaries responsible for financial and accounting matters with respect to the latest available interim unaudited consolidated financial statements of the Company, and such other inquiries and procedures as may be specified in such letter, and on the basis of such inquiries and procedures nothing came to their attention that caused them to believe that: (A) the latest available unaudited consolidated financial statements of the Company were not fairly presented in conformity with generally accepted accounting principles in the United States applied on a basis substantially consistent with that of the audited financial statements incorporated by reference therein, or (B) at a specified date not more than five days prior to the date of such letter, there was any change in the outstanding capital stock of the Company or any increase in consolidated long-term debt of the Company or any decrease in the stockholders' equity of the Company, in each case as compared with the amounts shown on the most recent consolidated balance sheet of the Company incorporated by reference in the Registration Statement and Prospectus or, during the period from the date of such balance sheet to a specified date not more than five days prior to the date of such letter, there were any decreases, as compared with the corresponding period in the preceding year, in consolidated revenues or net income of the Company, except in each such case as set forth in or contemplated by the Registration Statement and Prospectus or except for such exceptions enumerated in such letter as shall have been agreed to by the Agents and the Company. (iv) In addition to the examination referred to in their report included or incorporated by reference in the Registration Statement and the Prospectus, and the limited procedures referred to in clause (iii) above, they have carried out certain other specified procedures, not constituting an audit, with respect to certain financial information which is included or incorporated by reference in the Registration Statement and Prospectus, which would normally be covered under auditing procedures and which are specified by the Agents, and have found such financial information to be in 19 agreement with the relevant accounting, financial and other records of the Company identified in such letter. (f) OTHER DOCUMENTS. On the date hereof and on each Settlement Date with respect to any applicable Terms Agreement, counsel to the Agents shall have been furnished with such documents and opinions as such counsel may reasonably require for the purpose of enabling such counsel to pass upon the issuance and sale of Notes as herein contemplated and related proceedings, or in order to evidence the accuracy and completeness of any of the representations and warranties or the fulfillment of any of the conditions herein contained. If any condition specified in this Section 5 shall not have been fulfilled when and as required to be fulfilled, this Agreement may be terminated by any of the Agents (as to itself only) and any Terms Agreement may be terminated by the Agent party to such Terms Agreement by notice to the Company at any time and any such termination shall be without liability of any party to any other party, except that the covenants set forth in Section 3(f) hereof, the provisions of Section 4 hereof, the indemnity and contribution agreement set forth in Sections 7 and 8 hereof, and the provisions of Sections 9 and 13 hereof shall remain in effect. SECTION 6. SUBSEQUENT DOCUMENTATION REQUIREMENT OF THE COMPANY The Company covenants and agrees that so long as Notes are authorized for sale pursuant to this Agreement and unless the sale of Notes has been suspended as provided in this Agreement: (a) SUBSEQUENT DELIVERY OF CERTIFICATES. Each time that the Registration Statement or the Prospectus shall be amended or supplemented (other than by (i) a Pricing Supplement or an amendment or other supplement providing solely for a change in the interest rates of the Notes or changes in other terms of the Notes or (ii) an amendment or supplement which relates exclusively to an offering of securities other than the Notes) or there is filed with the Commission any document (other than a Current Report on Form 8-K unless delivery of a certificate is reasonably requested by the Agents with respect to such filing) incorporated by reference into the Prospectus or the Company sells Notes to an Agent pursuant to a Terms Agreement, the terms of which so require, the Company shall use its best efforts to furnish or cause to be furnished to the Agents or to the Agent party to the Terms Agreement, as the case may be, promptly following such amendment, supplement or filing or on the Settlement Date with respect to such Terms Agreement, as the case may be, a certificate in form satisfactory to counsel for the Agents to the effect that the statements contained in the certificate referred to in Section 5(d) hereof, which was last furnished to the Agents, are true and correct at the time of such amendment, supplement, filing or sale, as the case may be, as 20 though made at and as of such time (except that such statements shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented to such time) or, in lieu of such certificate, a certificate of the same tenor as the certificate referred to in said Section 5(d), modified as necessary to relate to the Registration Statement and the Prospectus as amended and supplemented to the time of delivery of such certificate; PROVIDED, HOWEVER, that in the case of any such amendment or supplement that relates to Notes which are indexed or linked to any foreign currency, composite currency, commodity, equity index or similar index, such certificate shall state that, for purposes of such certificate, the phrase "or with respect to Notes which are to be indexed or linked to any currency, composite currency, commodity, equity index or similar index" appearing in the second sentence of Section 1(a)(viii) hereof shall be deemed not to apply with respect to such Notes. (b) SUBSEQUENT DELIVERY OF LEGAL OPINIONS. Each time that the Registration Statement or the Prospectus shall be amended or supplemented (other than by (i) a Pricing Supplement or an amendment or other supplement providing solely for a change in the interest rates of the Notes or changes in other terms of the Notes or (ii) an amendment or supplement providing primarily for the inclusion of additional financial information, or (iii) an amendment or supplement which relates exclusively to an offering of securities other than the Notes) or there is filed with the Commission any document incorporated by reference into the Prospectus (other than any Annual Report on Form 10-K, Current Report on Form 8-K or Quarterly Report on Form 10-Q relating primarily to financial statements or other financial information as of and for any fiscal quarter) or the Company sells Notes to an Agent pursuant to a Terms Agreement, the terms of which so require, the Company shall use its best efforts to furnish or cause to be furnished promptly following such amendment, supplement or filing or on the Settlement Date with respect to such Terms Agreement, as the case may be, to the Agents or to the Agent party to the Terms Agreement, as the case may be (with a copy to counsel to the Agents or counsel to such Agent, as the case may be), letters substantially in the form of Appendix II hereto (modified, as necessary, in the case of a Terms Agreement) from the counsel last furnishing the opinions referred to in Sections 5(a) and 5(b) hereof or, in lieu of such letters, letters from other counsel reasonably satisfactory to the Agents (which, in the case of the opinions referred to in such Section 5(b), shall include David K. Thompson, Senior Vice President - Assistant General Counsel of the Company), dated the date of delivery of such letter and in form satisfactory to counsel for the Agents, of the same tenor as the opinions referred to in Sections 5(a) and 5(b) (other than, in the case of the opinion delivered pursuant to Section 5(b) hereof, the matters covered by Sections 5(b)(i) and 5(b)(iv)(x)) hereof, but modified, as necessary, to relate to the Registration Statement and the Prospectus as amended and supplemented to the time of delivery of such opinion; PROVIDED, HOWEVER, that (i) in the case of any such amendment or 21 supplement that relates to Notes which are indexed or linked to any foreign currency, composite currency, commodity, equity index or similar index, the opinions referred to in Section 5(a) hereof shall not include the exceptions set forth in such Section 5(a) as to Notes which are to be indexed or linked to any foreign currency, composite currency, commodity, equity index or similar index and (ii) if reasonably requested by the Agents, the counsel delivering such opinion shall expand the opinion rendered pursuant to Section 5(a)(i) to include any other subsidiary of the Company that, as a result of actions or events occurring after the date of this Agreement is of substantially similar materiality to the Company, on a consolidated basis, as each of the Significant Subsidiaries are as of the date of this Agreement. The Company shall use its best efforts to furnish or cause to be furnished to the Agents, promptly following each filing by the Company of a Quarterly Report on Form 10-Q or an Annual Report on Form 10-K, a letter from the counsel last furnishing the opinion referred to in Section 5(b) hereof, or from other counsel reasonably satisfactory to the Agents, dated the date of delivery of such letter and in form satisfactory to counsel for the Agents, of the same tenor as the opinion referred to in Section 5(b)(i) hereof, but modified, as necessary, to relate to the Registration Statement and Prospectus as amended and supplemented to the time of delivery of such letter. (c) SUBSEQUENT DELIVERY OF COMFORT LETTERS. Each time that the Registration Statement or the Prospectus shall be amended or supplemented to include additional financial information or there is filed with the Commission any document incorporated by reference into the Prospectus which contains additional financial statement information relating to the Company or the Company sells Notes pursuant to a Terms Agreement, the terms of which so require, the Company shall use its best efforts to cause the Company's independent public accountants promptly following such amendment, supplement or filing or on the Settlement Date with respect to such Terms Agreement, as the case may be, to furnish the Agents or to the Agent party to the Terms Agreement, as the case may be, a letter, dated the date of filing of such amendment, supplement or document with the Commission, or such Settlement Date, as the case may be, in form satisfactory to counsel for the Agents (or such Agent), of the same tenor as the portions of the letter referred to in clauses (i) and (ii) of Section 5(e) hereof but modified, as necessary, to relate to the Registration Statement and Prospectus, as amended and supplemented to the date of such letter, and of the same general tenor as the portions of the letter referred to in clause (iii) (other than the information required by clause (B) thereof, except in the case of a Terms Agreement, the terms of which so require) and clause (iv) of said Section 5(e) with such changes as may be necessary to reflect changes in the financial statements and other information derived from the accounting records of the Company; PROVIDED, HOWEVER, that if the Registration Statement or the Prospectus is amended or supplemented primarily to include financial information as of and for a fiscal quarter, the Company's independent certified public accountants may 22 limit the scope of such letter to the unaudited financial statements included in such amendment or supplement. SECTION 7. INDEMNIFICATION (a) INDEMNIFICATION OF THE AGENTS. The Company agrees to indemnify and hold harmless each Agent and each person, if any, who controls an Agent within the meaning of Section 15 of the 1933 Act as follows: (i) against any and all loss, liability, claim, damage and expense whatsoever (including, subject to the limitations set forth in subsection (c) below, the reasonable fees and disbursements of counsel chosen by the Agents), as incurred, insofar as such loss, liability, claim, damage or expense arises out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading, or arises out of any untrue statement or alleged untrue statement of a material fact contained in the Prospectus or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; (ii) against any and all loss, liability, claim, damage and expense whatsoever (including, subject to the limitations set forth in subsection (c) below, the reasonable fees and disbursements of counsel chosen by the Agents), as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever insofar as such loss, liability, claim, damage or expense arises out of any such untrue statement or omission, or any such alleged untrue statement or omission, if such settlement is effected with the written consent of the Company; and (iii) against any and all expense whatsoever (including, subject to the limitations set forth in subsection (c) below, the reasonable fees and disbursements of counsel chosen by the Agents), as incurred, reasonably incurred in investigating, preparing or defending against any litigation, or investigation or proceeding by any governmental agency or body, commenced or threatened, or any 23 claim whatsoever, based upon any such untrue statement or omission, or any such alleged untrue statement or omission; PROVIDED, HOWEVER, that this indemnity shall not apply to any loss, liability, claim, damage or expense (A) to the extent arising out of or based upon any untrue statement or omission or alleged untrue statement or omission made in reliance upon the Form T-1; or (B) to the extent arising out of any untrue statement or omission or alleged untrue statement or omission in the Prospectus if such untrue statement or alleged untrue statement or omission or alleged omission is corrected in all material respects in an amendment or supplement to the Prospectus and if, having previously been furnished by or on behalf of the Company with copies of the Prospectus, as so amended or supplemented, such Agent thereafter failed to deliver such Prospectus, as so amended or supplemented, prior to or concurrently with the sale of a Note or Notes to the person asserting such loss, liability, claim, damage or expense who purchased such Note or Notes which are the subject thereof from such Agent; or (C) as to which such Agent may be required to indemnify the Company pursuant to the provisions of subsection (b) of this Section 7. (b) INDEMNIFICATION OF THE COMPANY. Each Agent agrees to indemnify and hold harmless the Company, its directors, each of its officers who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of this Section 7, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement or the Prospectus in reliance upon and in conformity with written information furnished to the Company by or on behalf of such Agent expressly for use in the Registration Statement or the Prospectus. (c) GENERAL. (i) In case any action, suit or proceeding (including any governmental or regulatory investigation or proceeding) shall be brought against any Agent or any person controlling such Agent, based upon the Registration Statement or the Prospectus and with respect to which indemnity may be sought against the Company pursuant to this Section 7, such Agent or controlling person shall promptly notify the Company in writing, and the Company shall assume the defense thereof, including the employment of counsel (such counsel to be reasonably acceptable to such Agent) and payment of all expenses. Any such Agent or any such controlling person shall have the right to employ separate counsel in any such action, suit or proceeding and to participate in the defense thereof, but the fees and expenses of such separate counsel shall be at the expense of such Agent or such controlling person unless (A) the employment of such counsel shall have been specifically authorized in writing by the Company, 24 (B) the Company shall have failed to assume the defense and employ counsel or (C) the named parties to any such action, suit or proceeding (including any impleaded parties) shall include both such Agent or such controlling person and the Company, and such Agent or such controlling person shall have been advised by counsel that there may be one or more legal defenses available to it which are different from, or additional to, those available to the Company (in which case, if such Agent or such controlling person notifies the Company in writing that it elects to employ separate counsel at the expense of the Company, the Company shall not have the right to assume the defense of such action, suit or proceeding on behalf of such Agent or such controlling person, it being understood, however, that the Company shall not, in connection with any one such action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) for all such Agents and such controlling persons, which firm shall be designated in writing by a majority of all such Agents, on behalf of all of such Agents and such controlling persons). (ii) In case any action, suit or proceeding (including any governmental or regulatory investigation or proceeding) shall be brought against the Company, any of the Company's directors or officers, or any person controlling the Company, with respect to which indemnity may be sought against any Agent pursuant to this Section 7, such Agent shall have the rights and duties given to the Company by subsection (c)(i) of this Section 7, and the Company, the Company's directors and officers and any such controlling person shall have the rights and duties given to the Agents by subsection (c)(i) of this Section 7. SECTION 8. CONTRIBUTION In order to provide for just and equitable contribution in circumstances in which the indemnity agreement provided for in Section 7 hereof is for any reason held to be unenforceable with respect to the indemnified parties although applicable in accordance with its terms, the Company and each Agent shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by said indemnity agreement incurred by the Company and the Agents, as incurred, in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and each of the Agents participating in the offering that gave rise to such losses, liabilities, claims, damages and expenses (a "Relevant Agent") on the other hand from the offering of such Notes. If however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required pursuant to Section 7(c) hereof or pursuant to the last sentence of this Section 8, then the Company and each Agent shall contribute to 25 such aggregate losses, liabilities, claims, damages and expenses incurred by the Company and the Agents, as incurred, in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and each Relevant Agent on the other in connection with the statements or omissions which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and each Relevant Agent on the other hand in connection with the offering of such Notes shall be deemed to be in the same proportion as the total net proceeds from the sale of such Notes by such Relevant Agent received by the Company (before deducting expenses) bear to the total commissions or other compensation or remuneration received by such Relevant Agent in respect thereof. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or such Relevant Agent and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. If more than one Agent is a Relevant Agent in respect of a proceeding, each Relevant Agent's obligation to contribute pursuant to this Section 8 shall be several and not joint, and shall be in the proportion that the principal amount of the Notes that are the subject of such proceeding and that were offered and sold through such Relevant Agent bears to the aggregate principal amount of the Notes that are the subject of such proceeding. Notwithstanding the provisions of this Section 8, no Agent shall be required to contribute any amount in excess of the amount by which the total price at which the Notes purchased by or through it were sold exceeds the amount of any damages which such Agent has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 8, each person, if any, who controls an Agent within the meaning of Section 15 of the 1933 Act shall have the same rights to contribution as such Agent, and each director of the Company, each officer of the Company who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act shall have the same rights to contribution as the Company. Any party entitled to contribution pursuant to the first sentence of this Section 8 will, promptly after receipt of notice of commencement of any action, suit or proceeding against such party in respect of which a claim for contribution may be made against another party or parties under this Section 8, notify such party or parties from whom contribution may be sought, but the omission to so notify such party or parties shall not relieve the party or parties from whom contribution may be sought, from any other obligation it or they may have otherwise than under this Section 8; PROVIDED, HOWEVER, that such notice need not be given if such party entitled to 26 contribution hereunder has previously given notice pursuant to Section 7(c) hereof with respect to the same action, suit or proceeding. SECTION 9. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY All representations, warranties and agreements contained in this Agreement or any Terms Agreement, or contained in certificates of officers of the Company submitted pursuant hereto, shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of any Agent or any controlling person as defined in Section 15 of the 1933 Act of any Agent, or by or on behalf of the Company, and shall survive each delivery of and payment for any of the Notes. SECTION 10. TERMINATION (a) TERMINATION OF THIS AGREEMENT. This Agreement (excluding any Terms Agreement) may be terminated by the Company (i) for any reason at any time with respect to any Agent or Agents upon the giving of 2 business days' written notice of such termination to each other party hereto or (ii) at any time upon notice to each other party hereto if no Notes then remain authorized for sale pursuant hereto. This Agreement may be terminated by any Agent (as to itself only) either (x) upon the giving of 2 business days' written notice of such termination to each other party hereto or (y) at any time upon notice to the Company if the Company shall have failed to furnish or cause to be furnished the certificates, opinions or letters referred to in Section 5 or 6 hereof or if no Notes then remain authorized for sale pursuant hereto. (b) TERMINATION OF A TERMS AGREEMENT. An Agent party to a Terms Agreement may terminate such Terms Agreement (as to itself only) immediately upon notice to the Company, at any time prior to the Settlement Date relating thereto if (i) there has been, between the date of such Terms Agreement and the related Settlement Date, any material adverse change in the consolidated financial condition or earnings of the Company and its subsidiaries, considered as one enterprise, (ii) there has occurred any material adverse change in the financial markets in the United States or any outbreak or escalation of hostilities or other calamity or crisis, the effect of which is such as to make it, in the reasonable judgment of such Agent, impracticable to market the Notes or to enforce contracts for the sale of the Notes, (iii) trading in any securities of the Company has been suspended (other than pursuant to a request by the Company with respect to an announcement by the Company of certain information not constituting a material adverse change, since the date of such Terms Agreement, 27 in the consolidated financial condition or earnings of the Company and its subsidiaries, considered as one enterprise), the effect of which is such as to make it, in the reasonable judgment of such Agent, impracticable to market the Notes or to enforce contracts for the sale of the Notes, (iv) trading generally on the New York Stock Exchange has been suspended, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices for securities shall have been required, by such exchange or by order of the Commission or any other governmental authority, or if a banking moratorium has been declared by either Federal or New York authorities or if a banking moratorium has been declared by the relevant authorities in the country or countries of origin of any foreign currency or currencies in which the Notes are denominated or payable or (v) after the date of such Terms Agreement the rating assigned by any nationally recognized securities rating agency to any debt securities of the Company as of the date of such Terms Agreement shall have been lowered or any such rating agency shall have publicly announced that it has placed any debt securities of the Company on what is commonly termed a "watch list" with negative implications. (c) GENERAL. In the event of any such termination, no party will have any liability to any other party hereto, except that (i) a terminating Agent shall be entitled to any commissions earned in accordance with the third paragraph of Section 2(a) hereof, (ii) if at the time of termination (A) a terminating Agent and the Company shall have entered into a Terms Agreement and the Settlement Date with respect thereto shall not yet have occurred or (B) an offer to purchase any of the Notes has been accepted by the Company but the time of delivery to the purchaser or his agent of the Note or Notes relating thereto has not occurred, the covenants set forth in Sections 3 (subject to the provisions of Section 3(h)) and 6 hereof shall remain in effect until such Settlement Date or until such Notes are so delivered, as the case may be, and (iii) the covenant set forth in Section 3(f) hereof, the provisions of Section 4 hereof, the indemnity and contribution agreements set forth in Sections 7 and 8 hereof, and the provisions of Sections 9 and 13 hereof shall remain in effect. 28 SECTION 11. NOTICES All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Agents shall be directed, as the case may be, to: [ ] Notices to the Company shall be directed to it at: 500 South Buena Vista Street Burbank, California 91521 Attention: Legal Department SECTION 12. PARTIES This Agreement shall inure to the benefit of and be binding upon the Agents (and, in the case of a Terms Agreement, the Agent or Agents party thereto) and the Company and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the parties hereto and their respective successors and the controlling persons and officers and directors referred to in Sections 7 and 8 hereof and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provisions herein contained. This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the parties hereto and their respective successors and said controlling persons and officers and directors and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Notes shall be deemed to be a successor by reason merely of such purchase. SECTION 13. GOVERNING LAWS THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES CREATED HEREBY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING WITHOUT LIMITATION, Sections 5-1401, 5-1402 AND NYCPLR 327(b). If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument along with all counterparts will become a binding agreement between the Agents and the Company in accordance with its terms. Very truly yours, THE WALT DISNEY COMPANY By ------------------------------- Name: Title: CONFIRMED AND ACCEPTED, as of the date first above written: [ ] By --------------------------------- Name: Title: EXHIBIT A
Commission Term (1) Rate (2) - -------- -------- More than 9 months but less than 1 year. . . . . . . . . . . . . . . . From 1 year but less than 18 months. . . . . . . . . . . . . . . . . . From 18 months but less than 2 years . . . . . . . . . . . . . . . .. From 2 years but less than 3 years . . . . . . . . . . . . . . . . . . From 3 years but less than 4 years . . . . . . . . . . . . . . . . . . From 4 years but less than 5 years . . . . . . . . . . . . . . . . . . From 5 years but less than 6 years . . . . . . . . . . . . . . . . . . From 6 years but less than 7 years . . . . . . . . . . . . . . . . . . From 7 years but less than 10 years. . . . . . . . . . . . . . . . . . From 10 years but less than 15 years . . . . . . . . . . . . . . . . . From 15 years but less than 20 years . . . . . . . . . . . . . . . . . From 20 years but less than 30 years . . . . . . . . . . . . . . . . . From 30 years. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- -------------------- (1) With respect to each Note that is subject to purchase by the Company at the option of the holder thereof (a "Put Note"), the word "Term" as used in this Exhibit A refers to the earliest purchase date specified in the applicable Put Note. (2) WITH RESPECT TO EACH NOTE THAT IS A DISCOUNT SECURITY (AS DEFINED IN THE INDENTURE), THE COMMISSION PAYABLE TO EACH AGENT WITH RESPECT TO EACH SUCH NOTE SOLD AS A RESULT OF A SOLICITATION MADE BY SUCH AGENT SHALL BE BASED ON THE PURCHASE PRICE OF SUCH NOTE. EXHIBIT B The following terms, if applicable, shall be agreed to by each Agent and the Company pursuant to each Terms Agreement: Principal Amount: $__________ (or principal amount of foreign currency or composite currency) Interest Rate If Fixed Rate Note, Interest Rate: If Floating Rate Note: Base Rate or Rates: Initial Interest Rate: Spread or Spread Multiplier, if any: Interest Reset Dates: Interest Payment Dates: Index Maturity: CMT Maturity Index, if any: Interest Determination Dates: Maximum Interest Rate, if any: Minimum Interest Rate, if any: Interest Reset Period: Interest Payment Period: Calculation Agent (if other than the Trustee): If Redeemable: Earliest Redemption Date: Redemption Price: Stated Maturity: Final Maturity (for Renewable Notes): Initial Maturity (for Renewable Notes): Purchase Price: __% Settlement Date and Time: Currency of Denomination (if currency is other than U.S. dollar): Currency of Payment (if currency is other than U.S. dollar): Denominations: Additional Terms: Also, agreement(3) as to whether the following will be required: Officer's Certificate pursuant to Section 6(a) of the Distribution Agreement. Legal Opinion pursuant to Section 6(b) of the Distribution Agreement. Comfort Letter pursuant to Section 6(c) of the Distribution Agreement. Any restriction on the ability of the Company to sell senior debt securities with an identical or substantially similar maturity between the date of the Terms Agreement and the applicable Settlement Date. Payment by the Company of legal expenses of counsel to Agent(s). - -------------------- (3) The following generally will not be required in connection with a sale of less than $50,000,000 aggregate principal amount of Notes. EXHIBIT C THE WALT DISNEY COMPANY MEDIUM TERM NOTES ADMINISTRATIVE PROCEDURES _______________ [ ] The administrative procedures and specific terms of the offering of Medium-Term Notes (the "Notes") on a continuing basis by The Walt Disney Company (the "Issuer") pursuant to the Distribution Agreement, dated [ ] (as amended, modified or supplemented from time to time, the "Distribution Agreement"), between the Issuer and each of [the investment banks] (each an "Agent" and collectively, the "Agents") are explained below. In the Distribution Agreement, the Agents have agreed to act as agents of the Issuer to solicit offers to purchase the Notes. Each Agent, as principal, may purchase Notes for its own account pursuant to the terms and settlement details of a terms agreement entered into between the Issuer and such Agent, as contemplated by the Distribution Agreement. In the Distribution Agreement, the Issuer reserves the right to sell Notes directly on its own behalf and to or through others. Each Note will be issued under an indenture between the Issuer and Citibank, N.A., as trustee (the "Trustee"), dated as of March 7, 1996 (the "Indenture"), relating to senior debt securities of the Issuer. Notes will bear interest at either fixed rates ("Fixed Rate Notes") or floating rates ("Floating Rate Notes"). Each Note will be represented by either a Global Security (as defined hereinafter) delivered to the Trustee, as agent for The Depository Trust Company ("DTC"), and recorded in the book-entry system maintained by DTC (a "Book-Entry Note") or a certificate delivered to the Holder thereof or a Person designated by such Holder (a "Certificated Note"). Owners of beneficial interests in a Global Security will be entitled to physical delivery of Certificated Notes equal in principal amount to their respective beneficial interests only under certain limited circumstances. The Trustee will act as Paying Agent for the payment of principal of and interest on the Notes and will perform, as Paying Agent, unless otherwise specified in the Notes, the Indenture or herein, the other duties specified herein. Book-Entry Notes will be issued in accordance with the administrative procedures set forth in Part I hereof, and Certificated Notes will be issued in accordance with the administrative procedures set forth in Part II hereof. Any administrative responsibilities, document control and record-keeping functions to be performed by the Issuer will be performed by its Treasury Department. To the extent that the procedures set forth herein conflict with any provision of the Notes (which, in the case of Book-Entry Notes shall be the related Global Security), the Indenture or the Distribution Agreement, the relevant provisions of the Notes, the Indenture or the Distribution Agreement shall be controlling. Unless otherwise defined herein, terms defined in the Indenture, the Officers' Certificate establishing the Notes pursuant to Section 2.3(a) of the Indenture or the Notes shall be used herein as therein defined. PART I: ADMINISTRATIVE PROCEDURES FOR BOOK ENTRY NOTES In connection with the qualification of the Book-Entry Notes for eligibility in the book-entry system maintained by DTC, the Trustee will perform the custodial, document control and administrative functions described below, in accordance with its respective obligations under a Letter of Representations from the Issuer and the Trustee to DTC, dated [ ], and a Medium-Term Note Certificate Agreement between the Trustee and DTC, dated [ ], and its obligations as a participant in DTC, including DTC's Same-Day Funds Settlement System ("SDFS"). ISSUANCE: On any date of settlement (as defined under "Settlement" below) for one or more Book-Entry Notes, the Issuer will issue a single global security in fully registered form without coupons (a "Global Security") representing up to $200,000,000 principal amount of all such Notes that have the same Stated Maturity and Final Maturity, Earliest Redemption Date, Redemption Price and other redemption provisions, if any, Interest Payment Dates, Regular Record Dates, Interest Payment Period, original issue discount, if any, and, additionally, in the case of Fixed Rate Notes, interest rate and, in the case of Floating Rate Notes, Initial Interest Rate, Base Rate or Rates, Index Maturity, Interest Reset Period, Interest Reset Dates, Spread or Spread Multiplier, if any, Minimum Interest Rate, if any, and Maximum Interest Rate, if 2 any (collectively, the "Terms"). Each Global Security will be dated and issued as of the date of its authentication by the Trustee. Each Global Security will bear interest from the later of the Original Issue Date specified therein or from the most recent Interest Payment Date with respect to such Global Security (or Predecessor Security) to which interest has been paid or duly provided for (such later date being herein referred to as a "Global Interest Accrual Date"). Book-Entry Notes may only be denominated and payable in U.S. dollars. No Global Security will represent any Certificated Note. IDENTIFICATION NUMBERS: The Issuer has arranged with the CUSIP Service Bureau of Standard & Poor's Corporation (the "CUSIP Service Bureau") for the reservation of a series of CUSIP numbers (including tranche numbers), which series consists of approximately [900] CUSIP numbers (of which [900] remained unassigned as of the date hereof) and relates to Global Securities representing the Book-Entry Notes. The Issuer has obtained from the CUSIP Service Bureau a written list of such series of reserved CUSIP numbers and has delivered to the Trustee and DTC such written list of such CUSIP numbers. The Trustee will assign CUSIP numbers to Global Securities as described under Settlement Procedure "B" below. DTC will notify the CUSIP Service Bureau periodically of the CUSIP numbers that the Trustee has assigned to Global Securities. At any time when fewer than 100 of the reserved CUSIP numbers of a series remain unassigned to Global Securities, the Trustee, if it deems necessary, will reserve additional CUSIP numbers for assignment to Global Securities representing Book-Entry Notes. Upon obtaining such additional CUSIP numbers, the Trustee shall deliver a list of such additional CUSIP numbers to the Issuer and DTC. 3 REGISTRATION: Each Global Security will be registered in the name of Cede & Co., as nominee for DTC, on the register of Securities maintained under the Indenture. The beneficial owner of a Book-Entry Note (or one or more indirect participants in DTC designated by such owner) will designate one or more participants in DTC (with respect to such Note, the "Participants") to act as agent or agents for such owner in connection with the book-entry system maintained by DTC, and DTC will record in book-entry form, in accordance with instructions provided by such Participants, a credit balance with respect to such Note in the account of such Participants. The ownership interest of such beneficial owner in such Note will be recorded through the records of such Participants or through the separate records of such Participants and one or more indirect participants in DTC. TRANSFERS: Transfers of a Book-Entry Note will be accomplished by book entries made by DTC and, in turn, by Participants (and in certain cases, one or more indirect participants in DTC) acting on behalf of beneficial transferors and transferees of such Note. EXCHANGES: At the request of the Issuer, the Trustee shall deliver to DTC and the CUSIP Service Bureau at any time a written notice of consolidation specifying (i) the CUSIP numbers of two or more Outstanding Global Securities that represent Book-Entry Notes having the same Terms and for which interest has been paid to the same date, (ii) a date, occurring at least 30 days after such written notice is delivered and at least 30 days before the next Interest Payment Date for such Book-Entry Notes, on which such Global Securities shall be exchanged for a single replacement Global Security and (iii) a new CUSIP number, obtained from the Issuer, to be assigned to such replacement Global Security. Upon receipt of such a notice, DTC will send to its Participants (including the Trustee) a written 4 reorganization notice to the effect that such exchange will occur on such date. Prior to the specified exchange date, the Trustee will deliver to the CUSIP Service Bureau a written notice setting forth such exchange date and the new CUSIP number and stating that, as of such exchange date, the CUSIP numbers of the Global Securities to be exchanged will no longer be valid. On the specified exchange date, the Trustee will exchange such Global Securities for a single Global Security bearing the new CUSIP number, and the CUSIP numbers of the exchanged Global Securities will, in accordance with CUSIP Service Bureau customary procedures, be cancelled and not immediately reassigned. Notwithstanding the foregoing, if the Global Securities to be exchanged exceed $200,000,000 in aggregate principal amount, one Global Security will be authenticated and issued to represent each $200,000,000 of principal amount of the exchanged Global Securities and an additional Global Security will be authenticated and issued to represent any remaining principal amount of such Global Securities (see "Denominations" below). MATURITIES: Each Book-Entry Note will mature on a date nine months or more after the settlement date for such Note. NOTICE OF REDEMPTION DATES: In the case of a full redemption of all Book-Entry Notes represented by a single Global Security, the Trustee will notify DTC, not more than 60 but not less than 30 days prior to the Redemption Date with respect to such Global Security, of the CUSIP number of such Global Security, the Redemption Date and the Redemption Price. In the case of a redemption of less than all Book-Entry Notes represented by a single Global Security, the Trustee will notify DTC not more than 2 Business Days before 60 days, but not less than 2 Business Days before 30 days, prior to the Redemption Date with respect to such Global Security, 5 of the CUSIP number of such Global Security, the Redemption Date and the Redemption Price. DENOMINATIONS: Book-Entry Notes will be sold in denominations of $1,000 and any amount in excess thereof that is an integral multiple of $1,000. Global Securities will be issued in denominations of $1,000 and any amount in excess thereof that is an integral multiple of $1,000, up to a maximum denomination of $200,000,000. If one or more Book-Entry Notes having an aggregate principal amount in excess of $200,000,000 would, but for the preceding sentence, be represented by a single Global Security, then one Global Security will be issued to represent each $200,000,000 principal amount of such Book-Entry Note or Notes and an additional Global Security will be issued to represent any remaining principal amount of such Book-Entry Note or Notes. In such a case, each of the Global Securities representing such Book-Entry Note or Notes shall be assigned the same CUSIP number. INTEREST: GENERAL. Interest on each Book-Entry Note will accrue from the Global Interest Accrual Date with respect to the Global Security representing such Note and will be paid on the Interest Payment Dates of the Global Security representing such Book-Entry Note. In the case of a Global Security originally issued between a Regular Record Date and the related Interest Payment Date or on an Interest Payment Date, the first interest payment will be made on the Interest Payment Date immediately following the next Regular Record Date. Each payment of interest on a Global Security will include interest accrued to but excluding the Interest Payment Date or Maturity. See "Calculation of Interest" below. Interest payable at the Maturity of a Book-Entry Note will be payable to the Person to whom the principal of such Note is payable. Standard & Poor's Corporation will use the information received in the pending deposit message described under 6 Settlement Procedure "C" below in order to include the amount of any interest payable and certain other information regarding any Global Security in the appropriate weekly supplement to the Corporate Registered Bond Interest Record published by Standard & Poor's Corporation. REGULAR RECORD DATES. Except as otherwise provided with respect to any Book-Entry Note as specified in the related Global Security, the Regular Record Date with respect to any Interest Payment Date for Fixed Rate Book-Entry Notes shall be the January 15 or July 15, as the case may be, next preceding the applicable Interest Payment Date. Except as otherwise provided with respect to any Book-Entry Note as specified in the related Global Security, the Regular Record Date with respect to any Interest Payment Date for Floating Rate Book-Entry Notes shall be the fifteenth day (whether or not a Business Day) next preceding such Interest Payment Date. FIXED RATE BOOK-ENTRY NOTES. Except as otherwise provided with respect to any Book-Entry Note as specified in the related Global Security, interest payments on Fixed Rate Book-Entry Notes will be made semiannually on February 1 and August 1 of each year, as specified in the related Global Security, and at Stated Maturity, subject to the exceptions specified in "Payments of Principal and Interest" below. FLOATING RATE BOOK-ENTRY NOTES. Except as otherwise provided with respect to any Book-Entry Note as specified in the related Global Security, interest payments on Floating Rate Book-Entry Notes will be made monthly, quarterly, semiannually or annually of each year, as specified in the related Global Security, and at Stated Maturity. Except as otherwise provided with respect to any Book-Entry Note as specified in the 7 related Global Security, subject to the exceptions specified in "Payments of Principal and Interest" below, interest will be payable, in the case of Floating Rate Book-Entry Notes which pay interest (i) monthly, on the third Wednesday of each month; (ii) quarterly, on the third Wednesday of each March, June, September and December of each year; (iii) semiannually, on the third Wednesday of each of the two months specified in the Global Security representing the applicable Book-Entry Note; and (iv) annually, on the third Wednesday of the month specified in the Global Security representing the applicable Book-Entry Note. NOTICE OF INTEREST PAYMENT AND REGULAR RECORD DATES. On the first Business Day of January, April, July and October of each year, the Trustee will deliver to the Issuer and DTC a written list of Regular Record Dates and Interest Payment Dates (to the extent then determinable by the Trustee) that will occur with respect to each Global Security during the six-month period beginning on such first Business Day. Promptly after each Interest Determination Date for Floating Rate Notes, the calculation agent (the "Calculation Agent") will notify Standard & Poor's Corporation of the interest rates determined on such Interest Determination Date. CALCULATION OF INTEREST: FIXED RATE BOOK-ENTRY NOTES. Interest on Fixed Rate Book-Entry Notes (including interest for partial periods) will be calculated on the basis of a 360-day year of twelve 30-day months. FLOATING RATE BOOK-ENTRY NOTES. Interest rates on Floating Rate Book-Entry Notes will be determined as set forth in the Global Security representing the applicable Floating Rate Book-Entry Notes. Interest will be calculated in the case of (a) Commercial Paper 8 Rate Notes, LIBOR Notes, CD Rate Notes, Federal Funds Rate Notes and Prime Rate Notes, on the basis of the actual number of days in the interest period and a 360-day year; and (b) Treasury Rate Notes and CMT Rate Notes, on the basis of the actual number of days in the interest period and the actual number of days in the year. PAYMENTS OF PRINCIPAL AND INTEREST PAYMENTS OF INTEREST ONLY. Promptly after each Regular Record Date, the Trustee will deliver to the Issuer and DTC a written notice specifying by CUSIP number the amount of interest to be paid on each Global Security on the following Interest Payment Date (other than an Interest Payment Date coinciding with Stated Maturity) and the total of such amounts. DTC will check the amount payable on each Global Security on such Interest Payment Date as shown in the appropriate weekly supplements to the Corporate Registered Bond Interest Record published by Standard & Poor's Corporation. On such Interest Payment Date, the Issuer will pay to the Trustee the total amount of interest due on such Interest Payment Date (other than at Stated Maturity), and the Trustee will pay such amount to DTC at the times and in the manner set forth below under "Manner of Payment." If any Interest Payment Date for a Fixed Rate Book-Entry Note is scheduled to occur on a day that is not a Business Day with respect to such Fixed Rate Book-Entry Note, the payment due on such Interest Payment Date will be made on the following day that is a Business Day with respect to such Fixed Rate Book-Entry Note, and no interest shall accrue on the amount payable on such Interest Payment Date for the period from and after such Interest Payment Date to such following day that is a Business Day. 9 If any Interest Payment Date for a Floating Rate Book-Entry Note is scheduled to occur on a day that is not a Business Day with respect to such Floating Rate Book-Entry Note, the payment due on such Interest Payment Date will be made on the following day that is a Business Day with respect to such Floating Rate Book-Entry Note, and no interest shall accrue on the amount payable on such Interest Payment Date for the period from and after such Interest Payment Date to such following day that is a Business Day, except that in the case of a Floating Rate Book-Entry Note that is a LIBOR Note (or a Floating Rate Book-Entry Note for which LIBOR is the applicable Base Rate), if such Business Day is in the next succeeding calendar month, the payment due on such Interest Payment Date will be made on the immediately preceding day that is a Business Day. PAYMENTS AT MATURITY. On or about the first Business Day of each month, the Trustee will deliver to the Issuer and DTC a written list of principal and interest to be paid on each Global Security maturing either at Stated Maturity or on a Redemption Date occurring in the following month (to the extent then determinable by the Trustee). The Issuer, the Trustee and DTC will confirm the amounts of such principal and interest payments with respect to each such Global Security on or about the fifth Business Day preceding the Maturity of such Global Security. The Issuer will pay to Citibank, N.A., as the Paying Agent, the principal amount of such Global Security, together with interest due at such Maturity. Citibank, N.A. will pay such amounts to DTC at the times and in the manner set forth under "Manner of Payment" below. If any Maturity of a Global Security representing Book-Entry Notes is not a Business Day, the payment due on such day shall be made on the next succeeding Business Day and no interest shall accrue on such payment for the period from and after such Maturity. Promptly 10 after payment to DTC of the principal and interest due at the Stated Maturity of such Global Security, the Trustee will cancel such Global Security in accordance with the terms of the Indenture, deliver to the Issuer an appropriate debit advice and a certificate of destruction relating to all such cancelled Global Securities. On the first Business Day of each month, the Trustee will deliver to the Issuer by facsimile transmission a written statement, indicating the total principal amount of Outstanding Global Securities for which it serves as trustee as of the immediately preceding Business Day. MANNER OF PAYMENT. The total amount of any principal and interest due on Global Securities on any Interest Payment Date or at Maturity shall be debited from an account of the Issuer maintained at the Trustee with funds available for immediate use in the amount required for such payment. The Trustee will pay by separate wire transfer (using Fedwire message entry instructions in a form previously specified by DTC) to an account at the Federal Reserve Bank of New York previously specified by DTC, in funds available for immediate use by DTC, each payment of interest and principal due on a Global Security on such date. On each Interest Payment Date, interest payments shall be made to DTC in same day funds in accordance with existing arrangements between the Trustee and DTC. Thereafter on each such date, DTC will pay, in accordance with its SDFS operating procedures then in effect, such amounts in funds available for immediate use to the respective Participants in whose names the Book-Entry Notes represented by such Global Securities are recorded in the book-entry system maintained by DTC. Neither the Issuer (either as Issuer or as Paying Agent) nor the Trustee shall have any responsibility or liability for the payment by DTC to such Participants of the principal of and interest on the Book-Entry Notes. 11 WITHHOLDING TAXES. The amount of any taxes required under applicable law to be withheld from any interest payment on a Book-Entry Note will be determined and withheld by the Participant, indirect participant in DTC or other Person responsible for forwarding payments and materials directly to the beneficial owner of such Note. ACCEPTANCE AND REJECTION OF OFFERS: The Issuer has the sole right to accept offers to purchase Book-Entry Notes and may reject any such offer in whole or in part. Each Agent may, in its discretion reasonably exercised, reject any offer to purchase Book-Entry Notes received by it in whole or in part. Each Agent will advise the Issuer promptly by telephone or by facsimile transmission of all offers to purchase Book-Entry Notes received by such Agent, other than those rejected by it. SETTLEMENT: The receipt by the Issuer of immediately available funds in payment for a Book-Entry Note and the authentication and issuance of the Global Security representing such Note shall constitute "settlement" with respect to such Note. Each offer accepted by the Issuer will be settled on the third Business Day (or, if acceptance by the Issuer occurs after 4:30 p.m., New York time, on the fourth Business Day) following acceptance of such offer pursuant to the timetable for settlement set forth below, unless the Issuer and the purchaser agree to settlement on another day which shall be no earlier than the Business Day following acceptance of such offer. SETTLEMENT PROCEDURES: In the event of a purchase of Book-Entry Notes by one or more of the Agents, as principal, appropriate settlement details, if different from those set forth below, will be set forth in an applicable Terms Agreement to be entered into between such Agent or Agents and the Issuer pursuant to the Distribution 12 Agreement. Settlement Procedures with regard to each Book-Entry Note sold by the Issuer through an Agent, as agent, shall be as follows: A. Such Agent will advise the Issuer by facsimile transmission or orally (if confirmed within 24 hours by written telecommunication) of the following settlement information: 1. Principal amount. 2. Stated Maturity. 3. If such Note is a Fixed Rate Note, the interest rate. If such Note is a Floating Rate Note, the following: a. Base Rate or Base Rates; b. Initial Interest Rate; c. Spread or Spread Multiplier, if any; d. Interest Reset Dates; e. Interest Reset Period; f. Interest Payment Dates; g. Index Maturity; h. Interest Payment Period; i. Calculation Agent (if other than Citibank, N.A.; j. Maximum Interest Rate, if any; k. Minimum Interest Rate, if any; 13 l. Interest Determination Dates; and m. Index Currency, if applicable. 4. Earliest Redemption Date, Redemption Price and other redemption provisions, if any. 5. Settlement date. 6. Original Issue Price. 7. Original issue discount, if any. 8. Agent's commission, determined as provided in Section 2 of the Distribution Agreement between the Issuer and such Agent. 9. Additional terms or provisions of such Note, if any. 10. Net Proceeds to the Issuer. 11. Commission. 12. Discount. 13. Initial Maturity Date (for Renewable Notes). 14. Final Maturity Date (for Renewable Notes). B. The Issuer will advise the Trustee by telephone (confirmed in writing signed by an authorized person at any time on the same date) or facsimile transmission signed by an authorized person of the information set forth in 14 Settlement Procedure "A" above and the name of such Agent. C. The Trustee will assign a CUSIP number to the Global Security representing such Note. The Trustee will notify the Issuer and the Agent of such CUSIP number by telephone as soon as practicable. D. The Trustee will enter a pending deposit message through DTC's Participant Terminal System, providing the following settlement information to DTC, such Agent, and Standard & Poor's Corporation. 1. The information set forth in Settlement Procedure "A" above. 2. Numbers of the participant accounts maintained by DTC on behalf of the Trustee and the Agent. 3. Identification as a Fixed Rate Book-Entry Note or a Floating Rate Book-Entry Note. 4. Initial Interest Payment Date for such Note, Regular Record Date and amount of interest payable on such Interest Payment Date. 5. Interest Payment Period. 6. CUSIP number of the Global Security representing such Note. 7. Whether such Global Security will represent any other Book-Entry Note (to the extent known at such time). 15 E. The Issuer will deliver to the Trustee a pre-printed Global Security to represent such Note, in a form that has been approved by the Issuer, the Agents and the Trustee. F. The Trustee will complete and authenticate the Global Security representing such Note. G. DTC will credit such Note to the Trustee's participant account at DTC. H. The Trustee will enter an SDFS deliver order through DTC's Participant Terminal System instructing DTC to (i) debit such Note to the Trustee's participant account and credit such Note to such Agent's participant account and (ii) debit such Agent's settlement account and credit the Trustee's settlement account for an amount equal to the price of such Note less such Agent's commission. The entry of such a deliver order shall constitute a representation and warranty by the Trustee to DTC that (i) the Global Security representing such Book-Entry Note has been issued and authenticated and (ii) the Trustee is holding such Global Security pursuant to the Medium-Term Note Certificate Agreement between the Trustee and DTC. I. Such Agent will enter an SDFS deliver order through DTC's Participant Terminal System instructing DTC (i) to debit such Note to such Agent's participant account and credit such Note to the participant accounts of the Participants with respect to such Note and (ii) to debit the settlement accounts of such Participants and credit the settlement account of such Agent for any amount equal to the price of such Note. 16 J. Transfers of funds in accordance with SDFS deliver orders described in Settlement Procedures "G" and "H" above will be settled in accordance with SDFS operating procedures in effect on the settlement date. K. The Trustee will credit to an account of the Issuer maintained at the Trustee funds available for immediate use in the amount transferred to the Trustee in accordance with Settlement Procedure "G" above. L. The Trustee will retain the Global Security representing such Note and will send a photocopy thereof to the Issuer by first-class mail. The Trustee will send to the Issuer, at the request of the Issuer, a written statement setting forth (i) the principal amount of Notes Outstanding under the Indenture as of the date of such report, (ii) a brief description of any sales of which the Issuer has advised the Trustee but which have not yet been settled and (iii) a description of issuances and retirements of, payment on and other activity relating to the Notes during the related month. M. Such Agent will confirm the purchase of such Note to the purchaser either by transmitting to the Participants with respect to such Note a confirmation order or orders through DTC's institution delivery system or by mailing a written confirmation to such purchaser. SETTLEMENT PROCEDURES TIMETABLE: For orders of Book-Entry Notes solicited by an Agent, as agent, and accepted by the Issuer for settlement on the first Business Day after the sale date, Settlement Procedure "A" through "L" above shall be completed 17 as soon as possible but not later than the respective times (New York City time) set forth below:
SETTLEMENT PROCEDURE TIME --------- ---- A . . . . . . . 11:00 a.m. on the sale date B . . . . . . . 12:00 noon on the sale date C . . . . . . . 2:00 p.m. on the sale date D . . . . . . . 3:00 p.m. on the sale date E . . . . . . . 9:00 a.m. on settlement date F . . . . . . . 10:00 a.m. on settlement date G-I . . . . . . 2:00 p.m. on settlement date J-M . . . . . . 5:00 p.m. on settlement date
If a sale is to be settled more than one Business Day after the sale date, Settlement Procedure "A" shall be completed as soon as practicable but no later than 11:00 a.m. on the first Business Day after the sale date and Settlement Procedures "B" and "C" shall be completed as soon as practicable but no later than 12:00 noon and 2:00 p.m., respectively, on the first Business Day after the sale date. If the Initial Interest Rate for a Floating Rate Book-Entry Note has not been determined at the time that Settlement Procedure "A" is completed, Settlement Procedures "B" and "C" shall be completed as soon as such rate has been determined but no later than 12:00 noon and 2:00 p.m., respectively, on the second Business Day before the settlement date. Settlement Procedures "D" through "L" shall be completed as soon as possible thereafter but not later than the respective times (New York City time) set forth in the preceding table, except that Settlement Procedures "I" through "L" are subject to extension in accordance with any extension of Fedwire closing deadlines and in the other events specified in the SDFS operating procedures in effect on the settlement date. 18 If settlement of a Book-Entry Note is rescheduled or cancelled, the Trustee will deliver to DTC, through DTC's Participant Terminal System, a cancellation message to such effect by no later than 2:00 p.m. on the Business Day immediately preceding the scheduled settlement date. FAILURE TO SETTLE: If the Trustee fails to enter an SDFS deliver order with respect to a Book-Entry Note pursuant to Settlement Procedure "G," the Trustee may deliver to DTC, through DTC's Participant Terminal System, as soon as practicable, a withdrawal message instructing DTC to debit such Note to the Trustee's participant account. DTC will process the withdrawal message, provided that the Trustee's participant account contains a principal amount of the Global Security representing such Note that is at least equal to the principal amount to be debited. If a withdrawal message is processed with respect to all the Book-Entry Notes represented by a Global Security, the Trustee will mark such Global Security "cancelled," make appropriate entries in the Trustee's records and send such cancelled Global Security to the Issuer. The CUSIP number assigned to such Global Security shall, in accordance with CUSIP Service Bureau customary procedures, be cancelled and not immediately reassigned. If a withdrawal message is processed with respect to one or more, but not all, of the Book-Entry Notes represented by a Global Security, the Trustee will exchange the Global Security for two Global Securities, one of which shall represent such Book-Entry Note or Notes for which such withdrawal message has been processed and shall be cancelled immediately after issuance and the other of which shall represent the remaining Book-Entry Notes previously represented by the surrendered Global Security and shall bear the CUSIP number of the surrendered Global Security. 19 If the purchase price for any Book-Entry Note is not timely paid to the applicable Participants with respect to such Note by the beneficial purchaser thereof (or a Person, including an indirect participant in DTC, acting on behalf of such purchaser), such Participants and, in turn, the Agent for such Note, may enter SDFS deliver orders through DTC's Participant Terminal System reversing the orders entered pursuant to Settlement Procedures "H" and "G," respectively. Thereafter, the Trustee will deliver the withdrawal message and take the related actions described in the preceding paragraph. If such failure shall have occurred for any reason other than default by the applicable Agent in the performance of its obligations hereunder or under the Distribution Agreement, the Issuer will pay to such Agent an amount equal to the interest earned by the Issuer with respect to such funds during the period when the funds were credited to the account of the Issuer. Notwithstanding the foregoing, upon any failure to settle with respect to a Book-Entry Note, DTC may take such actions as it deems appropriate in accordance with its SDFS operating procedures then in effect in order to reverse the orders entered into DTC's Participant Terminal System pursuant to Settlement Procedures "H" and "G," respectively. In the event of a failure to settle with respect to one or more, but not all, of the Book-Entry Notes to have been represented by a Global Security, the Trustee will provide, in accordance with Settlement Procedures "D" and "E," for the authentication and issuance of a Global Security representing the other Book-Entry Notes to have been represented by such Global Security and will make appropriate entries in its records. PROCEDURE FOR POSTINGS: The Issuer will periodically contact one or more Agents for recommended interest rates, coupons or spreads ("postings") with respect to Notes being offered. When the Issuer has determined or changed its postings with 20 respect to Notes being offered, it will promptly advise the Agents. At such times as the Issuer is not posting, the Agents will not solicit firm offers but may record "indications of interest" only. PRICING SUPPLEMENTS: Within five Business Days after any sale of Notes, the Issuer will file or transmit for filing with the Securities and Exchange Commission (the "Commission"), in compliance with Rule 424(b)(3) of the rules and regulations of the Commission promulgated under the Securities Act of 1933, as amended, a copy of a pricing supplement to the Prospectus (as defined in the Distribution Agreement) relating to such Notes that reflects the applicable interest rates and other terms (the "Pricing Supplement") and will deliver a copy of such Pricing Supplement to each of the Agents and to the Trustee. SUSPENSION OF SOLICITATION, AMENDMENT OR SUPPLEMENT: The Issuer may instruct the Agents to suspend solicitation of offers to purchase Book-Entry Notes at any time. Upon receipt of such instructions, each Agent will as soon as possible suspend such solicitations until such time as it has been advised by the Issuer that such solicitations may be resumed. The Issuer will, consistent with its obligations under the Distribution Agreement, promptly advise each Agent and the Trustee whether orders outstanding at the time such Agent suspends solicitation may be settled and whether copies of the Prospectus, as in effect at the time of the suspension, together with the appropriate Pricing Supplement, may be delivered in connection with the settlement of such orders. The Issuer will have the sole responsibility for such decision and for any arrangements that may be made in the event that the Issuer determines that such orders may not be settled or 21 that copies of such Prospectus and Pricing Supplement may not be so delivered. DELIVERY OF PROSPECTUS: A copy of the most recent Prospectus and of the applicable Pricing Supplement, if any, must be provided to a purchaser by the applicable Agent prior to or at the time of the earlier of (a) the written confirmation of a sale sent to a purchaser of Book-Entry Notes or his Agent, and (b) the date of settlement of any such Book-Entry Notes (see "Settlement Procedures"). ADVERTISING COSTS: The Issuer will determine with the Agents the amount and nature of advertising that may be appropriate in offering the Notes. Advertising expenses approved in writing by the Issuer in connection with the solicitation of purchases of the Notes from the Issuer will be paid by the Issuer. PART II: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES The Trustee will serve as Registrar in connection with the Certificated Notes. ISSUANCE: Each Certificated Note will be dated and issued as of the date of its authentication by the Trustee. Each Certificated Note will bear interest from the later of the Original Issue Date specified therein or from the most recent Interest Payment Date with respect to such Certificated Note (or Predecessor Security) to which interest has been paid or duly provided for (such later date being herein referred to as a "Certificated Interest Accrual Date"). REGISTRATION: Certificated Notes will be issued only in fully registered form without coupons. TRANSFERS AND 22 EXCHANGES: A Certificated Note may be presented for transfer or exchange at the Corporate Trust office of the Trustee. Certificated Notes will be exchangeable for other Certificated Notes having identical terms but different denominations without service charge. Certificated Notes will not be exchangeable for Book-Entry Notes. MATURITIES: Each Certificated Note will mature on a date nine months or more from the settlement date for such Note. DENOMINATIONS: Certificated Notes will be issued in denominations of $1,000 or any amount in excess thereof that is an integral multiple of $1,000. INTEREST: GENERAL. Interest on each Certificated Note will accrue from the Certificated Interest Accrual Date of such Note. In the case of a Certificated Note originally issued between a Regular Record Date and the related Interest Payment Date or on an Interest Payment Date, the first interest payment will be made on the Interest Payment Date following the next Regular Record Date. Each payment of interest on a Certificated Note will include interest accrued to but excluding the Interest Payment Date or Maturity. See "Calculation of Interest" below. Interest will be payable to the person in whose name a Certificated Note is registered on the register of Securities at the close of business on the Regular Record Date next preceding the applicable Interest Payment Date; PROVIDED, HOWEVER, interest payable at Maturity will be payable to the Person to whom principal of such Certificated Note is payable. REGULAR RECORD DATE. The Regular Record Date with respect to Fixed Rate Certificated Notes shall be the January 15 or July 15, as the case may be, next preceding the applicable Interest Payment Date. The Regular Record Date with respect to any Interest Payment Date for Floating Rate Certificated Notes shall 23 be the fifteenth day (whether or not a Business Day) next preceding such Interest Payment Date. FIXED RATE CERTIFICATED NOTES. Interest payments on Fixed Rate Certificated Notes will be made semiannually on February 1 and August 1 of each year and at Maturity, subject to the exceptions specified in "Payments of Principal and Interest" below. FLOATING RATE CERTIFICATED NOTES. Interest payments will be made on Floating Rate Certificated Notes monthly, quarterly, semiannually or annually of each year, as specified in the related Note, and at maturity. Subject to the exceptions specified in "Payments of Principal and Interest" below, interest will be payable, in the case of Floating Rate Certificated Notes which pay interest (i) monthly, on the third Wednesday of each month; (ii) quarterly, on the third Wednesday of March, June, September and December of each year; (iii) semiannually, on the third Wednesday of each of the two months specified in the applicable Certificated Note; and (iv) annually, on the third Wednesday of the month specified in the applicable Certificated Note. CALCULATION OF INTEREST: FIXED RATE CERTIFICATED NOTES. Interest on Fixed Rate Certificated Notes (including interest for partial periods) will be calculated on the basis of a 360-day year of twelve 30-day months. FLOATING RATE CERTIFICATED NOTES. Interest rates on Floating Rate Certificated Notes will be determined as set forth in the applicable Notes. The Issuer and the Trustee will confirm the amount of the initial interest payment due on any Floating Rate Certificated Note for which the initial Interest Period is shorter or longer than the Index Maturity. Promptly after each Interest Determination Date for Floating Rate Certificated Notes, the Calculation Agent will notify Standard & 24 Poor's Corporation of the interest rates determined on such Interest Determination Date. Interest will be calculated in the case of (a) Commercial Paper Rate Notes, LIBOR Notes, CD Rate Notes, Federal Funds Rate Notes and Prime Rate Notes on the basis of the actual number of days in the interest period and a 360-day year; and (b) Treasury Rate Notes and CMT Rate Notes, on the basis of the actual number of days in the interest period and the actual number of days in the year. PAYMENTS OF PRINCIPAL AND INTEREST: The Trustee will pay the principal amount of each Certificated Note at Maturity upon presentation of such Note to the Trustee. Such payment, together with payment of interest due at Maturity of such Note, will be made in funds available for immediate use by the Holder of such Note. Certificated Notes presented to the Trustee at Maturity for payment will be cancelled by the Trustee in accordance with the terms of the Indenture and returned to the Issuer. All interest payments on a Certificated Note (other than interest due at Maturity) will be made by check drawn on the Trustee (or another Person appointed by the Trustee) and mailed by the Trustee to the Person entitled thereto as provided in such Note. Following each Regular Record Date and Special Record Date, the Trustee will furnish the Issuer with a list of interest payments to be made on the following Interest Payment Date for each Certificated Note and in total for all Certificated Notes. Interest at Maturity will be payable to the Person to whom the payment of principal is payable. The Trustee will provide monthly to the Issuer lists of principal and interest to be paid on Certificated Notes maturing in the next month. The Trustee will be responsible for withholding taxes on interest paid on Certificated Notes as required by applicable law. On the first Business Day of each month, the Trustee will deliver to the Issuer by facsimile transmission a written statement, 25 indicating the total principal amount of Outstanding Certificated Notes for which it serves as trustee as of the immediately preceding Business Day. If any Interest Payment Date for a Fixed Rate Certificated Note is scheduled to occur on a day that is not a Business Day with respect to such Fixed Rate Certificated Note, the payment due on such Interest Payment Date will be made on the following day that is a Business Day with respect to such Fixed Rate Certificated Note, and no interest shall accrue on the amount payable on such Interest Payment Date for the period from and after such Interest Payment Date to such following day that is a Business Day. If any Interest Payment Date for a Floating Rate Certificated Note is scheduled to occur on a day that is not a Business Day with respect to such Floating Rate Certificated Note, such Interest Payment Date will be the following day that is a Business Day with respect to such Floating Rate Certificated Note; PROVIDED, HOWEVER, that in the case of a Floating Rate Certificated Note that is a LIBOR Note (or a Floating Rate Certificated Note for which LIBOR is the applicable Base Rate), if such Business Day is in the next succeeding calendar month, such Interest Payment Date will be the immediately preceding day that is a Business Day. If the date of Maturity of a Certificated Note is scheduled to occur on a day that is not a Business Day with respect to such Certificated Note, the payment due at Maturity will be made on the following day that is a Business Day with respect to such Certificated Note, and no interest shall accrue on the amount payable at Maturity for the period from and after the date of Maturity. 26 ACCEPTANCE AND REJECTION OF OFFERS: The Issuer has the sole right to accept offers to purchase Certificated Notes and may reject any offer in whole or in part. Each Agent may, in its discretion reasonably exercised, reject any offer to purchase Certificated Notes received by it in whole or part. Each Agent will advise the Issuer promptly by telephone or facsimile transmission of all offers to purchase Certificated Notes received by such Agent, other than those rejected by it. SETTLEMENT: The receipt by the Issuer of immediately available funds in exchange for an authenticated Certificated Note delivered to the selling Agent and such Agent's delivery of such Note against receipt of immediately available funds shall constitute "settlement" with respect to such Note. Each offer accepted by the Issuer will be settled on the third Business Day (or, if acceptance by the Issuer occurs after 4:30 p.m., New York time, on the fourth Business Day) following acceptance of such offer pursuant to the timetable for settlement set forth below, unless the Issuer and the purchaser agree to settlement on another day; PROVIDED, HOWEVER, that the Issuer will notify the Trustee at least twenty-four hours prior to the time of settlement. SETTLEMENT PROCEDURES: In the event of a purchase of Certificated Notes by one or more of the Agents, as principal, appropriate settlement details, if different from those set forth below, will be set forth in an applicable Terms Agreement to be entered into between such Agent or Agents and the Issuer pursuant to the Distribution Agreement. Settlement Procedures with regard to each Certificated Note sold by the Issuer through an Agent, as agent, shall be as follows: 27 A. Such Agent will advise the Issuer by facsimile transmission or orally (if confirmed within 24 hours by written telecommunication) of the following settlement information: 1. Name in which such Note is to be registered (the "Registered Owner"). 2. Address of the Registered Owner and address for payment of principal and interest. 3. Taxpayer identification or Social Security number of the Registered Owner (if available). 4. Principal amount. 5. Stated Maturity. 6. If such Note is Fixed Rate Note, the interest rate. If such Note is a Floating Rate Note, the following: a. Base Rate or Base Rates; b. Initial Interest Rate; c. Spread or Spread Multiplier, if any; d. Interest Reset Dates; e. Interest Reset Period; f. Interest Payment Dates; g. Index Maturity; 28 h. Interest Payment Period; i. Calculation Agent (if other than Citibank, N.A.; j. Maximum Interest Rate, if any; k. Minimum Interest Rate, if any; l. Interest Determination Dates; and m. Index Currency, if applicable. 7. Earliest Redemption Date, Redemption Price and other redemption provisions, if any. 8. Settlement date. 9. Original Issue Price. 10. Original issue discount, if any. 11. Agent's commission, determined as provided in Section 2 of the Distribution Agreement between the Issuer and such Agent. 12. Additional terms or provisions of such Note, if any. 13. Net Proceeds to the Issuer. 14. Commission. 15. Discount. 16. Initial Maturity Date (for Renewable Notes). 29 17. Final Maturity Date (for Renewable Notes). B. The Issuer will advise the Trustee by telephone (confirmed in writing signed by an authorized person at any time on the same date) or facsimile transmission signed by an authorized person of the information set forth in Settlement Procedure "A" above and the name of such Agent. C. The Issuer will deliver (if not previously delivered) to the Trustee a preprinted four-ply packet for such Note, which packet will contain the following documents in forms that have been approved by the Issuer, the Agents and the Trustee: 1. Note with customer confirmation. 2. Stub One - for the Trustee. 3. Stub Two - for the Agent. 4. Stub Three - for the Issuer. D. The Trustee will complete and authenticate such Note and deliver it (with the confirmation) and Stubs One and Two to such Agent, and such Agent will acknowledge receipt of the Note by stamping or otherwise marking Stub One and returning it to the Trustee. Such delivery will be made only against such acknowledgment of receipt and evidence that instructions have been given by such Agent for payment to the account of the Issuer at the Trustee, in funds available for immediate use, of an amount equal to the price of such note less Agent's commission. In the event that the instructions given by such 30 Agent for payment to the account of the Issuer are revoked, the Issuer will, as promptly as possible, wire transfer to the account of such Agent an amount of immediately available funds equal to the amount of such payment and such Agent will return such Note to the Trustee. E. Such Agent will deliver such Note (with confirmation) to the customer against payment in immediately available funds. Such Agent will obtain the acknowledgment of receipt of such Note by retaining Stub Two. F. The Trustee will retain Stub One and will send Stub Three to the Issuer by first-class mail. Monthly, the Trustee will send to the Issuer a written statement, setting forth (i) the principal amount of the Notes Outstanding under the Indenture as of the date of such report, (ii) a brief description of any sales of which the Issuer has advised the Trustee but which have not yet been settled and (iii) a description of issuances and retirements of, payments on and other activity relating to the Notes during the related month. SETTLEMENT PROCEDURES TIMETABLE: For offers of Certificated Notes solicited by an Agent, as agent, and accepted by the Issuer, Settlement Procedures "A" through "F" set forth above shall be completed on or before the respective times (New York City time) set forth below:
SETTLEMENT PROCEDURE TIME --------- ---- A . . . 3:00 p.m. on day before settlement date 31 B . . . 4:00 p.m. on day before settlement date C-D . . 2:15 p.m. on settlement date E . . . 3:00 p.m. on settlement date F . . . 5:00 p.m. on settlement date
FAILURE TO SETTLE: If a purchaser fails to accept delivery of and make payment for any Certificated Note, the selling Agent will notify the Issuer and the Trustee by telephone and return such Note to the Trustee. Upon receipt of such Note, the Issuer will immediately wire transfer to the account of the Agent an amount equal to the amount previously credited thereto in respect of such Note. Such wire transfer will be made on the settlement date, if possible, and in any event not later than the day following the settlement date. If the failure shall have occurred for any reason other than a default by the applicable Agent in the performance of its obligations hereunder and under the Distribution Agreement, the Issuer will pay to such Agent an amount equal to the interest earned by the Issuer with respect to such funds during the period when they were credited to the account of the Issuer. Immediately upon receipt of the Certificated Note in respect of which such failure occurred, the Trustee will mark such Note "cancelled," make appropriate entries in the Trustee's records and send such cancelled Note to the Issuer. PROCEDURE FOR POSTINGS: The Issuer will periodically contact one or more Agents for recommended postings with respect to Certificated Notes being offered. When the Issuer has determined or changed its postings with respect to Certificated Notes being offered, it will promptly advise the Agents. At such times as the Issuer is not posting, the Agents will not solicit firm offers but may record "indications of interest" only. PRICING SUPPLEMENTS: Within five Business Days after any sale of Certificated Notes, the Issuer will file or transmit for filing with the 32 Commission in compliance with Rule 424(b)(3) of the rules and regulations of the Commission promulgated under the Securities Act of 1933, as amended, a copy of a Pricing Supplement to the Prospectus relating to such Notes that reflects the applicable interest rates and other terms and will deliver a copy of such Pricing Supplement to each of the Agents and the Trustee. SUSPENSION OF SOLICITATION, AMENDMENT OR SUPPLEMENT: The Issuer may instruct the Agents to suspend solicitation of offers to purchase Certificated Notes at any time. Upon receipt of such instructions, each Agent will as soon as possible suspend such solicitations until such time as it has been advised by the Issuer that such solicitations may be resumed. The Issuer will, consistent with its obligations under the Distribution Agreement, promptly advise each Agent and the Trustee whether orders outstanding at the time such Agent suspends solicitation may be settled and whether copies of the Prospectus, as in effect at the time of the suspension, together with the appropriate Pricing Supplement, may be delivered in connection with the settlement of such orders. The Issuer will have the sole responsibility for such decision and for any arrangements that may be made in the event that the Issuer determines that such orders may not be settled or that copies of such Prospectus and Pricing Supplement may not be so delivered. DELIVERY OF PROSPECTUS: A copy of the most recent Prospectus and of the applicable Pricing Supplement, if any, must be provided to a purchaser by the applicable Agent prior to or at the time of the earlier of (a) the written confirmation of a sale sent to a purchaser of Certificated Notes or his agent and (b) the delivery of any such Certificated Notes to a purchaser or his agent (see Settlement Procedures). 33 ADVERTISING COSTS: The Issuer will determine with the Agents the amount and nature of advertising that may be appropriate in offering the Certificated Notes. Advertising expenses approved in writing by the Issuer in connection with the solicitation of purchases of Certificated Notes from the Issuer will be paid by the Issuer. 34 Appendix I FORM OF OFFICER'S CERTIFICATE THE WALT DISNEY COMPANY I, [Name], [Title] of The Walt Disney Company, a Delaware corporation (the "Company"), pursuant to Section 5(d) of the Distribution Agreement, dated [____________] (the "Distribution Agreement"), among the Company and [____________] (collectively, the "Agents"), relating to the offering from time to time by the Company directly or through the Agents of up to $5,000,000,000 aggregate principal amount of Medium-Term Notes of the Company, hereby certify on behalf of the Company that: 1. Except as contemplated in the Prospectus or reflected therein by the filing of any amendment or supplement thereto or any Incorporated Document, since the date of the most recent consolidated financial statements included or incorporated by reference in the Prospectus, there has not been any material adverse change in the consolidated financial condition or earnings of the Company and its subsidiaries, considered as one enterprise. 2. The representations and warranties of the Company contained in Section 1(a) of the Distribution Agreement (other than Section 1(a)(vii) thereof) are true and correct in all material respects with the same force and effect as though expressly made at and as of the date hereof. 3. The Company has complied with all agreements and satisfied all conditions required by the Distribution Agreement or the Indenture on its part to be performed or satisfied at or prior to the date hereof. 4. No stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been initiated or, to the best of my knowledge, threatened by the Securities and Exchange Commission. Capitalized terms used but not defined herein have the meaning given in the Distribution Agreement. IN WITNESS WHEREOF, I have hereunto signed my name this ____ day of _________. By: -------------------------------------- Name: Title: Appendix II FORM OF RELIANCE LETTER OF COUNSEL [Date] [Investment Banks] Re: The Walt Disney Company Medium-Term Notes ----------------------------------------- Dear Sirs: [We] [I] have delivered an opinion to you dated ___________ as counsel to The Walt Disney Company (the "Company"), pursuant to Section [5(a)] [5(b)] of the Distribution Agreement, dated as of ___________ (the "Distribution Agreement"), among the Company and [the investment banks]. You may continue to rely upon such opinion [(other than, in the case of the opinion delivered pursuant to Section 5(b) of the Distribution Agreement, the matters covered by Section 5(b)(i) and 5(b)(iv)(x) thereof, as to which no opinion is expressed)] as if it were dated as of this date, except that all statements and opinions contained therein shall be deemed to relate to the Registration Statement and Prospectus (as such terms are defined in the Distribution Agreement) as amended and supplemented to this date. This letter is delivered to you pursuant to Section 6(b) of the Distribution Agreement. Very truly yours, EX-4.1 4 EX-4.1 EXHIBIT 4.1 RESTATED CERTIFICATE OF INCORPORATION OF THE WALT DISNEY COMPANY The undersigned, David K. Thompson, certifies that he is the Senior Vice President-Assistant General Counsel of The Walt Disney Company, a corporation organized and existing under the laws of the State of Delaware (the "Corporation"), and hereby further certifies as follows: 1. The name of the Corporation is The Walt Disney Company and the name under which the corporation was originally incorporated is DC Holdco, Inc. 2. The original Certificate of Incorporation of the Corporation was filed in the Office of the Secretary of State of the State of Delaware on July 28, 1995. 3. Restated Certificates of Incorporation were filed in the office of the Secretary of State of Delaware on September 21, 1995, January 19, 1996, February 20, 1996 and February 25, 1998. 4. This Restated Certificate of Incorporation was duly adopted in accordance with the provisions of Sections 242 and 245 of the General Corporation Law of the State of Delaware. 5. This Restated Certificate of Incorporation restates and integrates and further amends the Certificate of Incorporation of this Corporation by amending Article FOURTH to provide for the increase in the total number of authorized shares of the Corporation. 6. The text of the Certificate of Incorporation as amended or supplemented heretofore is further amended to read as herein set forth in full: FIRST: The name of the Corporation is The Walt Disney Company. SECOND: The address of the registered office of the Corporation in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at that address is The Corporation Trust Company. THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may now or hereafter be organized under the General Corporation Law of the State of Delaware as set forth in Title 8 of the Delaware Code, as in effect from time to time (the "GCL"). FOURTH: The total number of shares of stock which the Corporation shall have authority to issue is 3,700,000,000, consisting of 3,600,000,000 shares of common stock, par value $0.01 per share ("Common Stock"), and 100,000,000 shares of preferred stock, par value $0.01 per share ("Preferred Stock"). Shares of the Preferred Stock of the Corporation may be issued from time to time in one or more classes or series, each of which class or series shall have such distinctive designation, number of shares, or title as shall be fixed by the Board of Directors of the Corporation (the "Board of Directors") prior to the issuance of any shares thereof. Each such class or series of Preferred Stock shall consist of such number of shares, and have such voting powers, full or limited, or no voting powers, and such preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof, as shall be stated in such resolution or resolutions providing for the issue of such 1 class or series of Preferred Stock as may be adopted from time to time by the Board of Directors prior to the issuance of any shares thereof pursuant to the authority hereby expressly vested in it, all in accordance with the laws of the State of Delaware. SERIES R PREFERRED STOCK. There is designated a Series R Preferred Stock of the Corporation, the designation and amount thereof and the voting powers, preferences and relative, participating, optional or other special rights of the shares of such series and the qualifications, limitations and restrictions thereof, which are as follows: Section 1. DESIGNATION AND AMOUNT. The shares of such series shall be designated "Series R Preferred Stock" ("Series R Preferred Stock") and the number of shares constituting such series shall be 1,800,000. Shares of Series R Preferred Stock shall have a par value of $.01 per share. Section 2. DIVIDENDS AND DISTRIBUTIONS. (A) Subject to the provisions for adjustment hereinafter set forth, the holders of shares of Series R Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, (i) cash dividends in an amount per share (rounded to the nearest cent) equal to 400 times the aggregate per share amount of all cash dividends declared or paid on the Common Stock of the Corporation and (ii) a preferential cash dividend (a "Preferential Dividend"), if any, on the fifteenth day of January, April, July and October of each year (each a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series R Preferred Stock, in an amount equal to $1.00 per share of Series R Preferred Stock less the per share amount of all cash dividends declared on the Series R Preferred Stock pursuant to clause (i) of this sentence since the immediately preceding Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series R Preferred Stock. In the event the Corporation shall, at any time after the issuance of any share or fraction of a share of Series R Preferred Stock, make any distribution on the shares of Common Stock, whether by way of a dividend or a reclassification of stock, a recapitalization, reorganization or partial liquidation of the Corporation or otherwise, which is payable in cash or any debt security, debt instrument, real or personal property or any other property (other than cash dividends subject to clause (i) of the immediately preceding sentence and other than a distribution of shares of Common Stock or other capital stock of the Corporation and other than a distribution of rights or warrants to acquire any such share, including any debt security convertible into or exchangeable for any such share, at a price less than the Current Market Price of such share), then and in each such event the Corporation shall simultaneously pay on each then outstanding share of Series R Preferred Stock of the Corporation a distribution, in like kind, of 400 times (subject to the provisions for adjustment hereinafter set forth) such distribution paid on a share of Common Stock. The dividends and distributions on the Series R Preferred Stock to which holders thereof are entitled pursuant to clause (i) of the first sentence of this paragraph and the second sentence of this paragraph are hereinafter referred to as "Participating Dividends," and the multiple of cash and non-cash dividends on the Common Stock applicable to the determination of the Participating Dividends, which shall be 400, subject to adjustment from time to time as hereinafter provided, is hereinafter referred to as the "Dividend Multiple." In the event the Corporation shall at any time declare or pay any dividend or make any distribution on Common Stock payable in shares of Common Stock, or effect a subdivision or split or a combination, consolidation or reverse split of the outstanding shares of Common Stock into a greater or lesser number of shares of Common Stock, then in each such event the Dividend Multiple thereafter applicable to the determination of the amount of Participating Dividends which holders of shares of Series R Preferred Stock shall be entitled to receive shall be the Dividend Multiple applicable immediately prior to such event multiplied by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. (B) The Corporation shall declare each Participating Dividend at the same time it declares any cash or non-cash dividend or distribution on the Common Stock in respect of which a Participating Dividend is required to be paid. No cash or non-cash dividend or distribution on the Common Stock in respect of which a Participating Dividend is required shall be paid or set aside for payment on the 2 Common Stock unless a Participating Dividend in respect of such dividend or distribution on the Common Stock shall be simultaneously paid or set aside for payment on the Series R Preferred Stock. (C) Preferential Dividends shall begin to accumulate on outstanding shares of Series R Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issuance of any shares of Series R Preferred Stock. Accumulated but unpaid Preferential Dividends shall cumulate but shall not bear interest. Preferential Dividends paid on the shares of Series R Preferred Stock in an amount less than the total amount of such dividends at the time accumulated and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. Section 3. VOTING RIGHTS. The holders of shares of Series R Preferred Stock shall have the following voting rights: (A) Each share of Series R Preferred Stock shall entitle the holder thereof to 400 votes on all matters submitted to a vote of the stockholders of the Corporation. The number of votes which a holder of Series R Preferred Stock is entitled to cast, as the same may be adjusted from time to time as hereinafter provided, is hereinafter referred to as the "Vote Multiple." In the event the Corporation shall at any time declare or pay any dividend on Common Stock payable in shares of Common Stock, or effect a subdivision or split or a combination, consolidation or reverse split of the outstanding shares of Common Stock into a greater or lesser number of shares of Common Stock, then in each such case the Vote Multiple thereafter applicable to the determination of the number of votes per share to which holders of shares of Series R Preferred Stock shall be entitled after such event shall be the Vote Multiple immediately prior to such event multiplied by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. (B) Except as otherwise provided herein or by law, the holders of shares of Series R Preferred Stock and the holders of shares of Common Stock shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation. (C) If at the time of any annual meeting of stockholders for the election of directors a default in preference dividends on the Series R Preferred Stock shall exist, the number of directors constituting the Board of Directors of the Corporation shall be increased by two, and the holders of the Series R Preferred Stock, together with the holders of any other series of Preferred Stock of the Corporation who shall have been granted voting rights to elect directors upon a default in the payment of dividends by the Corporation (collectively with the holders of the Series R Preferred Stock, the "Preferred Stockholders"), shall have the right at such meeting, voting together as a single class without regard to series, to the exclusion of the holders of Common Stock, to elect two directors of the Corporation to fill such newly created directorships. Such right shall continue until there are no dividends in arrears upon the Series R Preferred Stock. Each director elected by the Preferred Stockholders (herein called a "Preferred Director") shall continue to serve as such director for the full term for which he shall have been elected, notwithstanding that prior to the end of such term a default in preference dividends shall cease to exist. Any Preferred Director may be removed by, and shall not be removed without cause except by, the vote of the Preferred Stockholders, voting together as a single class without regard to series, at a meeting of the stockholders, or of the Preferred Stockholders, called for the purpose. So long as a default in any preference dividends on the Series R Preferred Stock shall exist (i) any vacancy in the office of a Preferred Director may be filled (except as provided in the following clause (ii)) by an instrument in writing signed by the remaining Preferred Director and filed with the Corporation and (ii) in case of the removal of any Preferred Director, the vacancy may be filled by the vote of the Preferred Stockholders, voting together as a single class without regard to series, at the same meeting at which such removal shall be voted. Each director appointed as aforesaid by the remaining Preferred Director shall be deemed, for all purposes hereof, to be a Preferred Director. Whenever the term of office of the Preferred Directors shall end and a default in preference dividends shall no longer exist, the number of directors constituting the Board of Directors shall be reduced by two. For the purposes hereof, a "default in preference dividends" on the Series R Preferred Stock shall be deemed to have occurred whenever the amount of accrued dividends upon the Series R Preferred Stock shall be equivalent to six full quarter yearly dividends or more and, having so occurred, such default shall be deemed to exist thereafter until, but only until, all accrued dividends on all 3 shares of Series R Preferred Stock then outstanding shall have been paid to the end of the last preceding quarterly dividend period. (D) Except as otherwise required by law or set forth herein, holders of Series R Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for the taking of any corporate action. Section 4. CERTAIN RESTRICTIONS. (A) Whenever Preferential Dividends or Participating Dividends are in arrears or the Corporation shall be in default in payment thereof, thereafter and until all accumulated and unpaid Preferential Dividends and Participating Dividends, whether or not declared, on shares of Series R Preferred Stock outstanding shall have been paid or set aside for payment in full, and in addition to any and all other rights which any holder of shares of Series R Preferred Stock may have in such circumstances, the Corporation shall not: (i) declare or pay dividends on, make any other distributions on or redeem or purchase or otherwise acquire for consideration any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series R Preferred Stock; (ii) declare or pay dividends or make any other distributions on any shares of stock ranking on a parity as to dividends with the Series R Preferred Stock, unless dividends are paid ratably on the Series R Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled; (iii) except as permitted by subparagraph (iv) of this paragraph (A), redeem or purchase or otherwise acquire for consideration shares of any stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series R Preferred Stock, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such parity stock in exchange for shares of any stock of the Corporation ranking junior (both as to dividends and upon liquidation, dissolution or winding up) to the Series R Preferred Stock; or (iv) purchase or otherwise acquire for consideration any shares of Series R Preferred Stock, or any shares of stock ranking on a parity with the Series R Preferred Stock (either as to dividends or upon liquidation, dissolution or winding up), except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes. (B) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner. (C) The Corporation shall not issue any shares of Series R Preferred Stock except upon exercise of Rights issued pursuant to that certain Rights Agreement dated as of November 8, 1995 between the Corporation and The Bank of New York (the "Rights Agreement"), a copy of which is on file at the principal executive office of the Corporation and shall be made available to holders of record of Common Stock or Series R Preferred Stock without charge upon written request therefor addressed to the Secretary of the Corporation. Notwithstanding the foregoing sentence, nothing contained in the provisions hereof shall prohibit or restrict the Corporation from issuing for any purpose any series of Preferred Stock with rights and privileges similar to, different from, or greater than those of the Series R Preferred Stock. 4 Section 5. REACQUIRED SHARES. Any shares of Series R Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and canceled promptly after the acquisition thereof. The Corporation shall cause all such shares upon their retirement and cancellation to become authorized but unissued shares of Preferred Stock, without designation as to series, and such shares may be reissued as part of a new series of Preferred Stock to be created by resolution or resolutions of the Board of Directors. Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, no distribution shall be made (i) to the holders of shares of stock ranking junior to the Series R Preferred Stock (upon liquidation, dissolution or winding up) unless the holders of shares of Series R Preferred Stock shall have received, subject to adjustment as hereinafter provided, the greater of either (A) $100.00 per share plus an amount equal to accumulated and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment, or (B) the amount equal to 400 times the aggregate amount to be distributed per share to holders of Common Stock, or (ii) to the holders of stock ranking on a parity upon liquidation, dissolution or winding up with the Series R Preferred Stock, unless simultaneously therewith distributions are made ratably on the Series R Preferred Stock and all other shares of such parity stock in proportion to the total amounts to which the holders of shares of Series R Preferred Stock are entitled under clause (i) (A) of this sentence and to which the holders of such parity shares are entitled, in each case upon such liquidation, dissolution or winding up. The amount to which holders of Series R Preferred Stock shall be entitled upon liquidation, dissolution or winding up of the Corporation pursuant to clause (i) (B) of the foregoing sentence is hereinafter referred to as the "Participating Liquidation Amount," and the multiple of the amount to be distributed to holders of shares of Common Stock upon the liquidation, dissolution or winding up of the Corporation applicable pursuant to said clause to the determination of the Participating Liquidation Amount, which shall be 400 subject to adjustment from time to time as hereinafter provided, is hereinafter referred to as the "Liquidation Multiple." In the event the Corporation shall at any time declare or pay any dividend on Common Stock payable in shares of Common Stock, or effect a subdivision or split or a combination, consolidation or reverse split of the outstanding shares of Common Stock into a greater or lesser number of shares of Common Stock, then in each such case the Liquidation Multiple thereafter applicable to the determination of the Participating Liquidation Amount to which holders of Series R Preferred Stock shall be entitled after such event shall be the Liquidation Multiple applicable immediately prior to such event multiplied by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event Section 7. CERTAIN RECLASSIFICATIONS AND OTHER EVENTS (A) In the event that holders of shares of Common Stock receive in respect of their shares of Common Stock any share of capital stock of the Corporation (other than any share of Common Stock of the Corporation), whether by way of reclassification, recapitalization, reorganization, dividend or other distribution or otherwise ("Transaction"), then in each such event the dividend rights, rights upon the liquidation, dissolution or winding up of the Corporation and voting rights of the shares of Series R Preferred Stock shall be adjusted so that after such event the holders of Series R Preferred Stock shall be entitled, in respect of each share of Series R Preferred Stock held, in addition to such rights in respect thereof to which such holder was entitled immediately prior to such adjustment, to (i) such additional dividends as equal the Dividend Multiple in effect immediately prior to such Transaction multiplied by the additional dividends which the holder of a share of Common Stock shall be entitled to receive by virtue of the receipt in the Transaction of such capital stock, (ii) such additional distributions upon liquidation, dissolution or winding up of the Corporation as equal the Liquidation Multiple in effect immediately prior to such Transaction multiplied by the additional amount which the holder of a share of Common Stock shall be entitled to receive upon liquidation, dissolution or winding up of the Corporation by virtue of the receipt in the Transaction of such capital stock, as the case may be, all as provided by the terms of such capital stock and (iii) such additional voting rights as equal the Vote Multiple in effect immediately prior to such Transaction multiplied by the additional voting rights which the holder of a share of Common Stock shall be entitled to receive by virtue of the receipt in the Transaction of such capital stock. 5 (B) In the event that holders of shares of Common Stock receive in respect of their shares of Common Stock any right or warrant to purchase Common Stock (including as such a right, for all purposes of this paragraph, any security convertible into or exchangeable for Common Stock) at a purchase price per share less than the Current Market Price (as hereinafter defined) of a share of Common Stock on the date of issuance of such right or warrant, then in each such event the dividend rights, rights upon the liquidation, dissolution or winding up of the Corporation and voting rights of the shares of Series R Preferred Stock shall each be adjusted so that after such event the Dividend Multiple and the Liquidation Multiple and the Vote Multiple shall each be the product of the Dividend Multiple, the Liquidation Multiple and the Vote Multiple, as the case may be, in effect immediately prior to such event multiplied by a fraction the numerator at or of which shall be the number of shares of Common Stock outstanding immediately before such issuance of rights or warrants plus the maximum number of shares of Common Stock which could be acquired upon exercise in full of all such rights or warrants and the denominator of which shall be the number of shares of Common Stock outstanding immediately before such issuance of rights or warrants plus the number of shares of Common Stock which could be purchased, at the Current Market Price of the Common Stock at the time of such issuance, by the maximum aggregate consideration payable upon exercise in full of all such rights or warrants. (C) In the event that holders of shares of Common Stock receive in respect of their shares of Common Stock any right or warrant to purchase capital stock of the Corporation (other than shares of Common Stock), including as such a right, for all purposes of this paragraph, any security convertible into or exchangeable for capital stock of the Corporation (other than Common Stock), at a purchase price per share less than the Current Market Price of such shares of capital stock on the date of issuance of such right or warrant, then in each such event the dividend rights, rights upon liquidation, dissolution or winding up of the Corporation and the voting rights of the shares of Series R Preferred Stock shall each be adjusted so that after such event each holder of a share of Series R Preferred Stock shall be entitled, in addition to such rights in respect thereof to which such holder was entitled immediately prior to such event, to receive (i) such additional dividends as equal the Dividend Multiple in effect immediately prior to such event multiplied, first, by the additional dividends to which the holder of a share of Common Stock shall be entitled upon exercise of such right or warrant by virtue of the capital stock which could be acquired upon such exercise and multiplied again by the Discount Fraction (as hereinafter defined), (ii) such additional distributions upon liquidation, dissolution or winding up of the Corporation as equal the Liquidation Multiple in effect immediately prior to such event multiplied, first, by the additional amount which the holder of a share of Common Stock shall be entitled to receive upon liquidation, dissolution or winding up of the Corporation upon exercise of such right or warrant by virtue of the capital stock which could be acquired upon such exercise and multiplied again by the Discount Fraction and (iii) such additional voting rights as equal the Vote Multiple in effect immediately prior to such event multiplied, first, by the additional voting rights to which the holder of a share of Common Stock shall be entitled upon exercise of such right or warrant by virtue of the capital stock which could be acquired upon such exercise and multiplied again by the Discount Fraction. For purposes of this paragraph, the "Discount Fraction" shall be a fraction the numerator of which shall be the difference between the Current Market Price (as hereinafter defined) of a share of the capital stock subject to a right or warrant distributed to holders of shares of Common Stock as contemplated by this paragraph immediately after the distribution thereof and the purchase price per share for such share of capital stock pursuant to such right or warrant and the denominator of which shall be the Current Market Price of a share of such capital stock immediately after the distribution of such right or warrant. (D) For purposes of this Section 7, the "Current Market Price" of a share of capital stock of the Corporation (including a share of Common Stock) on any date shall be deemed to be the average of the daily closing prices per share thereof over the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date, provided that in the event that such Current Market Price of any such share of capital stock is determined during a period which includes any date that is within 30 Trading Days after the ex-dividend date for (i) a dividend or distribution on stock payable in shares of such stock or securities convertible into shares of such stock or (ii) any subdivision, split, combination, consolidation, reverse stock split or reclassification of such stock, then in each such event, the Current Market Price shall be appropriately adjusted by the Board of Directors to reflect the Current Market Price of such stock to take into account ex-dividend trading. The closing price for any day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and 6 asked prices, regular way, in either case as reported in the principle consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the shares are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares are listed or admitted to trading or, if the shares are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or such other system then in use, or if on any such date the shares are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the shares selected by the Board of Directors. The term "Trading Day" shall mean a day on which the principal national securities exchange on which the shares are listed or admitted to trading is open for the transaction of business or, if the shares are not listed or admitted to trading on any national securities exchange, on which the New York Stock Exchange or such other national securities exchange as may be selected by the Board of Directors is open. If the shares are not publicly held or not so listed or traded on any day within the period of 30 Trading Days applicable to the determination of Current Market Price thereof as aforesaid, "Current Market Price" shall mean the fair market value thereof per share as determined in good faith by the Board of Directors. In either case referred to in the foregoing sentence, the determination of Current Market Price shall be described in a statement filed with the Secretary of the Corporation. Section 8. CONSOLIDATION, MERGER, ETC. In the event that the Corporation shall enter into any consolidation, merger, combination or other transaction in which shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such event each outstanding share of Series R Preferred Stock shall at the same time be similarly exchanged for or changed into the aggregate amount of stock, securities, cash and other property (payable in like kind), as the case may be, for which or into which each share of Common Stock is changed or exchanged multiplied by the higher of the Dividend Multiple, the Liquidation Multiple or the Vote Multiple in effect immediately prior to such event. Section 9. EFFECTIVE TIME OF ADJUSTMENTS. (A) Adjustments to the Series R Preferred Stock required by the provisions hereof shall be effective as of the time at which the event requiring such adjustments occurs. (B) The Corporation shall give prompt written notice to each holder of a share of Series R Preferred Stock of the effect on any such shares of any adjustment to the dividend rights or rights upon liquidation, dissolution or winding up of the Corporation required by the provisions hereof. Notwithstanding the foregoing sentence, the failure of the Corporation to give such notice shall not affect the validity of or the force or effect of or the requirement for such adjustment. Section 10. NO REDEMPTION. The shares of Series R Preferred Stock shall not be redeemable at the option of the Corporation or any holder thereof. Notwithstanding the foregoing sentence of this Section, the Corporation may acquire shares of Series R Preferred Stock in any other manner permitted by law or the provisions hereof. Section 11. RANKING. Unless otherwise provided in the Restated Certificate of Incorporation or a Certificate of Designation relating to a subsequent series of Preferred Stock of the Corporation, the Series R Preferred Stock shall rank junior to all other series of the Corporation's Preferred Stock as to the payment of dividends and the distribution of assets on liquidation, dissolution or winding up and senior to the Common Stock. Section 12. AMENDMENT. After the Distribution Date (as defined in the Rights Agreement), the provisions of the Restated Certificate of Incorporation shall not be amended in any manner which would materially affect the rights, privileges or powers of the Series R Preferred Stock without, in addition to any other vote of stockholders required by law, the affirmative vote of the holders of 80% or more of the outstanding shares of Series R Preferred Stock, voting together as a single class. 7 FIFTH: The business and affairs of the Corporation shall be managed by or under the direction of a Board of Directors consisting of not less than nine directors or more than twenty-one directors, the exact number of directors to be determined from time to time solely by resolution adopted by the Board of Directors. Until the annual meeting of stockholders in 2001, the directors shall be divided into three classes, consisting initially of five, six and five directors and designed Class I, Class II and Class III, respectively. Each director elected prior to the effective date of this Article FIFTH shall serve for the full term for which he or she was elected, such that the term of each director elected at the 1996 annual meeting (Class III) shall end at the annual meeting in 1999, the term of each director elected at the 1997 annual meeting (Class I) shall end at the annual meeting in 2000, and the term of each director elected at the 1998 annual meeting (Class II) shall end at the annual meeting in 2001. The term of each director elected after the 1998 annual meeting, whether at an annual meeting or to fill a vacancy in the Board of Directors arising for any reason, including an increase in the size of the Board of Directors, shall end at the first annual meeting following his or her election. Commencing with the annual meeting in 2001, the foregoing classification of the Board of Directors shall cease, and all directors shall be of one class and serve for a term ending at the annual meeting following the annual meeting at which the director was elected. In no case shall a decrease in the number of directors shorten the term of any incumbent director. Each director shall hold office after the annual meeting at which his or her term is scheduled to end until his or her successor shall be elected and shall qualify, subject, however, to prior death, resignation, disqualification or removal from office. Any newly created directorship resulting from an increase in the number of directors may be filled by a majority of the Board of Directors then in office, provided that a quorum is present, and any other vacancy on the Board of Directors may be filed by a majority of the directors then in office, even if less than a quorum, or by a sole remaining director. SIXTH: Notwithstanding the provisions of Article FIFTH, whenever the holders of any one or more classes or series of Preferred Stock issued by the Corporation shall have the right, voting separately by class or series, to elect directors at an annual or special meeting of stockholders, the election, term of office, filling of vacancies and other features of such directorships shall be governed by the terms of this Restated Certificate of Incorporation or the resolution or resolutions adopted by the Board of Directors pursuant to Article FOURTH applicable thereto. SEVENTH: Elections of directors at an annual or special meeting of stockholders shall be by written ballot unless the Bylaws of the Corporation shall otherwise provide. EIGHTH: Special meetings of the stockholders of the Corporation for any purpose or purposes may be called at any time by the Board of Directors, the Chairman of the Board of Directors or the President. Special meetings of the stockholders of the Corporation may not be called by any other person or persons. NINTH: A. Except as set forth in Section B of this Article NINTH, the affirmative vote of the holders of four-fifths (4/5) of the outstanding stock of the Corporation entitled to vote shall be required for: (i) any merger or consolidation to which the Corporation, or any of its subsidiaries, and an Interested Person (as hereinafter defined) are parties; (ii) any sale or other disposition by the Corporation, or any of its subsidiaries, of all or substantially all of its assets to an Interested Person; (iii) any purchase or other acquisition by the Corporation, or any of its subsidiaries, of all or substantially all of the assets or stock of an Interested Person; and (iv) any other transaction with an Interested Person which requires the approval of the stockholders of the Corporation under the GCL. B. The provisions of Section A of this Article NINTH shall not be applicable to any transaction described therein if (i) such transaction is approved by resolution of the Corporation's Board of Directors, 8 provided that a majority of the members of the Board of Directors voting for the approval of such transaction were duly elected and acting members of the Board of Directors prior to the date that the person, firm or corporation, or any group thereof, with whom such transaction is proposed, became an Interested Person, or (ii) the provision of a vote in excess of that required by the GCL for such transaction violates the express provisions of the GCL. C. As used in this Article NINTH, the term "Interested Person" shall mean any person, firm or corporation, or any group thereof, acting or intending to act in concert, including any person directly or indirectly controlling or controlled by or under direct or indirect common control with such person, firm or corporation or group, which owns of record or beneficially, directly or indirectly, five percent (5%) or more of any class of voting securities of the Corporation. D. The affirmative vote of the owners of four-fifths (4/5) of the outstanding stock of the Corporation entitled to vote shall be required to amend, alter or repeal this Article NINTH. TENTH: The officers of the Corporation shall be chosen in such a manner, shall hold their offices for such terms and shall carry out such duties as are determined solely by the Board of Directors, subject to the right of the Board of Directors to remove any officer or officers at any time with or without cause. ELEVENTH: A. The Corporation shall indemnify to the full extent authorized or permitted by law (as now or hereinafter in effect) any person made, or threatened to be made, a defendant or witness to any action, suit or proceeding (whether civil or criminal or otherwise) by reason of the fact that he, his testator or intestate, is or was a director or officer of the Corporation or by reason of the fact that such director or officer, at the request of the Corporation, is or was serving any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, in any capacity. Nothing contained herein shall affect any rights to indemnification to which employees other than directors and officers may be entitled by law. No amendment or repeal of this Section A of Article ELEVENTH shall apply to or have any effect on any right to indemnification provided hereunder with respect to any acts or omissions occurring prior to such amendment or repeal. B. A director of this Corporation shall not be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted under the GCL. Any repeal or modification of the foregoing paragraph shall not adversely affect any right or protection of a director of the Corporation existing hereunder with respect to any act or omission occurring prior to such repeal or modification. C. In furtherance and not in limitation of the powers conferred by statute: (i) the Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under the provisions of law; and (ii) the Corporation may create a trust fund, grant a security interest and/or use other means (including, without limitation, letters of credit, surety bonds and/or other similar arrangements), as well as enter into contracts providing indemnification to the full extent authorized or permitted by law and including as part thereof provisions with respect to any or all of the foregoing to ensure the payment of such amounts as may become necessary to effect indemnification as provided therein, or elsewhere. 9 TWELFTH: In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to adopt, repeal, alter, amend or rescind the Bylaws of the Corporation. In addition, the Bylaws of the Corporation may be adopted, repealed, altered, amended or rescinded by the affirmative vote of sixty-six and two-thirds percent (66-2/3%) of the outstanding stock of the Corporation entitled to vote thereon. THIRTEENTH: The Corporation reserves the right to repeal, alter, amend or rescind any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred on stockholders herein are granted subject to this reservation. IN WITNESS WHEREOF, The Walt Disney Company. has caused its corporate seal to be hereunto affixed and this Restated Certificate of Incorporation to be signed by David K. Thompson, its Senior Vice President-Assistant General Counsel, this 10th day of June, 1998. THE WALT DISNEY COMPANY /s/ David K. Thompson ---------------------------------------- David K. Thompson Senior Vice President-Assistant General Counsel 10 EX-5.1 5 EXHIBIT 5.1 EXHIBIT 5.1 [LETTERHEAD OF O'MELVENY & MYERS LLP] August 3, 1998 The Walt Disney Company 500 South Buena Vista Street Burbank, California 91521 Re: The Walt Disney Company Amendment No. 1 to Registration Statement on Form S-3 (File No. 333-52659) ----------------------------------------------------- Ladies and Gentlemen: We have acted as special counsel to The Walt Disney Company, a Delaware corporation ("Disney"), in connection with the preparation of Amendment No. 1 to the Registration Statement on Form S-3 (File No. 333-52659) (the "Registration Statement") filed with the Securities and Exchange Commission (the "Commission") on August 3, 1998 under the Securities Act of 1933, as amended (the "Securities Act"). The Registration Statement relates to the issuance and sale from time to time, pursuant to Rule 415 of the General Rules and Regulations of the Commission promulgated under the Securities Act, of the following securities of Disney with an aggregate initial public offering price of up to $5,000,000,000 or the equivalent thereof in one or more foreign currencies or composite currencies: (i) senior, senior subordinated or subordinated debt securities, in one or more series (the "Debt Securities"), which may be issued under Indentures (the "Indentures") entered into or proposed to be entered into among Disney and trustees (the "Trustees") that have been or will be appointed prior to the issuance of Debt Securities; (ii) shares of Disney preferred stock, par value $.01 per share (the "Preferred Stock"), in one or more series, which may also be issued in the form of depositary shares (the "Depositary Shares") evidenced by depositary receipts (the "Receipts"); (iii) shares of Disney common stock, par value $.01 per share (the "Common Stock"); (iv) warrants to purchase Debt Securities (the "Debt Warrants") to be issued pursuant to a warrant agreement (the "Debt Warrant Agreement") between Disney and a warrant agent to be appointed prior to the issuance of Debt Warrants; (v) warrants to purchase Preferred Stock (the "Preferred Stock Warrants") to be issued pursuant to a warrant agreement (the "Preferred Stock Warrant Agreement") between Disney and a warrant agent to be appointed prior to the issuance of Preferred Stock Warrants; and (vi) warrants to purchase Common Stock (the "Common Stock Warrants" and, together with the Debt Warrants and the Preferred Stock Warrants, the "Warrants") to be issued pursuant to a warrant agreement (the "Common Stock Warrant Agreement" and, together with the Debt Warrant Agreement and the Preferred Stock Warrant Agreement, the "Warrant Agreements") between Disney and a warrant agent to be appointed prior to the issuance of Common Stock Warrants. The Debt Securities, the Preferred Stock, the Common Stock, the Depositary Shares and the Warrants are collectively referred to herein as the "Offered Securities." This opinion is being furnished in accordance with the requirements of Item 601(b)(5) of Regulation S-K promulgated under the Securities Act. In connection with this opinion, we have examined originals or copies, certified or otherwise identified to our satisfaction, of such corporate and other records and documents as we considered appropriate including, without limitation: (i) the Registration Statement; (ii) the form of underwriting agreement filed as an exhibit to the Registration Statement that may be entered into between or among Disney and one or more underwriters to be named therein in connection with any offering of Debt Securities; (iii) the form of distribution agreement filed as an exhibit to the Registration Statement that may be entered into between or among Disney and one or more agents to be named therein in connection with the sale of certain Debt Securities (the "Distribution Agreement"); (iv) the Indentures or forms thereof filed, or incorporated by reference, as exhibits to the Registration Statement; (v) the form of deposit agreement (the "Deposit Agreement") filed as an exhibit to the Registration Statement that may be entered into among Disney, a depositary to be appointed by Disney (the "Depositary") and the holders from time to time of Receipts issued thereunder in connection with any offering of Depositary Shares, including the form of Receipt evidencing the Depositary Shares included as Annex A to the Deposit Agreement; 2 (vi) the forms of the Warrant Agreements filed as exhibits to the Registration Statement; (vii) a specimen certificate representing the Common Stock; (viii) the Restated Certificate of Incorporation of Disney, as presently in effect; (ix) the Amended By-laws of Disney, as presently in effect; and (x) certain resolutions of the Board of Directors of Disney adopted at a meeting duly held on April 21, 1998 (the "Board Resolutions") relating to the issuance and sale of the Offered Securities and related matters, including a delegation of authority to Disney's Executive Committee to fix and determine the terms of certain of the Offered Securities. We have also obtained and relied upon certificates of public officials, certificates of officers or other representatives of Disney and others, and certificates as we considered appropriate. In our examination, we have assumed the legal capacity of all natural persons, the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified, conformed or photostatic copies and the authenticity of the originals of such latter documents. In making our examination of documents executed or to be executed by parties other than Disney, we have assumed that such parties had or will have the power, corporate or other, to enter into and perform all obligations thereunder and have also assumed the due authorization by all requisite action, corporate or other, and execution and delivery by such parties of such documents and the validity and binding effect thereof. As to any facts material to the opinions expressed herein which were not independently established or verified, we have relied upon oral or written statements and representations of officers and other representatives of Disney and others. We do not express any opinion as to the laws of any jurisdiction other than those of the State of New York and the General Corporation Law of the State of Delaware. 3 On the basis of such examination, our reliance upon the assumptions in this opinion and our consideration of those questions of law we considered relevant, and subject to the limitations and qualifications in this opinion, we are of the opinion that: 1. With respect to any series of Debt Securities (the "Offered Debt Securities"), when (i) the authorized officers of Disney have taken all necessary corporate action to fix and determine the terms of the Offered Debt Securities in accordance with the Board Resolutions; (ii) the terms of the Offered Debt Securities and of their issuance and sale have been duly established in conformity with the Indenture; (iii) the applicable Indenture has been duly executed and delivered; and (iv) the Offered Debt Securities have been duly executed and authenticated in accordance with the terms of the applicable Indenture and duly delivered to the purchasers thereof upon payment of the agreed-upon consideration therefor, the issuance and sale of the Offered Debt Securities (including any Offered Debt Securities duly issued (A) upon exchange or conversion of any shares of Preferred Stock that are exchangeable or convertible into Debt Securities or (B) upon the exercise of any Warrants exercisable for Debt Securities) will have been duly authorized by all necessary corporate action on the part of Disney, and the Offered Debt Securities will constitute valid and binding obligations of Disney enforceable against Disney in accordance with their terms, except (x) as may be limited by (1) bankruptcy, insolvency, reorganization, moratorium or similar laws relating to creditors' rights generally (including, without limitation, fraudulent conveyance laws), (2) general principles of equity including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance or injunctive relief, regardless of whether considered in a proceeding at law or in equity, (3) requirements that a claim with respect to any Offered Debt Securities denominated other than in United States dollars (or a judgment denominated other than in United States dollars in respect of such claim) be converted into United States dollars at a rate of exchange prevailing on a date determined pursuant to applicable law and (4) governmental authority to limit, delay or prohibit the making of payments outside the United States or in foreign currency or composite currency and (y) the waiver contained in Section 6.12 of the applicable Indenture may be deemed unenforceable and the provisions regarding jurisdiction contained in Section 12.9 of the senior Debt Securities Indenture and Section 13.9 of the senior subordinated and subordinated Debt Securities Indentures may not be honored by the courts included or excluded. 2. With respect to the shares of any series of Preferred Stock (the "Offered Preferred Stock"), when (i) the Board of Directors or the Executive Committee has taken all necessary corporate action to fix and determine the terms of the Offered Preferred Stock in accordance with the Board Resolutions, including the adoption of a Certificate of Designation for such Preferred Stock in the form required by applicable law; (ii) such 4 Certificate of Designation has been duly filed with the Secretary of State of the State of Delaware; (iii) certificates representing the shares of the Offered Preferred Stock have been manually signed by an authorized officer of the transfer agent and registrar for the Preferred Stock and registered by such transfer agent and registrar, and delivered to the purchasers thereof; and (iv) Disney receives consideration per share of the Offered Preferred Stock (A) in such amount (not less than the par value per share) as may be determined by the Board of Directors or the Executive Committee in the form of cash, services rendered, personal property, real property, leases of real property, or a combination thereof or (B) in an amount not less than the amount of consideration determined to be capital, in any of the above-stated forms, and a binding obligation of the purchaser to pay the balance of such purchase price, the issuance and sale of the shares of Offered Preferred Stock will have been duly authorized by all necessary corporate action on the part of Disney, and such shares will be validly issued, fully paid and nonassessable. 3. With respect to Depositary Shares representing fractional interests in any series of Preferred Stock, when (i) the Executive Committee has taken all necessary corporate action to fix and determine the terms of the Depositary Shares and the related series of Preferred Stock in accordance with the Board Resolutions, including the adoption of a Certificate of Designation for such related series of Preferred Stock in the form required by applicable law; (ii) such Certificate of Designation has been duly filed with the Secretary of State of the State of Delaware; (iii) the terms of the Depositary Shares and of their issuance and sale have been duly established in conformity with the Deposit Agreement; (iv) the applicable Deposit Agreement has been duly executed and delivered; (v) the related series of Preferred Stock has been duly authorized and validly issued in accordance with the laws of the State of Delaware and delivered to the Depositary for deposit in accordance with the Deposit Agreement; and (vi) the Receipts evidencing the Depositary Shares have been duly issued against deposit of the related series of Preferred Stock with the Depositary in accordance with the Deposit Agreement, the issuance and sale of the Depositary Shares will be validly issued and the Receipts will entitle the holders thereof to the rights specified therein and in the Deposit Agreement. 4. With respect to the shares of Common Stock (the "Offered Common Stock"), when (i) the Board of Directors or the Executive Committee has taken all necessary corporate action to authorize the issuance and sale of the Offered Common Stock in 5 accordance with the Board Resolutions; (ii) certificates representing the shares of the Offered Common Stock in the form of the specimen certificates examined by us have been manually signed by an authorized officer of the transfer agent and registrar for the Common Stock and registered by such transfer agent and registrar, and delivered to the purchasers thereof; and (iii) Disney receives consideration per share of the Offered Common Stock (A) in such an amount (not less than the par value per share) as may be determined by the Board of Directors or the Executive Committee in the form of cash, services rendered, personal property, real property, leases of real property, or a combination thereof or (B) in an amount not less than the amount of consideration determined to be capital, in any of the above-stated forms, and a binding obligation of the purchaser to pay the balance of such purchase price, the issuance and sale of the shares of Offered Common Stock (including any Offered Common Stock duly issued (1) upon exchange or conversion of any Debt Securities or shares of Preferred Stock that are exchangeable or convertible into Common Stock or (2) upon the exercise of any Warrants exercisable for Common Stock) will have been duly authorized by all necessary corporate action on the part of Disney, and such shares will be validly issued, fully paid and nonassessable. 5. With respect to any Warrants (the "Offered Warrants"), when (i) the Board of Directors or the Executive Committee or the authorized officers of Disney, as the case may be, have taken all necessary corporate action to fix and determine the terms of the Offered Warrants in accordance with the Board Resolutions; (ii) the terms of the Offered Warrants and of their issuance and sale have been duly established in conformity with the applicable Warrant Agreement; (iii) the applicable Warrant Agreement has been duly executed and delivered; and (iv) the Offered Warrants have been duly executed and authenticated in accordance with the terms of the applicable Warrant Agreement and duly delivered to the purchasers thereof upon payment of the agreed-upon consideration therefor, the issuance and sale of the Offered Warrants will have been duly authorized by all necessary corporate action on the part of Disney, and the Offered Warrants will constitute valid and binding obligations of Disney enforceable against Disney in accordance with their terms, except as may be limited by (A) bankruptcy, insolvency, reorganization, moratorium or similar laws relating to creditors' rights generally (including, without limitation, fraudulent conveyance laws), (B) general principles of equity including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance or injunctive relief, regardless of whether considered in a proceeding at law or in equity, (C) requirements that a claim with respect to any Offered Warrants denominated 6 other than in United States dollars (or a judgment denominated other than in United States dollars in respect of such claim) be converted into United States dollars at a rate of exchange prevailing on a date determined pursuant to applicable law and (D) governmental authority to limit, delay or prohibit the making of payments outside the United States or in foreign currency or composite currency. Notwithstanding the foregoing, the opinions expressed above with respect to the Offered Debt Securities shall be deemed not to address the application of the Commodity Exchange Act, as amended, or the rules, regulations or interpretations of the Commodity Futures Trading Commission to Offered Debt Securities the payment or interest on which will be determined by reference to one or more currency exchange rates, commodity prices, equity indices or other factors. We hereby consent to the filing of this opinion with the Commission as an exhibit to the Registration Statement. We also consent to the reference to our firm under the caption "Legal Matters" in the Registration Statement. Respectfully submitted, O'Melveny & Myers LLP 7 EX-23.2 6 EXHIBIT 23.2 EXHIBIT 23.2 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Prospectus constituting part of this Registration Statement on Form S-3 of our report dated November 18, 1997 appearing on page 31 of The Walt Disney Company's Annual Report on Form 10-K for the year ended September 30, 1997. We also consent to the reference to us under the heading "Experts" in such Prospectus. PricewaterhouseCoopers LLP Century City, California July 29, 1998 EX-23.3 7 EXHIBIT 23.3 EXHIBIT 23.3 CONSENT OF INDEPENDENT AUDITORS We consent to the reference to our firm under the caption "Experts" and the incorporation by reference of our report dated March 8, 1996 with respect to the consolidated financial statements of Capital Cities/ABC, Inc. as of December 31, 1995 and 1994 and for each of the three years in the period ended December 31, 1995 in the Registration Statement on Form S-3 to be filed with the Securities and Exchange Commission by The Walt Disney Company on or about August 3, 1998. Ernst & Young LLP New York, New York July 29, 1998 -----END PRIVACY-ENHANCED MESSAGE-----