S-3

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As filed with the Securities and Exchange Commission on January 19, 2005

Registration No. 333-

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

FORM S-3

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

The Walt Disney Company Disney Capital Trust I Disney Capital Trust II Disney Capital Trust III	Delaware Delaware Delaware Delaware	95-4545390 51-6522998 51-6522999 51-6523000
(Name of Registrant)	(State of incorporation or organization)	(I.R.S. Employer Identification Numbers)

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, ESQ.
Senior Vice President, Deputy General Counsel—Corporate and Corporate Secretary
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:

MORTON A. PIERCE
FRANK R. ADAMS
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, New York 10019
(212) 259-8000

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/

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Amount to be Registered(1)	Proposed Maximum Offering Price per Unit(2)	Proposed Maximum Aggregate Offering Price(1)(3)	Amount of Registration Fee(4)
Debt Securities(5)	(2)	—	(2)	(2)
Preferred Stock(5)	(2)	—	(2)	(2)
Depositary Shares(6)	(2)	—	(2)	(2)
Common Stock(5)	(2)	—	(2)	(2)
Warrants(5)	(2)	—	(2)	(2)
Trust Preferred Securities and Related Guarantees(7)	(2)	—	(2)	(2)
Purchase Contracts(5)	(2)	—	(2)	(2)
Units(5)	(2)	—	(2)	(2)
Total(8)	$5,000,000,000	—	$5,000,000,000	$373,991

(See footnotes on next page)

The Registrants hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrants 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.

(Footnotes from previous page)

(1)

In United States dollars or the equivalent thereof in one or more foreign currencies or units of two or more foreign currencies or composite currencies. The aggregate initial offering price of the above-referenced securities (collectively, the "Securities") registered hereby will not exceed $5,000,000,000. Such amount represents the principal amount of any Debt Securities issued at their principal amount, the issue price rather than the principal amount of any Debt Securities issued at an original issue discount, the liquidation preference (or, if different, the issue price) of any Preferred Stock or Trust Preferred Securities, the issue price of any Common Stock, the issue price of any Warrants (but not the exercise price of any Securities issuable upon the exercise of such Warrants), the issue price of any Purchase Contracts and the issue price of any Units.

(2)

Omitted pursuant to General Instruction II(D) of Form S-3 under the Securities Act of 1933, as amended (the "Securities Act").

(3)

No separate consideration will be received for (a) any Depositary Shares representing shares of Preferred Stock, or (b) any Debt Securities, Preferred Stock, Common Stock or other securities that may be issuable upon conversion of or in exchange for convertible or exchangeable securities (including any securities issuable upon stock splits and similar transactions pursuant to Rule 416).

(4)

Calculated pursuant to Rule 457(o) under the Securities Act. See Note (8).

(5)

Includes such indeterminate principal amount of Debt Securities, such indeterminate number of shares of Preferred Stock, such indeterminate number of shares of Common Stock, such indeterminate number of Warrants, such indeterminate number of Purchase Contracts, such indeterminate number of Units, and such indeterminate amount of securities as may be issued upon conversion of, or in exchange for, or upon exercise of, convertible or exchangeable securities (including any securities issuable upon stock splits and similar transactions pursuant to Rule 416 under the Securities Act) as may be offered pursuant to this Registration Statement.

(6)

Includes such indeterminate number of Depositary Shares as may be evidenced by Depositary Receipts issued pursuant to one or more Deposit Agreements. In the event the Registrant elects to offer to the public fractional interests in shares of the Preferred Stock registered hereunder, Depositary Receipts will be distributed to those persons acquiring such fractional interest and the shares of Preferred Stock will be issued to a Depositary under a Deposit Agreement.

(7)

Includes such indeterminate number of Trust Preferred Securities of Disney Capital Trust I, Disney Capital Trust II and Disney Capital Trust III (each, a "Trust" and, collectively, the "Trusts"), and such indeterminate principal amount of Debt Securities of The Walt Disney Company ("Disney") as from time to time may be issued in connection therewith at indeterminate prices. Debt Securities may be issued and sold to any Trust, in which event such Debt Securities may later be distributed to the holders of Trust Preferred Securities upon a dissolution of such Trust and the distribution of the assets thereof. Also includes the rights of holders of the Trust Preferred Securities under any Guarantees and certain back-up undertakings comprised of the obligations of Disney to provide certain indemnities in respect of, and pay and be responsible for certain costs, expenses, debts and liabilities of, each Trust (other than with respect to the Trust Preferred Securities) and such obligations of Disney as set forth in the Trust Agreement of each Trust and the Indenture relating to the related Debt Securities, in each case as further described in the Prospectus forming a part of this Registration Statement. The Guarantees, when taken together with Disney's obligations under the related Debt Securities, the related Indenture and the Trust Agreement, will provide a full and unconditional guarantee by Disney of payments due on the Trust Preferred Securities. No separate consideration will be received for any Guarantees or such back-up obligations.

(8)

The $5,000,000,000 of Securities offered hereby is comprised of $1,822,500,000 of securities registered pursuant to Registration Statement No. 333-67870 initially filed August 17, 2001 and included herein under Rule 429, for which the filing fee was previously paid, and $3,177,500,000 registered hereby. Accordingly, the filing fee paid herewith is $373,991 ($3,177,500,000 multiplied by .0001177). In the event any of such previously registered securities are offered prior to the effective date of this Registration Statement, they will not be included in the Prospectus constituting a part hereof.

SUBJECT TO COMPLETION, DATED JANUARY 19, 2005

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. NEITHER THE WALT DISNEY COMPANY NOR ANY DISNEY CAPITAL TRUST MAY SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

PROSPECTUS

THE WALT DISNEY COMPANY
500 South Buena Vista Street
Burbank, California 91521
(818) 560-1000

DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
DEPOSITARY SHARES
WARRANTS
PURCHASE CONTRACTS
UNITS

DISNEY CAPITAL TRUST I
DISNEY CAPITAL TRUST II
DISNEY CAPITAL TRUST III
500 South Buena Vista Street
Burbank, California 91521
(818) 560-1000

TRUST PREFERRED SECURITIES

        We or, as applicable, the Disney Capital Trusts may offer from time to time the following types of securities:

•

our debt securities, in one or more series, which may be senior debt securities or subordinated debt securities, in each case consisting of notes or other unsecured evidences of indebtedness;



•

shares of our preferred stock, which may be issued in the form of depositary receipts representing a fraction of a share of preferred stock;



•

shares of our common stock;



•

warrants to purchase any of the other securities that may be sold under this prospectus;



•

trust preferred securities issued by one of the Disney Capital Trusts;



•

purchase contracts to acquire any of the other securities that may be sold under this prospectus; or



•

any combination of these securities, individually or as units.

        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.

        We will provide specific terms of these securities in supplements to this prospectus. You should read this prospectus and any prospectus supplement, as well as the documents incorporated or deemed to be incorporated by reference in this prospectus, carefully before you invest.

        Our common stock is traded on the New York Stock Exchange and the Pacific Stock Exchange under the symbol "DIS."

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

        We will sell these securities directly, through agents, dealers or underwriters as designated from time to time, or through a combination of these methods. We reserve the sole right to accept, and together with our agents, dealers and underwriters reserve the right to reject, in whole or in part, any proposed purchase of securities to be made directly or through agents, underwriters or dealers. If any agents, dealers or underwriters are involved in the sale of any securities, the relevant prospectus supplement will set forth any applicable commissions or discounts. Our net proceeds from the sale of securities also will be set forth in the relevant prospectus supplement.

        This prospectus may not be used to consummate sales of securities unless accompanied by the applicable prospectus supplement.

The date of this prospectus is [                  ], 2005.

TABLE OF CONTENTS

Forward-Looking Information	3
Our Company	5
The Disney Capital Trusts	6
Use of Proceeds	6
Ratio of Earnings to Fixed Charges	7
General Description of Securities that We or the Trusts May Sell	7
Description of Debt Securities	8
Description of Preferred Stock	20
Description of Depositary Shares	23
Description of Common Stock	26
Description of Warrants	28
Description of Trust Preferred Securities	30
Description of Purchase Contracts	47
Description of Units	48
Plan of Distribution	48
Where You Can Find More Information	50
Legal Matters	51
Experts	51

        We have not authorized any person to give any information or to make any representation in connection with this offering other than those contained or incorporated by reference in this prospectus, and, if given or made, the information or representation must not be relied upon as having been authorized by us. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy by anyone in any jurisdiction in which the offer or solicitation is not authorized, or in which the person is not qualified to do so or to any person to whom it is unlawful to make the offer or solicitation. Neither the delivery of this prospectus nor any sale under this prospectus shall, under any circumstances, create any implication that there has been no change in our affairs since the date of this prospectus, that the information contained in this prospectus is correct as of any time subsequent to its date, or that any information incorporated by reference in this prospectus is correct as of any time subsequent to its date.

        Unless otherwise indicated, currency amounts in this prospectus and any prospectus supplement are stated in United States dollars ("$," "dollars," "U.S. dollars" or "U.S.$").

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ABOUT THIS PROSPECTUS

        This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission utilizing a "shelf" registration process. Under this shelf process, we may sell any combination of the securities described in this prospectus in one or more offerings up to an aggregate offering price of $5,000,000,000. This prospectus provides you with a general description of the securities we may offer. Each time we sell securities, we will provide a prospectus supplement that will contain specific information about the terms of that offering. The prospectus supplement may also add, update or change information contained in this prospectus. You should read both the prospectus and any prospectus supplement together with the additional information described under the heading "Where You Can Find More Information."

FORWARD-LOOKING INFORMATION

        The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by or on behalf of Disney. We may from time to time make written or oral statements that are "forward-looking," including statements contained in this prospectus and other filings with the Securities and Exchange Commission and in reports to our shareholders. Such statements may, for example, express expectations or projections about future actions that we may take, including restructuring or strategic initiatives, or about developments beyond our control, including changes in domestic or global economic conditions. These statements are made on the basis of management's views and assumptions as of the time the statements are made and we undertake no obligation to update these statements. There can be no assurance, however, that our expectations will necessarily come to pass.

        Factors that may affect forward-looking statements.    For an enterprise as large and complex as ours, a wide range of factors could materially affect future developments and performance. Significant factors affecting specific business operations are identified in connection with the description of these operations and the financial results of these operations incorporated by reference into this prospectus. General factors affecting our operations include:

•

Changes in company-wide or business-unit strategies, which may result in changes in the types or mix of businesses in which we are involved or will invest;



•

Changes in U.S., global or regional economic conditions, which may affect attendance and spending at our parks and resorts, purchases of Disney-licensed consumer products, the advertising market for broadcast and cable television programming and the performance of our theatrical and home entertainment releases;



•

Changes in U.S. and global financial and equity markets, including market disruptions and significant interest rate fluctuations, which may impede our access to, or increase the cost of, external financing for our operations and investments;



•

Changes in cost of providing pension and other postretirement medical benefits, including changes in health care costs, investment returns on plan assets, and discount rates used to calculate pension and related liabilities;



•

Increased competitive pressures, both domestically and internationally, which may, among other things, affect the performance of our parks and resorts operations, divert consumers from our creative or other products, or to other products or other forms of entertainment, or lead to increased expenses in such areas as television programming acquisition and motion picture production and marketing;



•

Legal and regulatory developments that may affect particular business units, such as regulatory actions affecting environmental activities, consumer products, theme park safety, broadcasting or

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Internet activities or the protection of intellectual property; the imposition by foreign countries of trade restrictions or motion picture or television content requirements or quotas, and changes in domestic or international tax laws or currency controls;

•

Adverse weather conditions or natural disasters, such as hurricanes and earthquakes, which may, among other things, affect performance at our parks and resorts;



•

Technological developments that may affect the distribution of our creative products or create new risks to our ability to protect our intellectual property;



•

Labor disputes, which may lead to increased costs or disruption of operations in any of our business units;



•

Changing public and consumer tastes and preferences, which may, among other things, affect our entertainment, broadcasting and consumer products businesses generally or our parks and resorts operations specifically, or result in lower broadcasting ratings or loss of advertising revenue;



•

Changes in or termination of long-term contracts for the acquisition or distribution of media programming or products, which may impact the availability of programming or product, the cost of acquired content, the ability to distribute content, or the revenue recognized from the distribution of content; and



•

International, political, health concerns and military developments that may affect, among other things, travel and leisure businesses generally or our parks and resorts operations specifically, or result in increases in broadcasting costs or loss of advertising revenue.

        This list of factors that may affect future performance and the accuracy of forward-looking statements is illustrative, but by no means exhaustive. Accordingly, all forward-looking statements should be evaluated with the understanding of their inherent uncertainty.

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OUR COMPANY

        We, or Disney, together with our subsidiaries, are a diversified worldwide entertainment company with operations in four business segments: Media Networks, Parks & Resorts, Studio Entertainment and Consumer Products. References in this section of the prospectus to "Disney" include us and our subsidiaries. To find out how to obtain more information regarding us and our business, you should read the section of this prospectus entitled "Where You Can Find More Information."

        Our principal executive offices are located at 500 South Buena Vista Street, Burbank, California 91521, and our telephone number is (818) 560-1000.

Media Networks

        Disney operates the ABC Television Network and ten owned television stations and the ABC Radio Networks and 71 owned radio stations. Both the television and radio networks have affiliated stations providing coverage to households throughout the United States. Most of the owned television and radio stations are affiliated with either the ABC Television Network or the ABC Radio Networks. Disney's cable/satellite 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 foreign television broadcasting, production and distribution entities. Primary cable/satellite programming services, which operate through consolidated subsidiary companies, are the ESPN-branded networks, Disney Channel, International Disney Channel, SOAPnet, Toon Disney, ABC Family Channel and JETIX channels in Europe and Latin America. Other programming services that operate through joint ventures, and are accounted for under the equity method, include A&E Television Networks, Lifetime Entertainment Services and E! Entertainment Television. Disney also produces original television programming for network, first-run syndication, pay and international syndication markets along with original animated television programming for network, pay and international syndication markets. Additionally, Disney operates ABC-, ESPN-, and Disney-branded Internet web site businesses.

Parks and Resorts

        Disney owns and operates the Walt Disney World Resort in Florida and the Disneyland Resort in California. The Walt Disney World Resort includes four theme parks (the Magic Kingdom, Epcot, Disney-MGM Studios and Disney's Animal Kingdom), seventeen resort hotels, a retail, dining and entertainment complex, a sports complex, conference centers, campgrounds, golf courses, water parks and other recreational facilities. In addition, Disney Cruise Line is operated out of Port Canaveral, Florida. The Disneyland Resort includes two theme parks (Disneyland and Disney's California Adventure), three resort hotels and Downtown Disney. Disney earns royalties on revenues generated by the Tokyo Disneyland Resort, which includes two theme parks and two Disney-branded hotels near Tokyo, Japan, and is owned and operated by an unrelated Japanese corporation. Disney manages and has a 41% equity investment in Euro Disney S.C.A. (Euro Disney), a publicly held French entity that operates Disneyland Resort Paris, which includes the Disneyland Park, the Walt Disney Studios Park, seven themed hotels, two convention centers, the Disney Village, a shopping, dining and entertainment center and a 27 hole golf facility. Disney also manages and has a 43% equity interest in Hong Kong Disneyland, which is under construction and is scheduled to open in fiscal 2005. During fiscal 2004, Disney began consolidating Euro Disney and Hong Kong Disneyland. Disney's Walt Disney Imagineering unit designs and develops new theme park concepts and attractions, as well as resort properties. Disney also manages and markets vacation ownership interests through the Disney Vacation Club. Included in Parks and Resorts are Disney's NHL franchise, the Mighty Ducks of Anaheim, and ESPN Zone, which operates sports-themed dining and entertainment facilities.

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Studio Entertainment

        Disney produces and acquires live-action and animated motion pictures for worldwide distribution to the theatrical, home entertainment and television markets. Disney distributes these products through its own distribution and marketing companies in the United States and most foreign markets, primarily under the Walt Disney Pictures, Touchstone Pictures, Miramax and Dimension banners. Disney also produces stage plays and musical recordings.

Consumer Products

        Disney licenses the name "Walt Disney," as well as its characters and visual and literary properties, to various manufacturers, retailers, show promoters and publishers throughout the world. Disney also engages in direct retail distribution principally through the Disney Stores. Disney produces books and magazines for the general public, computer software products for the entertainment market, as well as film, video and computer software products for the educational marketplace. Disney's Direct Marketing business operates the Disney Catalog, which markets Disney-themed merchandise through the direct mail channel. Catalog offerings include merchandise developed exclusively for the Disney Catalog and DisneyDirect.com, which is an internet shopping site, as well as other internal Disney businesses and Disney licensees.

THE DISNEY CAPITAL TRUSTS

        Each of Disney Capital Trust I, Disney Capital Trust II and Disney Capital Trust III is a statutory trust formed under Delaware law by us, as sponsor of each of the trusts, and Wilmington Trust Company, as trustee in the State of Delaware pursuant to the Delaware Statutory Trust Act. The trusts have been formed solely:

•

for the possible sale of one or more series of trust preferred securities under this prospectus and the sale of trust common securities to us or one of our subsidiaries at the time of any sale of trust preferred securities;



•

to purchase our junior subordinated debt securities with the proceeds of any sale of their securities; and



•

to engage in related activities.

        The principal office of each of the trusts is c/o The Walt Disney Company, 500 South Buena Vista Street, Burbank, California 91521, and its telephone number is (818) 560-1000.

USE OF PROCEEDS

        Unless otherwise indicated in an accompanying prospectus supplement, we intend to use the net proceeds from the sale of the securities offered by this prospectus for general corporate purposes.

        These general corporate purposes may include, among others:

•

to reduce our short-term indebtedness;



•

to fund investments in, or extensions of credit or contributions to, our subsidiaries; and



•

to fund acquisitions.

Proceeds may also be used for other purposes specified in the applicable prospectus supplement. Net proceeds may be temporarily invested prior to use. The precise amounts and timing of the application of proceeds will depend upon, among other things, our funding requirements and the funding requirements of our subsidiaries at the time of issuance and the availability of other funds.

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        The Disney Capital Trusts will use all of the proceeds from the sale of trust preferred securities and trust common securities to purchase our junior subordinated debt securities.

RATIO OF EARNINGS TO FIXED CHARGES

        The following table sets forth our consolidated ratio of earnings to fixed charges for the periods indicated:

	Year Ended September 30,
	2004	2003	2002	2001	2000
Ratio of earnings to fixed charges(1)(2)	5.5X	3.6X	3.5X	2.6X	3.9X

(1)

We calculated our ratio of earnings to fixed charges by dividing income before income taxes, minority interest, and the cumulative effect of accounting changes adjusted for (a) fixed charges, excluding capitalized interest, (b) amortization of capitalized interest, and (c) losses and undistributed earnings recognized with respect to less than 50% owned equity investments by fixed charges. Fixed charges consist of interest on borrowings, capitalized interest, and that portion of rental expense that approximates interest expense (estimated to be one-third of rental expense).

(2)

Our ratios of earnings to combined fixed charges and preferred stock dividends for the periods indicated above are the same as our ratios of earnings to fixed charges set forth above because we had no shares of preferred stock outstanding during the periods indicated and currently have no shares of preferred stock outstanding.

GENERAL DESCRIPTION OF SECURITIES THAT WE OR THE TRUSTS MAY SELL

        We or, as applicable, the Disney Capital Trusts directly or through agents, dealers or underwriters that we designate, may offer and sell, from time to time, up to $5,000,000,000 (or the equivalent in one or more foreign currencies or currency units) aggregate initial offering price of:

•

our debt securities, in one or more series, which may be senior debt securities or subordinated debt securities, in each case consisting of notes or other unsecured evidences of indebtedness;



•

shares of our preferred stock, which may be issued in the form of depositary receipts representing a fraction of a share of preferred stock;



•

shares of our common stock;



•

warrants to purchase any of the other securities that may be sold under this prospectus;



•

trust preferred securities issued by one of the Disney Capital Trusts;



•

purchase contracts to acquire any of the other securities that may be sold under this prospectus; or



•

any combination of these securities, individually or as units.

        We may offer and sell these securities either individually or as units consisting of one or more of these securities, each on terms to be determined at the time of sale. We may issue debt securities, preferred stock and/or trust preferred securities that are exchangeable for and/or convertible into common stock or any of the other securities that may be sold under this prospectus. When particular securities are offered, a supplement to this prospectus will be delivered with this prospectus, which will describe the terms of the offering and sale of the offered securities.

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DESCRIPTION OF DEBT SECURITIES

        We may issue debt securities either separately, or together with, or upon the conversion of or in exchange for, other securities. The debt securities may be our unsecured and unsubordinated obligations, which we refer to as "senior debt securities," or our subordinated obligations, which we refer to as "subordinated debt securities." The subordinated debt securities of any series may be our senior subordinated obligations, subordinated obligations, junior subordinated obligations or may have such other ranking as is described in the relevant prospectus supplement. We may issue any of these types of debt securities in one or more series.

        Our senior debt securities may be issued from time to time under a senior debt securities indenture. Our subordinated debt securities may be issued from time to time under a subordinated debt securities indenture. Each of the senior debt securities indenture and the subordinated debt securities indenture is referred to individually as an "indenture" and they are referred to collectively as the "indentures." Each trustee is referred to individually as a "trustee" and the trustees are collectively referred to as the "trustees."

        The following summary of selected provisions of the indentures and the debt securities is not complete. In connection with an investment in our debt securities, you should review the applicable prospectus supplement and the form of applicable indenture. The Senior Debt Securities Indenture and the Form of Subordinated Debt Securities Indenture have been filed as exhibits to the registration statement of which this prospectus is a part. To obtain a copy of the applicable indenture, see "Where You Can Find More Information" in this prospectus. The following summary and any description of our debt securities contained in an applicable prospectus supplement are qualified in their entirety by reference to all of the provisions of the applicable indenture, which provisions, including defined terms, are incorporated by reference in this prospectus. When we refer to "Disney," "we," "us" or "our" in this section or when we otherwise refer to ourselves in this section, we mean The Walt Disney Company, excluding, unless otherwise expressly stated or the context requires, our subsidiaries.

        The following description of debt securities describes general terms and provisions of the series of debt securities to which any prospectus supplement may relate. When we offer to sell a series of debt securities, we will describe the specific terms of the series in the applicable prospectus supplement. If any particular terms of the debt securities described in a prospectus supplement differ from any of the terms described in this prospectus, then the terms described in the applicable prospectus supplement will supersede the terms described in this prospectus.

General

        We can issue an unlimited amount of debt securities under the indentures. We can issue debt securities from time to time and in one or more series as determined by us. In addition, we can issue debt securities of any series with terms different from the terms of debt securities of any other series and the terms of particular debt securities within any series may differ from each other, all without the consent of the holders of previously issued series of debt securities. The debt securities of each series will be our direct, unsecured obligations.

        The applicable prospectus supplement relating to the series of debt securities will describe the specific terms of the debt securities being offered, including, where applicable, the following:

•

the title of the series of debt securities;



•

any limit on the aggregate principal amount of debt securities of the series;



•

whether the debt securities of the series are to be issuable in registered or bearer form or both and whether the debt securities of the series may be represented initially by a debt security in temporary or permanent global form, and, if so, the initial depositary with respect to such

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temporary or permanent global debt security 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 of like tenor and of any authorized form and denomination and the authorized newspapers for publication of notices to holders of bearer securities;

•

any other terms required to establish a series of bearer securities, including, but not limited to, tax compliance procedures;



•

the price or prices at which the debt securities of the series will be issued;



•

whether the debt securities of the series will be senior debt securities or subordinated debt securities;



•

the person to whom any interest will be payable on any registered securities of the series, if other than the person in whose name the registered security is registered at the close of business on the regular record date for the payment of interest;



•

the manner in which, and the person to whom, any interest on any bearer securities of the series, will be payable, if other than upon presentation and surrender of the coupons relating to the bearer security, and the extent to which, or the manner in which, any interest payable on a temporary or permanent global security on an interest payment date will be paid;



•

the date or dates on which the principal of and premium, if any, on the debt securities of the series is payable or the method or methods, if any, used to determine those dates;



•

the rate or rates at which the debt securities of the series will bear interest or the method or methods, if any, used to calculate those rate or rates;



•

the date or dates, if any, from which interest on the debt securities of the series will accrue, or the method or methods, if any, used to determine those dates;



•

the stated maturities of installments of interest, if any, on which any interest on the debt securities of the series will be payable and the regular record dates for any interest payable on any debt securities of the series which are registered securities;



•

the place or places where and the manner in which the principal of and premium, if any, and interest, if any, on the debt securities of the series will be payable and the place or places where the debt securities of the series may be presented for transfer and, if applicable, conversion or exchange and the place or places where notices and demands in respect of the debt securities of the series may be served on us;



•

our right, if any, to redeem the debt securities, and the period or periods within which, the price or prices at which and the terms and conditions upon which, the debt securities of the series may be redeemed, in whole or in part;



•

our obligation, if any, to redeem or purchase the debt securities of the series pursuant to any sinking fund or analogous provisions or at the option of a holder of such debt securities, 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, the debt securities of the series shall be redeemed or purchased, in whole or part, and any provisions for the remarketing of such debt securities;



•

the denominations in which any registered securities of the series are to be issuable, if other than denominations of $1,000 and any integral multiple thereof, and the denominations in which any bearer securities of the series are to be issuable, if other than denominations of $5,000 and $100,000;

9

•

the currency or currencies, including composite currencies, of payment of principal of, premium, if any, and interest, if any, on the debt securities of the series, if other than U.S. dollars, and, if other than U.S. dollars, whether the debt securities of the series may be satisfied and discharged other than as provided in the applicable indenture;



•

if the amount of payments of principal of, premium, if any, and interest, if any, on the debt securities of the series 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 debt securities of the series are stated to be payable, the manner in which these amounts are to be determined and the calculation agent, if any, with respect thereto;



•

if other than the principal amount thereof, the portion of the principal amount of the debt securities of the series which will be payable upon declaration or acceleration of the maturity thereof pursuant to an event of default;



•

if we agree to pay any additional amounts on any of the debt securities, and coupons, if any, of the series 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 we will make these payments, and whether those additional amounts paid by us will be treated as interest or principal pursuant to the applicable indenture, and whether we will have the option to redeem these debt securities rather than pay these additional amounts;



•

whether the debt securities of the series 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;



•

any terms applicable to debt securities of any series issued at an issue price below their stated principal amount, including the issue price thereof and the rate or rates at which the original issue discount will accrue;



•

whether the debt securities of the series are to be issued or delivered (whether at the time of original issuance or at the time of exchange of a temporary security of such series or otherwise), or any installment of principal or any premium or interest is to be payable only, upon receipt of certificates or other documents or satisfaction of other conditions in addition to those specified in the applicable indenture;



•

whether the debt securities of the series, in whole or any specified part, will not be defeasible pursuant to the applicable indenture and, if other than by an officers' certificate, the manner in which any election by us to defease the debt securities of the series will be evidenced;



•

any deletions from, modifications of or additions to the events of default or our covenants with respect to the debt securities of the series, whether or not these events of default or covenants are consistent with the events of default or covenants set forth in this prospectus and any change in the rights of the trustee or the requisite holders of the debt securities of the series to declare the principal amount of that series due and payable pursuant to the applicable indenture;



•

any special United States federal income tax considerations applicable to the debt securities of the series; and



•

any other terms of the debt securities of the series not inconsistent with the provisions of the applicable indenture.

        The prospectus supplement relating to any series of subordinated debt securities being offered will also describe the subordination provisions applicable to that series, if different from the subordination provisions described in this prospectus. In addition, the prospectus supplement relating to a series of

10

subordinated debt will describe our rights, if any, to defer payments of interest on the subordinated debt securities by extending the interest payment period.

        Debt securities may be issued as original issue discount securities to be sold at a substantial discount below their principal amount. In the event of an acceleration of the maturity of any original issue discount security, the amount payable to the holder upon acceleration will be determined in the manner described in the applicable prospectus supplement. Special United States federal tax and other considerations applicable to original issue discount securities will be described in the applicable prospectus supplement. In addition, special United States federal tax considerations or other restrictions or terms applicable to any debt securities to be issued 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 the applicable prospectus supplement.

        The above is not intended to be an exclusive list of the terms that may be applicable to any debt securities and we are not limited in any respect in our ability to issue debt securities with terms different from or in addition to those described above or elsewhere in this prospectus, provided that the terms are not inconsistent with the applicable indenture. Any applicable prospectus supplement will also describe any special provisions for the payment of additional amounts with respect to the debt securities.

        For a description of additional provisions that may be applicable to junior subordinated debt securities that we may issue in connection with an offering of trust preferred securities under this prospectus, you should read "Description of Trust Preferred Securities."

Subordination Provisions Relating to Subordinated Debt

        Except as otherwise described in the applicable prospectus supplement relating to a series of subordinated debt securities, the subordinated debt securities will be issued under the subordinated debt securities indenture and will rank subordinated and junior in right of payment, to the extent set forth in the subordinated debt securities indenture, to all of our "senior indebtedness," which is defined below.

        If

•

we default in the payment of any principal of, or premium, if any, or interest on any senior indebtedness when it becomes due and payable after any applicable grace period, and the default is continuing;



•

there is any other default in respect of our senior indebtedness which has occurred and is continuing which would permit the senior indebtedness to be accelerated;



•

there is any judicial proceeding pending regarding any default in respect of our senior indebtedness; or



•

the subordinated debt securities of the series are accelerated,

then, unless and until the event of default is cured or waived or ceases to exist, any acceleration is rescinded or annulled or any judicial proceeding is terminated, we cannot make any payment on account of or acquire the subordinated debt securities prior to the repayment in full of our outstanding senior indebtedness. Nevertheless, holders of subordinated debt securities may still receive and retain payments made:

•

from a trust of the type described in "—Discharge and Defeasance" below;



•

in our capital stock; or

11

•

in other securities which are payable no earlier than the final stated maturity date of the subordinated debt securities of the series, have terms no more restrictive than those of the subordinated debt securities of the series and are subordinated in right of payment to the senior indebtedness at least to the same extent as the subordinated debt securities of the series.

        If there is any insolvency, bankruptcy, receivership, liquidation, reorganization, dissolution, winding up, assignment for the benefit of our creditors, marshalling of our assets and liabilities, or other similar proceeding, whether or not voluntary, relating to us, our creditors or our assets, then all senior indebtedness must be paid in full or otherwise provided for before any payment may be made to any holders of subordinated debt securities other than payments made

•

from a trust of the type described in "—Discharge and Defeasance" below;



•

in our capital stock; or



•

in other securities which are payable no earlier than the final stated maturity date of the subordinated debt securities of the series, have terms no more restrictive than those of the subordinated debt securities of the series and are subordinated in right of payment to the senior indebtedness at least to the same extent as the subordinated debt securities of the series.

The subordinated debt securities indenture trustee and the holders of subordinated debt securities must return and deliver any payments of cash, property or securities received by them, other than any permitted payments described above, to the trustee or other paying agent for application to the payment of all senior indebtedness until all senior indebtedness is paid in full.

        Unless otherwise specified with respect to a series of subordinated debt securities issued under the subordinated debt securities indenture, "senior indebtedness" under the subordinated debt securities indenture means the principal of, premium, if any, and interest on (including interest accruing after the filing of a petition initiating any proceeding pursuant to any bankruptcy law, but only to the extent allowed or permitted to the holder against the bankruptcy or any other insolvency estate of Disney) and any other amounts due on or in connection with any of the following indebtedness, incurred, assumed or guaranteed by us, whether or not outstanding on the date we issue any series of subordinated debt securities (including renewals, extensions and refundings of these obligations):

(1)

our obligations for borrowed money;



(2)

our obligations evidenced by bonds, debentures, notes or other similar instruments;



(3)

our capital lease obligations;



(4)

all obligations of the type referred to in clauses (1) through (3) of other persons secured by a lien on any of our assets, whether or not we have assumed those obligations; and



(5)

all obligations of the type referred to in clauses (1) through (4) of other persons for the payment of which we are responsible or liable as obligor or guarantor.

        However, senior indebtedness does not include:

(a)

any indebtedness, including other series of debt securities issued under the subordinated debt securities indenture, created or evidenced by or outstanding pursuant to an instrument that expressly provides that the indebtedness is subordinated to any other indebtedness of ours, unless that indebtedness expressly provides that it will be senior to the subordinated debt securities of the series;



(b)

any indebtedness that by its terms states that it will not be senior in right of payment to the subordinated debt securities of the series; and



(c)

any indebtedness of ours to any of our affiliates or subsidiaries.

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        The subordinated debt securities indenture does not limit the amount of senior indebtedness that we may issue.

        We may issue senior subordinated debt securities under the subordinated debt securities indenture. In addition, in connection with any offering of trust preferred securities under this prospectus, we may issue junior subordinated debt securities. The subordination provisions applicable to any of these debt securities will be described in the applicable prospectus supplement.

Consequences of Holding Company Status

        Our operations are conducted almost entirely through subsidiaries. Accordingly, our cash flow and our ability to service our debt, including the debt securities, are dependent upon the earnings of our subsidiaries and the distribution of those earnings to us, whether by dividends, loans or otherwise. The payment of dividends and the making of loans and advances to us by our subsidiaries may be subject to statutory or contractual restrictions, are contingent upon the earnings of our subsidiaries and are subject to various business considerations. Our right to receive assets of any of our 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 we are recognized as a creditor of that subsidiary, in which case our claims would still be subordinate to any security interests in the assets of the subsidiary and any indebtedness of the subsidiary senior to that held by us.

Form, Exchange, Registration and Transfer

        The debt securities of a series may be issued as registered securities, 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.

        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 that 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 the date for payment of interest and interest will not be payable in respect of the registered security issued in exchange for the bearer security, but will be payable only to the holder of the 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 designated by us 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. The transfer or exchange will be effected on the books of the registrar or any other transfer agent appointed by us upon the registrar or transfer agent, as the case may be, being satisfied with the documents of title and identity of the person making the request. We intend to initially appoint the trustee as registrar and the name of any different

13

or additional registrar designated by us with respect to the debt securities of any series will be included in the applicable prospectus supplement. If a prospectus supplement refers to any transfer agents (in addition to the registrar) designated by us with respect to any series of debt securities, we may at any time rescind the designation of any transfer agent or approve a change in the location through which any transfer agent acts, except that, if debt securities of a series are issuable only as registered securities, we will be required to maintain a transfer agent in each place of payment for that series and, if debt securities of a series are issuable as bearer securities, we will be required to maintain (in addition to the registrar) a transfer agent in a place of payment for that series located outside the United States. We may at any time designate additional transfer agents with respect to any series of debt securities.

        In the event of any redemption of debt securities of any series, we will not be required to:

•

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



•

if debt securities of the series are issuable only as registered securities, the day of mailing of the relevant notice of redemption, and



•

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;



•

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



•

exchange any bearer security called for redemption, except to exchange the 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 our ability to enter into a highly leveraged transaction, including a reorganization, restructuring, merger or similar transaction involving us that may adversely affect the holders of the debt securities, if the 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 us to repurchase or redeem the debt securities in the event of a highly leveraged transaction. See "—Mergers and Sales of Assets."

        For a description of covenants that may be applicable to junior subordinated debt securities issued in connection with an offering of trust preferred securities under this prospectus, you should read "Description of Trust Preferred Securities—Description of Additional Terms of Junior Subordinated Debt Securities to be Issued to the Trusts."

Payment and Paying Agents

        Unless otherwise indicated in an applicable prospectus supplement, payment of principal of, premium, if any, and interest, if any, on registered securities will be made at the office of the paying agent or paying agents designated by us from time to time, except that at our option, payment of principal and premium, if any, or interest also may be made 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 the registered security is registered at the close of business on the regular record date for the interest payment.

14

        Unless otherwise indicated in an applicable prospectus supplement, payment of principal of, premium, if any, and interest, if any, on bearer securities will be payable, subject to any applicable laws and regulations, at the offices of the paying agents outside the United States designated by us from time to time, or by wire 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 the interest installment.

        Unless otherwise indicated in an applicable prospectus supplement, the trustee will be designated as our sole paying agent for payments with respect to debt securities which are issuable solely as registered securities and as our 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 us for any series of debt securities will be named in an applicable prospectus supplement. We 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, we will be required to maintain a paying agent in each place of payment for that series and, if debt securities of a series are issuable as bearer securities, we 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 applicable indenture, but not otherwise), and (ii) a paying agent in a place of payment located outside the United States where debt securities of that series and any related coupons may be presented and surrendered for payment.

        All moneys paid by us to a paying agent for the payment of principal of and premium, if any, or interest, if any, on any debt security which remains unclaimed at the end of two years after that principal or interest shall have become due and payable will be repaid to us, and the holder of the debt security or any coupon will thereafter look only to us for payment of those amounts.

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 the debt security or to a nominee or successor of the 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 a global debt security may exchange their interests for definitive debt securities of that series of like tenor and principal amount in any authorized form and denomination, the manner of payment of principal of, premium, if any, and interest, if any, on the global debt securities and the specific terms of the depositary arrangement with respect to any global debt security.

Mergers and Sales of Assets

        Each indenture provides that we may not consolidate with or merge into any other person or convey, transfer or lease our properties and assets substantially as an entirety to another person, unless, among other things, (i) we are the continuing corporation, or the resulting, surviving or transferee person (if other than us) is a corporation, partnership or trust organized and existing under the laws of the United States, any state thereof or the District of Columbia and that person expressly assumes all of our obligations under the applicable debt securities and the applicable indenture, (ii) immediately after giving effect to the 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

15

be continuing under the applicable indenture and (iii) we deliver to the trustee an officers' certificate and an opinion of counsel to the effect that the consolidation, merger, conveyance, transfer or lease, as the case may be, complies with the indenture and that all conditions precedent provided in the indenture with respect to the transaction have been satisfied. Upon the assumption of our obligations by a person to whom the properties or assets are conveyed or transferred, we will be discharged from all obligations under the applicable debt securities and the applicable indenture, except in the case of a lease of our properties and assets substantially as an entirety.

Events of Default

        Each indenture provides that if an event of default occurs and is continuing with respect to a series of debt securities, the trustee or the holders of not less than 25% in aggregate principal amount of the outstanding debt securities of that series may declare the principal amount (or, if any of the debt securities of that series are original issue discount securities, that portion of the principal amount of the debt securities as may be specified by the terms thereof) of the debt securities of that 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 the series may rescind the declaration.

        Under each indenture, unless otherwise specified with respect to a series of debt securities, the following events will constitute an event of default with respect to a series of debt securities:

(a)

default in payment of the principal of any debt security of the series;



(b)

default in payment of any interest on any debt security of the series when due, continuing for 30 days;



(c)

failure by us to comply with our other agreements in the debt securities of the series or the applicable indenture for the benefit of the holders of debt securities of that series upon the receipt by us of notice of the default given by the trustee or the holders of at least 25% in aggregate principal amount of the outstanding debt securities of the series and our failure to cure the default within 60 days after receipt by us of the notice;



(d)

specified events of bankruptcy or insolvency; and



(e)

any other event of default applicable to the series of debt securities and set forth in the applicable prospectus supplement.

        The trustee will give notice to holders of the debt securities of any continuing default known to the trustee within 90 days after the occurrence of the default. However, the trustee may withhold notice of 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 that series so long as the direction does not conflict with any law or the indenture and subject to other limitations provided for in the applicable indenture. Before proceeding to exercise any right or power under the indenture at the direction of holders, the trustee will be entitled to receive from the holders reasonable security or indemnity satisfactory to it against the costs, expenses and liabilities which might be incurred by it in complying with the direction. With respect to each series of debt securities, no holder will have any right to pursue any remedy with respect to the applicable indenture or the debt securities, unless

(a)

the holder has previously given the trustee written notice of a continuing event of default with respect to the debt securities of that series;

16

(b)

the holders of at least 25% in aggregate principal amount of the outstanding debt securities of the series have made a written request to the trustee to pursue the remedy;



(c)

the holder or holders have offered to the trustee reasonable security or indemnity satisfactory to the trustee;



(d)

the holders of a majority in aggregate principal amount of the outstanding debt securities of the series have not given the trustee a direction inconsistent with the request within 60 days after receipt of the request; and



(e)

the trustee has failed to comply with the request within the 60-day period.

        Notwithstanding the foregoing, the right of any holder of any debt security or coupon to receive payment of the principal of, premium, if any, and interest in respect of a debt security or payment of the coupon on the date specified for payment in the debt security or coupon representing the installment of interest (the "stated maturity" or "stated maturities") or to institute suit for the enforcement of payment may not be impaired or adversely affected without the holder's consent. The holders of at least a majority in aggregate principal amount of the outstanding debt securities of any series may waive an existing default with respect to that series and its consequences, other than (i) any default in any payment of the principal of, and premium, if any, or interest on, any debt security of the series or (ii) any default in respect of the covenants or provisions in the applicable indenture which may not be modified without the consent of the holder of each outstanding debt security of the series affected as described in "—Modification and Waiver," below.

        Each indenture provides for us to deliver to the trustee within 120 days after the end of each of our fiscal years an officers' certificate stating whether or not the signers know of any default that occurred during the last fiscal year.

Modification and Waiver

        The indentures permit us and the applicable trustee to execute a supplemental indenture without the consent of the holders of the debt securities or any related coupons:

•

to evidence the succession of another corporation to us and the assumption by it of our obligations under the applicable indenture and the debt securities;



•

to add to our covenants, agreements and obligations 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 us;



•

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 and premium, if any, 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;



•

to establish the form or terms of debt securities of any series or coupons as permitted by the applicable indenture;



•

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 that indenture as shall be necessary to provide for or facilitate the administration of the trusts by more than one trustee;



•

to cure any ambiguity, defect or inconsistency;

17

•

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 the addition, change or elimination neither (a) applies to any debt security of any series that was created prior to the execution of the supplemental indenture and is entitled to the benefit of that provision nor (b) modifies the rights of the holder of any such debt security with respect to that provision;



•

to secure the debt securities; or



•

to make any other change that does not adversely affect the rights of any holder of the debt securities.

        Each indenture also permits us and the applicable trustee, 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 the supplemental indenture, to execute a supplemental indenture to add provisions to, or change in any manner or eliminate any provisions of, the indenture with respect to that series of debt securities or modify in any manner the rights of the holders of the debt securities of that series and any related coupons under the applicable indenture. However, the supplemental indenture will not, without the consent of the holder of each outstanding debt security affected thereby:

•

change the stated maturity of the principal of, or any installment of principal or interest on, the debt securities or any premium payable upon redemption thereof;



•

reduce the amount of principal of any original issue discount securities that would be due and payable upon declaration of acceleration of maturity thereof;



•

reduce the principal amount of, or premium, if any, or the rate of interest on, the debt securities;



•

change the place or currency of payment of principal and premium, if any, or interest, if any, on the debt securities;



•

impair the right to institute suit for the enforcement of any payment on or with respect to the debt securities;



•

reduce the above-stated principal amount of outstanding debt securities of any series necessary to modify or amend the indenture;



•

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



•

in the case of subordinated debt securities, amend or modify any of the provisions of the applicable indenture relating to subordination of the debt securities in any manner adverse to the holders of the 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 us with certain of the restrictive covenants described above with respect to the debt securities of that series.

Discharge and Defeasance

        Unless otherwise indicated in an applicable prospectus supplement, each indenture provides that we 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 the series or depositing with the trustee, after the outstanding debt securities have become due and payable, or will become due and payable within one year or will be called for redemption within one year, cash sufficient to pay at stated maturity or redemption all of the outstanding debt securities of the series and all other sums payable under the indenture with respect to the series.

18

        In addition, unless otherwise indicated in an applicable prospectus supplement, each indenture provides that we may:

(a)

be discharged from our obligations in respect of the debt securities of a series ("defeasance and discharge"), or



(b)

cease to comply with specified restrictive covenants ("covenant defeasance"), including those described under "—Mergers and Sales of Assets";

and the omission will not be an event of default with respect to the debt securities of that series, in each case at any time prior to the stated maturity or redemption thereof, if we irrevocably deposit 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, premium, if any, and interest to stated maturity or redemption on, the debt securities of that series, or

        (ii)   that amount of direct obligations of, or obligations the principal of, 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, premium, if any, and interest to stated maturity or redemption on, the debt securities of that series.

        The defeasance and discharge and covenant defeasance described above are effective only if, among other things, we deliver an opinion of counsel to the effect that (i) we have met all of the conditions precedent to the defeasance and the holders of the debt securities of the series will not recognize income, gain or loss for United States federal income tax purposes as a result of the defeasance, and will be subject to tax in the same manner as if no defeasance had occurred and (ii) in the case of defeasance and discharge, the opinion as to tax consequences is based upon an Internal Revenue Service ruling or a change in applicable federal income tax law.

        Upon the defeasance and discharge, the holders of the debt securities of the series will no longer be entitled to the benefits of the applicable indenture, except for the purposes of registration of transfer and exchange of the debt securities of the series and replacement of lost, stolen or mutilated debt securities and may look only to the deposited funds or obligations for payment.

The Trustees under the Indentures

        The trustees under the indentures, and/or one or more of their respective affiliates, may be lenders under our credit agreements and may provide other commercial banking, investment banking and other services to us and/or our subsidiaries and affiliates. Each trustee will be permitted to engage in other transactions with us and/or our subsidiaries and affiliates. However, if any trustee acquires any conflicting interest, as defined in the Trust Indenture Act, it must eliminate the conflict or resign.

        The trustees will perform only those duties that are specifically set forth in the indentures, unless an event of default occurs and is continuing. In case an event of default occurs and is continuing, a trustee will exercise the same degree of care and skill as a prudent individual would exercise in the conduct of his or her own affairs

Applicable Law

        The debt securities and the indentures will be governed by and construed in accordance with the laws of the State of New York.

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DESCRIPTION OF PREFERRED STOCK

        We may issue, from time to time, shares of one or more series or classes of our 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 these general provisions may apply to the series of preferred stock offered will be described in the prospectus supplement relating to that preferred stock. The following summary of provisions of the preferred stock does not purport to be complete and is subject to, and is qualified in its entirety by reference to, the provisions of our charter, bylaws and the certificate of designation relating to a specific series of the preferred stock, which will be in the form filed as an exhibit to, or incorporated by reference in, the registration statement of which this prospectus is a part at or prior to the time of issuance of that series of preferred stock. You should read our charter, bylaws and the relevant certificate of designation.

General

        Under our charter, we have the authority to issue 100,000,000 shares of preferred stock. Our Board of Directors is authorized to issue shares of preferred stock, in one or more series or classes, and to fix for each series voting powers and those preferences and relative, participating, optional or other special rights and those qualifications, limitations or restrictions as are permitted by the Delaware General Corporation Law.

        Our Board of Directors is authorized to determine the terms for each series of preferred stock, and the prospectus supplement will describe the terms of any series of preferred stock being offered, including:

•

the designation of the shares and the number of shares that constitute the series;



•

the dividend rate (or the method of calculation thereof), if any, on the shares of the series and the priority as to payment of dividends with respect to other classes or series of our capital stock;



•

the dividend periods (or the method of calculation thereof);



•

the voting rights of the shares;



•

the liquidation preference and the priority as to payment of the liquidation preference with respect to other classes or series of our capital stock and any other rights of the shares of the series upon our liquidation or winding-up;



•

whether or not and on what terms the shares of the series will be subject to redemption or repurchase at our option;



•

whether and on what terms the shares of the series will be convertible into or exchangeable for other securities;



•

whether depositary shares representing shares of the series of preferred stock will be offered and, if so, the fraction of a share of the series of preferred stock represented by each depositary share (see "Description of Depositary Shares" below);



•

whether the shares of the series of preferred stock will be listed on a securities exchange;



•

any special United States federal income tax considerations applicable to the series; and



•

the other rights and privileges and any qualifications, limitations or restrictions of the rights or privileges of the series.

20

Dividends

        Holders of shares of preferred stock shall be entitled to receive, when and as declared by our Board of Directors out of our funds legally available therefor, an annual cash dividend payable at the dates and at the 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 that preferred stock. If we should fail at any time to pay accrued dividends on any senior shares at the time the dividends are payable, we may not pay any dividend on the junior preferred stock or redeem or otherwise repurchase shares of junior preferred stock until the accumulated but unpaid dividends on the senior shares have been paid or set aside for payment in full by us.

        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) may be declared or paid or set aside for payment, nor may any other distribution be declared or made upon the common stock, or any of our other capital stock ranking junior to or on a parity with the preferred stock of that series as to dividends, nor may any common stock or any of our other capital stock ranking junior to or on a parity with the preferred stock of that 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 of that stock) by us (except by conversion into or exchange for other capital stock of ours ranking junior to the preferred stock of that series as to dividends) unless (i) if that series of preferred stock has a cumulative dividend, full cumulative dividends on the preferred stock of that 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 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. However, any monies deposited in any sinking fund with respect to any preferred stock in compliance with the provisions of the sinking fund may be applied to the purchase or redemption of that preferred stock in accordance with the terms of the sinking fund, regardless of whether at the time of the application full dividends, including cumulative dividends, upon shares of the preferred stock outstanding on the last dividend payment date have been paid or declared and set apart for payment. In addition, any junior or parity preferred stock or common stock may be converted into or exchanged for our stock 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, unless otherwise set forth in the applicable prospectus supplement. Accrued but unpaid dividends will not bear interest, unless otherwise set forth in the applicable prospectus supplement.

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.

21

Liquidation Rights

        Unless otherwise set forth in the applicable prospectus supplement, in the event of our liquidation, dissolution or winding up, the holders of shares of each series of preferred stock are entitled to receive out of our assets 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 that 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 that 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, those shares until the liquidation preference of any shares of our capital stock ranking senior to that 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 our liquidation, dissolution or winding up, the amounts payable with respect to the preferred stock, and any other preferred stock ranking as to any distribution on a parity with the preferred stock are not paid in full, then the holders of the preferred stock and the other parity preferred stock will share ratably in any 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 our assets. Neither a consolidation or merger of us with another corporation nor a sale of securities shall be considered a liquidation, dissolution or winding up of us.

Voting Rights

        The holders of each series or class of preferred stock we may issue will have no voting rights, except as required by law and as described below or in the applicable prospectus supplement. Our Board of Directors may, upon issuance of a series or class of preferred stock, grant voting rights to the holders of that series or class to elect additional board members if we fail to pay dividends in a timely fashion.

        Without the affirmative vote of a majority of the shares of any class of preferred stock then outstanding, we may not:

•

increase or decrease the aggregate number of authorized shares of that class;



•

increase or decrease the par value of the shares of that class; or



•

alter or change the powers, preferences or special rights of the shares of that class so as to affect them adversely.

        If the amendment would adversely alter or change the powers, preferences or special rights of one or more series of a class of preferred stock, but not the entire class, then only the shares of the affected series will have the right to vote on the amendment.

Miscellaneous

        The holders of our preferred stock will have no preemptive rights. All shares of preferred stock being offered by the applicable prospectus supplement will be fully paid and not liable to further calls or assessment by us. If we should redeem or otherwise reacquire shares of our preferred stock, then these shares will resume the status of authorized and unissued shares of preferred stock undesignated as to series, and will 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

22

preferred stock may be restricted by loan agreements, indentures and other transactions entered into by us. Any material contractual restrictions on dividend payments will be described or incorporated by reference in the applicable prospectus supplement.

        When we offer to sell a series of preferred stock, we will describe the specific terms of the series in the applicable prospectus supplement. If any particular terms of a series of preferred stock described in a prospectus supplement differ from any of the terms described in this prospectus, then the terms described in the applicable prospectus supplement will be deemed to supersede the terms described in this prospectus.

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, our charter 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.

DESCRIPTION OF DEPOSITARY SHARES

General

        We may, at our option, elect to offer fractional shares rather than full shares of the preferred stock of a series. In the event that we exercise this option, we 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 among us, a depositary to be named in the applicable prospectus supplement, 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 the 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 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. To the extent that any particular terms of the depositary shares or the deposit agreement described in a prospectus supplement differ from any of the terms described below, then the terms described below will be deemed to have been superseded by that prospectus supplement. The forms of deposit agreement and depositary receipt have been or will be filed or incorporated by reference as exhibits to the registration statement of which this prospectus is a part or the documents incorporated or deemed to be incorporated by reference in this prospectus.

        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

23

the provisions of the deposit agreement and the applicable prospectus supplement, including the definitions therein of certain terms.

        Immediately following our issuance of shares of a series of preferred stock that will be offered as fractional shares, we will deposit the 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 depositary receipts, the depositary may, upon our written order, 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 our 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 the series of preferred stock in proportion to the number of the depositary shares owned by the 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 the holders, unless the depositary determines that the distribution cannot be made proportionately among the holders or that it is not feasible to make the distributions, in which case the depositary may, with our approval, adopt any method as it deems equitable and practicable for the purpose of effecting the distribution, including the sale (at public or private sale) of the securities or property thus received, or any part thereof, at the place or places and upon those 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 us or the depositary on account of taxes or other governmental charges.

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 the 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 the series of the preferred stock. If we redeem 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 redemption and any money or other property to which the holders of the depositary shares were entitled upon such redemption, upon surrender to the depositary of the depositary receipts evidencing the depositary shares. Any funds deposited by us with the depositary for any depositary shares that the holders thereof fail to redeem will be returned to us after a period of two years from the date the funds are so deposited.

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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 the notice of meeting to the record holders of the depositary shares relating to the series of preferred stock. Each record holder of the 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 that 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 the depositary shares in accordance with the instructions, provided the depositary receives the instructions sufficiently in advance of the meeting to enable it to so vote or cause to be voted the shares of preferred stock, and we 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 the 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 the depositary shares. Holders of depositary shares will be entitled to receive whole shares of the related series of preferred stock, but holders of the whole shares of preferred stock will not thereafter be entitled to deposit the 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 the holder or upon his or her order at the same time a new depositary receipt evidencing the 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 us 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 the amendment has been approved by the holders of at least a majority of the depositary shares of the series then outstanding. Every holder of a depositary receipt at the time the amendment becomes effective will be deemed, by continuing to hold the 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 the 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 us 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 the notice, the depositary shall deliver or make available for delivery to holders of depositary shares, upon surrender of the depositary receipts evidencing the depositary shares, the number of whole or fractional shares of the related series of preferred stock as are represented by the 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

25

the related series of preferred stock in connection with any liquidation, dissolution or winding up of us and the distribution has been distributed to the holders of depositary shares.

Charges of Depositary

        We will pay all transfer and other taxes and the governmental charges arising solely from the existence of the depositary arrangements. We 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 any 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 us written notice of its election to do so, and we may at any time remove the depositary. Any resignation or removal is 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 us that are delivered to the depositary and which we are 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 also act as redemption agent for the corresponding depositary receipts.

DESCRIPTION OF COMMON STOCK

        We may issue, from time to time, shares of our 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 our charter, bylaws and the applicable prospectus supplement.

Authorized Shares

        Under our charter, we have the authority to issue 4,600,000,000 shares of common stock.

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 the stock out of assets legally available for distribution when, as and if authorized and declared by our Board of Directors. The payment of dividends on the common stock will be a business decision to be made by our Board of Directors from time to time based upon results of our operations and our financial condition and any other factors as our 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 us from time to time. Any material contractual restrictions on dividend payments will be described in the applicable prospectus supplement.

26

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 the shares possess all voting power. Our charter 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 our assets legally available for distribution to our stockholders in the event of our liquidation, dissolution or winding up.

Absence of Other Rights

        Holders of common stock have no preferential, preemptive, conversion or exchange rights.

Miscellaneous

        All shares of common stock being offered by the applicable prospectus supplement will be fully paid and not liable to further calls or assessment by us.

Transfer Agent and Registrar

        We are the principal transfer agent and registrar for the common stock.

Certain Anti-takeover Effects

        General.    Certain provisions of our charter and the Delaware General Corporation Law (the "DGCL") could make it more difficult to consummate an acquisition of control of us by means of a tender offer, a proxy fight, open market purchases or otherwise in a transaction not approved by our Board of Directors. The provisions described below may reduce our vulnerability to an unsolicited proposal for the restructuring or sale of all or substantially all of our assets or an unsolicited takeover attempt which is unfair to our stockholders. The summary of the provisions set forth below does not purport to be complete and is qualified in its entirety by reference to our charter and the DGCL.

        Our Board of Directors has no present intention to introduce additional measures that might have an anti-takeover effect; however, our Board of Directors expressly reserves the right to introduce these measures in the future.

        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

27

in the person becoming an interested stockholder prior to the time that 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, for purposes of determining the voting stock outstanding, but not the outstanding voting stock owned by the interested stockholder, 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 or bylaws contains a provision expressly electing not to be governed by the statute; however, neither our charter nor our bylaws contains a provision electing to "opt-out" of Section 203.

        Supermajority Requirements.    In addition to the requirements of Section 203 of the DGCL, our charter provides that the affirmative vote of four-fifths of our outstanding stock entitled to vote shall be required for:

(1)

any merger or consolidation to which we, or any of our subsidiaries, and an Interested Person (as defined below) are parties;



(2)

any sale or other disposition by us, or any of our subsidiaries, of all or substantially all of our or its assets to an interested person, as defined below;



(3)

any purchase or other acquisition by us, or any of our subsidiaries, of all or substantially all of the assets or stock of an interested person; and



(4)

any other transaction with an interested person which requires the approval of our stockholders under the DGCL.

However, the above will not apply to any transaction if (a) the transaction is authorized by a resolution of our Board of Directors, provided that a majority of the members of our Board of Directors voting for the approval of the transaction were duly elected and acting members of our Board of Directors prior to the date that the person, firm or corporation, or any group thereof, with whom the transaction is proposed, became an interested person, or (b) the provision of a vote in excess of that required by the DGCL for the 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 our voting securities.

        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 charter or the bylaws. Our charter provides that special meetings of stockholders may only be called by our Board of Directors, the Chairman of our Board of Directors, or our President.

        Additional Authorized Shares of Capital Stock.    The additional shares of authorized common stock and preferred stock available for issuance under our charter could be issued at such times, under such circumstances and with such terms and conditions as to impede a change in control.

DESCRIPTION OF WARRANTS

        We may issue, either separately or together with other securities, warrants for the purchase of any of the other types of securities that we may sell under this prospectus.

        The warrants will be issued under warrant agreements to be entered into between us and a bank or trust company, as warrant agent, all to be set forth in the applicable prospectus supplement relating

28

to any or all warrants in respect of which this prospectus is being delivered. Copies of the form of agreement for each warrant, which we refer to collectively as "warrant agreements," including the forms of certificates representing the warrants, which we refer to collectively as "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, have been or will be filed as exhibits to the registration statement of which this prospectus forms a part or as exhibits to documents which have been or will be incorporated by reference in this prospectus.

        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 the 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:

•

the principal amount of, or the number of securities, as the case may be, purchasable upon exercise of each warrant and the initial price at which the principal amount or number of securities, as the case may be, may be purchased upon such exercise;



•

the designation and terms of the securities, if other than common stock, purchasable upon exercise thereof and of any securities, if other than common stock, with which the warrants are issued;



•

the procedures and conditions relating to the exercise of the warrants;



•

the date, if any, on and after which the warrants, and any securities with which the warrants are issued, will be separately transferable;



•

the offering price of the warrants, if any;



•

the date on which the right to exercise the warrants will commence and the date on which that right will expire;



•

a discussion of any material United States federal income tax considerations applicable to the exercise of the warrants;



•

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;



•

call provisions of the warrants, if any;



•

antidilution provisions of the warrants, if any; and



•

any other material terms of the warrants.

Exercise of Warrants

        Each warrant will entitle the holder to purchase for cash that principal amount of or number of securities, as the case may be, at the exercise price set forth in, or to be determined as set forth in, the applicable prospectus supplement relating to the warrants. Unless otherwise specified in the applicable prospectus supplement, warrants may be exercised at the corporate trust office of the warrant agent or

29

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 executed, we will, as soon as practicable, issue the securities purchasable upon exercise of the warrant. If less than all of the warrants represented by the 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 securities purchasable upon the exercise of the warrants, and will not be entitled to:

•

in the case of warrants to purchase debt securities, payments of principal of, premium, if any, or interest, if any, on the debt securities purchasable upon exercise; or



•

in the case of warrants to purchase equity securities, the right to vote or to receive dividend payments or similar distributions on the securities purchasable upon 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.

DESCRIPTION OF TRUST PREFERRED SECURITIES

        We may offer one or more series of trust preferred securities either separately, or together with, or upon the conversion of or in exchange for, other securities. All of the trust common securities will be owned directly or indirectly by us. The trust preferred securities would be issued by one of the Disney Capital Trusts. The terms of the series of trust preferred securities will include those stated in the amended trust agreement entered into at the time the securities are issued and those made part of the amended trust agreement by the Trust Indenture Act or the Delaware Statutory Trust Act. The amended trust agreement will be qualified as an indenture under the Trust Indenture Act. We will enter into a guarantee with respect to each series of trust preferred securities under which we will irrevocably and unconditionally agree to make certain payments to the holders of that series of trust preferred securities, subject to applicable subordination provisions, except that the guarantee will only apply when the trust has sufficient funds legally and immediately available to make those payments but has not made them.

        The proceeds from the sale of a series of trust preferred securities and any trust common securities will be used by the trust to purchase a series of our junior subordinated debt securities. The payment terms of the series of junior subordinated debt securities will mirror the terms of that series of trust preferred securities and any trust common securities. Each series of junior subordinated debt securities will be issued under our subordinated debt securities indenture. Except as described in an applicable prospectus supplement, the features of the junior subordinated debt securities will be similar to the subordinated debt securities described above under "Description of Debt Securities," with the additional features summarized below under "—Description of Additional Terms of Junior Subordinated Debt Securities to be Issued to the Trusts."

        The series of junior subordinated debt securities purchased with the proceeds from the sale of a series of trust preferred securities and trust common securities by a trust, along with its rights under the amended trust agreement and other agreements described in this section, will be the sole assets of the trust, and our payments under the series of junior subordinated debt securities and the agreement

30

as to expenses and liabilities between us and the trust will be the sole revenue of the trust. If we fail to make a payment on the series of junior subordinated debt securities, the trust will not have sufficient funds to make related payments, including distributions, on the series of trust preferred securities.

        Our guarantee, when taken together with our obligations under the junior subordinated debt securities, the related indenture and the amended trust agreement, will provide a full and unconditional guarantee on a subordinated basis by us of payments due on the trust preferred securities.

        The following summary of selected provisions of the amended trust agreement, and the trust preferred securities, related guarantees and junior subordinated debt securities, is not complete. When we offer to sell a series of trust preferred securities, we will describe the material additional terms of the series in the applicable prospectus supplement. If any particular terms of the trust preferred securities described in a prospectus supplement differ from any of the terms described in this prospectus, then the terms described in the applicable prospectus supplement will supersede the terms described in this prospectus. In addition, you should review the forms of amended trust agreement, guarantee, subordinated debt securities indenture, agreement as to expenses and liabilities and certificate evidencing the trust preferred securities, which forms have been filed as exhibits to the registration statement of which this prospectus is a part. To obtain a copy of these documents, see "Where You Can Find More Information" in this prospectus. The following summary and any description of trust preferred securities and related matters in the applicable prospectus supplement are qualified in their entirety by reference to all of the provisions of these documents, which provisions, including defined terms, are incorporated by reference in this prospectus. When we refer to "Disney," "we," "us" or "our" in this section or when we otherwise refer to ourselves in this section, we mean The Walt Disney Company, excluding, unless otherwise expressly stated or the context requires, our subsidiaries. References to "trust securities" below include trust preferred securities and trust common securities (all of which, with respect to any trust, will be directly or indirectly owned by us), collectively.

General

        Each trust may issue only one series of trust preferred securities and one series of trust common securities, and will use the proceeds from the sale of a series of trust preferred securities and trust common securities to purchase our junior subordinated debt securities. See "—Description of Additional Terms of Junior Subordinated Debt Securities to be Issued to the Trusts" below. The applicable prospectus supplement relating to any series of trust preferred securities will describe the terms of the trust preferred securities, including, where applicable:

•

the title of the trust preferred securities;



•

the liquidation amount and number of trust preferred securities issued;



•

any limit on the aggregate liquidation amount of the trust preferred securities;



•

whether the trust preferred securities may be represented initially by a trust preferred security in temporary or permanent global form, and if so, the initial depositary with respect to the temporary or permanent global debt security and whether and the circumstances under which beneficial owners of interests in any the temporary or permanent global debt security may exchange those interests for trust preferred securities of like tenor and of any authorized form and denomination;



•

the price or prices at which the trust preferred securities will be issued;



•

the annual distribution rate or rates on the trust preferred securities or the method or methods, if any, used to calculate those rates, the payment date or dates and the record dates used to determine the holders who are to receive distributions;

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•

the date or dates from which distributions on the trust preferred securities will be cumulative or the method or methods, if any, used to determine those dates;



•

the person to whom any distributions will be payable on any trust preferred securities, if other than the person in whose name the security is registered at the close of business on the regular record date for the payment of such interest;



•

the regular payment date or dates on which distributions on the trust preferred securities will be payable and the regular record dates for the distributions payable on the trust preferred securities;



•

the place or places where and the manner in which the distributions of and payments in redemption of the trust preferred securities will be payable and the place or places where the trust preferred securities of the series may be presented for transfer and, if applicable, conversion or exchange and the place or places where notices and demands in respect of the trust preferred securities may be served on us;



•

the period or periods within which, the price or prices at which and the terms and conditions upon which, the trust preferred securities may be redeemed, in whole or in part, at our option;



•

whether the trust preferred securities are convertible or exchangeable into our common stock or other securities, and, if so, the terms and conditions upon which the 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;



•

the terms and conditions, if any, upon which the junior subordinated debt securities and the related guarantee may be distributed to holders of those trust preferred securities and trust common securities;



•

any securities exchange on which the trust preferred securities will be listed; and



•

any other relevant rights, preferences, privileges, limitations or restrictions of the trust preferred securities.

        The interest rate and interest and other payment dates of each series of junior subordinated debt securities issued to a trust will correspond to the rate at which distributions will be paid and the distribution and other payment dates of the trust preferred securities of that trust. Holders of trust preferred securities will have no preemptive or similar rights.

Distributions

        Distributions on the trust preferred securities will be made on the dates payable to the extent that the trust has funds available for the payment of distributions in the trust's property account. The trust's funds available for distribution to the holders of the trust securities will be limited to payments received from us on the junior subordinated debt securities issued to the trust in connection with the issuance of the trust preferred securities. We will guarantee the payment of distributions out of monies held by the trust to the extent set forth under "—Description of the Guarantees" below.

        Distributions on the trust preferred securities will be payable to the holders named on the securities register of the trust at the close of business on the relevant record dates, which, as long as the trust preferred securities remain in book-entry only form, will be one business day prior to the relevant payment dates. Distributions will be paid through the property trustee who will hold amounts received in respect of the junior subordinated debt securities in the property account for the benefit of the holders of the trust securities. In the event that the trust preferred securities do not continue to remain in book-entry only form, the administrative trustees will have the right to select relevant record dates, which will be at least 15 days prior to the relevant payment dates. In the event that any date on

32

which distributions are to be made on the trust preferred securities is not a business day, then payment of the distributions payable on that date will be made on the next succeeding day which is a business day and without any interest or other payment in respect of that delay, except that, if that business day is in the next succeeding calendar year, the payment will be made on the immediately preceding business day, in each case with the same force and effect as if made on the payment date.

Deferral of Distributions

        We will have the right under the junior subordinated debt securities to defer payments of interest on the junior subordinated debt securities by extending the interest payment period from time to time on the junior subordinated debt securities. As a consequence of our extension of the interest payment period on junior subordinated debt securities held by a trust, distributions on the trust preferred securities would be deferred during any such extended interest payment period. The trust will give the holders of the trust preferred securities notice of an extension period upon their receipt of notice from us. If distributions are deferred, the deferred distributions and accrued interest will be paid to holders of record of the trust preferred securities as they appear on the books and records of the trust on the record date next following the termination of the deferral period. See "—Description of Additional Terms of Junior Subordinated Debt Securities to be Issued to the Trusts" below for more information on our right to defer interest payments.

Mandatory Redemption

        The trust preferred securities have no stated maturity date, but will be redeemed upon the maturity of the junior subordinated debt securities issued to the trust in connection with the issuance of the trust preferred securities or to the extent the junior subordinated debt securities are redeemed prior to maturity. The junior subordinated debt securities will mature on the date specified in the applicable prospectus supplement. The junior subordinated debt securities may be redeemed at our option, to the extent specified in the applicable prospectus supplement and may also be redeemed at any time, in whole although not in part, in certain circumstances upon the occurrence of a tax event or an investment company event as described under "—Special Event Redemption" below.

        Upon maturity of the junior subordinated debt securities, the proceeds of their repayment simultaneously will be applied to redeem all outstanding trust securities at the redemption price. Upon the redemption of the junior subordinated debt securities, either at our option or pursuant to a tax event or investment company event, the trust will use the cash it receives upon redemption to redeem trust securities having an aggregate principal amount equal to the aggregate principal amount of the junior subordinated debt securities so redeemed at the redemption price. Before such redemption, holders of trust securities will be given not less than 30 nor more than 60 days' notice. In the event that fewer than all of the outstanding trust securities are to be redeemed, the trust securities will be redeemed proportionately.

Special Event Redemption

        Both a tax event and an investment company act event constitute special events for purposes of the redemption provisions described above.

        A tax event means that the trust has received an opinion of tax counsel to the effect that, as a result of any amendment to, change or announced proposed change in, the laws or regulations of the United States or any of its political subdivisions or taxing authorities, or written administrative or judicial decision, interpretation or application of these laws and regulations, there is more than an insubstantial risk that:

•

the trust is or within 90 days would be subject to United States federal income tax with respect to income accrued or received on the junior subordinated debt securities;

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•

interest payable to the trust on the junior subordinated debt securities is not or within 90 days would not be deductible, in whole or in part, by us for United States federal income tax purposes; or



•

the trust is or within 90 days would be subject to a more than a de minimis amount of other taxes, duties or other governmental charges.

        An investment company event means that the trust has received an opinion of counsel to the effect that, as a result of an amendment to or change in the applicable laws or regulations, or written administrative or judicial decision, interpretation or application of these laws and regulations, the trust is or will be considered an investment company required to be registered under the Investment Company Act.

Redemption Procedures

        A trust may not redeem fewer than all of the outstanding trust securities unless all accumulated and unpaid distributions have been paid on all trust securities for all distribution periods terminating on or prior to the date of redemption. If fewer than all of the outstanding trust securities are to be redeemed, the trust securities will be redeemed proportionately.

        If (1) a trust gives a notice of redemption of trust securities (which notice may not be conditional) and (2) we have paid to the property trustee a sufficient amount of cash in connection with the related redemption or maturity of the junior subordinated debt securities, then on or before the redemption date, the property trustee will deposit with the paying agent funds sufficient to pay the applicable redemption price. Upon surrender of the trust securities to the paying agent, the holders of the trust securities will be paid the applicable redemption price plus accumulated distributions to the redemption date.

        Once notice of redemption is given, distributions will cease to accumulate and all rights of holders of trust preferred securities called for redemption will cease, except the right of the holders to receive the redemption price plus accumulated distributions. If any redemption date is not a business day, then payment of the redemption price payable on such date will be made on the next succeeding day that is a business day, without any interest or other payment in respect of any such delay. However, if such business day falls in the next calendar year, such payment will be made on the immediately preceding business day.

        We or our subsidiaries may, at any time, and from time to time, purchase outstanding trust securities by tender, in the open market or by private agreement.

Conversion or Exchange Rights

        The terms on which the trust preferred securities or related junior subordinated debt securities will be convertible into or exchangeable for our common stock or other securities will be set forth in the applicable prospectus supplement. Those terms, if applicable, will include provisions as to whether conversion or exchange is mandatory, at the option of the holder or at our option, and may include provisions under which the number of shares of our common stock or other securities to be received by the holders of trust preferred securities or related junior subordinated debt securities would be subject to adjustment.

Dissolution

        Each amended trust agreement will state that the trust will be dissolved:

•

upon our bankruptcy;



•

upon the filing of a certificate of dissolution or its equivalent with respect to us;

34

•

upon obtaining the consent of at least a majority in liquidation amount of the trust securities, voting together as a single class;



•

90 days after the revocation of our charter, but only if the charter is not reinstated during that 90-day period;



•

upon entry of a court order for the dissolution of us or the trust;



•

upon the redemption of all of the trust securities;



•

upon the distribution of the related junior subordinated debt securities directly to the holders of the trust securities; or



•

if prior to the issuance of the trust securities, when we and the administrative trustees have consented to dissolution of the trust.

In the event of a dissolution, after the trust pays all amounts owed to creditors, the holders of the trust securities will be entitled to receive:

•

cash equal to the total liquidation amount of each trust security specified in the applicable prospectus supplement, plus accumulated and unpaid distributions to the date of payment; or



•

junior subordinated debt securities in a total principal amount equal to the total liquidation amount of the trust securities.

        If the trust cannot pay the full amount due on its trust securities because insufficient assets are available for payment, then the amounts payable by the trust on its trust securities will be paid proportionately. However, if an event of default under the related amended trust agreement occurs, the total amounts due on the trust preferred securities will be paid before any distribution on the trust common securities.

Distribution of Junior Subordinated Debt Securities

        We will have the right at any time to dissolve a trust and, after satisfaction of the liabilities of creditors of the trust as provided by applicable law, to cause the distribution of junior subordinated debt securities issued to the trust to the holders of the trust securities in a total stated principal amount equal to the total stated liquidation amount of the trust securities then outstanding. The right to dissolve the trust and distribute the junior subordinated debt securities will be conditioned on our receipt of an opinion rendered by tax counsel that the distribution would not be taxable for United States federal income tax purposes to the holders.

Trust Enforcement Events

        Upon the occurrence of a trust enforcement event, the property trustee, as the sole holder of the junior subordinated debt securities, will have the right under the subordinated debt securities indenture to declare the principal of, interest on and premium, if any, on the junior subordinated debt securities to be immediately due and payable. A trust enforcement event under the amended trust agreement also will be an event of default under the subordinated debt securities indenture. See "—Description of Additional Terms of Junior Subordinated Debt Securities to be Issued to the Trusts."

        Under the amended trust agreement, until all trust enforcement events with respect to the trust preferred securities have been cured, waived or otherwise eliminated, the holder of the trust common securities will be deemed to have waived any trust enforcement event with respect to the trust common securities, the property trustee will be deemed to be acting solely on behalf of the holders of the trust preferred securities and only the holders of the trust preferred securities will have the right to direct the property trustee with respect to certain matters under the amended trust agreement and the subordinated debt securities indenture as it relates to the junior subordinated debt securities. In the

35

event that any trust enforcement event with respect to the trust preferred securities is waived by the holders of the trust preferred securities as provided in the amended trust agreement, the holder of trust common securities has agreed that the waiver also constitutes a waiver of the trust enforcement event with respect to the trust common securities for all purposes under the amended trust agreement without any further act, vote or consent of the holder of trust common securities.

        Each amended trust agreement will provide that we and the administrative trustees shall deliver to the property trustee within 120 days after the end of each of our fiscal years a certificate evidencing compliance with all the applicable conditions and covenants under the amended trust agreement during the last fiscal year.

        If a property trustee fails to enforce its rights under the amended trust agreement or the subordinated debt securities indenture to the fullest extent permitted by law and, subject to the terms of the amended trust agreement and the subordinated debt securities indenture, any holder of trust securities may sue us, or seek other remedies, to enforce the property trustee's rights under the amended trust agreement or the subordinated debt securities indenture without first instituting a legal proceeding against the property trustee or any other person. If a trust enforcement event occurs and is continuing as a result of our failure to pay the principal of, interest on or premium, if any, on the junior subordinated debt securities when payable, then a holder of the trust preferred securities may directly sue us or seek other remedies, to collect its proportionate share of payments owed. See "—Relationship Among the Trust Preferred Securities, the Guarantees and the Junior Subordinated Debt Securities Held By The Trust" below.

Removal and Replacement of Trustees

        Once trust securities have been issued, the number of trustees may be increased or decreased by a majority in liquidation amount of the trust common securities and only the holder of trust common securities has the right to remove or replace the trustees of the trust, except that while an event of default in respect of the junior subordinated debt securities has occurred and is continuing, the holders of a majority of the trust preferred securities will have this right. The resignation or removal of any property or Delaware trustee and the appointment of a successor property or Delaware trustee will be effective only on the acceptance of appointment by the successor property or Delaware trustee in accordance with the provisions of the amended trust agreement. The resignation of an administrative trustee is effective upon delivery of notice of resignation.

Mergers and Sales of Assets

        A trust may not consolidate, merge with or into, or be replaced by or convey, transfer or lease its properties and assets substantially as an entirety to any other trust entity (each, a merger event), except as described below. A trust may, at our request and with the consent of a majority of its administrative trustees (but without the consent of the holders of its trust securities, the Delaware trustee or the property trustee), consolidate, merge with or into, or be replaced by, or convey, transfer or lease its properties or assets substantially as an entirety to, another trust, provided that:

•

the successor entity either (1) assumes all of the obligations of the trust relating to its trust securities or (2) substitutes other securities for the trust preferred securities that are substantially similar to the trust preferred securities, so long as the successor securities rank the same as the trust preferred securities for distributions and payments upon liquidation, redemption and otherwise;



•

we appoint a trustee of the successor entity who has the same powers and duties as the property trustee of the trust, as the holder of the junior subordinated debt securities;

36

•

the trust preferred securities are listed, or any successor securities will be listed, upon notice of issuance, on the same securities exchange or other organization that the trust preferred securities are then listed;



•

the merger event does not cause the trust preferred securities or successor securities to be downgraded by any nationally recognized rating agency;



•

the merger event does not adversely affect the rights, preferences and privileges of the holders of the trust preferred securities or successor securities in any material way, other than with respect to any dilution of the holders' interest in the new entity;



•

the successor entity has a purpose identical to that of the trust;



•

prior to the merger event, we have received an opinion of counsel stating that (1) the merger event does not adversely affect the rights, preferences and privileges of the holders of the trust preferred securities or any successor securities in any material way, other than with respect to any dilution of the holders' interest in the new entity, (2) following the merger event, neither the trust nor the successor entity will be required to register as an investment company under the Investment Company Act, and (3) following the merger event the trust or the successor entity will continue to be classified as a grantor trust for United States federal income tax purposes;



•

we directly or indirectly own all of the trust common securities of the successor entity and guarantee the obligations of the successor entity under the successor securities in the same manner as in the guarantee; and



•

the successor entity assumes all of the obligations of the trust with respect to the trustees.

        In addition, unless all of the holders of the trust preferred securities and trust common securities approve otherwise, the trust will not consolidate, merge with or into, or be replaced by, or convey, transfer or lease its properties or assets substantially as an entirety to, any other entity or permit any other entity to consolidate, merge with or into, or replace it, if, in the opinion of tax counsel, the transaction would cause the trust or the successor entity to be classified other than as a grantor trust for United States federal income tax purposes and would cause the holders of the trust securities not to be treated as owning an undivided interest in the junior subordinated debt securities.

Voting Rights; Amendment of Amended Trust Agreement

        The holders of trust securities have no voting rights except as discussed under "—Removal and Replacement of Trustees" and "—Mergers and Sales of Assets" above and "—Description of the Guarantees" below and as otherwise required by law and the amended trust agreement.

        The amended trust agreement may be amended if approved by us, a majority of the administrative trustees of the trust, the property trustee and, if the amendment affects the rights, powers, duties, obligations or immunities of the Delaware trustee, the Delaware trustee. However, if any proposed amendment provides for:

•

any action that would adversely affect the powers, preferences or special rights of the trust securities, whether by way of amendment to the amended trust agreement or otherwise; or



•

the dissolution, winding-up or termination of the trust other than under the terms of its amended trust agreement;

then the holders of the trust securities as a single class will be entitled to vote on the amendment. In that case, the amendment will be effective only if approved by at least a majority in liquidation amount of the trust securities affected by the amendment. However, if any proposed amendment would adversely affect only the trust preferred securities or the trust common securities, then only the affected class will be entitled to vote on the amendment.

37

        In addition, if any proposed amendment provides for:

•

any action that would change the amount or timing of any distribution of the trust securities or otherwise adversely affect the amount of any distribution required to be made in respect of the trust securities on a specified date; or



•

any action that would restrict the right of a holder of trust securities to institute suit for the enforcement of payment of the distribution on or after the specified date;

then the holders of trust securities as a single class will be entitled to vote on the amendment. In that case, the amendment will be effective only if approved by each holder of trust securities affected by the amendment.

        No amendment may be made to an amended trust agreement if that amendment would:

•

cause the trust to be characterized as other than a grantor trust for United States federal income tax purposes;



•

reduce or otherwise adversely affect the powers of the property trustee in contravention of the Trust Indenture Act; or



•

cause the trust to be deemed to be an investment company which is required to be registered under the Investment Company Act.

        As described in the form of amended trust agreement, the administrative trustees may hold a meeting to have holders of trust securities vote on an amendment or have them approve an amendment by written consent.

        If a vote by the holders of trust preferred securities is taken or a consent is obtained, any trust preferred securities owned by us or our affiliates will, for purposes of the vote or consent, be treated as if they were not outstanding, which will have the following consequences:

•

we and our affiliates will not be able to vote on or consent to matters requiring the vote or consent of holders of trust preferred securities; and



•

any trust preferred securities owned by us or our affiliates will not be counted in determining whether the required percentage of votes or consents has been obtained.

        The holders of a majority of the total liquidation amount of each of the trust preferred securities and the trust common securities have the right to:

•

direct the time, method and place of conducting any proceeding for any remedy available to the property trustee; or



•

direct the exercise of any trust or power conferred upon the property trustee under the amended trust agreement, including the right to direct the property trustee, as the holder of the junior subordinated debt securities, to

•

exercise the remedies available under the subordinated debt securities indenture with respect to the junior subordinated debt securities;

•

consent to any amendment or modification of the subordinated indenture with respect to the junior subordinated debt securities; or

•

waive any event of default under the subordinated debt securities indenture that is waivable.

        However, the holders of a majority of the total liquidation amount of the trust common securities can exercise the foregoing rights only after all trust enforcement events with respect to the trust preferred securities have been cured, waived or otherwise eliminated. In addition, before taking any of the foregoing actions, the property trustee must obtain an opinion of tax counsel stating that, as a

38

result of that action, the trust will continue to be classified as a grantor trust for United States federal income tax purposes and that each holder of trust securities will be treated as owning an undivided beneficial ownership interest in junior subordinated debt securities.

Information Concerning the Property Trustee

        For matters relating to compliance with the Trust Indenture Act, the property trustee will have all of the duties and responsibilities of an indenture trustee under the Trust Indenture Act. The property trustee, and/or one or more of its affiliates, may be a lender under our credit agreements and may provide other commercial banking, investment banking and other services to us and/or our subsidiaries and affiliates. The property trustee will be permitted to engage in other transactions with us and/or our subsidiaries and affiliates. However, if the property trustee acquires any conflicting interest, as defined in the Trust Indenture Act, it must eliminate the conflict or resign.

        The property trustee, other than during the occurrence and continuance of a trust enforcement event, undertakes to perform only the duties that are specifically described in the amended trust agreement and, upon a trust enforcement event, must use the same degree of care and skill as a prudent man would exercise or use in the conduct of his own affairs. Subject to this provision, the property trustee is under no obligation to exercise any of the powers given it by the applicable amended trust agreement at the request of any holder of trust preferred securities unless it is offered reasonable security or indemnity against the costs, expenses and liabilities that it might incur.

Information Concerning the Administrative Trustees

        Initially, there will be three administrative trustees of each trust. The administrative trustees may be officers or employees of Disney or entities affiliated with us. The administrative trustees are authorized and directed to conduct the affairs of and, among other things, to operate the trust in a way that:

•

will not cause it to be deemed to be an investment company required to be registered under the Investment Company Act;



•

will cause it to be classified as a grantor trust for United States federal income tax purposes; and



•

will cause the junior subordinated debt securities it holds to be treated as our indebtedness for United States federal income tax purposes.

        The administrative trustees are authorized to take any action, so long as it is consistent with applicable law, the certificate of trust and the amended trust agreement, that they determine to be necessary or desirable for those purposes.

Description of the Guarantees

        We will execute a guarantee for the benefit of the holders of each series of trust preferred securities. Each guarantee will be qualified as an indenture under the Trust Indenture Act. The applicable prospectus supplement with respect to the trust preferred securities will identify the guarantee trustee. The terms of the guarantee will be those set forth in the guarantee and those made part of the guarantee by the Trust Indenture Act. The guarantee trustee will hold each guarantee for the benefit of the holders of the trust preferred securities to which it relates.

General

        We will irrevocably and unconditionally agree under each guarantee to pay the guarantee payments that are set forth below, to the extent specified in that guarantee, to the holders of the trust preferred securities to which the guarantee relates, to the extent that the guarantee payments are not paid by or

39

on behalf of the related trust. We are required to pay the guarantee payments to the extent specified in the relevant guarantee regardless of any defense, right of set-off or counterclaim that we may have or may assert against any person.

        The following payments and distributions on the trust preferred securities of a trust are guarantee payments:

•

any accumulated and unpaid distributions required to be paid on the trust preferred securities of the trust, but only to the extent that the trust has funds legally and immediately available for those distributions;



•

the redemption price for any trust preferred securities that the trust calls for redemption, including all accumulated and unpaid distributions to the redemption date, but only to the extent that the trust has funds legally and immediately available for the payment; and



•

upon a dissolution, winding-up or termination of the trust, other than in connection with the distribution of junior subordinated debt securities to the holders of trust securities of the trust or the redemption of all the trust preferred securities of the trust, the lesser of:

•

the sum of the liquidation amount and all accumulated and unpaid distributions on the trust preferred securities of the trust to the payment date, to the extent that the trust has funds legally and immediately available for the payment; and

•

the amount of assets of the trust remaining available for distribution to holders of the trust preferred securities of the trust in liquidation of the trust.

        We may satisfy our obligation to make a guarantee payment by making that payment directly to the holders of the related trust preferred securities or by causing the trust to make the payment to those holders.

        Each guarantee will be a full and unconditional guarantee, subject to certain subordination provisions of the guarantee payments with respect to the related trust preferred securities from the time of issuance of those trust preferred securities, except that the guarantee will only apply to the payment of distributions and other payments on the trust preferred securities when the trust has sufficient funds legally and immediately available to make those distributions or other payments.

        If we do not make the required payments on the junior subordinated debt securities that the property trustee holds under a trust, that trust will not make the related payments on its trust preferred securities.

Subordination

        Our obligations under each guarantee will be unsecured obligations of ours. Those obligations will rank:

•

subordinate and junior in right of payment to all of our other liabilities, other than obligations or liabilities that rank equal in priority or subordinate by their terms;



•

equal in priority with the junior subordinated debt securities that we may issue and similar guarantees; and



•

senior to our common stock.

        Each guarantee will be a guarantee of payment and not of collection. This means that the guaranteed party may institute a legal proceeding directly against us, as guarantor, to enforce its rights under the guarantee without first instituting a legal proceeding against any other person or entity.

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        The terms of the trust preferred securities will provide that each holder of the trust preferred securities, by accepting those trust preferred securities, agrees to the subordination provisions and other terms of the related guarantee.

Amendments

        We may amend the guarantee without the consent of any holder of the trust preferred securities to which the guarantee relates if the amendment does not materially and adversely affect the rights of those holders. We may otherwise amend the guarantee with the approval of the holders of at least a majority of the outstanding trust preferred securities to which the guarantee relates.

Termination

        The guarantee will terminate and be of no further effect when:

•

the redemption price of the trust preferred securities to which it relates is fully paid;



•

we distribute the related junior subordinated debt securities to the holders of those trust preferred securities; or



•

the amounts payable upon liquidation of the related trust are fully paid.

        Each guarantee will remain in effect or will be reinstated if at any time any holder of the related trust preferred securities must restore payment of any sums paid to that holder with respect to those trust preferred securities or under that guarantee.

Certain Covenants

        We will covenant that, so long as any trust preferred securities remain outstanding, if we have given notice of our election to defer payments of interest on the junior subordinated debt securities or if there is an event of default under the guarantee or the subordinated debt securities indenture with respect to the junior subordinated debt securities (or any event of which we have knowledge that with the giving of notice or lapse of time or both would constitute an event of default under the subordinated debt securities indenture with respect to the junior subordinated debt securities and which we have not taken responsible steps to cure):

•

we will not make distributions related to our debt securities that rank equally with or junior to the junior subordinated debt securities, including any payment of interest, principal or premium, or repayments, repurchases or redemptions; and



•

we will not make distributions related to our capital stock, including dividends, redemptions, repurchases, liquidation payments, or guarantee payments.

We may, however, make the following types of distributions:

•

dividends paid in common stock;



•

dividends in connection with the implementation of a shareholder rights plan, the issuance of capital stock under any such plan or the redemption or repurchase of any rights pursuant to such plan;



•

payments under a guarantee to a trust holding junior subordinated debt securities of the same series;



•

repurchases, redemptions or other acquisitions of shares of our capital stock in connection with any benefit plan or other similar arrangement with or for the benefit of employees, officers, directors, consultants or advisors; and

41

•

the purchases of fractional interests in shares of capital stock pursuant to the conversion or exchange provisions of the capital stock or the security being converted or exchanged.

        Because we are a holding company, the claims of creditors of our subsidiaries will have a priority over our equity rights and the rights of our creditors, including the trust, as holder of the guarantee and the junior subordinated debt securities, to participate in the assets of the subsidiary upon the subsidiary's liquidation. See "Description of Debt Securities—Consequences of Holding Company Status."

Events of Default

        An event of default will occur under any guarantee if we fail to perform any of our payment obligations under the guarantee. The holders of a majority of the trust preferred securities of any series may waive any such event of default and its consequences on behalf of all of the holders of the trust preferred securities of that series. The guarantee trustee is entitled to enforce the guarantee for the benefit of the holders of the trust preferred securities of a series if an event of default occurs under the related guarantee.

        The holders of a majority of the trust preferred securities to which a guarantee relates have the right to direct the time, method and place of conducting any proceeding for any remedy available to the guarantee trustee with respect to that guarantee or to direct the exercise of any trust or power that the guarantee trustee holds under that guarantee. Any holder of the related trust preferred securities may institute a legal proceeding directly against us to enforce that holder's rights under the guarantee without first instituting a legal proceeding against the guarantee trustee or any other person or entity.

Information Concerning the Guarantee Trustee

        The guarantee trustee, and/or one or more of its affiliates, may be a lender under our credit agreements and may provide other commercial banking, investment banking and other services to us and/or our subsidiaries and affiliates. The guarantee trustee will be permitted to engage in other transactions with us and/or our subsidiaries and affiliates. However, if the guarantee trustee acquires any conflicting interest, as defined in the Trust Indenture Act, it must eliminate the conflict or resign.

        The guarantee trustee will perform only those duties that are specifically set forth in each guarantee unless an event of default under the guarantee occurs and is continuing. In case an event of default occurs and is continuing, the guarantee trustee will exercise the same degree of care as a prudent individual would exercise in the conduct of his or her own affairs. Subject to those provisions, the guarantee trustee is under no obligation to exercise any of its powers under any guarantee at the request of any holder of the related trust preferred securities unless that holder offers reasonable indemnity to the guarantee trustee against the costs, expenses and liabilities which it might incur as a result.

Applicable Law

        The guarantees will be governed by and construed in accordance with the laws of the State of New York.

Agreement as to Expenses and Liabilities

        We will enter into an agreement as to expenses and liabilities in connection with each amended trust agreement. The agreement as to expenses and liabilities will provide that we will, with certain exceptions, irrevocably and unconditionally guarantee the full payment of any indebtedness, expenses or liabilities of the related trust to each person or entity to whom that trust becomes indebted or liable. The exceptions are the obligations of the trust to pay to the holders of the related trust preferred

42

securities or other similar interests in the trust the amounts due to the holders under the terms of those trust preferred securities or those similar interests.

Description of Additional Terms of Junior Subordinated Debt Securities to be Issued to the Trusts

General

        The junior subordinated debt securities, which each trust that issues trust preferred securities will hold as trust assets, will be issued under the subordinated debt securities indenture relating to that series of junior subordinated debt securities. Except as described in an applicable prospectus supplement, the features of the junior subordinated debt securities will be similar to the subordinated debt securities described above under "Description of Debt Securities," with the additional features summarized below.

        Junior subordinated debt securities will be issued in a principal amount equal to the aggregate stated liquidation amount of trust preferred securities plus our investment in trust common securities. The entire principal amount of the junior subordinated debt securities held by each trust will mature and become due and payable, together with any accrued and unpaid interest thereon, on the date set forth in the applicable prospectus supplement.

        If distributed to the holders of trust preferred securities upon dissolution of a trust, junior subordinated debt securities represented by a paper certificate may be presented for exchange or transfer at the office of the relevant registrar. Holders will not have to pay any service charge for any registration of transfer or exchange of their certificates, but we may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with such registration of transfer.

Subordination

        The junior subordinated debt securities will rank subordinated and junior in right of payment, to the extent described in the applicable prospectus supplement and as set forth in the subordinated debt securities indenture, to all of our senior indebtedness. For purposes of the junior subordinated debt securities, senior indebtedness shall include those obligations described as senior indebtedness for purposes of the subordinated debt securities under "Description of Debt Securities—Subordination Provisions Relating to Subordinated Debt" above, as well as all principal, premium, if any, and interest in respect of subordinated debt securities issued under the subordinated debt securities indenture, except for any series of subordinated debt securities that by its terms is subordinated to, or ranks on an equal basis with, junior subordinated debt securities.

        The subordinated debt securities indenture does not limit the amount of senior indebtedness that we may issue.

Optional Redemption

        To the extent described in the applicable prospectus supplement, we will have the right to redeem the junior subordinated debt securities, in whole or in part, from time to time, on or after the applicable redemption date at the applicable redemption price, together with interest, upon not less than 30 nor more than 60 days' notice.

Deferral of Interest Payments on Junior Subordinated Debt Securities

        We can defer interest payments by extending the interest payment period for the number of consecutive extension periods specified in the applicable prospectus supplement. Other details regarding the extension period will also be specified in the applicable prospectus supplement. No extension period may extend beyond the maturity of the junior subordinated debt securities. At the end of the extension period (or periods), we will pay all interest then accrued and unpaid, together with

43

interest on the deferred amount as provided in the applicable prospectus supplement, to the extent permitted by applicable law.

        During any extension period, we will not make distributions related to our capital stock, including dividends, redemptions, repurchases, liquidation payments, or guarantee payments. In addition, we will not make any payments, redeem or repurchase any debt securities of equal or junior rank to the junior subordinated debt securities or make any guarantee payments on any such debt securities of our subsidiaries. We may, however, make the following types of distributions:

•

dividends or distributions paid in common stock;



•

dividends in connection with the implementation of a shareholder rights plan;



•

payments to a trust holding securities of the same series under a guarantee;



•

repurchases, redemptions or other acquisitions of shares of our capital stock in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of employees, officers, directors, consultants or advisors; or



•

the purchases of fractional interests in shares of capital stock pursuant to the conversion or exchange provisions of the capital stock or the security being converted or exchanged.

        Prior to the termination of any extension period for a series of junior subordinated debt securities, we may further defer payments of interest on the junior subordinated debt securities by extending the interest payment period, provided that the extension period together with all previous and further extensions thereof for the series of junior subordinated debt securities may not extend beyond five consecutive years or extend beyond the maturity of the series. Upon the termination of any extension period, and the payment of all accrued and unpaid interest on the junior subordinated debt securities then due, we may select a new extension period for the series of junior subordinated debt securities, subject to the above requirements. No interest on a series of junior subordinated debt securities during an extension period, except at the end thereof, will be due and payable.

        If the property trustee is the sole holder of the junior subordinated debt securities, we will give the property trustee notice of the selection of an extension period for such series of junior subordinated debt securities one business day prior to the earlier of:

•

the regular record date for the interest payment on which the extension period is to commence or relating to the interest payment on which an extension period that is being extended would otherwise terminate; or



•

the date a trust is required to give notice to the applicable self-regulatory organization or to holders of the trust preferred securities on the record date or the date the distribution is payable, but in any event not less than one business day prior to such record date.

The administrative trustees shall give notice of the selection of an extension period to the holders of trust preferred securities. If the property trustee is not the sole holder of a series of junior subordinated debt securities, we will give the holders of such junior subordinated debt securities notice of the selection of an extension period ten business days prior to the earlier of:

•

the regular record date for the interest payment on which the extension period is to commence or relating to the interest payment on which an extension period that is being extended would otherwise terminate; or



•

the date we are required to give notice to the applicable self-regulatory organization or to holders of the subordinated debt securities, but in any event at least two business days before such record date.

        We have no present intention to defer interest payments.

44

Certain Covenants

        The subordinated debt securities indenture, as it applies to any junior subordinated debt securities, will require us to:

•

maintain 100% direct or indirect ownership of the trust common securities of any trust to which the junior subordinated debt securities have been issued while the junior subordinated debt securities remain outstanding; and



•

pay to any trust to which the junior subordinated debt securities have been issued any taxes, duties, assessments or governmental charges of whatever nature (other than withholding taxes) imposed by the United States or any other taxing authority on that trust, so that the net amounts received and retained by that trust (after paying any taxes, duties, assessments or other governmental charges) will be not less than the trust would have received had no such taxes, duties, assessments or other governmental charges been imposed.

        If there has occurred any event of default, then we may not:

•

declare or pay any dividend on, make any distributions with respect to, or redeem, purchase, acquire or make a liquidation payment with respect to, any of our capital stock; or



•

make any payment of interest, principal or premium, on or repay, repurchase or redeem any, debt securities (including guarantees other than the trust guarantee) issued by us which rank pari passu with or junior to the junior subordinated debt securities.

        The preceding sentence, however, shall not restrict:

•

dividends or distributions paid in common stock;



•

dividends in connection with the implementation of a shareholder rights plan;



•

payments to a trust holding securities of the same series under a guarantee;



•

repurchases, redemptions or other acquisitions of shares of our capital stock in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of employees, officers, directors, consultants or advisors; or



•

the purchase of fractional interests in shares of capital stock pursuant to the conversion or exchange provision of the capital stock or the security being converted or exchanged.

        The subordinated debt securities indenture will provide that, with respect to any junior subordinated debt securities, we will not merge or consolidate with another corporation or sell or lease all or substantially all of our assets to another corporation, or purchase all or substantially all the assets of another corporation unless:

•

either (1) we are the continuing corporation or (2) the successor corporation, if other than us, expressly assumes the obligations evidenced by the junior subordinated debt securities issued pursuant to the subordinated debt securities indenture and our obligations under the trust guarantees;



•

immediately prior to and after the transaction, there would not be any events of default in the performance of any covenant or condition of the subordinated debt securities indenture as it relates to the junior subordinated debt securities; and



•

the transaction is permitted under the relevant amended trust agreement and guarantee and does not give rise to any breach or violation of such trust agreement or guarantee.

Modification of the Subordinated Indenture

        If we and the trustee propose a modification of the subordinated debt securities indenture or the rights of the holders of a series of junior subordinated debt securities that requires the consent of the

45

holders of the series and the modification relates to a series of junior subordinated debt securities held by or on behalf of a Disney Capital Trust, then:

•

if the consent of a majority in aggregate principal amount of junior subordinated debt securities is required, the modification will not be effective until the holders of a majority in liquidation amount of trust securities issued by the affected trust have consented to the modification; and



•

if the consent of each outstanding junior subordinated debt security is required, the modification will not be effective until each holder of the trust securities of the affected trust has consented to the modification.

However, the holders of the trust common securities can vote to provide the foregoing consent only after all events of default with respect to the trust preferred securities have been cured, waived or otherwise eliminated and after the property trustee has obtained an opinion from tax counsel that the corresponding trust will not fail to be classified as a grantor trust for United States federal income tax purposes, as provided in the amended trust agreement.

Additional Events of Default

        In addition to the events of default described under "Description of Debt Securities—Events of Default," the voluntary or involuntary dissolution, winding up or termination of a Disney Capital Trust will be an additional event of default regarding any series of junior subordinated debt securities held as trust assets, unless the dissolution, winding up or termination is in connection with:

•

the distribution of junior subordinated debt securities to holders of trust securities in liquidation of a trust;



•

the redemption of all outstanding trust securities of such trust; or



•

certain mergers or consolidations permitted by the amended trust agreement.

        Holders of a majority in principal amount of junior subordinated debt securities of any series or the majority in liquidation amount of the trust preferred securities of a trust or of the trust common securities of a trust may waive any past default will respect to such securities, except a default in payment of principal, premium or interest or a default in a covenant or provision which may not be modified or amended without the consent of each holder of a junior subordinated debt security of the affected series or the affected trust preferred securities or trust common securities. The holders of trust preferred securities in certain circumstances have the right to direct the property trustee to exercise its rights as holder of junior subordinated debt securities.

Enforcement of Certain Rights by Holders of Trust Preferred Securities

        To the extent any action under the subordinated debt securities indenture as it relates to a series of junior subordinated debt securities is entitled to be taken by the holders of at least a specified percentage of junior subordinated debt securities, holders of the corresponding trust preferred securities may take any action if it is not taken by the property trustee of the related Disney Capital Trust. Notwithstanding the foregoing, if an event of default has occurred and is continuing and is attributable either to:

•

our failure to pay the principal of, premium, if any, on or interest on the junior subordinated debt securities on the due date; or



•

our failure to deliver the required securities or other rights upon an appropriate conversion or exchange right election;

a holder of the related trust preferred securities may institute a legal proceeding directly against us for enforcement of payment to that holder of the principal of or premium, if any, on or interest on the junior subordinated debt securities having a principal amount equal to the liquidation amount of the

46

trust preferred securities held by that holder or for enforcement of such conversion or exchange rights, as the case may be, which is referred to as a direct action. We may not amend the subordinated debt securities indenture to remove the foregoing right to bring a direct action without the prior written consent of the holders of all of the trust preferred securities outstanding. Notwithstanding any payments made to a holder of trust preferred securities by us in connection with a direct action, we shall remain obligated to pay the principal of and premium, if any, on and interest on the related junior subordinated debt securities, and we shall be subrogated to the rights of the holder of the trust preferred securities with respect to payments on the trust preferred securities to the extent of any payments made by us to that holder in any direct action.

        The holders of the trust preferred securities will not be able to exercise directly any remedies, other than those set forth in the preceding paragraph, available to the holders of the related junior subordinated debt securities unless an event of default has occurred and is continuing under the applicable declaration of trust. See "—Trust Enforcement Events."

Relationship Among the Trust Preferred Securities, the Guarantees and the Junior Subordinated Debt Securities Held by the Trust

        We will guarantee payments of distributions and redemption and liquidation payments due on the trust preferred securities, to the extent the trust has funds available for the payments, to the extent described under "—Description of the Guarantees." No single document executed by us in connection with the issuance of the trust preferred securities will provide for our full, irrevocable and unconditional guarantee of the trust preferred securities. It is only the combined operation of our obligations under the guarantee, the amended trust agreement and the subordinated debt securities indenture (as it relates to the junior subordinated debt securities) that has the effect of providing a full, irrevocable and unconditional guarantee of the trust's obligations under the trust preferred securities.

        As long as we make payments of interest and other payments when due on the junior subordinated debt securities held by the trust, those payments will be sufficient to cover the payment of distributions and redemption and liquidation payments due on the trust preferred securities issued by the trust, primarily because:

•

the total principal amount of the junior subordinated debt securities will be equal to the sum of the total liquidation amount of the trust securities;



•

the interest rate and interest and other payment dates on the junior subordinated debt securities will match the distribution rate and distribution and other payment dates for the trust securities;



•

we will pay for any and all costs, expenses and liabilities of the trust except its obligations under its trust preferred securities; and



•

each amended trust agreement will provide that the trust will not engage in any activity that is not consistent with the limited purposes of the trust.

        If and to the extent that we do not make payments of the junior subordinated debt securities, the trust will not have funds available to make payments of distributions or other amounts due on its trust preferred securities. In those circumstances, holders will not be able to rely upon the guarantee for payment of these amounts. Instead, holders may directly sue us or seek other remedies to collect their proportionate share of payments owed. If holders sue us to collect payment, then we will assume rights as a holder of trust preferred securities under the amended trust agreement to the extent we make a payment to holders in any such legal action.

DESCRIPTION OF PURCHASE CONTRACTS

        We may issue, from time to time, purchase contracts, including contracts obligating holders to purchase from us and us to sell to the holders, a specified principal amount of debt securities or a

47

specified number of shares of common stock or preferred stock or any of the other securities that we may sell under this prospectus at a future date or dates. The consideration payable upon settlement of the purchase contracts may be fixed at the time the purchase contracts are issued or may be determined by a specific reference to a formula set forth in the purchase contracts. The purchase contracts may be issued separately or as part of units consisting of a purchase contract and other securities or obligations issued by us or third parties, including United States treasury securities, securing the holders' obligations to purchase the relevant securities under the purchase contracts. The purchase contracts may require us to make periodic payments to the holders of the purchase contracts or units or vice versa, and the payments may be unsecured or prefunded on some basis. The purchase contracts may require holders to secure their obligations under the purchase contracts.

        The prospectus supplement will describe, among other things, the material terms of any purchase contracts and of the securities being sold pursuant to such purchase contracts, a discussion, if appropriate, of any special United States Federal income tax considerations applicable to the purchase contracts and any material provisions governing the purchase contracts that differ from those described above. The description in the prospectus supplement will not necessarily be complete and will be qualified in its entirety by reference to the purchase contracts, and, if applicable, collateral arrangements and depositary arrangements, relating to the purchase contracts.

DESCRIPTION OF UNITS

        We may, from time to time, issue units comprised of one or more of the other securities that may be offered under this prospectus, in any combination. Each unit will be issued so that the holder of the unit is also the holder of each security included in the unit. Thus, the holder of a unit will have the rights and obligations of a holder of each included security. The unit agreement under which a unit is issued may provide that the securities included in the unit may not be held or transferred separately at any time, or at any time before a specified date.

        Any applicable prospectus supplement will describe, among other things:

•

the material terms of the units and of the securities comprising the units, including whether and under what circumstances those securities may be held or transferred separately;



•

any material provisions relating to the issuance, payment, settlement, transfer or exchange of the units or of the securities comprising the units;



•

if appropriate, any special United States Federal income tax considerations applicable to the units; and



•

any material provisions of the governing unit agreement that differ from those described above.

PLAN OF DISTRIBUTION

        We and, in the case of trust preferred securities, a Disney Capital Trust may sell the securities to one or more underwriters for public offering and sale by them or may sell the securities to investors through agents or dealers. Any underwriter or agent involved in the offer and sale of the securities will be named in the applicable prospectus supplement. We and, in the case of trust preferred securities, a Disney Capital Trust, also reserve the right to sell securities directly to investors on our own or its behalf in those jurisdictions where we are, or it is, authorized to do so.

        Underwriters may offer and sell the 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 prevailing market prices or at negotiated prices. We and, in the case of trust preferred securities, a Disney Capital Trust also may, from time to time, authorize underwriters acting as our agents to offer and sell the securities upon the terms and conditions set forth in any prospectus supplement. In connection with the sale of the securities, underwriters may be deemed to have received compensation from us or a Disney Capital

48

Trust in the form of underwriting discounts or commissions and may also receive commissions from purchasers of the securities for whom they may act as agent.

        If a dealer is utilized in the sale of the securities in respect of which this prospectus is delivered, we or, in the case of trust preferred securities, a Disney Capital Trust, may sell the securities to the dealer, as principal. The dealer may then resell the securities to the public at varying prices to be determined by the dealer at the time of resale.

        Any underwriting compensation paid by us or by a Disney Capital Trust to underwriters or agents in connection with the offering of the 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 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 securities may be deemed to be underwriting discounts and commissions under the Securities Act. Underwriters, dealers and agents may be entitled under agreements with us and, in the case of trust preferred securities, a Disney Capital Trust to indemnification against and contribution toward certain civil liabilities, including liabilities under the Securities Act, and to reimbursement by us and, in the case of trust preferred securities, a Disney Capital Trust for certain expenses.

        In connection with underwritten offerings of securities, underwriters may over-allot or effect transactions that stabilize, maintain or otherwise affect the market price of the offered securities at levels above those that might otherwise prevail in the open market, including by entering stabilizing bids, effecting syndicate covering transactions or imposing penalty bids, each of which is described below.

•

A stabilizing bid means the placing of any bid, or the effecting of any purchase, for the purpose of pegging, fixing or maintaining the price of a security.



•

A syndicate covering transaction means the placing of any bid on behalf of the underwriting syndicate or the effecting of any purchase to reduce a short position created in connection with the offering.



•

A penalty bid means an arrangement that permits the managing underwriter to reclaim a selling concession from a syndicate member in connection with the offering when offered securities originally sold by the syndicate member are purchased in syndicate covering transactions.

        These transactions may be effected on the New York Stock Exchange, in the over-the-counter market or otherwise. Underwriters are not required to engage in any of these activities, or to continue the activities if commenced.

        If so indicated in an applicable prospectus supplement, we and/or a Disney Capital Trust may authorize dealers acting as our or its agents to solicit offers by institutions to purchase the securities from us or it at the public offering price set forth in the prospectus supplement pursuant to delayed delivery contracts providing for payment and delivery on the date or dates stated in the prospectus supplement. Each delayed delivery contract will be for an amount not less than, and the aggregate principal amount or offering price of the securities sold pursuant to delayed delivery contracts will not be less nor more than, the respective amounts stated in the prospectus supplement. Institutions with whom delayed delivery contracts, when authorized, may be entered into 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 approval by us and/or a Disney Capital Trust.

        The 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

49

for their own accounts or as agents for us and/or a Disney Capital Trust. Any remarketing firm will be identified and the terms of its agreement, if any, with us and its compensation will be described in the applicable prospectus supplement. Remarketing firms may be deemed to be underwriters in connection with the securities remarketed thereby. Remarketing firms may be entitled under agreements which may be entered into with us and/or a Disney Capital Trust to indemnification by us against certain liabilities, including liabilities under the Securities Act.

        We may enter into derivative transactions with third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions. If the applicable prospectus supplement indicates, in connection with those derivatives, the third parties may sell securities covered by this prospectus and the applicable prospectus supplement, including in short sale transactions. If so, the third party may use securities pledged by us or borrowed from us or others to settle those sales or to close out any open borrowings of stock, and may use securities received from us in settlement of those derivatives to close out any related open borrowings of stock. The third parties in such sale transactions will be underwriters and, if not identified in this prospectus, will be identified in the applicable prospectus supplement (or a post-effective amendment).

        The securities may or may not be listed on a national securities exchange or a foreign securities exchange. Securities offered may be a new issue of securities with no established trading market. Any underwriters to whom or agents through whom these securities are sold by us for public offering and sale may make a market in these securities, but such underwriters or agents will not be obligated to do so and may discontinue any market making at any time without notice. No assurance can be given as to the liquidity of or the trading market for any such securities.

        One or more of the underwriters, and/or one or more of their respective affiliates, may be a lender under our credit agreements and may provide other commercial banking, investment banking and other services to us and/or our subsidiaries and affiliates in the ordinary course of business.

WHERE YOU CAN FIND MORE INFORMATION

        We file reports, proxy statements and other information with the Securities and Exchange Commission. You may read and copy this information at the Public Reference Room maintained by the Securities and Exchange Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C., 20549. You may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. Our filings are also available on the Securities and Exchange Commission's website on the Internet at http://www.sec.gov. This information may also be inspected and copied at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005.

        This prospectus constitutes part of a registration statement on Form S-3 that we and the Disney Capital Trusts filed with the Securities and Exchange Commission under the Securities Act. As permitted by the rules and regulations of the Securities and Exchange Commission, this prospectus omits some of the information, exhibits and undertakings included in the registration statement. You may read and copy the information omitted from this prospectus but contained in the registration statement, as well as the periodic reports and other information we file with the Securities and Exchange Commission, at the Public Reference Room maintained by the Securities and Exchange Commission in Washington, D.C.

        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 the contract or other document filed as an exhibit to, or incorporated by reference in, the registration statement, each statement being qualified in all respects by such reference.

50

        We have elected to "incorporate by reference" certain information into this prospectus. By incorporating by reference, we can disclose important information to you by referring you to another document we have filed separately with the Securities and Exchange Commission. The information incorporated by reference is deemed to be part of this prospectus, except for information incorporated by reference that is superseded by information contained in this prospectus, any applicable prospectus supplement or any document we subsequently file with the Securities and Exchange Commission that is incorporated or deemed to be incorporated by reference in this prospectus. Likewise, any statement in this prospectus or any document which is incorporated or deemed to be incorporated by reference herein will be deemed to have been modified or superseded to the extent that any statement contained in any applicable prospectus supplement or any document that we subsequently file with the Securities and Exchange Commission that is incorporated or deemed to be incorporated by reference herein modifies or supersedes that statement. We incorporate by reference the following documents that we have previously filed with the Securities and Exchange Commission (other than information in such documents that is deemed not to be filed):

(a)

Annual Report on Form 10-K for the fiscal year ended September 30, 2004, filed on December 13, 2004;



(b)

Current Report on Form 8-K, filed on December 23, 2004; and



(c)

Registration Statement on Form 8-A, filed on November 17, 1999.

        We also are incorporating by reference all future documents that we file with the Securities and Exchange Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 prior to the termination of the offering of the securities made hereby (other than information in such documents that is deemed not to be filed).

        We will provide without charge to each person to whom a copy of this prospectus has been delivered, on the written or oral request of that 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 these documents, unless the exhibits are also specifically incorporated by reference herein. Requests for copies should be directed to The Walt Disney Company, 500 South Buena Vista Street, Burbank, California 91521, Attention: Senior Vice President, Deputy General Counsel—Corporate and Corporate Secretary; telephone number (818) 560-1000. The information relating to us contained in this prospectus does not purport to be complete and should be read together with the information contained in the documents incorporated or deemed to be incorporated by reference in this prospectus and the information included in the applicable prospectus supplement.

LEGAL MATTERS

        Legal matters with respect to the validity of the securities being offered hereby will be passed upon for us by Dewey Ballantine LLP, New York, New York. Sidley Austin Brown & Wood LLP, Los Angeles, California, will act as counsel for any agents or underwriters. Potter Anderson & Corroon LLP, Wilmington, Delaware, will pass on certain matters for us with respect to the trust preferred securities.

EXPERTS

        The consolidated financial statements and management's assessment of the effectiveness of internal control over financial reporting (which is included in Management's Report on Internal Control over Financial Reporting) incorporated in this Prospectus by reference to the Annual Report on Form 10-K for the year ended September 30, 2004 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

51

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		$	373,991
Accountants' fees and expenses			30,000
Legal fees and expenses			100,000
Printing and engraving expenses			100,000
Rating agencies' fees			1,700,000
Trustee's and registrar's fees and expenses			35,000
Miscellaneous			65,000
	Total:	$	2,403,991

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

II-1

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 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. The Registrant's Restated Certificate of Incorporation further provides that a director of the Registrant shall not be liable to the Registrant 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 Delaware General Corporation Law.

        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.

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 Underwriting Agreement with respect to Trust Preferred Securities.
*1.6	Form of Underwriting Agreement with respect to Purchase Contracts.
*1.7	Form of Underwriting Agreement with respect to Units.
†1.8	Form of Distribution Agreement with respect to Debt Securities.
4.1	Amended and Restated Certificate of Incorporation of Registrant (incorporated by reference from Annex C to the Joint Proxy Statement/Prospectus included in Disney's Registration Statement on Form S-4 (No. 333-88105) filed on September 30, 1999).

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4.2	Bylaws of Registrant (incorporated by reference from Exhibit 3(a) of Disney's Form 10-Q for the period ended June 30, 2004).
4.3	Senior Debt Securities Indenture (incorporated by reference from Exhibit 4.1 of Disney's Current Report on Form 8-K filed on September 24, 2001).
*4.4	Form of Senior Debt Securities.
4.5	Form of Subordinated Debt Securities Indenture (incorporated by reference from Disney's Registration Statement on Form S-3 (No. 333-67870)).
*4.6	Form of Subordinated Debt Securities.
*4.7	Form of Warrant Agreement (including form of Warrant Certificate).
*4.8	Form of Purchase Contract (including form of Purchase Contract Certificate) and, if applicable, Pledge Agreement.
*4.9	Form of Unit Agreement (including form of Unit Certificate).
4.10	Form of Deposit Agreement (including form of Depositary Receipts) (incorporated by reference from Disney's Registration Statement on Form S-3 (No. 333-52659)).
4.11	Specimen Common Stock Certificate (incorporated by reference from Disney's Registration Statement on Form S-3 (No. 333-52659)).
*4.12	Certificate of Designation of Preferred Stock.
*4.13	Form of Preferred Stock Certificate.
4.14	Certificate of Trust of Disney Capital Trust I (incorporated by reference from Disney's Registration Statement on Form S-3 (No. 333-67870)).
4.15	Trust Agreement of Disney Capital Trust I (incorporated by reference from Disney's Registration Statement on Form S-3 (No. 333-67870)).
4.16	Certificate of Trust of Disney Capital Trust II (incorporated by reference from Disney's Registration Statement on Form S-3 (No. 333-67870)).
4.17	Trust Agreement of Disney Capital Trust II (incorporated by reference from Disney's Registration Statement on Form S-3 (No. 333-67870)).
4.18	Certificate of Trust of Disney Capital Trust III (incorporated by reference from Disney's Registration Statement on Form S-3 (No. 333-67870)).
4.19	Trust Agreement of Disney Capital Trust III (incorporated by reference from Disney's Registration Statement on Form S-3 (No. 333-67870)).
4.20	Form of Amended and Restated Trust Agreement of the Disney Capital Trusts relating to Trust Preferred Securities.
4.21	Form of Trust Preferred Security (included in Exhibit 4.20).
4.22	Form of Guarantee Agreement of The Walt Disney Company relating to Trust Preferred Securities (incorporated by reference from Disney's Registration Statement on Form S-3 (No. 333-67870)).
4.23	Form of Agreement as to Expenses and Liabilities relating to Trust Preferred Securities (incorporated by reference from Disney's Registration Statement on Form S-3 (No. 333-67870)).

II-3

†5.1	Opinion of Dewey Ballantine LLP.
†5.2	Opinion of Potter Anderson & Corroon LLP, Delaware Counsel.
12.1	Computation of Ratio of Earnings to Fixed Charges.
23.1	Consent of Dewey Ballantine LLP (included in their opinion filed as Exhibit 5.1).
23.2	Consent of Potter Anderson & Corroon LLP (included in their opinion filed as Exhibit 5.2).
23.3	Consent of Independent Registered Public Accounting Firm (PricewaterhouseCoopers 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 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 Trustee under the Subordinated Debt Securities Indenture.
**25.3	Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of Trustee under Guarantee Agreement of The Walt Disney Company relating to Trust Preferred Securities.
**25.4	Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of Trustee under Amended and Restated Trust Agreement of the Disney Capital Trusts relating to Trust Preferred Securities.

*

To be filed by a post-effective amendment to the Registration Statement or incorporated by reference from a Current Report on Form 8-K.

**

To be filed separately pursuant to Trust Indenture Act Section 305(b)(2).

†

To be filed by amendment.

ITEM 17.    UNDERTAKINGS

(a)

The undersigned Registrants hereby undertake:

        (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. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement;

II-4

(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 (a)(1)(i) and (a)(1)(ii) 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.

        (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)   Each of the undersigned Registrants 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 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities and 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.

        (d)   The undersigned Registrants hereby undertake to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act in accordance with the rules and regulations prescribed by the Commission under Section 305(b)(2) of the Act.

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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 Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Burbank, State of California, on the 19th day of January, 2005.

THE WALT DISNEY COMPANY
By:	/s/  MICHAEL D. EISNER Michael D. Eisner Chief Executive Officer

POWER OF ATTORNEY

        We, the undersigned directors and officers of The Walt Disney Company, do hereby severally constitute and appoint Robert A. Iger, Thomas O. Staggs, Christine M. McCarthy and David K. Thompson, and each of them, our true and lawful attorneys and agents, to do any and all acts and things in our name and behalf in our capacities as directors and officers and to execute any and all instruments for us and in our names in the capacities indicated below, which said attorneys and agents, or any of them, may deem necessary or advisable to enable said Company to comply with the Securities Act of 1933, as amended, and any rules, regulations and requirements of the Securities and Exchange Commission, in connection with this Registration Statement on Form S-3, including specifically, but without limitation, power and authority to sign for us or any of us, in our names in the capacities indicated below, any and all amendments (including pre- and post-effective amendments) hereto and any related registration statement and amendments thereto filed pursuant to Rule 462(b) promulgated under the Securities Act of 1933; and we do each hereby ratify and confirm all that said attorneys and agents, or any one of them, shall do or cause to be done by virtue hereof.

        Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/  MICHAEL D. EISNER        (Michael D. Eisner)	Chief Executive Officer and Director (Principal Executive Officer)	January 19, 2005
/s/  ROBERT A. IGER        (Robert A. Iger)	President and Chief Operating Officer and Director	January 19, 2005
/s/  THOMAS O. STAGGS        (Thomas O. Staggs)	Senior Executive Vice President and Chief Financial Officer (Principal Financial Officer)	January 19, 2005
/s/  JOHN J. GARAND        (John J. Garand)	Executive Vice President—Planning and Control (Principal Accounting Officer)	January 19, 2005

II-6

/s/  GEORGE J. MITCHELL        (George J. Mitchell)	Chairman of the Board	January 19, 2005
/s/  JOHN E. BRYSON        (John E. Bryson)	Director	January 19, 2005
/s/  JOHN S. CHEN        (John S. Chen)	Director	January 19, 2005
/s/  JUDITH L. ESTRIN        (Judith L. Estrin)	Director	January 19, 2005
/s/  FRED H. LANGHAMMER        (Fred H. Langhammer)	Director	January 19, 2005
/s/  AYLWIN B. LEWIS        (Aylwin B. Lewis)	Director	January 19, 2005
/s/  MONICA C. LOZANO        (Monica C. Lozano)	Director	January 19, 2005
/s/  ROBERT W. MATSCHULLAT        (Robert W. Matschullat)	Director	January 19, 2005
/s/  LEO J. O'DONOVAN, S.J.        (Leo J. O'Donovan, S.J.)	Director	January 19, 2005
/s/  GARY L. WILSON        (Gary L. Wilson)	Director	January 19, 2005

II-7

        Pursuant to the requirement of the Securities Act of 1933, Disney Capital Trust I 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 Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Burbank, State of California, on the 19th day of January, 2005.

DISNEY CAPITAL TRUST I
BY THE WALT DISNEY COMPANY, AS SPONSOR
By:	/s/  THOMAS O. STAGGS Thomas O. Staggs Senior Executive Vice President and Chief Financial Officer

        Pursuant to the requirement of the Securities Act of 1933, Disney Capital Trust II 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 Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Burbank, State of California, on the 19th day of January, 2005.

DISNEY CAPITAL TRUST II
BY THE WALT DISNEY COMPANY, AS SPONSOR
By:	/s/  THOMAS O. STAGGS Thomas O. Staggs Senior Executive Vice President and Chief Financial Officer

        Pursuant to the requirement of the Securities Act of 1933, Disney Capital Trust III 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 Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Burbank, State of California, on the 19th day of January, 2005.

DISNEY CAPITAL TRUST III
BY THE WALT DISNEY COMPANY, AS SPONSOR
By:	/s/  THOMAS O. STAGGS Thomas O. Staggs Senior Executive Vice President and Chief Financial Officer

II-8

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 Underwriting Agreement with respect to Trust Preferred Securities.
*1.6	Form of Underwriting Agreement with respect to Purchase Contracts.
*1.7	Form of Underwriting Agreement with respect to Units.
†1.8	Form of Distribution Agreement with respect to Debt Securities.
4.1	Amended and Restated Certificate of Incorporation of Registrant (incorporated by reference from Annex C to the Joint Proxy Statement/Prospectus included in Disney's Registration Statement on Form S-4 (No. 333-88105) filed on September 30, 1999).
4.2	Bylaws of Registrant (incorporated by reference from Exhibit 3(a) of Disney's Form 10-Q for the period ended June 30, 2004).
4.3	Senior Debt Securities Indenture (incorporated by reference from Exhibit 4.1 of Disney's Current Report on Form 8-K filed on September 24, 2001).
*4.4	Form of Senior Debt Securities.
4.5	Form of Subordinated Debt Securities Indenture (incorporated by reference from Disney's Registration Statement on Form S-3 (No. 333-67870)).
*4.6	Form of Subordinated Debt Securities.
*4.7	Form of Warrant Agreement (including form of Warrant Certificate).
*4.8	Form of Purchase Contract (including form of Purchase Contract Certificate) and, if applicable, Pledge Agreement.
*4.9	Form of Unit Agreement (including form of Unit Certificate).
4.10	Form of Deposit Agreement (including form of Depositary Receipts) (incorporated by reference from Disney's Registration Statement on Form S-3 (No. 333-52659)).
4.11	Specimen Common Stock Certificate (incorporated by reference from Disney's Registration Statement on Form S-3 (No. 333-52659)).
*4.12	Certificate of Designation of Preferred Stock.

*4.13	Form of Preferred Stock Certificate.
4.14	Certificate of Trust of Disney Capital Trust I (incorporated by reference from Disney's Registration Statement on Form S-3 (No. 333-67870)).
4.15	Trust Agreement of Disney Capital Trust I (incorporated by reference from Disney's Registration Statement on Form S-3 (No. 333-67870)).
4.16	Certificate of Trust of Disney Capital Trust II (incorporated by reference from Disney's Registration Statement on Form S-3 (No. 333-67870)).
4.17	Trust Agreement of Disney Capital Trust II (incorporated by reference from Disney's Registration Statement on Form S-3 (No. 333-67870)).
4.18	Certificate of Trust of Disney Capital Trust III (incorporated by reference from Disney's Registration Statement on Form S-3 (No. 333-67870)).
4.19	Trust Agreement of Disney Capital Trust III (incorporated by reference from Disney's Registration Statement on Form S-3 (No. 333-67870)).
4.20	Form of Amended and Restated Trust Agreement of the Disney Capital Trusts relating to Trust Preferred Securities.
4.21	Form of Trust Preferred Security (included in Exhibit 4.20).
4.22	Form of Guarantee Agreement of The Walt Disney Company relating to Trust Preferred Securities (incorporated by reference from Disney's Registration Statement on Form S-3 (No. 333-67870)).
4.23	Form of Agreement as to Expenses and Liabilities relating to Trust Preferred Securities (incorporated by reference from Disney's Registration Statement on Form S-3 (No. 333-67870)).
†5.1	Opinion of Dewey Ballantine LLP.
†5.2	Opinion of Potter Anderson & Corroon LLP, Delaware Counsel.
12.1	Computation of Ratio of Earnings to Fixed Charges.
23.1	Consent of Dewey Ballantine LLP (included in their opinion filed as Exhibit 5.1).
23.2	Consent of Potter Anderson & Corroon LLP (included in their opinion filed as Exhibit 5.2).
23.3	Consent of Independent Registered Public Accounting Firm (PricewaterhouseCoopers 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 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 Trustee under the Subordinated Debt Securities Indenture.
**25.3	Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of Trustee under Guarantee Agreement of The Walt Disney Company relating to Trust Preferred Securities.
**25.4	Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of Trustee under Amended and Restated Trust Agreement of the Disney Capital Trusts relating to Trust Preferred Securities.

*

To be filed by a post-effective amendment to the Registration Statement or incorporated by reference from a Current Report on Form 8-K.

**

To be filed separately pursuant to Trust Indenture Act Section 305(b)(2).

†

To be filed by amendment.

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TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
FORWARD-LOOKING INFORMATION
OUR COMPANY
THE DISNEY CAPITAL TRUSTS
USE OF PROCEEDS
RATIO OF EARNINGS TO FIXED CHARGES
GENERAL DESCRIPTION OF SECURITIES THAT WE OR THE TRUSTS MAY SELL
DESCRIPTION OF DEBT SECURITIES
DESCRIPTION OF PREFERRED STOCK
DESCRIPTION OF DEPOSITARY SHARES
DESCRIPTION OF COMMON STOCK
DESCRIPTION OF WARRANTS
DESCRIPTION OF TRUST PREFERRED SECURITIES
DESCRIPTION OF PURCHASE CONTRACTS
DESCRIPTION OF UNITS
PLAN OF DISTRIBUTION
WHERE YOU CAN FIND MORE INFORMATION
LEGAL MATTERS
EXPERTS
PART II INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
ITEM 16. EXHIBITS
ITEM 17. UNDERTAKINGS

SIGNATURES
POWER OF ATTORNEY
EXHIBIT INDEX

EX-4.20

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EXHIBIT 4.20

AMENDED AND RESTATED TRUST AGREEMENT

By and Among

THE WALT DISNEY COMPANY,
as Sponsor,

WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Property Trustee,

WILMINGTON TRUST COMPANY,
as Delaware Trustee,

and

THE ADMINISTRATIVE TRUSTEES NAMED HEREIN

Dated as of                         , 200  

Cross Reference Table*

Section of Trust Indenture Act of 1939, as amended	Section of Trust Agreement
310(a)	6.3
310(b)	6.3
310(c)	Inapplicable
311(a)	2.2(b)
311(b)	2.2(b)
311(c)	Inapplicable
312(a)	2.2(a)
312(b)	2.2(b); 13.2
312(c)	13.2
313(a)	2.3
313(b)	2.3
313(c)	2.3
313(d)	2.3
314(a)	2.4; 3.6(k); 13.4
314(b)	Inapplicable
314(c)	2.5
314(d)	Inapplicable
314(e)	2.5; 13.4
314(f)	Inapplicable
315(a)	3.9(b); 3.10(a)
315(b)	2.7
315(c)	3.9
315(d)	3.9
315(e)	Inapplicable
316(a)	2.6(a), (b) and (c)
316(b)	Inapplicable
316(c)	3.6(f)
317(a)	3.16; 3.8(e)
317(b)	3.8(h)
318(a)	2.1(c)

*

This corss-reference table does not constitute part of the agreement and shall not have any bearing upon the interpretation of any of its terms or provisions.

Table of Contents

			Page
ARTICLE 1 INTERPRETATION AND DEFINITIONS			1
	Section 1.1.	Definitions	1
	Section 1.2.	Other Definitions	6
	Section 1.3.	Incorporation by Reference of Trust Indenture Act	6
	Section 1.4.	Rules of Construction	6
ARTICLE 2 TRUST INDENTURE ACT			7
	Section 2.1.	Trust Indenture Act; Application	7
	Section 2.2.	Lists of Holders of Securities	7
	Section 2.3.	Reports by the Property Trustee	7
	Section 2.4.	Periodic Reports to the Property Trustee	7
	Section 2.5.	Evidence of Compliance with Conditions Precedent	8
	Section 2.6.	Trust Enforcement Events; Waiver	8
	Section 2.7.	Notice of Trust Enforcement Event by Property Trustee	9
ARTICLE 3 ORGANIZATION			9
	Section 3.1.	Name and Organization	9
	Section 3.2.	Office	9
	Section 3.3.	Purpose	9
	Section 3.4.	Authority	10
	Section 3.5.	Title to Property of the Trust	10
	Section 3.6.	Powers and Duties of the Administrative Trustees	10
	Section 3.7.	Prohibition of Actions by the Trust and the Trustees	12
	Section 3.8.	Powers and Duties of the Property Trustee	13
	Section 3.9.	Duties and Responsibilities of the Property Trustee	14
	Section 3.10.	Rights of Property Trustee	16
	Section 3.11.	Delaware Trustee	17
	Section 3.12.	Execution of Documents	17
	Section 3.13.	Trustees' Disclaimer	17
	Section 3.14.	Duration of Trust	17
	Section 3.15.	Mergers	17
	Section 3.16.	Property Trustee May File Proofs of Claim	19
ARTICLE 4 SPONSOR			19
	Section 4.1.	Responsibilities of the Sponsor	19
	Section 4.2.	Compensation and Indemnification	20
ARTICLE 5 TRUST COMMON SECURITIES HOLDER			20
	Section 5.1.	Debenture Issuer's Purchase of Common Securities	20
	Section 5.2.	Covenants of the Common Securities Holder	20
ARTICLE 6 TRUSTEES			20
	Section 6.1.	Number of Trustees	20
	Section 6.2.	Delaware Trustee; Eligibility	21
	Section 6.3.	Property Trustee; Eligibility; Disqualification	21
	Section 6.4.	Qualifications of Administrative Trustees and Delaware Trustee Generally	21
	Section 6.5.	Initial Administrative Trustees	21
	Section 6.6.	Replacement of Trustees	21
	Section 6.7.	Vacancies among Trustees	22
	Section 6.8.	Effect of Vacancies	22
	Section 6.9.	Meetings	23
	Section 6.10.	Delegation of Power	23
	Section 6.11.	Successor Trustee by Merger, etc.	23
ARTICLE 7 TERMS OF SECURITIES			23
	Section 7.1.	General Provisions Regarding Securities	23
	Section 7.2.	Distributions	25
	Section 7.3.	Redemption of Securities	27
	Section 7.4.	Redemption Procedures	27
	Section 7.5.	Voting Rights of Preferred Securities	28
	Section 7.6.	Voting Rights of Common Securities	30
	Section 7.7.	Registrar and Paying Agent	31
	Section 7.8.	Listing	31

i

	Section 7.9.	Transfer and Exchange of Securities	32
	Section 7.10.	Mutilated, Destroyed, Lost and Stolen Securities	32
	Section 7.11.	Outstanding Securities	33
	Section 7.12.	Treasury Securities	33
	Section 7.13.	Temporary Securities	33
	Section 7.14.	Cancellation	33
	Section 7.15.	Deemed Security Holders	33
	Section 7.16.	Global Securities	34
	Section 7.16.1	Terms of Securities	34
	Section 7.16.2	Transfer and Exchange	34
	Section 7.16.3	Legend	34
	Section 7.16.4	Cancellation; Issuance of Registered Securities	34
	Section 7.16.5	Acts of Holders	35
	Section 7.16.6	Payments	35
	Section 7.16.7	Consents, Declaration and Directions	35
	Section 7.17.	CUSIP Numbers	35
	Section 7.18.	Over-Allotment Option	35
ARTICLE 8 DISSOLUTION AND TERMINATION OF TRUST			36
	Section 8.1.	Dissolution and Termination of Trust	36
	Section 8.2.	Liquidation Distribution Upon Dissolution of the Trust	37
ARTICLE 9 LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, DELAWARE TRUSTEES OR OTHERS			37
	Section 9.1.	Liability	37
	Section 9.2.	Exculpation	38
	Section 9.3.	Fiduciary Duty	38
	Section 9.4.	Indemnification	39
	Section 9.5.	Outside Businesses	41
ARTICLE 10 ACCOUNTING			42
	Section 10.1.	Fiscal Year	42
	Section 10.2.	Certain Accounting Matters	42
	Section 10.3.	Banking	42
	Section 10.4.	Withholding	42
ARTICLE 11 AMENDMENTS AND MEETINGS			43
	Section 11.1.	Amendments	43
	Section 11.2.	Meetings of the Holders of Securities; Action by Written Consent	44
ARTICLE 12 REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE			45
	Section 12.1.	Representations and Warranties of the Property Trustee	45
	Section 12.2.	Representations and Warranties of the Delaware Trustee	46
ARTICLE 13 MISCELLANEOUS			47
	Section 13.1.	Notices	47
	Section 13.2.	Communication by Holders with Other Holders	47
	Section 13.3.	Certificate and Opinion as to Conditions Precedent	47
	Section 13.4.	Statements Required in Certificate or Opinion	48
	Section 13.5.	Rules by Trustee and Agents	48
	Section 13.6.	Legal Holidays	48
	Section 13.7.	No Recourse Against Others	48
	Section 13.8.	Intention of the Parties	48
	Section 13.9.	Counterparts	48
	Section 13.10.	Governing Laws	48
	Section 13.11.	Successors	49
	Section 13.12.	Severability	49
	Section 13.13.	Table of Contents, Headings, etc.	49
Exhibits
Exhibit A		Form of Preferred Security Certificate
Exhibit B		Form of Common Security Certificate

ii

AMENDED AND RESTATED TRUST AGREEMENT

        This AMENDED AND RESTATED TRUST AGREEMENT (the "Trust Agreement"), dated as of                        , 200  , is entered into by and among (i) The Walt Disney Company, a Delaware corporation, as sponsor (the "Sponsor"), (ii)(a) Wells Fargo Bank, National Association, a national banking association organized under the laws of the United States, as initial Property Trustee, (b) Wilmington Trust Company, a banking corporation organized under the laws of Delaware, as initial Delaware Trustee, and (c)             , an individual,             , an individual and             , an individual, each of whose address is              (each an "Administrative Trustee" and, collectively, the "Administrative Trustees" and, together with the Property Trustee and the Delaware Trustee, the "Trustees," all not in their individual capacities, but solely as Trustees) and (iii) the several Holders as hereinafter defined.

RECITALS

        WHEREAS, the Delaware Trustee and the Sponsor established Disney Capital Trust [I / II / III] (the "Trust"), a statutory trust under the Statutory Trust Act (as defined, together with other capitalized terms, herein) pursuant to a Trust Agreement dated as of August 16, 2001 (the "Original Trust Agreement") and a Certificate of Trust (the "Certificate of Trust") filed with the Secretary of State of the State of Delaware on August 16, 2001;

        WHEREAS, the sole purpose of the Trust shall be to issue and sell certain securities representing undivided beneficial ownership interests in the assets of the Trust, to invest the proceeds from such sales in the Debentures issued by the Debenture Issuer, to make Distributions as herein provided and to engage in only those activities necessary, advisable or incidental thereto; and

        WHEREAS, the parties hereto, by this Trust Agreement, amend and restate each and every term and provision of the Original Trust Agreement;

        NOW, THEREFORE, it being the intention of the parties hereto to continue the Trust as a statutory trust under the Statutory Trust Act and that this Trust Agreement constitute the governing instrument of such statutory trust, the Trustees hereby declare that all assets contributed to the Trust be held in trust for the benefit of the Holders, from time to time, of the Securities representing undivided beneficial ownership interests in the assets of the Trust issued hereunder, subject to the provisions of this Trust Agreement.

ARTICLE 1

INTERPRETATION AND DEFINITIONS

        Section 1.1. Definitions. The following terms have the following meanings:

        "Administrative Trustee" means any Trustee other than the Property Trustee and the Delaware Trustee.

        "Affiliate" of any specified person means any other person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified person. For the purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled," "controlled by" and "under common control with") as used with respect to any person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such person, directly or indirectly, whether through the ownership of voting securities or by agreement or otherwise.

        "Agreement as to Expenses and Liabilities" means the Agreement as to Expenses and Liabilities between the Sponsor and Disney Capital Trust [I / II / III] dated as of                        , 200  .

        "Authorized Officer" of a Person means any Person that is authorized to bind such Person.

        "Bankruptcy Event" means, with respect to any Person:

(a)

the entry of a decree or order by a court having jurisdiction in the premises judging such person a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjudication or composition of or in respect of such person under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law, or appointing a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of such person or of any substantial part of its property or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days; or



(b)

the institution by such person of proceedings to be adjudicated bankrupt or insolvent, or the consent by it to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law, or the consent by it to the filing of any such petition or to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of such person or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due and its willingness to be adjudicated a bankrupt, or the taking of corporate action by such person in furtherance of any such action.

        "Beneficial Owners" means, for Preferred Securities represented by a Global Security, the person who acquires an interest in the Preferred Securities which is reflected on the records of the Depositary through the Depositary Participants.

        "Board of Directors" means the Board of Directors of the Sponsor or any committee of such board authorized with respect to any matter to exercise the power of the Board of Directors of the Sponsor.

        "Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Sponsor to have been duly adopted by the Board of Directors or pursuant to authorization by the Board of Directors and to be in full force and effect on the date of such certification and delivered to the applicable Trustee.

        "Business Day" means, except as otherwise provided by Board Resolution or Officers' Certificate, any day except a Saturday, Sunday or legal holiday in The City of New York, New York on which banking institutions are authorized or required by law, regulation or executive order to close.

        "Certificate" means a Common Security Certificate or a Preferred Security Certificate.

        "Closing Date" means the date on which the Preferred Securities are issued and sold; provided that if the Trust and the Sponsor grant the underwriters or initial purchasers an option to purchase an additional amount of Preferred Securities, pursuant to Section 7.18(a), including for the purpose of covering over-allotments, pursuant to the underwriting agreement or purchase agreement, as the case may be, and such option is so exercised, then the term "Closing Date" shall mean such initial or second closing date, as the context requires.

        "Code" means the Internal Revenue Code of 1986, as amended from time to time, or any successor legislation. A reference to a specific section of the Code refers not only to such specific section but also to any corresponding provision of any federal tax statute enacted after the date of this Trust Agreement, as such specific section or corresponding provision is in effect on the date of application of the provisions of this Trust Agreement containing such reference.

        "Commission" means the Securities and Exchange Commission or any successor thereto.

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        "Common Security Certificate" means a definitive certificate in fully registered form representing a Common Security, substantially in the form of Exhibit B hereto.

        "Common Securities Holder" means The Walt Disney Company, in its capacity as purchaser and holder of all of the Common Securities issued by the Trust, or any permitted successor holder of the Common Securities.

        "Corporate Trust Office" means the office of the Property Trustee at which at any particular time its corporate trust business shall be principally administered, which office at the date of execution of this Trust Agreement is located at Wells Fargo Bank, National Association, 707 Wilshire Boulevard, 17th Floor, Los Angeles, California 90017.

        "Covered Person" means (a) any officer, director, shareholder, partner, member, representative, employee or agent of (i) the Trust or (ii) the Trust's Affiliates; and (b) any Holder.

        "Debentures" means the series of junior subordinated debt securities to be issued by the Debenture Issuer designated the "    % Junior Subordinated Debt Securities due             " and to be purchased by the Trust and held by the Property Trustee.

        "Debenture Issuer" shall mean The Walt Disney Company, a Delaware corporation, in its capacity as issuer of the Debentures under the Indenture.

        "Delaware Trustee" means the Trustee meeting the eligibility requirements set forth in Section 6.2.

        "Depositary" means, with respect to Securities issuable in whole or in part in the form of one or more Global Securities, a clearing agency registered under the Exchange Act that is designated to act as Depositary for such Securities.

        "Depositary Participant" means a member of, or participant in, the Depositary.

        "Distribution" means a distribution payable to Holders of Securities in accordance with Section 7.2.

        "Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time, or any successor legislation.

        "Global Security" means a fully registered, global Preferred Security Certificate.

        "Guarantee" means the Guarantee Agreement, dated as of                        , 200  , of the Sponsor in respect of the Preferred Securities.

        "Holder" means a person in whose name a Security is registered; provided, however, that in determining whether the Holders of the requisite liquidation amount of Preferred Securities have voted on any matter provided for in this Trust Agreement, then for the purpose of such determination only (and not for any other purpose hereunder), if the Preferred Securities remain in the form of one or more Global Securities and if the Depositary which is the holder of such Global Securities has sent an omnibus proxy to the Trust assigning voting rights to Depositary Participants to whose accounts the Preferred Securities are credited on the record date, the term "Holders" shall mean such Depositary Participants acting at the direction of the Beneficial Owners.

        "Indemnified Person" means a Sponsor Indemnified Person or a Fiduciary Indemnified Person.

        "Indenture" means the Subordinated Debt Securities Indenture, dated as of                        , 200   between the Debenture Issuer and the Indenture Trustee, pursuant to which the Debentures are to be issued and as thereafter amended.

        "Indenture Event of Default" has the meaning given to the term "Event of Default" in the Indenture.

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        "Indenture Trustee" means Wells Fargo Bank, National Association, in its capacity as trustee under the Indenture until a successor is appointed thereunder, and thereafter means such successor trustee.

        "Investment Company" means an investment company as defined in the 1940 Act and the regulations promulgated thereunder.

        "Investment Company Event" means the receipt by the Trust of an opinion of a nationally recognized independent counsel (an "1940 Act Opinion"), to the effect that, as a result of the occurrence of a change in law or regulation or a written change in interpretation or application of law or regulation by any legislative body, court, governmental agency or regulatory authority (a "Change in 1940 Act Law"), the Trust is or will be considered an "investment company" that is required to be registered under the 1940 Act, which Change in 1940 Act Law becomes effective on or after the Closing Date.

        "Majority In Liquidation Amount" means, except as provided in the terms of the Preferred Securities or by the TIA, Holder(s) of outstanding Securities, voting together as a single class, or, as the context may require, Holders of outstanding Preferred Securities or Holders of outstanding Common Securities, voting separately as a class, who are the record owners of more than 50% of the aggregate liquidation amount (including the stated amount that would be paid on redemption, liquidation or otherwise, plus accumulated and unpaid Distributions to the date upon which the voting percentages are determined) of all outstanding Securities of the relevant class.

        "New York Stock Exchange" means the New York Stock Exchange, Inc. or any successor thereto.

        "1940 Act" means the Investment Company Act of 1940, as amended from time to time, or any successor legislation.

        "Officer" means the Chairman of the Board, any Vice Chairman, the Chief Executive Officer, the President, any Vice President, the Treasurer, the Secretary, any Assistant Treasurer or any Assistant Secretary of the Sponsor.

        "Officers' Certificate" means a written certificate containing the information specified in Sections 13.3 and 13.4 hereof signed in the name of the Sponsor by its Chairman of the Board, a Vice Chairman, its Chief Executive Officer, its President or a Vice President, and by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to the applicable Trustee; provided, that the term "Officers' Certificate" when used with reference to Administrative Trustees who are natural persons shall mean a certificate signed by two or more of the Administrative Trustees which otherwise satisfies the foregoing requirements.

        "Opinion of Counsel" means a written legal opinion containing the information specified in Sections 13.3 and 13.4 hereof. The counsel may be an employee of, or counsel to, the Sponsor.

        "Person" means any individual, corporation, estate, partnership, joint venture, association, joint stock company, limited liability company, trust, unincorporated organization, or government or any agency or political subdivision thereof.

        "Preferred Security Certificate" means a definitive certificate in fully registered form representing a Preferred Security, substantially in the form of Exhibit A.

        "Property Trustee" means the Trustee meeting the eligibility requirements set forth in Section 6.3.

        "Pro Rata" means pro rata to each Holder of Securities according to the aggregate liquidation amount of the Securities held by the relevant Holder in relation to the aggregate liquidation amount of all Securities outstanding.

        "Quorum" means a majority of the Administrative Trustees or, if there are only two Administrative Trustees, both of them.

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        "Redemption Price" means the amount for which the Securities will be redeemed, which amount will equal (i) the redemption price paid by the Debenture Issuer to repay or redeem, in whole or in part, the Debentures held by the Trust plus an amount equal to accumulated and unpaid Distributions on such Securities through the date of their redemption or (ii) such lesser amount as will be received by the Trust in respect of the Debentures so repaid or redeemed.

        "Responsible Officer" means, with respect to the Property Trustee, any officer with direct responsibility for the administration of this Trust Agreement and also means, with respect to a particular corporate trust matter, any other officer to whom any corporate trust matter is referred because of that officer's knowledge of and familiarity with a particular subject.

        "Securities" means the Common Securities and the Preferred Securities.

        "Securities Act" means the Securities Act of 1933, as amended from time to time, or any successor legislation.

        "Special Event" means a Tax Event or an Investment Company Event.

        "Sponsor" means The Walt Disney Company, a Delaware corporation, or any successor entity in a transaction involving the Sponsor that is permitted by Article V of the Indenture and pursuant to which the successor agrees in writing to perform the Sponsor's obligations hereunder.

        "Sponsor Indemnified Person" means (i) any Administrative Trustee or any officers, directors, employees, shareholders or agents of any Administrative Trustee or (ii) any officer, employee or agent of the Trust.

        "Statutory Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from time to time, or any successor legislation.

        "Tax Event" means the receipt by the Trust of an opinion of independent tax counsel experienced in such matters ("Tax Event Opinion"), to the effect that, as a result of (a) any amendment to, change in or announced prospective change in the laws (or any regulations thereunder) of the United States or any political subdivision or taxing authority thereof or therein, or (b) any official administrative written decision or pronouncement, or judicial decision interpreting or applying such laws or regulations, which amendment or change is effective or which pronouncement, or decision is announced on or after the Closing Date, there is more than an insubstantial risk that (i) the Trust is, or will be within 90 days of the date of such opinion, subject to the United States federal income tax with respect to income received or accrued on the Debentures, (ii) interest payable by the Debenture Issuer on the Debentures is not, or within 90 days of the date of such opinion will not be, deductible, in whole or in part, by the Debenture Issuer for United States federal income tax purposes, or (iii) the Trust is, or will be within 90 days of the date of such opinion, subject to more than a de minimis amount of other taxes, duties or other governmental charges.

        "10% In Liquidation Amount" means, except as provided in the terms of the Preferred Securities or by the TIA, Holder(s) of outstanding Securities, voting together as a single class, or, as the context may require, Holders of outstanding Preferred Securities or Holders of outstanding Common Securities, voting separately as a class, who are the record owners of 10% or more of the aggregate liquidation amount (including the stated amount that would be paid on redemption, liquidation or otherwise, plus accumulated and unpaid Distributions to the date upon which the voting percentages are determined) of all outstanding Securities of the relevant class.

        "TIA" means the Trust Indenture Act of 1939 (15 U.S. Code §§ 77aaa-77bbbb), as amended from time to time, and as in effect on the date of this Trust Agreement; provided, however, that in the event the TIA is amended after such date, TIA means, to the extent required by any such amendment, the TIA as so amended.

5

        "Treasury Regulations" means the income tax regulations, including temporary and proposed regulations, promulgated under the Code by the United States Treasury, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).

        "Trust Enforcement Event" in respect of the Securities means an Indenture Event of Default has occurred and is continuing in respect of the Debentures.

        "Trustee" or "Trustees" means each person who has signed this Trust Agreement as a trustee, so long as such person shall continue as a trustee in accordance with the terms hereof, and all other persons who may from time to time be duly appointed, qualified and serving as Trustees in accordance with the provisions hereof, and references herein to a Trustee or the Trustees shall refer to such person or persons solely in their capacity as trustees hereunder.

        Section 1.2. Other Definitions.

Term	Defined in Section
"Certificate of Trust"	Recitals
"Common Securities"	7.1(a)(ii)
"Compound Distributions"	7.2(b)
"Delaware Trustee"	6.2
"Direct Action"	3.8(e)
"Extension Period"	7.2(b)
"Fiduciary Indemnified Person"	9.4(b)
"Fiscal Year"	10.1
"Legal Action"	3.6(g)
"Legal Holiday"	13.6
"Liquidation"	8.2(a)
"Liquidation Distribution"	8.2(a)
"List of Holders"	2.2(a)
"Option"	7.18(a)
"Original Trust Agreement"	Recitals
"Paying Agent"	3.8(h)
"Payment Amount"	7.2(c)
"Preferred Securities"	7.1(a)(i)
"Property Account"	3.8(c)
"Registrar"	7.7
"Service Agent"	7.7
"Successor Entity"	3.15(b)(i)
"Successor Securities"	3.15(b)(i)b
"Super Majority"	2.6(a)(ii)
"Trust"	Recitals
"Trust Agreement"	Preamble
"Trust Order"	7.1(c)

        Section 1.3. Incorporation by Reference of Trust Indenture Act. Whenever this Trust Agreement refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Trust Agreement. All terms used in this Trust Agreement that are defined by the TIA, defined by TIA reference to another statute or defined by Commission rule under the TIA and not otherwise defined herein are used herein as so defined.

        Section 1.4. Rules of Construction. Unless the context otherwise requires:

(a)

a term has the meaning assigned to it;

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(b)

"or" is not exclusive;



(c)

words in the singular include the plural, and in the plural include the singular; and



(d)

provisions apply to successive events and transactions.

ARTICLE 2

TRUST INDENTURE ACT

        Section 2.1. Trust Indenture Act; Application.

(a)

This Trust Agreement is subject to the provisions of the TIA that are required to be part of this Trust Agreement and shall, to the extent applicable, be governed by such provisions.



(b)

The Property Trustee shall be the only Trustee which is a Trustee for the purposes of the TIA.



(c)

If and to the extent that any provision of this Trust Agreement conflicts with the duties imposed by Sections 310 to 317, inclusive, of the TIA, such imposed duties shall control.



(d)

The application of the TIA to this Trust Agreement shall not affect the Trust's classification as a grantor trust for United States federal income tax purposes and shall not affect the nature of the Securities as equity securities representing undivided beneficial ownership interests in the assets of the Trust.

        Section 2.2. Lists of Holders of Securities.

(a)

Each of the Sponsor and the Administrative Trustees on behalf of the Trust shall provide the Property Trustee at any time when the Property Trustee is not also acting as Registrar for the Securities at least 10 days before each Distribution payment date and at such other times as the Property Trustee may request in writing a list, in such form and as of such date as the Property Trustee may reasonably require, of the names and addresses of the Holders of the Securities ("List of Holders"); provided that neither the Sponsor nor the Administrative Trustees on behalf of the Trust shall be obligated to provide such List of Holders at any time the List of Holders does not differ from the most recent List of Holders given to the Property Trustee by the Sponsor and the Administrative Trustees on behalf of the Trust. The Property Trustee shall preserve, in as current a form as is reasonably practicable, all information contained in Lists of Holders given to it or which it receives in the capacity as Paying Agent (if acting in such capacity); provided that the Property Trustee may destroy any List of Holders previously given to it on receipt of a new List of Holders.



(b)

The Property Trustee shall comply with its obligations under, and shall be entitled to the benefits of, Sections 311(a), 311(b) and 312(b) of the TIA.

        Section 2.3. Reports by the Property Trustee. Within 60 days after May 15 of each year (commencing with the year in which the first anniversary of the issuance of the Preferred Securities occurs), the Property Trustee shall provide to the Holders of the Preferred Securities such reports as are required by Section 313(a) of the TIA, if any, in the form and in the manner provided by Section 313 of the TIA. The Property Trustee shall also comply with the other requirements of Section 313 of the TIA. The Sponsor shall promptly notify the Property Trustee when the Preferred Securities are listed on any stock exchange.

        Section 2.4. Periodic Reports to the Property Trustee. Each of the Sponsor and the Administrative Trustees on behalf of the Trust shall provide to the Property Trustee such documents, reports and information as required by Section 314 of the TIA (if any) and the compliance certificate required by Section 314(a)(4) of the TIA in the form, in the manner and at the times required by Section 314 of

7

the TIA; provided that such compliance certificate shall be delivered on or before 120 days after the end of each fiscal year of the Sponsor.

        Section 2.5. Evidence of Compliance with Conditions Precedent. Each of the Sponsor and the Administrative Trustees on behalf of the Trust shall provide to the Property Trustee such evidence of compliance with any conditions precedent, if any, provided for in this Trust Agreement that relate to any of the matters set forth in Section 314(c) of the TIA. Any certificate or opinion required to be given by an officer pursuant to Section 314(c)(1) may be given in the form of an Officers' Certificate.

        Section 2.6. Trust Enforcement Events; Waiver.

(a)

The Holders of a Majority in Liquidation Amount of the Preferred Securities may, by vote or written consent, on behalf of the Holders of all of the Preferred Securities, waive any past Trust Enforcement Event in respect of the Preferred Securities and its consequences; provided that, if the underlying Indenture Event of Default:



(i)

is not waivable under the Indenture, the Trust Enforcement Event under the Trust Agreement shall also not be waivable; or



(ii)

requires the consent or vote of the Holders of greater than a majority in principal amount of the Debentures (a "Super Majority") to be waived under the Indenture, the related Trust Enforcement Event under the Trust Agreement may only be waived by the vote or written consent of the Holders of at least the proportion in aggregate liquidation amount of the Preferred Securities that the relevant Super Majority represents of the aggregate principal amount of the Debentures outstanding.

        The foregoing provisions of this Section 2.6(a) shall be in lieu of Section 316(a)(1)(B) of the TIA and such Section 316(a)(1)(B) of the TIA is hereby expressly excluded from this Trust Agreement and the Securities, as permitted by the TIA. Upon such waiver, any such default shall cease to exist, and any Trust Enforcement Event with respect to the Preferred Securities arising therefrom shall be deemed to have been cured, for every purpose of this Trust Agreement and the Preferred Securities, but no such waiver shall extend to any subsequent or other Trust Enforcement Event with respect to the Preferred Securities or impair any right consequent thereon. Any waiver by the Holders of the Preferred Securities of a Trust Enforcement Event with respect to the Preferred Securities shall also be deemed to constitute a waiver by the Holders of the Common Securities of any such Trust Enforcement Event with respect to the Common Securities for all purposes of this Trust Agreement without any further act, vote, or consent of the Holders of the Common Securities.

(b)

The Holders of a Majority in Liquidation Amount of the Common Securities may, by vote or written consent, on behalf of the Holders of all of the Common Securities, waive any past Trust Enforcement Event in respect of the Common Securities and its consequences; provided that, if the underlying Indenture Event of Default:



(i)

is not waivable under the Indenture, except where the Holders of the Common Securities are deemed to have waived such Trust Enforcement Event under the Trust Agreement as provided below in this Section 2.6(b), the Trust Enforcement Event under the Trust Agreement shall also not be waivable; or



(ii)

requires the consent or vote of a Super Majority to be waived under the Indenture, except where the Holders of the Common Securities are deemed to have waived such Trust Enforcement Event under the Trust Agreement as provided below in this Section 2.6(b), the Trust Enforcement Event under the Trust Agreement may only be waived by the vote or written consent of the Holders of at least the proportion in aggregate liquidation amount of the Common Securities that the relevant Super Majority represents of the aggregate principal amount of the Debentures outstanding;

8

provided, further, each Holder of Common Securities will be deemed to have waived any Trust Enforcement Event and all Trust Enforcement Events with respect to the Common Securities and the consequences thereof until all Trust Enforcement Events with respect to the Preferred Securities have been cured, waived or otherwise eliminated, and until such Trust Enforcement Events with respect to the Preferred Securities have been so cured, waived or otherwise eliminated, the Property Trustee will be deemed to be acting solely on behalf of the Holders of the Preferred Securities and only the Holders of the Preferred Securities will have the right to direct the Property Trustee in accordance with the terms of this Trust Agreement and the Indenture.

        The foregoing provisions of this Section 2.6(b) shall be in lieu of Sections 316(a)(1)(A) and 316(a)(1)(B) of the TIA and such Sections 316(a)(1)(A) and 316(a)(1)(B) of the TIA are hereby expressly excluded from this Trust Agreement and the Securities, as permitted by the TIA. Subject to the foregoing provisions of this Section 2.6(b), upon such cure, waiver or other elimination, any such default shall cease to exist and any Trust Enforcement Event with respect to the Common Securities arising therefrom shall be deemed to have been cured for every purpose of this Trust Agreement, but no such waiver shall extend to any subsequent or other Trust Enforcement Event with respect to the Common Securities or impair any right consequent thereon.

(c)

A waiver of an Indenture Event of Default by the Property Trustee at the direction of the Holders of the Preferred Securities constitutes a waiver of the corresponding Trust Enforcement Event with respect to the Preferred Securities under this Trust Agreement. The foregoing provisions of this Section 2.6(c) shall be in lieu of Section 316(a)(1)(B) of the TIA and such Section 316(a)(1)(B) of the TIA is hereby expressly excluded from this Trust Agreement and the Securities, as permitted by the TIA.

        Section 2.7. Notice of Trust Enforcement Event by Property Trustee.

        If a Trust Enforcement Event occurs and is continuing with respect to the Securities and if it is actually known to a Responsible Officer of the Property Trustee, the Property Trustee shall mail to each Holder of Securities notice of a Trust Enforcement Event within 90 days after it occurs or, if later, after a Responsible Officer of the Property Trustee has actual knowledge of such Trust Enforcement Event. Except in the case of a Trust Enforcement Event caused by a default in payment of principal of or interest on any Debentures, the Property Trustee may withhold the notice if and so long as its corporate trust committee or a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of Holders of Securities.

ARTICLE 3

ORGANIZATION

        Section 3.1. Name and Organization. The Trust hereby continued is named "Disney Capital Trust [I / II / III]" as such name may be modified from time to time by the Administrative Trustees following written notice to the Holders of Securities, the Property Trustee and the Delaware Trustee. The Trust's activities may be conducted under the name of the Trust or any other name deemed advisable by the Administrative Trustees.

        Section 3.2. Office. The address of the principal office of the Trust is c/o The Walt Disney Company, 500 South Buena Vista Street, Burbank, California 91521. On 10 Business Days' written notice to the Holders of Securities, the Property Trustee and the Delaware Trustee, the Administrative Trustees may designate another principal office.

        Section 3.3. Purpose. The exclusive purposes and functions of the Trust are (a) to issue and sell Securities and use the gross proceeds from such sale to acquire the Debentures, (b) making

9

Distributions to Holders of Securities as herein provided and (c) except as otherwise limited herein, to engage in only those other activities necessary, advisable or incidental thereto. The Trust shall not borrow money, issue debt or reinvest proceeds derived from investments, pledge any of its assets or otherwise undertake (or permit to be undertaken) any activity that would cause the Trust not to be classified as a grantor trust for United States federal income tax purposes.

        By the acceptance of this Trust, none of the Trustees, the Sponsor, the Holders of the Preferred Securities or Common Securities or the Beneficial Owners will take any position for United States federal income tax purposes which is contrary to the classification of the Trust as a grantor trust.

        Section 3.4. Authority. Subject to the limitations provided in this Trust Agreement and to the specific duties of the Property Trustee, the Administrative Trustees shall have exclusive authority to carry out the purposes of the Trust. An action taken by the Administrative Trustees in accordance with their powers shall constitute the act of and serve to bind the Trust, and an action taken by the Property Trustee on behalf of the Trust in accordance with its powers shall constitute the act of and serve to bind the Trust. In dealing with the Trustees acting on behalf of the Trust, no Person shall be required to inquire into the authority of the Trustees to bind the Trust. Persons dealing with the Trust are entitled to rely conclusively on the power and authority of the Trustees as set forth in this Trust Agreement.

(a)

Except as expressly set forth in this Trust Agreement and except if a meeting of the Administrative Trustees is called with respect to any matter over which the Administrative Trustees have power to act, any power of the Administrative Trustees may be exercised by, or with the consent of, any one such Administrative Trustee.



(b)

Unless otherwise determined by the Administrative Trustees, and except as otherwise required by the Statutory Trust Act or applicable law, any Administrative Trustee is authorized to execute on behalf of the Trust any documents which the Administrative Trustees have the power and authority to cause the Trust to execute.



(c)

Any Administrative Trustee may, by power of attorney consistent with applicable law, delegate to any other natural person over the age of 21 his or her power for the purposes of signing any documents which the Administrative Trustees have power and authority to cause the Trust to execute.

        Section 3.5. Title to Property of the Trust. Except as provided in Section 3.8 with respect to the Debentures and the Property Account or as otherwise provided in this Trust Agreement, legal title to all assets of the Trust shall be vested in the Trust. The Holders shall not have legal title to any part of the assets of the Trust, but shall have an undivided beneficial ownership interest in the assets of the Trust.

        Section 3.6. Powers and Duties of the Administrative Trustees. The Administrative Trustees shall have the exclusive power, duty and authority to cause the Trust to engage in the following activities:

(a)

issue and sell the Preferred Securities and the Common Securities in accordance with this Trust Agreement; provided, however, that the Trust may issue no more than one series of Preferred Securities and no more than one series of Common Securities; and provided, further, that there shall be no interests in the Trust other than the Securities and, except as provided in Section 7.18, the issuance of Securities shall be limited to a one-time, simultaneous issuance of both Preferred Securities and Common Securities on the Closing Date;



(b)

in connection with the issue and sale of the Preferred Securities, at the direction of the Sponsor, to execute and file any documents prepared by the Sponsor, or take any acts as determined by the Sponsor to be necessary, in order to qualify or register all or part of the

10

Preferred Securities in any State in which the Sponsor has determined to qualify or register such Preferred Securities for sale;

(c)

in connection with the issue and sale of Preferred Securities, to execute and deliver on behalf of the Trust the Agreement as to Expenses and Liabilities;



(d)

to acquire the Debentures with the proceeds of the sale of the Preferred Securities and the Common Securities; provided, however, that the Administrative Trustees shall cause legal title to the Debentures to be held of record in the name of the Property Trustee for the benefit of the Trust, the Holders of the Preferred Securities and the Holders of the Common Securities;



(e)

to give the Sponsor and the Property Trustee prompt written notice of the occurrence of a Special Event;



(f)

to establish a record date with respect to all actions to be taken hereunder that require a record date be established, including and with respect to, for the purposes of Section 316(c) of the TIA, Distributions, voting rights, redemptions and exchanges, and to issue relevant notices to the Holders of Preferred Securities and Holders of Common Securities as to such actions and applicable record dates;



(g)

to take all actions and perform such duties as may be required of the Administrative Trustees pursuant to the terms of this Trust Agreement and the Securities;



(h)

to bring or defend, pay, collect, compromise, arbitrate, resort to legal action or otherwise adjust claims or demands of or against the Trust ("Legal Action"), unless pursuant to Section 3.8(e), the Property Trustee has the exclusive power to bring such Legal Action;



(i)

to employ or otherwise engage employees and agents (who may be designated as officers with titles) and managers, contractors, advisors and consultants to conduct only those services that the Administrative Trustees have authority to conduct directly, and to pay reasonable compensation for such services;



(j)

to cause the Trust to comply with the Trust's obligations under the TIA;



(k)

to give the certificate required by Section 314(a)(4) of the TIA to the Property Trustee, which certificate may be executed by any Administrative Trustee;



(l)

to incur expenses that are necessary or incidental to carry out any of the purposes of the Trust;



(m)

to act as, or appoint another person to act as, registrar and transfer agent for the Securities;



(n)

to give prompt written notice to the Holders of the Securities of any notice received from the Debenture Issuer of its election to defer payments of interest on the Debentures by extending the interest payment period under the Debentures as authorized by the Indenture;



(o)

to take all action that may be necessary or appropriate for the preservation and the continuation of the Trust's valid existence, rights, franchises and privileges as a statutory trust under the laws of the State of Delaware and of each other jurisdiction in which such existence is necessary to protect the limited liability of the Holders of the Preferred Securities and the Holders of the Common Securities or to enable the Trust to effect the purposes for which the Trust was created;



(p)

to take any action, not inconsistent with applicable law, that the Administrative Trustees determine in their discretion to be necessary or desirable in carrying out the purposes and

11

functions of the Trust as set out in Section 3.3 or the activities of the Trust as set out in this Section 3.6, including, but not limited to:

(i)

causing the Trust not to be deemed to be an Investment Company required to be registered under the 1940 Act;



(ii)

causing the Trust to be classified as a grantor trust for United States federal income tax purposes; and



(iii)

cooperating with the Debenture Issuer to ensure that the Debentures will be treated as indebtedness of the Debenture Issuer for United States federal income tax purposes;



(q)

to take all action necessary to cause all applicable tax returns and tax information reports that are required to be filed with respect to the Trust to be duly prepared and filed by the Administrative Trustees, on behalf of the Trust; and



(r)

to execute and deliver all documents or instruments, perform all duties and powers, and do all things for and on behalf of the Trust in all matters necessary or incidental to the foregoing.

        The Administrative Trustees shall exercise the powers set forth in this Section 3.6 in a manner that is consistent with the purposes and functions of the Trust set out in Section 3.3, and the Administrative Trustees shall have no power to, and shall not, take any action that is inconsistent with the purposes and functions of the Trust set forth in Section 3.3.

        Subject to this Section 3.6, the Administrative Trustees shall have none of the powers or the authority of the Property Trustee set forth in Section 3.8.

        Any expenses incurred by the Administrative Trustees pursuant to this Section 3.6 shall be reimbursed by the Sponsor.

        Section 3.7. Prohibition of Actions by the Trust and the Trustees.

(a)

The Trust shall not, and none of the Trustees (including the Property Trustee) shall cause the Trust to, engage in any activity other than as required or authorized by this Trust Agreement. In particular, the Trust shall not and none of the Trustees (including the Property Trustee) shall cause the Trust to:



(i)

invest any proceeds received by the Trust from holding the Debentures, but shall distribute all such proceeds to Holders of Securities pursuant to the terms of this Trust Agreement and of the Securities;



(ii)

acquire any assets other than as expressly provided herein;



(iii)

possess Trust property for other than a Trust purpose;



(iv)

make any loans other than loans represented by the Debentures or incur any indebtedness;



(v)

possess any power or otherwise act in such a way as to vary the Trust assets;



(vi)

possess any power or otherwise act in such a way as to vary the terms of the Securities in any way whatsoever (except to the extent expressly authorized in this Trust Agreement or by the terms of the Securities);



(vii)

issue any securities or other evidences of beneficial ownership of, or beneficial interest in, the Trust other than the Securities;



(viii)

other than as provided in this Trust Agreement or by the terms of the Securities, (A) direct the time, method and place of exercising any trust or power conferred upon the Indenture Trustee with respect to the Debentures, (B) waive any past default that is

12

waivable under the Indenture, (C) exercise any right to rescind or annul any declaration that the principal of all the Debentures shall be due and payable, or (D) consent to any amendment, modification or termination of the Indenture or the Debentures where such consent shall be required unless the Trust shall have received an Opinion of Counsel to the effect that such amendment or modification will not cause more than an insubstantial risk that the Trust will be deemed an Investment Company required to be registered under the 1940 Act, or the Trust will not be classified as a grantor trust for United States federal income tax purposes;

(ix)

take any action inconsistent with the status of the Trust as a grantor trust for United States federal income tax purposes; or



(x)

revoke any action previously authorized or approved by vote of the Holders of the Preferred Securities except pursuant to a subsequent vote of the Holders of the Preferred Securities.

        Section 3.8. Powers and Duties of the Property Trustee.

(a)

The legal title to the Debentures shall be owned by and held of record in the name of the Property Trustee for the benefit of the Trust and the Holders of the Securities. The right, title and interest of the Property Trustee to the Debentures shall vest automatically in each person who may hereafter be appointed as Property Trustee in accordance with Section 6.6. Such vesting and cessation of title shall be effective whether or not conveyancing documents with regard to the Debentures have been executed and delivered.



(b)

The Property Trustee shall not transfer its right, title and interest in the Debentures to the Administrative Trustees or to the Delaware Trustee (if the Property Trustee does not also act as Delaware Trustee).



(c)

The Property Trustee shall:



(i)

establish and maintain a segregated non-interest bearing trust account (the "Property Account") in the name of and under the exclusive control of the Property Trustee on behalf of the Holders of the Securities and, upon the receipt of payments of funds made in respect of the Debentures held by the Property Trustee, deposit such funds into the Property Account and make payments to the Holders of the Preferred Securities and Holders of the Common Securities from the Property Account in accordance with Section 7.2. Funds in the Property Account shall be held uninvested until disbursed in accordance with this Trust Agreement. The Property Account shall be an account that is maintained with a banking institution the rating on whose long-term unsecured indebtedness is at least equal to the rating assigned to the Preferred Securities by a "nationally recognized statistical rating organization," within the meaning of Rule 436(g)(2) under the Securities Act;



(ii)

engage in such ministerial activities as shall be necessary or appropriate to effect the redemption of the Preferred Securities and the Common Securities to the extent the Debentures are redeemed or mature; and



(iii)

upon written notice of distribution issued by the Administrative Trustees in accordance with the terms of the Securities, engage in such ministerial activities as so directed and as shall be necessary or appropriate to effect the distribution of the Debentures to Holders of Securities upon the occurrence of a Special Event.



(d)

The Property Trustee shall take all actions and perform such duties as may be specifically required of the Property Trustee pursuant to the terms of this Trust Agreement and the Securities.

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(e)

Subject to Section 3.9(b), the Property Trustee may take any Legal Action which arises out of or in connection with a Trust Enforcement Event or the Property Trustee's duties and obligations under this Trust Agreement or the TIA; provided, however, that if a Trust Enforcement Event has occurred and is continuing and such event is attributable to the failure of the Debenture Issuer to pay interest, principal or other required payments on the Debentures on the date such interest, principal or other required payments are otherwise payable (or in the case of redemption, on the redemption date), then a Holder of Preferred Securities may directly institute a proceeding against the Debenture Issuer for enforcement of payment to such Holder of the principal of (including premium, if any) or interest (including any Additional Interest, as defined in the Indenture) on Debentures having a principal amount equal to the aggregate liquidation amount of the Preferred Securities of such Holder (a "Direct Action") on or after the respective due date specified in the Debentures. Notwithstanding anything to the contrary in this Trust Agreement or the Indenture, the Debenture Issuer shall have the right to set-off any payment it is otherwise required to make in respect of any Preferred Security to the extent the Debenture Issuer has heretofore made, or is currently on the date of such payment making, a payment under the Guarantee relating to such Preferred Security or under the Indenture.



(f)

The Property Trustee shall continue to serve as a Trustee until either:



(i)

the Trust has been completely liquidated and the proceeds of the liquidation distributed to the Holders of Securities pursuant to the terms of the Securities; or



(ii)

a successor Property Trustee has been appointed and has accepted that appointment in accordance with Section 6.6.



(g)

The Property Trustee shall have the legal power to exercise all of the rights, powers and privileges of a holder of Debentures under the Indenture and, if a Trust Enforcement Event occurs and is continuing, the Property Trustee shall, for the benefit of Holders of the Securities, enforce its rights as holder of the Debentures subject to the rights of the Holders pursuant to this Trust Agreement and the terms of the Securities.



(h)

The Property Trustee may authorize one or more Persons (each, a "Paying Agent") to pay Distributions, redemption payments or liquidation payments on behalf of the Trust with respect to all Securities and any such Paying Agent shall comply with Section 317(b) of the TIA. Any Paying Agent may be removed by the Property Trustee at any time and a successor Paying Agent or additional Paying Agents may be appointed at any time by the Property Trustee.



(i)

Subject to this Section 3.8, the Property Trustee shall have none of the duties, liabilities, powers or the authority of the Administrative Trustees set forth in Section 3.6.

        The Property Trustee shall exercise the powers set forth in this Section 3.8 in a manner that is consistent with the purposes and functions of the Trust set out in Section 3.3, and the Property Trustee shall have no power to, and shall not, take any action that is inconsistent with the purposes and functions of the Trust set out in Section 3.3.

        Section 3.9. Duties and Responsibilities of the Property Trustee.

(a)

If a Trust Enforcement Event has occurred and is continuing, the Property Trustee shall exercise the rights and powers vested in it by this Trust Agreement and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.

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(b)

Except during the continuance of any Trust Enforcement Event:



(i)

the Property Trustee need perform only those duties that are specifically set forth in this Trust Agreement and no others; and



(ii)

in the absence of bad faith on its part, the Property Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon Officers' Certificates or Opinions of Counsel furnished to the Property Trustee and conforming to the requirements of this Trust Agreement; however, in the case of any such Officers' Certificates or Opinions of Counsel which by any provision hereof are specifically required to be furnished to the Property Trustee, the Property Trustee shall examine such Officers' Certificates and Opinions of Counsel to determine whether or not they conform to the requirements of this Trust Agreement.



(c)

The Property Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:



(i)

this paragraph does not limit the effect of paragraphs (b) and (d) through (j) of this Section;



(ii)

the Property Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Property Trustee was negligent in ascertaining the pertinent facts; and



(iii)

the Property Trustee shall not be liable with respect to any action taken or omitted to be taken by it with respect to the Securities in good faith in accordance with the direction of the Holders of not less than a Majority in Liquidation Amount of the Securities relating to the time, method and place of conducting any proceeding for any remedy available to the Property Trustee or exercising any trust or power conferred upon the Property Trustee under this Trust Agreement.



(d)

Every provision of this Trust Agreement that in any way relates to the Property Trustee is subject to paragraphs (a), (b) and (c) of this Section 3.9.



(e)

The Property Trustee may refuse to perform any duty or exercise any right or power unless it receives indemnity satisfactory to it against any loss, liability or expense.



(f)

Money held in trust by the Property Trustee need not be segregated from other funds except in relation to the Property Account maintained pursuant to Section 3.8(c)(i) and except to the extent required by law. The Property Trustee shall not be liable for interest on any money received by it except as the Property Trustee may agree in writing with the Sponsor.



(g)

No provision of this Trust Agreement shall require the Property Trustee to risk its own funds or otherwise incur any financial liability in the performance of any of its duties, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk is not reasonably assured to it.



(h)

The Property Trustee's sole duty with respect to the custody, safe-keeping and physical preservation of the Debentures and the Property Account shall be to deal with such property in a similar manner as the Property Trustee deals with similar property for its own account, subject to the protections and limitations on liability afforded to the Property Trustee under this Trust Agreement and the TIA.



(i)

The Property Trustee shall have no duty or liability for or with respect to the value, genuineness, existence or sufficiency of the Debentures or the payment of any taxes or assessments levied thereon or in connection therewith.



(j)

The Property Trustee shall not be responsible for monitoring the compliance by the Administrative Trustees or the Sponsor with their respective duties under this Trust Agreement, nor shall the Property Trustee be liable for any default or misconduct of the Administrative Trustees or the Sponsor.

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        Section 3.10. Rights of Property Trustee.

(a)

The Property Trustee may rely on and shall be protected in acting or refraining from acting upon any document believed by it to be genuine and to have been signed or presented by the proper person. The Property Trustee need not investigate any fact or matter stated in the document.



(b)

Before the Property Trustee acts or refrains from acting, it may require an Officers' Certificate or an Opinion of Counsel. The Property Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers' Certificate or Opinion of Counsel.



(c)

The Property Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care. No Depositary shall be deemed an agent of the Property Trustee and the Property Trustee shall not be responsible for any act or omission by any Depositary.



(d)

Subject to the provisions of Section 3.9(c), the Property Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers.



(e)

The Property Trustee may consult with counsel and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.



(f)

The Property Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Trust Agreement at the request or direction of any of the Holders of Securities unless such Holders shall have offered to the Property Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction, including such reasonable advances as may be requested by the Property Trustee; provided, that nothing contained in this Section 3.10(f) shall be taken to relieve the Property Trustee, upon the occurrence of a Trust Enforcement Event, of its obligation to exercise the rights and powers vested in it by this Trust Agreement in the manner provided by Section 3.9(a).



(g)

Whenever in the administration of this Trust Agreement the Property Trustee shall deem it desirable to receive instructions with respect to enforcing any remedy or right or taking any other action hereunder, the Property Trustee (i) may request instructions from the Holders of the Securities which instructions may only be given by the Holders of the same proportion in liquidation amount of the Securities as would been entitled to direct the Property Trustee under the terms of the Securities in respect of such remedy, right or action, (ii) may refrain from enforcing such remedy or right or taking such other action until such instructions are received, and (iii) shall be protected in conclusively relying on or acting in accordance with such instructions.



(h)

Except as otherwise expressly provided by this Trust Agreement, the Property Trustee shall not be under any obligation to take any action that is discretionary under the provisions of this Trust Agreement.



(i)

When the Property Trustee incurs expenses or renders services in connection with a bankruptcy, the expenses and the compensation for the services are intended to constitute expenses of administration under any bankruptcy law or law for the relief of debtors generally.



(j)

No provision of this Trust Agreement shall be deemed to impose any duty or obligation on the Property Trustee to perform any act or acts or exercise any right, power, duty or obligation conferred or imposed on it, in any jurisdiction in which it shall be illegal, or in which the Property Trustee shall be unqualified or incompetent in accordance with applicable law, to

16

perform any such act or acts, or to exercise any such right, power, duty or obligation. No permissive power or authority available to the Property Trustee shall be construed to be a duty.

        Section 3.11. Delaware Trustee. Notwithstanding any other provision of this Trust Agreement other than Section 6.2, the Delaware Trustee shall not be entitled to exercise any powers, nor shall the Delaware Trustee have any of the duties and responsibilities of the Administrative Trustees or the Property Trustee described in this Trust Agreement. Except as set forth in Section 6.2, the Delaware Trustee shall be a Trustee for the sole and limited purpose of fulfilling the requirements of Section 3807(a) of the Statutory Trust Act. In the event the Delaware Trustee shall at any time be required to take any action or perform any duty hereunder with respect to the Trust, the Delaware Trustee shall be entitled to all of the same rights as the Property Trustee listed in Sections 3.9(b)-(h) and Section 3.10. No implied covenants or obligations shall be read into this Trust Agreement against the Delaware Trustee. It is expressly understood and agreed by the parties hereto that in fulfilling its obligations as Delaware Trustee hereunder on behalf of the Trust (i) any agreements or instruments executed and delivered by Wilmington Trust Company are executed and delivered not in its individual capacity but solely as Delaware Trustee under this Trust Agreement in the exercise of the powers and authority conferred and vested in it, (ii) each of the representations, undertakings and agreements herein made on the part of the Trust is made and intended not as representations, warranties, covenants, undertakings and agreements by Wilmington Trust Company in its individual capacity but is made and intended for the purpose of binding only the Trust, and (iii) under no circumstances shall Wilmington Trust Company in its individual capacity be personally liable for the payment of any indebtedness or expenses of the Trust or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Trust under this Trust Agreement, except if such breach or failure is due to any gross negligence or willful misconduct of the Delaware Trustee.

        Section 3.12. Execution of Documents. Unless otherwise determined by the Administrative Trustees, and except as otherwise required by the Statutory Trust Act or applicable law, any Administrative Trustee is authorized to execute on behalf of the Trust any documents that the Administrative Trustees have the power and authority to execute pursuant to Section 3.6.

        Section 3.13. Trustees' Disclaimer. The Trustees make no representation as to the validity or adequacy of this Trust Agreement, the Securities, the Indenture or the Debentures; they shall not be accountable for the Debenture Issuer's use of the proceeds from the Debentures, and they shall not be responsible for any statement in the Debentures or the Securities, except that the Property Trustee and the Administrative Trustees shall be responsible for the Securities' authentication.

        Section 3.14. Duration of Trust. The Trust shall exist until terminated pursuant to the provisions of Article 8 hereof.

        Section 3.15. Mergers.

(a)

The Trust may not consolidate, merge with or into, or be replaced by or convey, transfer or lease its properties and assets substantially as an entirety to any person, except as described in Section 3.15(b) and (c) or Section 8.2.



(b)

The Trust may, at the request of the Sponsor and with the consent of the Administrative Trustees or, if there are more than two, a majority of the Administrative Trustees and without the consent of the Holders of the Securities, the Delaware Trustee or the Property Trustee, consolidate, merge with or into, or be replaced by or convey, transfer or lease its properties

17

substantially as an entirety to a trust organized as such under the laws of any State; provided, that:

(i)

if the Trust is not the successor, such successor entity (the "Successor Entity") either:



a.

expressly assumes all of the obligations of the Trust with respect to the Securities; or



b.

substitutes for the Preferred Securities other securities having substantially the same terms as the Preferred Securities (the "Successor Securities") so long as the Successor Securities rank the same as the Preferred Securities rank in priority with respect to Distributions and payments upon liquidation, redemption and otherwise;



(ii)

if the Trust is not the Successor Entity, the Sponsor expressly appoints a trustee of such Successor Entity that possesses the same powers and duties as the Property Trustee as the holder of the Debentures;



(iii)

the Preferred Securities or any Successor Securities are listed, or any Successor Securities will be listed upon notification of issuance, on any national securities exchange or with any other or organization on which the Preferred Securities are then listed or quoted;



(iv)

such merger, consolidation, replacement, conveyance, transfer or lease does not cause the Preferred Securities (including any Successor Securities) to be downgraded by any nationally recognized statistical rating organization;



(v)

such merger, consolidation, replacement, conveyance, transfer or lease does not adversely affect the rights, preferences and privileges of the Holders of the Preferred Securities (including any Successor Securities) in any material respect other than with respect to the dilution of the Holders' interest in the new entity;



(vi)

such Successor Entity has a purpose identical to that of the Trust;



(vii)

prior to such merger, consolidation, replacement, conveyance, transfer or lease the Sponsor has received an opinion of independent counsel to the Trust experienced in such matters to the effect that:



a.

such merger, consolidation, replacement, conveyance, transfer or lease does not adversely affect the rights, preferences and privileges of the Holders of the Preferred Securities (including any Successor Securities) in any material respect (including any Successor Securities) other than with respect to the dilution of the Holders' interest in the new entity;



b.

following such merger, consolidation, replacement, conveyance, transfer or lease, neither the Trust nor the Successor Entity will be required to register as an Investment Company; and



c.

following such merger, consolidation or replacement, the Trust (or the Successor Entity) will continue to be classified as a grantor trust for United States federal income tax purposes;



(viii)

the Sponsor or any permitted successor or assignee owns all of the common securities and guarantees the obligations of such Successor Entity under the Successor Securities at least to the extent provided by the Guarantee; and



(ix)

such Successor Entity expressly assumes all of the obligations of the Trust with respect to the Trustees.



(c)

Notwithstanding Section 3.15(b), the Trust shall not, except with the consent of Holders of 100% in aggregate liquidation amount of the Securities, consolidate, merge with or into, or be

18

replaced by or convey, transfer or lease its properties and assets substantially as an entirety to, any other entity or permit any other entity to consolidate, merge with or into, or replace it, if in the opinion of independent tax counsel experienced in such matters such consolidation, merger, replacement, conveyance, transfer or lease would cause the Trust or Successor Entity to be classified as other than a grantor trust for United States federal income tax purposes and each Holder of the Securities not to be treated as owning an undivided interest in the Debentures.

        Section 3.16. Property Trustee May File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other similar judicial proceeding relative to the Trust or any other obligor upon the Securities or the property of the Trust or of such other obligor or their creditors, the Property Trustee (irrespective of whether any Distributions on the Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Property Trustee shall have made any demand on the Trust for the payment of any past due Distributions) shall be entitled and empowered, to the fullest extent permitted by law, by intervention in such proceeding or otherwise:

(a)

to file and prove a claim for the whole amount of any Distributions owing and unpaid in respect of the Securities and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Property Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Property Trustee, its agents and counsel) and of the Holders allowed in such judicial proceeding, and



(b)

to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Property Trustee and, in the event the Property Trustee shall consent to the making of such payments directly to the Holders, to pay to the Property Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Property Trustee, its agents and counsel, and any other amounts due the Property Trustee.

        Nothing herein contained shall be deemed to authorize the Property Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or compensation affecting the Securities or the rights of any Holder thereof or to authorize the Property Trustee to vote in respect of the claim of any Holder in any such proceeding.

ARTICLE 4

SPONSOR

        Section 4.1. Responsibilities of the Sponsor. In connection with the issue and sale of the Preferred Securities, the Sponsor shall have the exclusive right and responsibility to engage in the following activities:

(a)

to prepare, execute and file on behalf of the Trust an application to the New York Stock Exchange or any other national stock exchange or the NASDAQ Stock Market for listing upon notice of issuance of any Preferred Securities, the Guarantee and the Debentures;



(b)

to prepare, execute and file on behalf of the Trust with the Commission under the Securities Act or the Exchange Act one or more registration statements on the applicable forms, including any amendments thereto, pertaining to the Preferred Securities, the Guarantee and the Debentures;

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(c)

to determine the States in which to take appropriate action to qualify or register for sale all or part of the Preferred Securities and to do any and all such acts, other than actions which must be taken by the Trust, and advise the Trust of actions it must take, and prepare for execution and filing any documents to be executed and filed by the Trust, as the Sponsor deems necessary or advisable in order to comply with the applicable laws of any such States; and



(d)

to negotiate the terms of and to execute on behalf of the Trust an underwriting agreement and other related agreements providing for the sale of the Preferred Securities.

        Section 4.2. Compensation and Indemnification. Pursuant to the Agreement as to Expenses and Liabilities, the Sponsor shall pay to each of the Property Trustee and the Delaware Trustee from time to time reasonable compensation for their services. Such Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Sponsor shall reimburse each Trustee upon request for all reasonable out-of-pocket expenses incurred by it. Such expenses shall include the reasonable compensation and expenses of such Trustee's agents and counsel.

ARTICLE 5

TRUST COMMON SECURITIES HOLDER

        Section 5.1. Debenture Issuer's Purchase of Common Securities. On the applicable Closing Date, the Debenture Issuer will purchase all of the Common Securities issued by the Trust on such Closing Date, for an amount at least equal to 3% of the capital of the Trust at such time, at the same time as Preferred Securities are sold; provided that, if the Option set forth in Section 7.18(a) is exercised, then the Debenture Issuer will purchase such additional Common Securities from the Trust on such second Closing Date such that it will then hold at least 3% of the capital of the Trust.

        The aggregate stated liquidation amount of Common Securities outstanding at any time shall not be less than 3% of the capital of the Trust.

        Section 5.2. Covenants of the Common Securities Holder. For so long as the Preferred Securities remain outstanding, the Common Securities Holder will covenant (i) to maintain, directly or indirectly, 100% ownership of the Common Securities, (ii) to cause the Trust to remain a statutory trust and not to voluntarily dissolve, wind up, liquidate or be terminated, except as permitted by this Trust Agreement, (iii) to use its commercially reasonable efforts to ensure that the Trust will not be an investment company for purposes of the 1940 Act, and (iv) to take no action which would be reasonably likely to cause the Trust to be classified as an association or a publicly traded partnership taxable as a corporation for United States federal income tax purposes.

ARTICLE 6

TRUSTEES

        Section 6.1. Number of Trustees. The number of Trustees initially shall be five, and:

(a)

at any time before the issuance of any Securities, the Sponsor may, by written instrument, increase or decrease the number of Trustees; and



(b)

after the issuance of any Securities, the number of Trustees may be increased or decreased by vote of the Holders of a Majority in Liquidation Amount of the Common Securities voting as a class at a meeting of the Holders of the Common Securities or by written consent in lieu of such meeting; provided that the number of Trustees shall be at least three; and provided, further, that (i) the Delaware Trustee, in the case of a natural person, shall be a person who is a resident of the State of Delaware or that, if not a natural person, is an entity which has its

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principal place of business in the State of Delaware and otherwise meets the requirements of applicable law; (ii) at least one Administrative Trustee is an employee or officer of, or is affiliated with, the Sponsor; and (iii) one Trustee shall be the Property Trustee for so long as this Trust Agreement is required to qualify as an indenture under the TIA, and such Trustee may also serve as Delaware Trustee if it meets the applicable requirements.

        Section 6.2. Delaware Trustee; Eligibility. If required by the Statutory Trust Act, one Trustee (which may be the Property Trustee) (the "Delaware Trustee") shall be:

(a)

a natural person who is a resident of the State of Delaware; or



(b)

if not a natural person, an entity which has its principal place of business in the State of Delaware, and otherwise meets the requirements of applicable law; provided that, if the Property Trustee has its principal place of business in the State of Delaware and otherwise meets the requirements of applicable law, then the Property Trustee shall also be the Delaware Trustee and Section 3.11 shall have no application.

        Section 6.3. Property Trustee; Eligibility; Disqualification.

        This Trust Agreement shall always have a Property Trustee who satisfies the requirements of Sections 310(a)(1), (2) and (5) of the TIA. The Property Trustee shall always have a combined capital and surplus of at least $25,000,000 as set forth in its most recent published annual report of condition. The Property Trustee shall comply with Section 310(b) of the TIA.

        Section 6.4. Qualifications of Administrative Trustees and Delaware Trustee Generally. Each Administrative Trustee and the Delaware Trustee (unless the Property Trustee also acts as Delaware Trustee) shall be either a natural person who is at least 21 years of age or a legal entity that shall act through one or more Authorized Officers.

        Section 6.5. Initial Administrative Trustees. The initial Administrative Trustees shall be:             ,              and             , the business address of all of whom is The Walt Disney Company, 500 South Buena Vista Street, Burbank, California 91521.

        Section 6.6. Replacement of Trustees.

(a)

Subject to Section 6.6(b), Trustees may be appointed or removed without cause at any time:



(i)

until the issuance of any Securities, by written instrument executed by the Sponsor;



(ii)

after the issuance of any Securities (but, except as provided in clause (a)(iii) below, not while an Indenture Event of Default has occurred and is continuing), by vote of the Holders of a Majority in Liquidation Amount of the Common Securities voting as a class at a meeting of the Holders of the Common Securities; and



(iii)

after the issuance of the Preferred Securities during the continuance of an Indenture Event of Default, by vote of the Holders of a Majority in Liquidation Amount of the Preferred Securities; provided, however, that the Administrative Trustees may still be appointed or removed without cause in such circumstance, by vote of the Holders of a Majority in Liquidation Amount of the Common Securities voting as a class at a meeting of the Holders of the Common Securities.



(b)

A Trustee may resign with respect to the Securities by so notifying the Sponsor and the Trust. A resignation or removal of the Property Trustee or Delaware Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of appointment as provided in this Section. The resignation of an Administrative Trustee is effective upon delivery of notice to the Sponsor and the Trust.

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(c)

The Holders of the Common Securities may remove the Property Trustee or Delaware Trustee if:



(i)

the Trustee fails to comply with Section 6.3, in the case of the Property Trustee, or Section 6.2 in the case of the Delaware Trustee;



(ii)

the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any bankruptcy law or law for the relief of debtors generally;



(iii)

a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) takes charge of the Trustee or its property; or



(iv)

the Trustee becomes incapable of acting.



(d)

If a Trustee resigns or is removed or if a vacancy exists in the office of a Trustee for any reason, the Holders of the Common Stock shall promptly appoint a successor Trustee.



(e)

If a successor Property Trustee or Delaware Trustee does not take office within 60 days after the retiring Property Trustee or Delaware Trustee, as the case may be, resigns or is removed, the retiring Trustee, the Sponsor or the Holders of at least 10% in Liquidation Amount of the Securities may petition any court of competent jurisdiction for the appointment of a successor Trustee.



(f)

If the Property Trustee fails to comply with Section 6.3, any Holder of Securities may petition any court of competent jurisdiction for the removal of the Property Trustee and the appointment of a successor Property Trustee.



(g)

A successor Property Trustee shall deliver a written acceptance of its appointment to the retiring Property Trustee and to the Trust and Sponsor. Immediately after that, the retiring Property Trustee shall transfer all property held by it as Property Trustee to the successor Property Trustee, the resignation or removal of the retiring Property Trustee shall become effective, and the successor Property Trustee shall have all the rights, powers and duties of the Property Trustee. A successor Property Trustee shall mail a notice of its succession to each Holder. Notwithstanding replacement of the Property Trustee pursuant to this Section 6.6, the Sponsor's obligations under Section 4.2 hereof shall continue for the benefit of the retiring Property Trustee with respect to expenses and liabilities incurred by it prior to such replacement.



(h)

A successor Delaware Trustee shall deliver a written acceptance of its appointment to the retiring Delaware Trustee and to the Trust and Sponsor. Immediately after that, the resignation or removal of the retiring Delaware Trustee shall become effective, and the successor Delaware Trustee shall have all the rights, powers and duties of the Delaware Trustee. A successor Delaware Trustee shall mail a notice of its succession to each Holder.

        Section 6.7. Vacancies among Trustees. If a Trustee ceases to hold office for any reason and the number of Trustees is not reduced pursuant to Section 6.1, or if the number of Trustees is increased pursuant to Section 6.1, a vacancy shall occur. A resolution certifying the existence of such vacancy by the Administrative Trustees or, if there are more than two, a majority of the Administrative Trustees shall be conclusive evidence of the existence of such vacancy. The vacancy shall be filled with a Trustee appointed in accordance with Section 6.6.

        Section 6.8. Effect of Vacancies. The death, resignation, retirement, removal, bankruptcy, dissolution, liquidation, incompetence or incapacity to perform the duties of a Trustee shall not operate to annul, dissolve or terminate the Trust. Whenever a vacancy in the number of Administrative Trustees shall occur, until such vacancy is filled by the appointment of an Administrative Trustee in accordance with Section 6.6, the Administrative Trustees in office, regardless of their number, shall have all the

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powers granted to the Administrative Trustees and shall discharge all the duties imposed upon the Administrative Trustees by this Trust Agreement.

        Section 6.9. Meetings. If there is more than one Administrative Trustee, meetings of the Administrative Trustees may be held from time to time upon the call of any Administrative Trustee. Regular meetings of the Administrative Trustees may be held at a time and place fixed by resolution of the Administrative Trustees. Notice of any in-person meetings of the Administrative Trustees shall be hand delivered or otherwise delivered in writing (including by facsimile) not less than 48 hours before such meeting. Notice of any telephonic meetings of the Administrative Trustees shall be hand delivered or otherwise delivered in writing (including by facsimile) not less than 24 hours before a meeting. Notices shall contain a brief statement of the time, place and anticipated purposes of the meeting. The presence (whether in person or by telephone) of an Administrative Trustee at a meeting shall constitute a waiver of notice of such meeting except where an Administrative Trustee attends a meeting for the express purpose of objecting to the transaction of any activity on the ground that the meeting has not been lawfully called or convened. Unless provided otherwise in this Trust Agreement, any action of the Administrative Trustees may be taken at a meeting by vote of a majority of the Administrative Trustees present (whether in person or by telephone) and eligible to vote with respect to such matter; provided that a Quorum is present, or without a meeting by the unanimous written consent of the Administrative Trustees. In the event there is only one Administrative Trustee, any and all action of such Administrative Trustee shall be evidenced by a written consent of such Administrative Trustee.

        Section 6.10. Delegation of Power.

(a)

Any Administrative Trustee may, by power of attorney consistent with applicable law, delegate to any natural person over the age of 21 his, her or its power for the purpose of executing any documents contemplated in Section 3.6, including any registration statement or amendment thereto filed with the Commission, or making any other governmental filing.



(b)

The Administrative Trustees shall have power to delegate from time to time to such of their number or to officers of the Trust the doing of such things and the execution of such instruments either in the name of the Trust or the names of the Administrative Trustees or otherwise as the Administrative Trustees may deem expedient, to the extent such delegation is not prohibited by applicable law or contrary to the provisions of the Trust, as set forth herein.

        Section 6.11. Successor Trustee by Merger, etc. If a Property Trustee or Delaware Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the resulting, surviving or transferee corporation without any further act shall be the successor Property Trustee or Delaware Trustee; provided the successor corporation complies with the TIA provisions of Section 6.3 or Section 6.4, respectively.

ARTICLE 7

TERMS OF SECURITIES

        Section 7.1. General Provisions Regarding Securities.

(a)

The Administrative Trustees shall on behalf of the Trust issue one class of preferred securities representing undivided beneficial ownership interests in the assets of the Trust and one class of common securities representing undivided beneficial ownership interests in the assets of the Trust.



(i)

Preferred Securities. The Preferred Securities of the Trust have an aggregate liquidation amount with respect to the assets of the Trust of              dollars ($            ) with respect to the [initial] closing of the sale of Preferred Securities [and, if the Option set forth in

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Section 7.18(a) is exercised, an additional aggregate liquidation amount with respect to the assets of the Trust of              dollars ($            ) with respect to the second closing of the sale of Preferred Securities; provided that the maximum aggregate liquidation amount of Preferred Securities of the Trust shall not exceed              dollars ($            )]. The Preferred Securities are hereby designated for identification purposes only as "    % Preferred Securities" (the "Preferred Securities"). The Preferred Securities shall be in substantially the form set forth in Exhibit A to this Trust Agreement, or in such other form as shall be established by the Administrative Trustees, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Trust Agreement, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or as may, consistent herewith, be determined by the Administrative Trustees executing such Preferred Securities, as evidenced by their execution of the Preferred Securities.

        The definitive Preferred Securities shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the Administrative Trustees executing such Preferred Securities, as evidenced by their execution of such Preferred Securities.

(ii)

Common Securities. The Common Securities of the Trust shall have an aggregate liquidation amount with respect to the assets of the Trust of              dollars ($            ) with respect to the [initial] closing of the sale of Common Securities [and, if the Option set forth in Section 7.18(a) is exercised, an additional aggregate liquidation amount with respect to the assets of the Trust of              dollars ($            ) with respect to the second closing of the sale of Common Securities; provided that the maximum aggregate liquidation amount of common securities issued by the Trust shall not exceed              dollars ($            )]. The Common Securities are hereby designated for identification purposes only as "    % Common Securities" (the "Common Securities"). The Common Securities shall be in substantially the form set forth in Exhibit B to this Trust Agreement, or in such other form as shall be established by the Administrative Trustees, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Trust Agreement, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or as may, consistent herewith, be determined by the Administrative Trustees executing such Common Securities, as evidenced by their execution of the Common Securities.

        The definitive Common Securities shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the Administrative Trustees executing such Common Securities, as evidenced by their execution of such Common Securities.

(b)

Payment of Distributions on, and payment of the Redemption Price upon a redemption of, the Preferred Securities and the Common Securities, as applicable, shall be made Pro Rata based on the liquidation amount of such Preferred Securities and Common Securities; provided, however, that if on any date on which amounts payable on distribution or redemption, an Indenture Event of Default shall have occurred and be continuing, no payment of any Distribution on, or Redemption Price of, any of the Common Securities, and no other payment on account of the redemption, liquidation or other acquisition of such Common Securities, shall be made unless payment in full in cash of all accumulated and unpaid Distributions on all of the outstanding Preferred Securities for all Distribution periods terminating on or prior thereto, or, in the case of amounts payable on redemption, the full amount of the Redemption Price for all of the outstanding Preferred Securities then called for redemption, shall have been made or provided for, and all funds available to the Property

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Trustee shall first be applied to the payment in full in cash of all Distributions on, or the Redemption Price of, the Preferred Securities then due and payable. The Trust shall issue no securities or other interests in the assets of the Trust other than the Preferred Securities and the Common Securities.

(c)

An Administrative Trustee shall sign the Securities for the Trust by manual or facsimile signature.

        If an Administrative Trustee whose signature is on a Security no longer holds that office at the time the Security is authenticated, the Security shall nevertheless be valid.

        A Security shall not be valid until authenticated by the manual signature of the Property Trustee or an authenticating agent. The signature shall be conclusive evidence that the Security has been authenticated under this Trust Agreement.

        The Property Trustee shall at any time, and from time to time, authenticate Securities for original issue in an amount not to exceed the liquidation amounts set forth in Section 7.1(a), upon receipt by the Property Trustee of a written order of the Trust signed by an Administrative Trustee (a "Trust Order"). Such Trust Order may authorize authentication and delivery pursuant to oral or electronic instructions from an Administrative Trustee, which oral instructions shall be promptly confirmed in writing. Each Security shall be dated the date of its authentication unless otherwise provided by a Trust Order.

        The aggregate number of Securities outstanding at any time may not exceed the liquidation amounts set forth in Section 7.1(a), except as provided in Section 7.10.

        The Property Trustee shall have the right to decline to authenticate and deliver any Securities: (a) if the Property Trustee, being advised by counsel, determines that such action may not lawfully be taken; or (b) if the Property Trustee in good faith by its board of directors or trustees, executive committee or a trust committee of directors and/or vice-presidents shall determine that such action would expose the Property Trustee to personal liability to Holders of any Securities.

        The Property Trustee may appoint an authenticating agent acceptable to the Trust to authenticate Securities. An authenticating agent may authenticate Securities whenever the Property Trustee may do so. Each reference in this Trust Agreement to authentication by the Property Trustee includes authentication by such agent. An authenticating agent has the same rights as any registrar, paying agent or service agent to deal with the Trust.

(d)

The consideration received by the Trust for the issuance of the Securities shall constitute a contribution to the capital of the Trust and shall not constitute a loan to the Trust.



(e)

Except to the extent set forth in Section 9.1(b), upon issuance of the Securities as provided in this Trust Agreement, the Securities so issued shall be deemed to be validly issued, fully paid and non-assessable undivided beneficial ownership interests in the assets of the Trust.



(f)

Every person, by virtue of having become a Holder or a Preferred Security Beneficial Owner in accordance with the terms of this Trust Agreement, shall be deemed to have expressly assented and agreed to the terms of, and shall be bound by, this Trust Agreement and the terms of the Securities, the Guarantee, the Indenture and the Debentures.



(g)

The holders of the Securities shall have no preemptive or similar rights.

        Section 7.2. Distributions.

(a)

Holders of Securities shall be entitled to receive cumulative cash Distributions at the rate per annum of     % of the stated liquidation amount of $             per Security. The amount of Distributions payable for any period shall be computed on the basis of a 360-day year of

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twelve 30-day months. The amount of distributions payable for any period shorter than a full [quarterly] [semi-annual] distribution period shall be computed on the basis of a 30-day month and for periods of less than a month, the actual number of days elapsed per 30-day month. Subject to Section 7.1(b), Distributions shall be made on the Preferred Securities and the Common Securities on a Pro Rata basis. Distributions on the Securities shall, from the date of original issue, accrue and be cumulative and shall be payable [quarterly][semi-annually], in arrears, on each              [,            ,            ] and                   , commencing                        , 200  , when, as and if available for payment, by the Property Trustee, except as otherwise described below. Distributions are payable only to the extent that payments are made in respect of the Debentures held by the Property Trustee and to the extent that the Trust has funds available for the payment of such Distributions in the Property Account.

(b)

Distributions not paid on the scheduled payment date, including Distributions not paid during any Extension Period (as defined below), will accumulate and compound [quarterly][semi-annually] at the rate of     % per annum, to the extent permitted by applicable law ("Compounded Distributions"). "Distributions" shall mean ordinary cumulative distributions together with any Compounded Distributions. So long as no Indenture Event of Default has occurred and is continuing, the Sponsor shall have the right, at any time during the term of the Debentures, from time to time to defer the payment of interest on such Debentures in the manner and for such period or periods not exceeding 20 consecutive periods as may be specified as contemplated by the Indenture (each, an "Extension Period") during which Extension Periods no interest on the Debentures shall be due and payable. As a consequence of such deferral, Distributions will also be deferred. No Extension Period shall end on a date other than an interest payment date for the Debentures or extend beyond the Stated Maturity (as defined in the Indenture) of the Debentures. At the end of any such Extension Period the Sponsor shall pay all interest then accrued and unpaid on the Debentures (together with any additional amounts payable as contemplated by Section 2.3(a)(15) of the Indenture or other interest thereon, if any, at the rate specified for the Debentures to the extent permitted by applicable law).

        At any time the foregoing notices are given to the Trustee, the Sponsor shall give the Paying Agent for the Debentures such information as said Paying Agent shall reasonably require in order to fulfill its tax reporting obligations with respect to such Debentures.

(c)

If and to the extent that the Debenture Issuer makes a payment of interest, premium and/or principal on the Debentures held by the Property Trustee (the amount of any such payment being a "Payment Amount"), the Property Trustee shall and is directed, to the extent funds are available for that purpose, to make a Pro Rata distribution of the Payment Amount to Holders, subject to Section 7.1(b).



(d)

Distributions on the Securities shall be payable to the Holders thereof as they appear on the register of the Trust as of the close of business on the relevant record dates. While the Preferred Securities are represented by one or more Global Securities, the relevant record dates shall be the close of business on the Business Day next preceding such Distribution payment date, unless a different regular record date is established or provided for the corresponding interest payment date on the Debentures. The relevant record dates for the Common Securities shall be the same as for the Preferred Securities. If the Preferred Securities shall not continue to remain represented by one or more Global Securities, the relevant record dates for the Preferred Securities shall be selected by the Administrative Trustees and shall be at least 15 days prior to the relevant payment dates. At all times, the Distribution payment dates shall correspond to the interest payment dates on the Debentures. Distributions payable on any Securities that are not punctually paid on any Distribution payment date, as a result of the Debenture Issuer having failed to make a payment under the

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Debentures, shall cease to be payable to the person in whose name such Securities are registered on the relevant record date, and such defaulted Distribution will instead be payable to the person in whose name such Securities are registered on the special record date or other specified date determined with respect to the related interest payment date pursuant to the Indenture. If any date on which Distributions are payable on the Securities is not a Business Day, then payment of the Distribution payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay), except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the next preceding day which is a Business Day, with the same force and effect as if made on such payment date.

(e)

In the event that there is any money or other property held by or for the Trust that is not accounted for hereunder, such property shall be distributed Pro Rata among the Holders of the Securities.

        Section 7.3. Redemption of Securities.

(a)

Upon the repayment or redemption, in whole or in part, of the Debentures held by the Trust, whether at the stated maturity of the Debentures or upon earlier redemption as provided in the Debentures and the Indenture, including pursuant to a Special Event, the proceeds from such repayment or redemption shall be simultaneously applied Pro Rata (subject to Section 7.1(b)) to redeem Securities having an aggregate liquidation amount equal to the aggregate principal amount of the Debentures so repaid or redeemed at the Redemption Price. Holders shall be given not less than 30 nor more than 60 days notice of such redemption in accordance with Section 7.4.



(b)

Certificates called for redemption in whole must be surrendered to the Paying Agent in order to receive payment of the Redemption Price. Upon surrender of a Security that is redeemed in part, the Property Trustee shall authenticate for the Holder a new Security equal in liquidation amount to the unredeemed portion of the Security surrendered.

        Section 7.4. Redemption Procedures.

(a)

At least 30 days but not more than 60 days before a redemption date, the Trust shall mail a notice of redemption by first-class mail to each Holder whose Securities are to be redeemed.

        The notice shall identify the Securities to be redeemed and shall state:

(i)

the redemption date;



(ii)

the redemption price;



(iii)

the name and address of the Paying Agent;



(iv)

that Securities called for redemption must be surrendered to the Paying Agent to collect the redemption price;



(v)

that Distributions on Securities called for redemption cease to accrue on and after the redemption date; and



(vi)

any other information as may be required by the terms of the Securities being redeemed.

        At the Trust's request, the Property Trustee shall give the notice of redemption in the Trust's name and at its expense.

(b)

If fewer than all the outstanding Securities are to be so redeemed, the Common Securities and the Preferred Securities will be redeemed Pro Rata (subject to Section 7.1(b)) and will be redeemed as described in Section 7.4(c) below. The Trust may not redeem the Securities in

27

part unless all accumulated and unpaid Distributions to the date of redemption have been paid in full on all Securities then outstanding. For all purposes of this Trust Agreement, unless the context otherwise requires, all provisions relating to the redemption of Preferred Securities shall relate, in the case of any Preferred Security redeemed or to be redeemed only in part, to the portion of the aggregate liquidation amount of Preferred Securities which has been or is to be redeemed.

(c)

Once notice of redemption is mailed as provided in Section 7.4(a), Securities called for redemption become due and payable on the redemption date and at the redemption price. A notice of redemption may not be conditional. Upon surrender to the Paying Agent, such Securities shall be paid at the redemption price plus accumulated Distributions to the redemption date.



(d)

On or before the redemption date; provided that the Debenture Issuer has paid the Property Trustee a sufficient amount of immediately available funds in connection with the related redemption of the Debentures, the Property Trustee shall deposit with the Paying Agent money sufficient to pay the redemption price of and accumulated and unpaid Distributions, if any, on all Securities to be redeemed on that date.



(e)

Subject to the foregoing and applicable law (including, without limitation, United States federal securities laws), the Sponsor or its subsidiaries may at any time and from time to time purchase outstanding Preferred Securities by tender, in the open market or by private agreement.

        Section 7.5. Voting Rights of Preferred Securities.

(a)

Except as provided under Sections 2.6, 6.6, 11.1 and this Article 7 and as otherwise required by the Statutory Trust Act, the TIA and other applicable law, the Holders of the Preferred Securities shall have no voting rights.



(b)

Subject to the requirement of the Property Trustee to obtain a tax opinion in certain circumstances as set forth in Section 7.5(d) below, the Holders of a Majority in Liquidation Amount of the Preferred Securities shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Property Trustee, or exercising any trust or power conferred on the Property Trustee under the Trust Agreement, including the right to direct the Property Trustee, as Holder of the Debentures, to (i) exercise the remedies available to it under the Indenture as a Holder of the Debentures; (ii) consent to any amendment or modification of the Indenture or the Debentures where such consent shall be required or (iii) waive any past default and its consequences that is waivable under Section 6.4 of the Indenture; provided, however, that if an Indenture Event of Default has occurred and is continuing, then the Holders of 25% of the aggregate liquidation amount of the Preferred Securities may direct the Property Trustee to declare the principal of and accrued and unpaid interest, if any, on the Debentures due and payable immediately; provided, further, that where a consent or action under the Indenture would require the consent or act of the Holders of more than a majority of the aggregate principal amount of Debentures affected thereby, only the Holders of the percentage of the aggregate stated liquidation amount of the Preferred Securities which is at least equal to the percentage required under the Indenture may direct the Property Trustee to give such consent to take such action; provided, further, that (subject to the provisions of Section 3.9) the Property Trustee shall have the right to decline to follow any such direction if the Property Trustee shall (x) determine that the direction conflicts with any rule of law, the Trust Agreement or the Indenture; (y) determine that the Property Trustee may take any other action deemed proper by the Property Trustee which is not inconsistent with such direction; and (z) in good faith, by a

28

Responsible Officer of the Property Trustee, determine that the proceeding so directed would involve the Property Trustee in personal liability.

(c)

If the Property Trustee fails to enforce its rights under the Debentures after a Holder of Preferred Securities has made a written request, such Holder of Preferred Securities may, to the extent permitted by applicable law, institute a legal proceeding directly against the Debenture Issuer to enforce the Property Trustee's rights under the Indenture without first instituting any legal proceeding against the Property Trustee or any other person. In addition, if a Trust Enforcement Event has occurred and is continuing and such event is attributable to the failure of the Debenture Issuer to make any interest, principal or other required payments when due under the Indenture, then a Holder of Preferred Securities may directly institute a Direct Action against the Debenture Issuer on or after the respective due date specified in the Debentures.



(d)

Subject to Section 2.7, the Property Trustee shall notify all Holders of the Preferred Securities of any notice of any Indenture Event of Default received from the Debenture Issuer with respect to the Debentures. Such notices shall state that such Indenture Event of Default also constitutes a Trust Enforcement Event. Except with respect to directing the time, method, and place of conducting a proceeding for a remedy, the Property Trustee shall be under no obligation to take any of the actions described in clause 7.5(b)(i) and (ii) above unless the Property Trustee has obtained an opinion of independent tax counsel to the effect that the Trust will not fail to be classified as a grantor trust for United States federal income tax purposes as a result of such action, and each Holder will be treated as owning an undivided beneficial ownership interest in the Debentures.



(e)

In the event the consent of the Property Trustee, as the Holder of the Debentures, is required under the Indenture with respect to any amendment or modification of the Indenture, the Property Trustee shall request the direction of the Holders of the Securities with respect to such amendment or modification and shall vote with respect to such amendment or modification as directed by not less than a majority in liquidation amount of the Securities voting together as a single class; provided, however, that where a consent under the Indenture would require the consent of the Holders of more than a majority of the aggregate principal amount of the Debentures, the Property Trustee may only give such consent at the direction of the Holders of at least the same proportion in aggregate stated liquidation amount of the Securities. The Property Trustee shall not take any such action in accordance with the directions of the Holders of the Securities unless the Property Trustee has obtained an opinion of independent tax counsel to the effect that the Trust will not be classified as other than a grantor trust for United States federal income tax purposes as a result of such action, and each Holder will be treated as owning an undivided beneficial ownership interest in the Debentures.



(f)

A waiver of an Indenture Event of Default with respect to the Debentures will constitute a waiver of the corresponding Trust Enforcement Event.



(g)

Any required approval or direction of Holders of Preferred Securities may be given at a separate meeting of Holders of Preferred Securities convened for such purpose, at a meeting of all of the Holders of Securities or pursuant to written consent. The Administrative Trustees will cause a notice of any meeting at which Holders of Preferred Securities are entitled to vote to be mailed to each Holder of record of Preferred Securities. Each such notice will include a statement setting forth (i) the date of such meeting, (ii) a description of any resolution proposed for adoption at such meeting on which such Holders are entitled to vote and (iii) instructions for the delivery of proxies.



(h)

No vote or consent of the Holders of Preferred Securities shall be required for the Trust to redeem and cancel Preferred Securities or distribute Debentures in accordance with this Trust Agreement and the terms of the Securities.

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(i)

Notwithstanding that Holders of Preferred Securities are entitled to vote or consent under any of the circumstances described above, any of the Preferred Securities that are owned at such time by the Debenture Issuer, any Administrative Trustee or any entity directly or indirectly controlled by, or under direct or indirect common control with, the Debenture Issuer or any Administrative Trustee, shall not be entitled to vote or consent and shall, for purposes of such vote or consent, be treated as if such Securities were not outstanding; provided, however, that persons otherwise eligible to vote to whom the Debenture Issuer or any of its subsidiaries have pledged Preferred Securities may vote or consent with respect to such pledged Preferred Securities under any of the circumstances described herein.



(j)

Subject to Sections 6.6(a) and 7.5(k), Holders of the Preferred Securities shall have no rights to appoint or remove the Trustees, who may be appointed, removed or replaced solely by the Common Securities Holders.



(k)

Subject to the rights of the Holders of a Majority in Liquidation Amount of the Common Securities to appoint or remove Administrative Trustees as provided in Section 6.6(a)(iii), if an Indenture Event of Default has occurred and is continuing, the Trustees may be removed at such time only by a Majority in Liquidation Amount of the Preferred Securities.

        Section 7.6. Voting Rights of Common Securities.

(a)

Except as provided under Sections 2.6, 6.1(b) or 6.6, this Section 7.6 or Section 11.1 or as otherwise required by the Statutory Trust Act, the TIA or other applicable law, the Holders of the Common Securities will have no voting rights.



(b)

Subject to Sections 6.6(a) and 7.5(k), the Holders of the Common Securities shall be entitled, in accordance with Article 6 of this Trust Agreement, to vote to appoint, remove or replace any Trustee or to increase or decrease the number of Trustees.



(c)

Subject to Section 2.6 and only after all Trust Enforcement Events with respect to the Preferred Securities have been cured, waived, or otherwise eliminated and subject to the requirement of the Property Trustee to obtain a tax opinion in certain circumstances as set forth in this paragraph (c), the Holders of a Majority in Liquidation Amount of the Common Securities have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Property Trustee, or exercising any trust or power conferred on the Property Trustee under this Trust Agreement, including the right to direct the Property Trustee, as Holder of the Debentures, to (i) exercise the remedies available to it under the Indenture as a Holder of the Debentures, (ii) consent to any amendment or modification of the Indenture or the Debentures where such consent shall be required or (iii) waive any past default and its consequences that is waivable under Section 6.4 of the Indenture; provided, however, that where a consent or action under the Indenture would require the consent or act of the Holders of more than a majority of the aggregate principal amount of Debentures affected thereby, only the Holders of the percentage of the aggregate stated liquidation amount of the Common Securities which is at least equal to the percentage required under the Indenture may direct the Property Trustee to have such consent or take such action; provided, further, that (subject to the provisions of Section 3.9) the Property Trustee shall have the right to decline to follow any such direction if the Property Trustee shall (x) determine that the direction conflicts with any rule of law, the Trust Agreement or the Indenture; (y) determine that the Property Trustee may take any other action deemed proper by the Property Trustee which is not inconsistent with such direction; and (z) in good faith, by a Responsible Officer of the Property Trustee, determine that the proceeding so directed would involve the Property Trustee in personal liability. Except with respect to directing the time, method, and place of conducting a proceeding for a remedy, the Property Trustee shall be under no obligation to take any of the actions described in clause 7.6(c)(i) and (ii) above

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unless the Property Trustee has obtained an opinion of independent tax counsel to the effect that the Trust will not fail to be classified as a grantor trust for United States federal income tax purposes as a result of such action, and each Holder will be treated as owning an undivided beneficial ownership interest in the Debentures.

(d)

If the Property Trustee fails to enforce its rights under the Debentures after a Holder of Common Securities has made a written request, such Holder of Common Securities may, to the extent permitted by applicable law, directly institute a legal proceeding directly against the Debenture Issuer to enforce the Property Trustee's rights under the Debentures without first instituting any legal proceeding against the Property Trustee or any other person.



(e)

A waiver of an Indenture Event of Default with respect to the Debentures will constitute a waiver of the corresponding Trust Enforcement Event.



(f)

Any required approval or direction of Holders of Common Securities maybe given at a separate meeting of Holders of Common Securities convened for such purpose, at a meeting of all of the Holders of Securities or pursuant to written consent. The Administrative Trustees will cause a notice of any meeting at which Holders of Common Securities are entitled to vote to be mailed to each Holder of record of Common Securities. Each such notice will include a statement setting forth (i) the date of such meeting, (ii) a description of any resolution proposed for adoption at such meeting on which such Holders are entitled to vote and (iii) instructions for the delivery of proxies.



(g)

No vote or consent of the Holders of the Common Securities will be required for the Trust to redeem and cancel Common Securities or to distribute Debentures in accordance with the Trust Agreement and the terms of the Securities.

        Section 7.7. Registrar and Paying Agent. The Trust shall cause a Paying Agent to maintain an office or agency where the Securities may be presented or surrendered for payment, maintain an office or agency where Securities may be surrendered for registration of transfer or exchange ("Registrar") and where notices and demands to or upon the Trust in respect of the Securities and this Trust Agreement may be served ("Service Agent"). The Registrar shall keep a register with respect to the Securities and to their transfer and exchange. The Trust will give prompt written notice to the Property Trustee of the name and address, and any change in the name or address, of each Registrar, Paying Agent or Service Agent. If at any time the Trust shall fail to maintain any such required Registrar, Paying Agent or Service Agent or shall fail to furnish the Property Trustee with the name and address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Property Trustee, and the Trust hereby appoints the Property Trustee as its agent to receive all such presentations, surrenders, notices and demands.

        The Trust may also from time to time designate one or more co-registrars, additional paying agents or additional service agents and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Trust of its obligations to maintain a Registrar, Paying Agent and Service Agent for such purposes. The Trust will give prompt written notice to the Property Trustee of any such designation or rescission and of any change in the name or address of any such co-registrar, additional paying agent or additional service agent. The term "Registrar" includes any co-registrar; the term "Paying Agent" includes any additional paying agent; and the term "Service Agent" includes any additional service agent.

        The Trust hereby appoints the Property Trustee the initial Registrar, Paying Agent and Service Agent for the Securities.

        Section 7.8. Listing. The Sponsor shall use its best efforts to cause the Preferred Securities to be listed for quotation on the New York Stock Exchange.

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        Section 7.9. Transfer and Exchange of Securities.

(a)

Securities may only be transferred, in whole or in part, in accordance with the terms and conditions set forth in this Trust Agreement and in the terms of the Securities. To the fullest extent permitted by law, any transfer or purported transfer of any Security not made in accordance with this Trust Agreement shall be null and void.



(b)

(i)      Subject to this Article 7, Preferred Securities shall be freely transferable.



(ii)

Holders of the Common Securities may not transfer the Common Securities except (A) in compliance with a consolidation, merger, sale, conveyance or lease of the Sponsor in compliance with Article V of the Indenture or (B) to the Sponsor or an Affiliate thereof in compliance with applicable law, including the Securities Act and applicable state securities and blue sky laws. To the fullest extent permitted by law, any attempted transfer of the Common Securities other than as set forth in the immediately preceding sentence shall be null and void.



(c)

Where Securities are presented to the Registrar or a co-registrar with a request to register a transfer or to exchange them for an equal liquidation amount of Securities, the Registrar shall register the transfer or make the exchange if the requirements of this Trust Agreement for such transactions are met. To permit registrations of transfers and exchanges, the Property Trustee shall authenticate Securities at the Registrar's request. No service charge shall be made for any registration of transfer or exchange (except as otherwise expressly permitted herein), but the Trust may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer tax or similar governmental charge payable upon exchanges pursuant to Section 7.4).

        Neither the Trust nor the Registrar shall be required (i) to issue, register the transfer of, or exchange Securities for the period beginning at the opening of business fifteen days immediately preceding the mailing of a notice of redemption of Securities and ending at the close of business on the day of such mailing, or (ii) to register the transfer of or exchange Securities selected, called or being called for redemption as a whole or the portion being redeemed of any such Securities selected, called or being called for redemption in part.

        Section 7.10. Mutilated, Destroyed, Lost and Stolen Securities. If any mutilated Security is surrendered to the Property Trustee, the Administrative Trustees shall execute and the Property Trustee shall authenticate and deliver in exchange therefor a new Security of like tenor and liquidation amount and bearing a number not contemporaneously outstanding.

        If there shall be delivered to the Administrative Trustees and the Property Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Administrative Trustees or the Property Trustee that such Security has been acquired by a bona fide purchaser, the Administrative Trustees shall execute and upon its request the Property Trustee shall authenticate and make available for delivery, in lieu of any such destroyed, lost or stolen Security, a new Security of like tenor and liquidation amount and bearing a number not contemporaneously outstanding.

        In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Trust in its discretion may, instead of issuing a new Security, pay such Security.

        Upon the issuance of any new Security under this Section, the Trust may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Property Trustee) connected therewith.

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        Every new Security issued pursuant to this Section in lieu of any mutilated, destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Trust, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Trust Agreement equally and proportionately with any and all other Securities duly issued hereunder.

        The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities.

        Section 7.11. Outstanding Securities. The Securities outstanding at any time are all the Securities authenticated by the Property Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest on a Global Security effected by the Property Trustee in accordance with the provisions hereof and those described in this Section as not outstanding.

        If a Security is replaced pursuant to Section 7.10, it ceases to be outstanding until the Property Trustee receives proof satisfactory to it that the replaced Security is held by a bona fide purchaser.

        If the Paying Agent (other than the Sponsor, a subsidiary or an Affiliate of any thereof) holds on a redemption date of Securities money sufficient to pay such Securities payable on that date, then on and after that date such Securities cease to be outstanding and Distributions on them cease to accrue.

        A Security does not cease to be outstanding because the Sponsor or an Affiliate holds the Security.

        Section 7.12. Treasury Securities. In determining whether the Holders of the required liquidation amount of Preferred Securities have concurred in any request, demand, authorization, direction, notice, consent or waiver, Preferred Securities owned by the Sponsor or an Affiliate shall be disregarded, except that for the purposes of determining whether the Property Trustee shall be protected in relying on any such request, demand, authorization, direction, notice, consent or waiver only Preferred Securities that the Property Trustee knows are so owned shall be so disregarded.

        Section 7.13. Temporary Securities. Until definitive Securities are ready for delivery, the Administrative Trustees may prepare and the Property Trustee shall authenticate temporary Securities upon a Trust Order. Temporary Securities shall be substantially in the form of definitive Securities but may have variations that the Administrative Trustees consider appropriate for temporary Securities. Without unreasonable delay, the Administrative Trustees shall prepare and the Property Trustee upon request shall authenticate definitive Securities in exchange for temporary Securities. Until so exchanged, temporary securities shall have the same rights under this Trust Agreement as the definitive Securities.

        Section 7.14. Cancellation. The Trust at any time may deliver Securities to the Property Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Property Trustee any Securities surrendered to them for registration of transfer, exchange or payment. The Property Trustee shall cancel all Securities surrendered for transfer, exchange, payment, replacement or cancellation and shall destroy such canceled Securities (subject to the record retention requirement of the Exchange Act) and deliver a certificate of such destruction to the Trust, unless the Trust otherwise directs. The Trust may not issue new Securities to replace Securities that it has paid or delivered to the Property Trustee for cancellation.

        Section 7.15. Deemed Security Holders. The Trustees may treat the person in whose name any Certificate shall be registered on the register of the Trust as the sole Holder of such Certificate and of the Securities represented by such Certificate for purposes of receiving Distributions subject to Section 7.2(d) and for all other purposes whatsoever and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such Certificate or in the Securities represented by such

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Certificate on the part of any Person, whether or not the Trust shall have actual or other notice thereof.

        Section 7.16. Global Securities.

        Section 7.16.1 Terms of Securities. A Trust Order shall establish whether the Preferred Securities shall be issued in whole or in part in the form of one or more Global Securities and the Depositary for such Global Security or Securities.

        Section 7.16.2 Transfer and Exchange. Notwithstanding any provisions to the contrary contained in Section 7.9 and in addition thereto, any Global Security shall be exchangeable pursuant to Section 7.9 for Preferred Securities registered in the names of Holders other than the Depositary for such Preferred Security or its nominee only if (i) such Depositary notifies the Trust that it is unwilling or unable to continue as Depositary for such Global Security or if at any time such Depositary ceases to be a clearing agency registered under the Exchange Act, and, in either case, the Trust fails to appoint a successor Depositary within 90 days of such event, (ii) the Trust executes and delivers to the Property Trustee an Officers' Certificate to the effect that such Global Security shall be so exchangeable, or (iii) a Trust Enforcement Event with respect to the Preferred Securities represented by such Global Security shall have happened and be continuing. Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for Preferred Securities registered in such names as the Depositary shall direct in writing in an aggregate liquidation amount equal to the liquidation amount of the Global Security with like tenor and terms.

        Except as provided in this Section 7.16.2, a Global Security may not be transferred except as a whole by the Depositary with respect to such Global Security to a nominee of such Depositary, by a nominee of such Depositary to such Depositary or another nominee of such Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such a successor Depositary.

        Section 7.16.3 Legend. Any Global Security issued hereunder shall bear a legend in substantially the following form:

        "This Security is a Global Security within the meaning of the Trust Agreement hereinafter referred to and is registered in the name of the Depositary or a nominee of the Depositary. This Security is exchangeable for Preferred Securities registered in the name of a person other than the Depositary or its nominee only in the limited circumstances described in the Trust Agreement, and may not be transferred except as a whole by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such a successor Depositary."

        Unless this Preferred Security Certificate is presented by an authorized representative of the Depositary to Disney Capital Trust [I / II / III] or its agent for registration of transfer, exchange or payment, and any Preferred Security Certificate issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of the Depositary (and any payment hereon is made to Cede & Co. or to such other entity as is requested by an authorized representative of the Depositary), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the registered owner hereof, Cede & Co., has an interest herein."

        Section 7.16.4 Cancellation; Issuance of Registered Securities. At such time as all interests in Global Securities have been redeemed, repurchased or cancelled, such Global Securities shall be, upon receipt thereof, cancelled by the Property Trustee in accordance with standing procedures of the Depositary. At any time prior to such cancellation, if any interest in Global Securities is exchanged for Preferred Securities not represented by a Global Security, redeemed, cancelled or transferred to a transferee who receives Preferred Securities not represented by a Global Security therefor or any Preferred Security

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not represented by a Global Security is exchanged or transferred for part of Global Securities, the principal amount of such Global Securities shall, in accordance with the standing procedures of the Depositary, be reduced or increased, as the case may be, and an endorsement shall be made on such Global Securities by the Property Trustee to reflect such reduction or increase.

        The Trust may at any time and in its sole discretion determine that the Preferred Securities issued in the form of one or more Global Securities shall no longer be represented by a Global Security. In such event the Trust shall execute, and the Property Trustee, shall authenticate and deliver, Preferred Securities in definitive registered form, in any authorized denominations, in an aggregate liquidation amount equal to the principal amount of the Global Security representing such Preferred Securities, in exchange for such Global Security.

        Section 7.16.5 Acts of Holders. The Depositary, as a Holder, may appoint agents and otherwise authorize participants to give or take any request, demand, authorization, direction, notice, consent, waiver or other action which a Holder is entitled to give or take under the Trust Agreement.

        Section 7.16.6 Payments. Notwithstanding the other provisions of this Trust Agreement, payment of the liquidation amount on any Global Security shall be made to the Holder thereof.

        Section 7.16.7 Consents, Declaration and Directions. Except as provided in Section 7.16.6, the Trust, the Property Trustee and any Agent shall treat a person as the Holder of such liquidation amount of outstanding Preferred Securities represented by a Global Security as shall be specified in a written statement of the Depositary with respect to such Global Security, for purposes of obtaining any consents, declarations, waivers or directions required to be given by the Holders pursuant to this Trust Agreement.

        Section 7.17. CUSIP Numbers. The Trust in issuing the Securities may use "CUSIP" numbers (if then generally in use), and, if so, the Property Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only on the other elements of identification printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers.

        Section 7.18. Over-Allotment Option.

(a)

The Sponsor, on behalf of the Trust, may grant to the underwriters or initial purchasers who are underwriting or purchasing, as the case may be, the Preferred Securities, an option (the "Option") to purchase an additional liquidation amount of such series of Preferred Securities on the terms and conditions specified in the underwriting agreement or purchase agreement, as the case may be, relating to such Preferred Securities; provided, however, the Option may only be granted if the following conditions are satisfied:



(i)

the Option, if exercised, may not result in the issue and sale of an aggregate liquidation amount of Preferred Securities greater than that registered by the Sponsor and the Trust on the applicable registration statement or registration statements (including by a registration statement filed under Rule 462(b) under the Securities Act, if any), as the case may be, with the Commission under the Securities Act;



(ii)

the Option must result, if exercised, in the issuance and sale of Preferred Securities to such underwriters or initial purchasers, as the case may be, and the issuance and sale of Common Securities to the Sponsor on a Pro Rata basis and not in contravention of any other provision of this Agreement or the Statutory Trust Act, consistent with Section 5.1; and

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(iii)

the Preferred Securities and the Common Securities issued and sold subject to the exercise of the Option, if any, must be of the same series and must bear the same CUSIP numbers as the series of Preferred Securities and the Common Securities, respectively, which were initially issued and sold by the Trust and the Sponsor, respectively.



(b)

With respect to any issuance of Preferred Securities and Common Securities following the exercise of the Option,



(i)

the designation the "    % Preferred Securities" and, for all purposes under this Trust Agreement, the defined terms the "Preferred Securities" shall mean both the Preferred Securities issued initially hereunder and any Preferred Securities issued pursuant to the exercise of the Option; and



(ii)

the designation the "    % Common Securities" and, for all purposes under this Trust Agreement, the defined term the "Common Securities" shall mean both the Common Securities issued initially hereunder and any Common Securities issued pursuant to the requirement of Section 7.18(a)(ii) regarding the additional issuance of Common Securities on a Pro Rata basis if the Option is exercised.



(c)

If the Option set forth in Section 7.18(a) is exercised on a date other than the initial Closing Date, then the parties to the Trust Agreement shall cause there to occur a second closing for the consummation of the sale of the Preferred Securities and Common Securities under substantially the same conditions that applied to the initial closing of the sale of such securities, including the following:



(i)

the execution and delivery of a second Preferred Security Certificate, or such additional Preferred Security Certificates, as appropriate, which is, or are, as the case may be, substantially identical in all respects to the Preferred Security Certificate issued initially; and



(ii)

the execution and delivery of a second Common Security Certificate, or such additional Common Security Certificates, as appropriate, which is, or are, as the case may be, substantially identical in all relevant respects to the Common Security Certificate issued initially.

ARTICLE 8

DISSOLUTION AND TERMINATION OF TRUST

        Section 8.1. Dissolution and Termination of Trust.

(a)

The Trust shall dissolve upon the earliest of:



(i)

the Bankruptcy Event of the Holder of the Common Securities or the Sponsor;



(ii)

the filing of a certificate of dissolution or its equivalent with respect to the Sponsor;



(iii)

after obtaining the consent of the Holders of at least a Majority in Liquidation Amount of the Securities to dissolve the Trust;



(iv)

the revocation of the Sponsor's charter and the expiration of 90 days after the date of revocation without a reinstatement thereof;



(v)

the entry of a decree of judicial dissolution of the Sponsor or the Trust;

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(vi)

the time when all of the Securities shall have been called for redemption and the amounts then due shall have been paid to the Holders in accordance with the terms of the Securities;



(vii)

at the Sponsor's election by notice and direction to the Property Trustee to distribute the Debentures to the Holders of the Securities in exchange for all of the Securities; provided that the Sponsor will be required to obtain an opinion of an independent counsel that the distribution of the Debentures will not be taxable to the Holders of the Preferred Securities for United States federal income tax purposes; or



(viii)

the time when the Sponsor shall have consented to dissolution of the Trust; provided such action is taken before the issuance of any Securities.



(b)

As soon as is practicable after the occurrence of an event referred to in Section 8.1(a) and upon completion of the winding up and liquidation of the Trust, a Trustee shall terminate the Trust by filing a certificate of cancellation with the Secretary of State of the State of Delaware.



(c)

The provisions of Section 4.2 and Article 9 shall survive the termination of the Trust.

        Section 8.2. Liquidation Distribution Upon Dissolution of the Trust.

(a)

In the event of any voluntary or involuntary liquidation, dissolution, or winding-up of the Trust (each a "Liquidation"), the Holders of the Securities on the date of the Liquidation will be entitled to receive, out of the assets of the Trust available for distribution to Holders of Securities after satisfaction of the Trusts' liabilities to creditors, if any, distributions in cash or other immediately available funds in an amount equal to the aggregate of the stated liquidation amount of $             per Security plus accumulated and unpaid Distributions thereon to the date of payment (such amount being the "Liquidation Distribution"), unless, in connection with such Liquidation, Debentures in an aggregate stated principal amount equal to the aggregate stated liquidation amount of, with an interest rate identical to the distribution rate of, and accrued and unpaid interest equal to accumulated and unpaid Distributions on, such Securities shall be distributed on a Pro Rata basis to the Holders of the Securities in exchange for such Securities.



(b)

If, upon any such Liquidation, the Liquidation Distribution can be paid only in part because the Trust has insufficient assets available to pay in full the aggregate Liquidation Distribution, then the amounts payable directly by the Trust on the Securities shall be paid on a Pro Rata basis. The Holders of the Common Securities will be entitled to receive distributions upon any such Liquidation Pro Rata with the Holders of the Preferred Securities except that if an Indenture Event of Default has occurred and is continuing, the Preferred Securities shall have a preference over the Common Securities with regard to such distributions.

ARTICLE 9

LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, DELAWARE TRUSTEES OR OTHERS

        Section 9.1. Liability.

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(a)

Except as expressly set forth in this Trust Agreement, the Guarantee, the Agreement as to Expenses and Liabilities and the terms of the Securities, the Sponsor:



(i)

shall not be personally liable for the return of any portion of the capital contributions (or any return thereon) of the Holders of the Securities which shall be made solely from assets of the Trust; and



(ii)

shall not be required to pay to the Trust or to any Holder of Securities any deficit upon dissolution of the Trust or otherwise.



(b)

Pursuant to Section 3803(a) of the Statutory Trust Act, the Holders of the Common Securities shall be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware.



(c)

Pursuant to Section 3803(a) of the Statutory Trust Act, the Holders of the Preferred Securities shall be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware.

        Section 9.2. Exculpation.

(a)

No Indemnified Person shall be liable, responsible or accountable in damages or otherwise to the Trust or any Covered Person for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Indemnified Person in good faith on behalf of the Trust and in a manner such Indemnified Person reasonably believed to be within the scope of the authority conferred on such Indemnified Person by this Trust Agreement or by law, except that, subject to section 3.11, an Indemnified Person shall be liable for any such loss, damage or claim incurred by reason of such Indemnified Person's negligence or willful misconduct with respect to such acts or omissions (or with respect to the Delaware Trustee and its officers, directors, shareholders or agents, such Indemnified Persons' gross negligence or willful misconduct).



(b)

An Indemnified Person shall be fully protected in relying in good faith upon the records of the Trust and upon such information, opinions, reports or statements presented to the Trust by any person as to matters the Indemnified Person reasonably believes are within such other person's professional or expert competence and who has if selected by such Indemnified Person, been selected by such Indemnified Person with reasonable care on behalf of the Trust, including information, opinions, reports or statements as to the value and amount of the assets, liabilities, profits, losses or any other facts pertinent to the existence and amount of assets from which Distributions to Holders of Securities might properly be paid.

        Section 9.3. Fiduciary Duty.

(a)

To the extent that, at law or in equity, an Indemnified Person has duties (including fiduciary duties) and liabilities relating thereto to the Trust or to any other Covered Person, an Indemnified Person acting under this Trust Agreement shall not be liable to the Trust or to another Covered Person for its good faith reliance on the provisions of this Trust Agreement. The provisions of this Trust Agreement, to the extent that they restrict the duties and liabilities of an Indemnified Person otherwise existing at law or in equity (other than the duties imposed on the Property Trustee under the TIA), are agreed by the parties hereto to replace such other duties and liabilities of such Indemnified Person.

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(b)

Unless otherwise expressly provided herein:



(i)

whenever a conflict of interest exists or arises between any Covered Person and any Indemnified Person; or



(ii)

whenever this Trust Agreement or any other agreement contemplated herein or therein provides that an Indemnified Person shall act in a manner that is, or provides terms that are, fair and reasonable to the Trust or any Holder of Securities, the Indemnified Person shall resolve such conflict of interest, take such action or provide such terms, considering in each case the relative interest of each party (including its own interest) to such conflict, agreement, transaction or situation and the benefits and burdens relating to such interests, any customary or accepted industry practices and any applicable generally accepted accounting practices or principles. In the absence of bad faith by the Indemnified Person, the resolution, action or term so made, taken or provided by the Indemnified Person shall not constitute a breach of this Trust Agreement or any other agreement contemplated herein or of any duty or obligation of the Indemnified Person at law or in equity or otherwise.



(c)

Whenever in this Trust Agreement an Indemnified Person is permitted or required to make a decision:



(i)

in its "discretion" or under a grant of similar authority, the Indemnified Person shall be entitled to consider such interests and factors as it desires, including its own interests, and shall have no duty or obligation to give any consideration to any interest of or factors affecting the Trust or any other Person; or



(ii)

in its "good faith" or under another express standard, the Indemnified Person shall act under such express standard and shall not be subject to any other or different standard imposed by this Trust Agreement or by applicable law.

        Section 9.4. Indemnification.

(i)

(i) The Sponsor shall indemnify, to the full extent permitted by law, any Sponsor Indemnified Person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Trust) by reason of the fact that he is or was a Sponsor Indemnified Person against expenses (including attorney fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding 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 Trust, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the Sponsor Indemnified Person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Trust, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.



(ii)

The Sponsor shall indemnify, to the full extent permitted by law, any Sponsor Indemnified Person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Trust to procure a judgment in its favor by reason of the fact that he is or was a Sponsor Indemnified Person against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in

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good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Trust, except that no such indemnification shall be made in respect of any claim, issue or matter as to which such Sponsor Indemnified Person shall have been adjudged to be liable to the Trust unless and only to the extent that the Court of Chancery of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such Court of Chancery or such other court shall deem proper.

(iii)

Any indemnification under paragraphs (i) and (ii) of this Section 9.4(a) (unless ordered by a court) shall be made by the Sponsor only as authorized in the specific case upon a determination that indemnification of the Sponsor Indemnified Person is proper in the circumstances because he has met the applicable standard of conduct set forth in paragraphs (i) and (ii). Such determination shall be made (1) by the Administrative Trustees by a majority vote of a quorum consisting of such Administrative Trustees who were not parties to such action, suit or proceeding, (2) if such a quorum is not obtainable, or, even if obtainable, if a quorum of disinterested Administrative Trustees so directs, by independent legal counsel in a written opinion, or (3) by the Holders of the Common Securities of the Trust.



(iv)

Expenses (including attorneys' fees) incurred by a Sponsor Indemnified Person in defending a civil, criminal, administrative or investigative action, suit or proceeding referred to in paragraphs (i) and (ii) of this Section 9.4(a) shall be paid by the Sponsor in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such Sponsor Indemnified Person to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Sponsor as authorized in this Section 9.4(a). Notwithstanding the foregoing, no advance shall be made by the Sponsor if a determination is reasonably and promptly made (i) by the Administrative Trustees by a majority vote of a quorum of disinterested Administrative Trustees, (ii) if such a quorum is not obtainable, or, even if obtainable, if a quorum of disinterested Administrative Trustees so directs, by independent legal counsel in a written opinion or (iii) the Common Security Holder of the Trust, that, based upon the facts known to the Administrative Trustees, counsel or the Common Security Holder at the time such determination is made, such Sponsor Indemnified Person acted in bad faith or in a manner that such person did not believe to be in or not opposed to the best interests of the Trust, or, with respect to any criminal proceeding, that such Sponsor Indemnified Person believed or had reasonable cause to believe his conduct was unlawful. In no event shall any advance be made in instances where the Administrative Trustees, independent legal counsel or Common Security Holder reasonably determine that such person deliberately breached his duty to the Trust or its Common or Preferred Security Holders.



(v)

The indemnification and advancement of expenses provided by, or granted pursuant to, the other paragraphs of this Section 9.4(a) shall not be deemed exclusive of any other rights to which those seeking indemnification and advancement of expenses may be entitled under any agreement, vote of stockholders or disinterested directors of the Sponsor or Preferred Security Holders of the Trust or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. All rights to indemnification under this Section 9.4(a) shall be deemed to be provided by a contract between the Sponsor and each Sponsor Indemnified Person who serves in such capacity at any time while this Section 9.4(a) is in effect. Any repeal or modification of this Section 9.4(a) shall not affect any rights or obligations then existing.

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(vi)

The Sponsor or the Trust may purchase and maintain insurance on behalf of any person who is or was a Sponsor Indemnified Person 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 Sponsor would have the power to indemnify him against such liability under the provisions of this Section 9.4(a).



(vii)

For purposes of this Section 9.4(a), references to "the Trust" shall include, in addition to the resulting or surviving entity, any constituent entity (including any constituent of a constituent) absorbed in a consolidation or merger, so that any person who is or was a director, trustee, officer or employee of such constituent entity, or is or was serving at the request of such constituent entity as a director, trustee, officer, employee or agent of another entity, shall stand in the same position under the provisions of this Section 9.4(a) with respect to the resulting or surviving entity as he would have with respect to such constituent entity if its separate existence had continued.



(viii)

The indemnification and advancement of expenses provided by, or granted pursuant to, this Section 9.4(a) shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a Sponsor Indemnified Person and shall inure to the benefit of the heirs, executors and administrators of such a person. The obligation to indemnify as set forth in this Section 9.4(a) shall survive the resignation or removal of the Delaware Trustee or the Property Trustee or the termination of this Trust Agreement.



(b)

The Sponsor agrees to indemnify (i) the Property Trustee, (ii) the Delaware Trustee and (iii) any officers, directors, employees, shareholders or agents of the Property Trustee or the Delaware Trustee (each of the Persons in (i) through (iii) being referred to as a "Fiduciary Indemnified Person") for, and to hold each Fiduciary Indemnified Person harmless against, any loss, liability or expense incurred without negligence or willful misconduct on its part (or without gross negligence or willful misconduct on the part of the Delaware Trustee or its officers, directors, employees, shareholders or agents), arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses (including reasonable legal fees and expenses) of defending itself against or investigating any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. The obligation to indemnify as set forth in this Section 9.4(b) shall survive the resignation and removal of the Delaware Trustee or the Property Trustee and the dissolution of the Trust and the termination of this Trust Agreement. In addition, the Sponsor has agreed in the Indenture to pay the fees and expenses of the Delaware Trustee and the Property Trustee.

        Section 9.5. Outside Businesses. Subject to the provisions of Section 6.3, any Covered Person, the Sponsor, the Delaware Trustee and the Property Trustee may engage in or possess an interest in other business ventures of any nature or description, independently or with others, similar or dissimilar to the activities of the Trust, and the Trust and the Holders of Securities shall have no rights by virtue of this Trust Agreement in and to such independent ventures or the income or profits derived therefrom, and the pursuit of any such venture, even if competitive with the activities of the Trust, shall not be deemed wrongful or improper. No Covered Person, the Sponsor, the Delaware Trustee or the Property Trustee shall be obligated to present any particular investment or other opportunity to the Trust even if such opportunity is of a character that, if presented to the Trust, could be taken by the Trust, and any Covered Person, the Sponsor, the Delaware Trustee and the Property Trustee shall have the right to take for its own account (individually or as a partner or fiduciary) or to recommend to others any such particular investment or other opportunity. Any Covered Person, the Delaware Trustee and the Property Trustee may engage or be interested in any financial or other transaction with the Sponsor or any Affiliate of the Sponsor, or may act as depositary for, trustee or agent for, or act on any committee or body of holders of, securities or other obligations of the Sponsor or its Affiliates.

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ARTICLE 10

ACCOUNTING

        Section 10.1 Fiscal Year. The fiscal year ("Fiscal Year") of the Trust shall be the fiscal year of the Sponsor, or such other year as is required by the Code.

        Section 10.2. Certain Accounting Matters.

(a)

At all times during the existence of the Trust, the Administrative Trustees shall keep, or cause to be kept, full books of account, records and supporting documents, which shall reflect in reasonable detail, each transaction of the Trust. The books of account shall be maintained on the accrual method of accounting, in accordance with generally accepted accounting principles, consistently applied. The Trust shall use the accrual method of accounting for United States federal income tax purposes. The books of account and the records of the Trust shall be examined by and reported upon as of the end of each Fiscal Year of the Trust by a firm of independent certified public accountants selected by the Administrative Trustees.



(b)

The Administrative Trustees shall cause to be prepared and delivered to each of the Holders of Securities, within 90 days after the end of each Fiscal Year of the Trust, annual financial statements of the Trust, including a balance sheet of the Trust as of the end of such Fiscal Year, and the related statements of income or loss.



(c)

The Administrative Trustees shall cause to be duly prepared and delivered to each of the Holders of Securities, an annual United States federal income tax information statement, required by the Code, containing such information with regard to the Securities held by each Holder as is required by the Code and the Treasury Regulations. Notwithstanding any right under the Code to deliver any such statement at a later date, the Administrative Trustees shall endeavor to deliver all such statements within 30 days after the end of each Fiscal Year of the Trust.



(d)

The Administrative Trustees shall cause to be duly prepared and filed with the appropriate taxing authority, an annual United States federal income tax return, on a Form 1041 or such other form required by United States federal income tax law, and any other annual income tax returns required to be filed by the Administrative Trustees on behalf of the Trust with any state or local taxing authority.

        Section 10.3. Banking. The Trust shall maintain one or more bank accounts in the name and for the sole benefit of the Trust; provided, however, that all payments of funds in respect of the Debentures held by the Property Trustee shall be made directly to the Property Account and no other funds of the Trust shall be deposited in the Property Account. The sole signatories for such accounts shall be designated by the Administrative Trustees; provided, however,that the Property Trustee shall designate the signatories for the Property Account.

        Section 10.4. Withholding. The Trust and the Administrative Trustees shall comply with all withholding requirements under United States federal, state and local law. The Trust shall request, and the Holders shall provide to the Trust, such forms or certificates as are necessary to establish an exemption from withholding with respect to each Holder, and any representations and forms as shall reasonably be requested by the Trust to assist it in determining the extent of, and in fulfilling, its withholding obligations. The Administrative Trustees shall file required forms with applicable jurisdictions and, unless an exemption from withholding is properly established by a Holder, shall remit amounts withheld with respect to the Holder to applicable jurisdictions. To the extent that the Trust is required to withhold and pay over any amounts to any authority with respect to distributions or allocations to any Holder, the amount withheld shall be deemed to be a distribution in the amount of

42

the withholding to the Holder. In the event of any claim that amounts have been withheld in excess of the amounts required by the applicable jurisdictions, Holders shall be limited to an action against the applicable jurisdiction. If the amount required to be withheld was not withheld from actual Distributions made, the Trust may reduce subsequent Distributions by the amount of such withholding.

ARTICLE 11

AMENDMENTS AND MEETINGS

        Section 11.1. Amendments.

(a)

Except as otherwise provided in this Trust Agreement or by any applicable terms of the Securities, this Trust Agreement may only be amended by a written instrument approved and executed by the Sponsor and (i) the Administrative Trustees (or, if there are more than two Administrative Trustees, a majority of the Administrative Trustees), (ii) the Property Trustee; and (iii) the Delaware Trustee if the amendment affects the rights, powers, duties, obligations or immunities of the Delaware Trustee.



(b)

No amendment shall be made, and any such purported amendment shall be void and ineffective:



(i)

unless, the Property Trustee shall have first received:



a.

an Officers' Certificate from each of the Trust and the Sponsor that such amendment is permitted by, and conforms to, the terms of this Trust Agreement (including the terms of the Securities) and that all conditions precedent to the execution and delivery of such amendment have been satisfied; and



b.

an Opinion of Counsel (who may be counsel to the Sponsor or the Trust) that such amendment is permitted by, and conforms to, the terms of this Trust Agreement (including the terms of the Securities) and that all conditions precedent to the execution and delivery of such amendment have been satisfied; and



(ii)

to the extent the result of such amendment would be to:



a.

cause the Trust to be classified other than as a grantor trust for United States federal income tax purposes;



b.

reduce or otherwise adversely affect the powers of the Property Trustee in contravention of the TIA; or



c.

cause the Trust to be deemed to be an Investment Company required to be registered under the 1940 Act.



(c)

If the Trust has issued any Securities that remain outstanding:



(i)

any amendment that would (a) change the amount or timing of any distribution of the Securities or otherwise adversely affect the amount of any distribution required to be made in respect of the Securities as of a specified date or (b) restrict the right of a Holder of Securities to institute suit for the enforcement of any such payment on or after such date, will entitle the Holders of such Securities, voting together as a single class, to vote on such amendment or proposal and such amendment or proposal shall not be effective except with the approval of each of the Holders of the Securities affected thereby; and



(ii)

any amendment that would (a) adversely affect the powers, preferences or special rights of the Securities, whether by way of amendment to this Trust Agreement or otherwise or

43

(b) result in the dissolution, winding-up or termination of the Trust other than pursuant to the terms of this Trust Agreement, will entitle the holders of the Securities voting together as a single class to vote on such amendment or proposal and such amendment or proposal shall not be effective except with the approval of a Majority in Liquidation Amount of the Securities affected thereby; provided that, if any amendment or proposal referred to in clause (a) above would adversely affect only the Preferred Securities or the Common Securities, then only the affected class will be entitled to vote on such amendment or proposal.

(d)

This Section 11.1 shall not be amended without the consent of all of the Holders of the Securities.



(e)

Article 4 shall not be amended without the consent of the Holders of a Majority in Liquidation Amount of the Common Securities.



(f)

The rights of the Holders of the Common Securities under Article 6 to increase or decrease the number of, and appoint and remove Trustees shall not be amended without the consent of the Holders of a Majority in Liquidation Amount of the Common Securities.



(g)

Notwithstanding Section 11.1(c), this Trust Agreement may be amended without the consent of the Holders of the Securities, if such amendment does not adversely affect in any material respect the rights of the holders of the Securities, to:



(i)

cure any ambiguity, defect or inconsistency;



(ii)

add to the covenants, restrictions or obligations of the Sponsor;



(iii)

to conform to any change in Rule 3a-5 of the 1940 Act or written change in interpretation or application of Rule 3a-5 of the 1940 Act by any legislative body, court, government agency or regulatory authority; or



(iv)

to modify, eliminate and add to any provision of this Trust Agreement to ensure that the Trust will be classified as a grantor trust for United States federal income tax purposes at all times that any Securities are outstanding or to ensure that the Trust will not be required to register as an Investment Company under the 1940 Act.



(h)

Neither the Property Trustee nor the Delaware Trustee shall be required to sign any amendment that affects its rights, duties, obligations or immunities under this Trust Agreement or otherwise.

        Section 11.2. Meetings of the Holders of Securities; Action by Written Consent.

(a)

Meetings of the Holders of any class of Securities may be called at any time by the Administrative Trustees (or as provided in the terms of the Securities) to consider and act on any matter on which Holders of such class of Securities are entitled to act under the terms of this Trust Agreement, the terms of the Securities or the rules of any stock exchange on which the Preferred Securities are listed or admitted for trading. The Administrative Trustees shall call a meeting of the Holders of such class if directed to do so by the Holders of at least 10% in Liquidation Amount of such class of Securities. Such direction shall be given by delivering to the Administrative Trustees one or more calls in a writing stating that the signing Holders of Securities wish to call a meeting and indicating the general or specific purpose for which the meeting is to be called. Any Holders of Securities calling a meeting shall specify in writing the Certificates held by the Holders of Securities exercising the right to call a meeting and only those Securities specified shall be counted for purposes of determining whether the required percentage set forth in the second sentence of this paragraph has been met.

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(b)

Except to the extent otherwise provided in the terms of the Securities, the following provisions shall apply to meetings of Holders of Securities:



(i)

notice of any such meeting shall be given to all the Holders of Securities having a right to vote thereat at least 7 days and not more than 60 days before the date of such meeting. Whenever a vote, consent or approval of the Holders of Securities is permitted or required under this Trust Agreement or the rules of any stock exchange on which the Preferred Securities are listed or admitted for trading, such vote, consent or approval may be given at a meeting of the Holders of Securities. Any action that may be taken at a meeting of the Holders of Securities may be taken without a meeting and without prior notice if a consent in writing setting forth the action so taken is signed by the Holders of Securities owning not less than the minimum amount of Securities in liquidation amount that would be necessary to authorize or take such action at a meeting at which all Holders of Securities having a right to vote thereon were present and voting. Prompt notice of the taking of action without a meeting shall be given to the Holders of Securities entitled to vote who have not consented in writing. The Administrative Trustees may specify that any written ballot submitted to the Security Holders for the purpose of taking any action without a meeting shall be returned to the Trust within the time specified by the Administrative Trustees;



(ii)

each Holder of a Security may authorize any person to act for it by proxy on all matters in which a Holder of Securities is entitled to participate, including waiving notice of any meeting, or voting or participating at a meeting. No proxy shall be valid after the expiration of 11 months from the date thereof unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of the Holder of Securities executing such proxy. Except as otherwise provided herein, all matters relating to the giving, voting or validity of proxies shall be governed by the General Corporation Law of the State of Delaware relating to proxies, and judicial interpretations thereunder, as if the Trust were a Delaware corporation and the Holders of the Securities were stockholders of a Delaware corporation;



(iii)

each meeting of the Holders of the Securities shall be conducted by the Administrative Trustees or by such other person that the Administrative Trustees may designate; and



(iv)

unless the Statutory Trust Act, this Trust Agreement, the terms of the Securities, the TIA or the listing rules of any stock exchange on which the Preferred Securities are then listed for trading, otherwise provides, the Administrative Trustees, in their sole discretion, shall establish all other provisions relating to meetings of Holders of Securities, including notice of the time, place or purpose of any meeting at which any matter is to be voted on by any Holders of Securities, waiver of any such notice, action by consent without a meeting, the establishment of a record date, quorum requirements, voting in person or by proxy or any other matter with respect to the exercise of any such right to vote.

ARTICLE 12

REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE

        Section 12.1 Representations and Warranties of the Property Trustee. The Trustee that acts as initial Property Trustee represents and warrants to the Trust and to the Sponsor at the date of this Trust Agreement, and each successor Property Trustee represents and warrants to the Trust and the Sponsor at the time of the successor Property Trustee's acceptance of its appointment as Property Trustee that:

45

(a)

the Property Trustee is a National Banking Association, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with trust power and authority to execute and deliver, and to carry out and perform its obligations under the terms of, this Trust Agreement;



(b)

the Property Trustee satisfies the requirements set forth in Section 6.3;



(c)

the execution, delivery and performance by the Property Trustee of this Trust Agreement has been duly authorized by all necessary action on the part of the Property Trustee. This Trust Agreement has been duly executed and delivered by the Property Trustee, and it constitutes a legal, valid and binding obligation of the Property Trustee, enforceable against it in accordance with its terms, subject to applicable bankruptcy, reorganization, moratorium, insolvency and other similar laws affecting creditors' rights generally and to general principles of equity and the discretion of the court (regardless of whether the enforcement of such remedies is considered in a proceeding in equity or at law);



(d)

the execution, delivery and performance of this Trust Agreement by the Property Trustee does not conflict with or constitute a breach of the articles of association or incorporation, as the case may be, or the by-laws (or other similar organizational documents) of the Property Trustee; and



(e)

no consent, approval or authorization of, or registration with or notice to, any State (which term, in the case of the initial Property Trustee, shall mean the State of California) or federal banking authority having jurisdiction over the trust powers of the Property Trustee is required for the execution, delivery or performance by the Property Trustee of this Trust Agreement.

        Section 12.2. Representations and Warranties of the Delaware Trustee. The Trustee that acts as initial Delaware Trustee represents and warrants to the Trust and to the Sponsor at the date of this Trust Agreement, and each successor Delaware Trustee represents and warrants to the Trust and the Sponsor at the time of the successor Delaware Trustee's acceptance of its appointment as Delaware Trustee that:

(a)

the Delaware Trustee satisfies the requirements set forth in Section 6.2, satisfies Trust Section 3807 of the Statutory Trust Act and has the power and authority to execute and deliver, and to carry out and perform its obligations under the terms of, this Trust Agreement and, if it is not a natural person, is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or organization;



(b)

the Delaware Trustee has been authorized to perform its obligations under the Certificate of Trust and this Trust Agreement. This Trust Agreement under Delaware law constitutes a legal, valid and binding obligation of the Delaware Trustee, enforceable against it in accordance with its terms, subject to applicable bankruptcy, reorganization, moratorium, insolvency and other similar laws affecting creditors' rights generally and to general principles of equity and the discretion of the court (regardless of whether the enforcement of such remedies is considered in a proceeding in equity or at law); and



(c)

no consent, approval or authorization of, or registration with or notice to, the State of Delaware or federal banking authority is required for the execution, delivery or performance by the Delaware Trustee of this Trust Agreement.

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ARTICLE 13

MISCELLANEOUS

        Section 13.1 Notices. Any notice or communication is duly given if in writing and delivered in person or mailed by first-class mail:

(a)

if to the Trust, in care of the Administrative Trustees:

c/o The Walt Disney Company
500 South Buena Vista Street
Burbank, California 91521
Attention:                   

(b)

if to the Property Trustee:

Wells Fargo Bank, National Association
707 Wilshire Boulevard, 17th Floor
Los Angeles, California 90017
Attention: Corporate Trust Department

(c)

if to the Delaware Trustee:

Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration

(d)

if to the Holder of the Common Securities:

The Walt Disney Company
500 South Buena Vista Street
Burbank, California 91521
Attention:                   

        Notice may be given to designate additional or different addresses for subsequent notices or communications.

        Any notice or communication to a Holder of Preferred Securities shall be mailed by first-class mail to his address shown on the register kept by the Registrar. Failure to mail a notice or communication to a Holder of Preferred Securities or any defect in it shall not affect its sufficiency with respect to other Holders of Preferred Securities.

        If a notice or communication is mailed or published in the manner provided above, within the time prescribed, it is duly given, whether or not the Holder of Preferred Securities receives it.

        If the Trust mails a notice or communication to Holders of Securities, it shall mail a copy to the Property Trustee and each Agent at the same time.

        Section 13.2. Communication by Holders with Other Holders. Holders of Securities may communicate pursuant to Section 312(b) of the TIA with other Holders of Securities with respect to their rights under this Trust Agreement or the Securities. The Trust, the Property Trustee, the Delaware Trustee, the Registrar and anyone else shall have the protection of Section 312(c) of the TIA.

        Section 13.3. Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Trust to the Property Trustee to take any action under this Trust Agreement, the Administrative Trustees shall furnish to the Property Trustee:

47

(a)

an Officers' Certificate stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Trust Agreement relating to the proposed action have been complied with; and



(b)

an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent have been complied with.

        Section 13.4. Statements Required in Certificate or Opinion. Each certificate or Opinion of Counsel with respect to compliance with a condition or covenant provided for in this Trust Agreement (other than a certificate provided pursuant to Section 314(a)(4) of the TIA) shall comply with the provisions of Section 314(e) of the TIA and shall include:

(a)

a statement that the person signing such Officers' Certificate or Opinion of Counsel has read such covenant or condition;



(b)

a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such Officers' Certificate or Opinion of Counsel are based;



(c)

a statement that, in the opinion of such person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and



(d)

a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with.

        Section 13.5. Rules by Trustee and Agents. The Trustee may make reasonable rules for action by or a meeting of Holders of Securities. Any Agent may make reasonable rules and set reasonable requirements for its functions.

        Section 13.6. Legal Holidays. Unless otherwise provided by Officers' Certificate, a "Legal Holiday" is any day that is not a Business Day. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no Distributions shall accrue for the intervening period.

        Section 13.7 No Recourse Against Others. A director, officer, employee or stockholder, as such, of the Debenture Issuer shall not have any liability for any obligations of the Debenture Issuer under the Securities, the Trust Agreement, the Debentures or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each Holder of Securities by accepting a Security waives and releases all such liability.

        The waiver and release are part of the consideration for the issue of the Securities.

        Section 13.8. Intention of the Parties. It is the intention of the parties hereto that the Trust be classified for United States federal income tax purposes as a grantor trust. The provisions of this Trust Agreement shall be interpreted in a manner consistent with such classification.

        Section 13.9. Counterparts. This Trust Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

        Section 13.10. Governing Laws. THIS TRUST AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF; PROVIDED THAT THE IMMUNITIES AND STANDARD OF CARE OF THE PROPERTY TRUSTEE IN CONNECTION WITH THE ADMINISTRATION OF ITS TRUSTS HEREUNDER SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE

48

WITH THE LAWS OF THE JURISDICTION OF ITS INCORPORATION; PROVIDED, HOWEVER, THAT THERE SHALL NOT BE APPLICABLE TO THE PARTIES HEREUNDER OR THIS TRUST AGREEMENT ANY PROVISION OF THE LAWS (COMMON OR STATUTORY) OF THE STATE OF DELAWARE PERTAINING TO TRUSTS THAT RELATE TO OR REGULATE, IN A MANNER INCONSISTENT WITH THE TERMS HEREOF, (A) THE FILING WITH ANY COURT OR GOVERNMENTAL BODY OR AGENCY OF TRUSTEE ACCOUNTS OR SCHEDULES OF TRUSTEE FEES AND CHARGES, (B) AFFIRMATIVE REQUIREMENTS TO POST BONDS FOR TRUSTEES, OFFICERS, AGENTS OR EMPLOYEES OF A TRUST, (C) THE NECESSITY FOR OBTAINING COURT OR OTHER GOVERNMENTAL APPROVAL CONCERNING THE ACQUISITION, HOLDING OR DISPOSITION OF REAL OR PERSONAL PROPERTY, (D) FEES OR OTHER SUMS PAYABLE TO TRUSTEES, OFFICERS, AGENTS OR EMPLOYEES OF A TRUST, (E) THE ALLOCATION OF RECEIPTS AND EXPENDITURES TO INCOME OR PRINCIPAL, (F) RESTRICTIONS OR LIMITATIONS ON THE PERMISSIBLE NATURE, AMOUNT OR CONCENTRATION OF TRUST INVESTMENTS OR REQUIREMENTS RELATING TO THE TITLING, STORAGE OR OTHER MANNER OF HOLDING OR INVESTING TRUST ASSETS OR (G) THE ESTABLISHMENT OF FIDUCIARY OR OTHER STANDARDS OF RESPONSIBILITY OR LIMITATIONS ON THE ACTS OR POWERS OF TRUSTEES THAT ARE INCONSISTENT WITH THE LIMITATIONS OR AUTHORITIES AND POWERS OF THE TRUSTEES HEREUNDER AS SET FORTH OR REFERENCED IN THIS AGREEMENT. SECTION 3540 OF TITLE 12 OF THE DELAWARE CODE SHALL NOT APPLY TO THE TRUST.

        Section 13.11. Successors. All agreements of the Trust in this Trust Agreement and the Securities shall bind its successor. All agreements of the Trustees in this Trust Agreement shall bind their respective successors.

        Section 13.12. Severability. In case any provision in this Trust Agreement or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

        Section 13.13. Table of Contents, Headings, etc. The Table of Contents, Cross-Reference Table, and headings of the Articles and Sections of this Trust Agreement have been inserted for convenience of reference only, are not to be considered a part hereof, and shall in no way modify or restrict any of the terms or provisions hereof.

[THE REST OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY; THE SIGNATURE PAGE FOLLOWS.]

49

        IN WITNESS WHEREOF, the undersigned have caused these presents to be executed as of the day and year first above written.

THE WALT DISNEY COMPANY, as Sponsor
By:	Name: Title:
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Property Trustee
By:	Name: Title:
WILMINGTON TRUST COMPANY, as Delaware Trustee
By:	Name: Title:
[Name of Administrative Trustee], as Administrative Trustee
[Name of Administrative Trustee], as Administrative Trustee
[Name of Administrative Trustee], as Administrative Trustee

50

EXHIBIT A

        [IF THE SECURITY IS TO BE A GLOBAL SECURITY, INSERT THE FOLLOWING:

        THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE TRUST AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITARY OR A NOMINEE OF THE DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR PREFERRED SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE TRUST AGREEMENT, AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY, BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH A SUCCESSOR DEPOSITARY.

        UNLESS THIS PREFERRED SECURITY CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TO THE PREFERRED SECURITY ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY PREFERRED SECURITY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

A-1

CERTIFICATE NO.	NUMBER OF PREFERRED SECURITIES:
CUSIP NO.

CERTIFICATE EVIDENCING     % PREFERRED SECURITIES
OF
DISNEY CAPITAL TRUST [I / II / III]
% PREFERRED SECURITIES
(LIQUIDATION AMOUNT $                   PER PREFERRED SECURITY)
FULLY AND UNCONDITIONALLY
GUARANTEED BY THE WALT DISNEY COMPANY

        DISNEY CAPITAL TRUST [I / II / III], a statutory trust created under the laws of the State of Delaware (the "Trust"), hereby certifies that                    (the "Holder") is the registered owner of                    preferred securities of the Trust representing undivided beneficial ownership interests in the assets of the Trust designated the "    % Preferred Security" (liquidation amount $                   per Preferred Security) (the "Preferred Securities"). The Preferred Securities are transferable on the register of the Trust, in person or by a duly authorized attorney, upon surrender of this certificate duly endorsed and in proper form for transfer as provided in the Trust Agreement (as defined below). The designation, rights, privileges, restrictions, preferences and other terms and provisions of the Preferred Securities represented hereby are issued and shall in all respects be subject to the provisions of the Amended and Restated Trust Agreement of the Trust, dated as of                        , 200  , as the same may be amended from time to time (the "Trust Agreement"), by and among THE WALT DISNEY COMPANY,                   ,                    and                   , as Administrative Trustees,                   , as Property Trustee,                   , as Delaware Trustee and the Holders. Capitalized terms used herein but not defined shall have the meaning given them in the Trust Agreement. The Holder is entitled to the benefits of the Guarantee to the extent described therein. The Sponsor will provide a copy of the Trust Agreement, the Guarantee and the Indenture to a Holder without charge upon written request to the Sponsor at its principal place of business. Upon receipt of this certificate, the Holder is bound by the Trust Agreement and is entitled to the benefits thereunder. By acceptance, the Holder agrees to treat, for United States federal income tax purposes, the Debentures as indebtedness and the Preferred Securities as evidence of undivided indirect beneficial ownership interests in the Debentures.

A-2

        IN WITNESS WHEREOF, the Trust has executed this certificate this      day of                   , 200  .

	DISNEY CAPITAL TRUST [I / II / III]
	By:	Name: Title: Administrative Trustee
This is one of the Preferred Securities referred to in the within-mentioned Trust Agreement.
	WELLS FARGO BANK, NATIONAL ASSOCIATION, as Property Trustee
	By:	Name: Authorized Officer

A-3

[FORM OF ASSIGNMENT]
ASSIGNMENT

FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred Security Certificate to:

(Insert assignee's social security or tax identification number)

(Insert address and zip code of assignee)

and irrevocably appoints

agent to transfer this Preferred Security Certificate on the books of the Trust. The agent may substitute another to act for him or her.

Date:

Signature:

(Sign exactly as your name appears on the other side of this Preferred Security Certificate)

A-4

EXHIBIT B

TRANSFER OF THIS CERTIFICATE IS SUBJECT TO THE
CONDITIONS SET FORTH IN THE TRUST AGREEMENT
REFERRED TO BELOW.

CERTIFICATE NO.	NUMBER OF COMMON SECURITIES:
CUSIP NO.

CERTIFICATE EVIDENCING COMMON SECURITIES
OF
DISNEY CAPITAL TRUST [I / II / III]

% COMMON SECURITIES
(LIQUIDATION AMOUNT $                   PER COMMON SECURITY)

        DISNEY CAPITAL TRUST [I / II / III], a statutory trust created under the laws of the State of Delaware (the "Trust"), hereby certifies that THE WALT DISNEY COMPANY (the "Holder") is the registered owner of common securities of the Trust representing an undivided beneficial ownership interest in the assets of the Trust designated the "    % Common Securities" (liquidation amount $                   per Common Security) (the "Common Securities"). The Common Securities are not transferable and any attempted transfer thereof shall be void except as permitted by applicable law and by Section 7.9 of the Trust Agreement (as defined below). The designation, rights, privileges, restrictions, preferences and other terms and provisions of the Common Securities represented hereby are issued and shall in all respects be subject to the provisions of the Amended and Restated Trust Agreement of the Trust, dated as of                        , 200   (as the same may be amended from time to time, the "Trust Agreement"), by and among THE WALT DISNEY COMPANY, as Sponsor,                   ,                   , and                   , as Administrative Trustees,                   , as Property Trustee,                   , as Delaware Trustee and the Holders. The Holder is entitled to the benefits of the Guarantee to the extent described therein. Capitalized terms used herein but not defined shall have the meaning given them in the Trust Agreement. The Sponsor will provide a copy of the Trust Agreement, the Guarantee and the Indenture to the Holder without charge upon written request to the Sponsor at its principal place of business. Upon receipt of this certificate, the Holder is bound by the Trust Agreement and is entitled to the benefits thereunder. By acceptance, the Holder agrees to treat, for United States federal income tax purposes, the Debentures as indebtedness and the Common Securities as evidence of an undivided indirect beneficial ownership interest in the Debentures.

B-1

        IN WITNESS WHEREOF, the Trust has executed this certificate this      day of                   , 200  .

	DISNEY CAPITAL TRUST [I / II / III]
	By:	Name: Title: Administrative Trustee
This is one of the Common Securities referred to in the within-mentioned Trust Agreement.
	WELLS FARGO BANK, NATIONAL ASSOCIATION, as Property Trustee
	By:	Name: Authorized Officer

B-2

[FORM OF ASSIGNMENT]
ASSIGNMENT

FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security Certificate to:

(Insert assignee's social security or tax identification number)

(Insert address and zip code of assignee)

and irrevocably appoints

agent to transfer this Common Security Certificate on the books of the Trust. The agent may substitute another to act for him or her.

Date:

Signature:

(Sign exactly as your name appears on the other side of this Common Security Certificate)

B-3

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EXHIBIT 4.20

EX-12.1

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EXHIBIT 12.1

THE WALT DISNEY COMPANY
RATIO OF EARNINGS TO FIXED CHARGES
FIVE YEARS ENDED SEPTEMBER 30, 2004
(AMOUNTS IN MILLIONS, EXCEPT RATIOS)

		Year Ended September 30,
		2004			2003			2002			2001			2000
EARNINGS
Income from continuing operations before     income taxes, minority interests and     cumulative effect of accounting change		$	3,739.0		$	2,254.0		$	2,190.0		$	1,283.0		$	2,633.0
Plus
	Equity in (earnings) loss of less than 50%     equity investments		(372.0	)		(334.0	)		(225.0	)		(300.0	)		(208.0	)
	Dividends		404.0			335.0			227.5			254.8			212.4
	Interest expense, amortization of debt     discounts and premium on all     indebtedness and amortization of     capitalized interest		660.2			698.2			797.5			617.1			653.7
Imputed interest on operating leases     (estimated to be one-third of     rental expense)			172.7			176.0			137.7			140.0			160.7
TOTAL EARNINGS		$	4,603.9		$	3,129.2		$	3,127.7		$	1,994.9		$	3,451.8
FIXED CHARGES
Interest expense and amortization of debt     discounts and premium on all indebtedness		$	628.9		$	666.2		$	723.0		$	544.0		$	599.0
Capitalized interest			34.9			33.0			35.8			94.0			132.0
Imputed interest on operating leases			172.7			176.0			137.7			140.0			160.7
TOTAL FIXED CHARGES		$	836.5		$	875.2		$	896.5		$	778.0		$	891.7
RATIO OF EARNINGS TO FIXED CHARGES			5.5			3.6			3.5			2.6			3.9

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EXHIBIT 12.1

EX-23.3

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EXHIBIT 23.3

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

        We hereby consent to the incorporation by reference in this Registration Statement on Form S-3 of our report dated December 9, 2004 relating to the consolidated financial statements, management's assessment of the effectiveness of internal control over financial reporting and the effectiveness of internal control over financial reporting, which appears in The Walt Disney Company's Annual Report on Form 10-K for the year ended September 30, 2004. We also consent to the reference to us under the heading "Experts" in such Registration Statement.

PRICEWATERHOUSECOOPERS LLP

Los Angeles, California
January 19, 2005

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EXHIBIT 23.3