8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 30, 2003

The Walt Disney Company

(Exact Name of Registrant as Specified in its Charter)

Delaware

(State or Other Jurisdiction of Incorporation)

1-11605 (Commission File Number)	95-4545390 (IRS Employer Identification No.)
500 South Buena Vista Street Burbank, California (Address of Principal Executive Offices)	91521 (Zip Code)

Registrant’s Telephone Number, Including Area Code (818) 560-1000

Not applicable

(Former Name or Former Address, if Changed Since Last Report )

Item 6. Resignations of Registrant’s Directors

On November 30, 2003, Roy E. Disney resigned from his positions as Vice Chairman of the Board of Directors of The Walt Disney Company (the “Company”) and Chairman of the Feature Animation Division of the Company. A copy of his letter addressed to Michael D. Eisner, Chairman of the Board of Directors and Chief Executive Officer of the Company, in which Mr. Disney described his disagreement with the Company, is attached hereto as Exhibit 99.1.

On November 30, 2003, Senator George J. Mitchell, Presiding Director of the Board of Directors of the Company, issued the following statement on behalf of the Board of Directors of the Company: “The Governance and Nominating Committee recently informed Mr. Disney of its judgment that the mandatory age limits of the [C]ompany’s Corporate Governance Guidelines, which had previously been unanimously approved by the Board, should be applied to him and two other Board members, Thomas S. Murphy and Raymond Watson. It is unfortunate that the Committee’s judgment to apply these unanimously adopted governance rules has become an occasion to raise again criticisms of the direction of the Company, and calls for change of management, that have been previously rejected by the Board.”

On December 1, 2003, Stanley P. Gold resigned from his position as a director of the Company. A copy of his letter addressed to the Board of Directors of the Company, in which Mr. Gold described his disagreement with the Company, is attached hereto as Exhibit 99.2.

On December 1, 2003, the independent members of the Board of Directors of the Company issued the following statement: “We categorically reject Mr. Gold’s untrue and unwarranted allegations about the Company and the Board. As he has done repeatedly in the past, Mr. Gold in his letter persists in characterizing the Board’s failure to agree with him as failure to consider the issues he has raised. In fact, the Board has extensively discussed and deliberated on each of the concerns he has expressed. Because the Board, after careful consideration, has refused to accept their principal recommendation to replace management, Mr. Gold and Mr. Disney have chosen their current destructive course of action. Both Mr. Gold and Mr. Disney, along with every other director, voted in favor of the very retirement rules to which they now object and which apply to ‘all directors.’ It is unfortunate that the application of these rules has been used as an occasion to again raise unwarranted criticisms of the Company and of the Board. It is a disservice to shareholders and to employees that the Company faces this distraction at a time when its performance is improving as a result of growth plans and initiatives being implemented by management with Board approval.”

Item 7. Financial Statements, Financial Information and Exhibits

(c) Exhibits
99.1	Letter, dated November 30, 2003, from Roy E. Disney to Michael D. Eisner, Chairman of the Board of Directors and Chief Executive Officer of The Walt Disney Company.
99.2	Letter, dated December 1, 2003, from Stanley P. Gold to the Board of Directors of The Walt Disney Company.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

THE WALT DISNEY COMPANY
By:	/S/    ALAN N. BRAVERMAN
	Alan N. Braverman Senior Executive Vice President and General Counsel

Date: December 5, 2003

EXHIBIT INDEX

Exhibit Number	Exhibit Name
99.1	Letter, dated November 30, 2003, from Roy E. Disney to Michael D. Eisner, Chairman of the Board of Directors and Chief Executive Officer of The Walt Disney Company.
99.2	Letter, dated December 1, 2003, from Stanley P. Gold to the Board of Directors of The Walt Disney Company.

EX-99.1

Exhibit 99.1

[Letterhead of Roy E. Disney]

Dear Michael:

It is with deep sadness and regret that I send you this letter of resignation from the Walt Disney Company, both as Chairman of the Feature Animation Division and as Vice Chairman of the Board of Directors.

You well know that you and I have had serious differences of opinion about the direction and style of management in the Company in recent years. For whatever reason, you have driven a wedge between me and those I work with even to the extent of requiring some of my associates to report my conversations and activities back to you. I find this intolerable.

Finally, you discussed with the Nominating Committee of the Board of Directors its decision to leave my name off the slate of directors to be elected in the coming year, effectively muzzling my voice on the Board—much as you did with Andrea Van de Kamp last year.

Michael, I believe your conduct has resulted from my clear and unambiguous statements to you and to the Board of Directors that after 19 years at the helm you are no longer the best person to run the Walt Disney Company. You had a very successful first 10-plus years at the company in partnership with Frank Wells, for which I salute you. But, since Frank’s untimely death in 1994, the Company has lost it focus, its creative energy, and its heritage.

As I have said, and as Stanley Gold has documented in letters to you and other members of the Board, this Company, under your leadership has failed during the last seven years in many ways:

1. The failure to bring back ABC Prime Time from the ratings abyss it has been in for years and your inability to program successfully the ABC Family Channel. Both of these failures have had, and I believe will continue to have, significant adverse impact on shareholder value.

2. Your consistent micro-management of everyone around you with the resulting loss of morale throughout this Company.

3. The timidity of your investments in our theme park business. At Disney’s California Adventure, Paris and now in Hong Kong, you have tried to build parks “on the cheap” and they show it and the attendance figures reflect it.

4. The perception by all of our stakeholders-consumers, investors, employees, distributors and suppliers—that the Company is rapacious, soul-less, and always looking for the “quick buck” rather than long-term value which is leading to a loss of public trust.

5. The creative brain drain of the last several years, which is real and continuing, and damages our Company with the loss of every talented employee.

6. Your failure to establish and build constructive relationships with creative partners, especially Pixar, Miramax, and the cable companies distributing our products.

7. Your consistent refusal to establish a clear succession plan.

In conclusion, Michael, it is my sincere belief that it is you who should be leaving and not me. Accordingly, I once again call for your resignation or retirement. The Walt Disney Company deserves fresh, energetic leadership at this challenging time in its history just as it did in 1984 when I headed a restructuring which resulted in your recruitment to the Company.

I have and will always have an enormous allegiance and respect for this Company, founded by my uncle, Walt, and father, Roy, and to our faithful employees and loyal stockholders. I don’t know if you and other directors can comprehend how painful it is for me and the extended Disney family to arrive at this decision.

In accordance with Item 6 of Form 8-K and Item 7 of Schedule 14A, I request that you disclose this letter and that you file a copy of this letter as an exhibit to a Company Form 8-K.

With sincere regret,

/s/ Roy E. Disney

cc: Board of Directors

EX-99.1

Exhibit 99.2

[Letterhead of Stanley P. Gold]

December 1, 2003

To the Board of Directors of the Walt Disney Company:

It is with regret that I resign effective immediately from the Board of Directors of the Walt Disney Company and second Roy Disney’s call for the removal of Michael Eisner as Chairman and C.E.O. I am proud of my more than 15 years of service and my role in reshaping the Company in 1984 by bringing Frank Wells and Michael Eisner to the Company. I do, however, lament that my efforts over the past three years to implement needed changes has only succeeded in creating an insular Board of Directors serving as a bulwark to shield management from criticism and accountability. At this time, I believe there is little that I can achieve by working from within to refocus the Company. I hope that my resignation will serve as a catalyst for change at Disney.

The most recent evidence of the drive for insularity is reflected in the Governance Committee’s determination that Roy Disney should no longer serve on the Board, ostensibly because Roy had surpassed the expected retirement age established by the Board’s Corporate Governance Guidelines. In fact, these very rules regarding age, by their terms, only apply to non-management directors, not to Roy, who, as the Committee knows, has been deemed a management director. The Committee’s decision and George Mitchell’s defense of it yesterday are clearly disingenuous. The real reason for the Committee’s action is that Roy has become more pointed and vocal in his criticism of Michael Eisner and this Board. This is yet another attempt by this Board to squelch dissent by hiding behind the veil of “good governance.” What a curious result.

Roy has devoted a lifetime to Disney as both an employee and Director. He has served with renewed vigor during these times of malaise, disappointment and instability at the Company, trying to maintain the morale of employees, focusing on the magic that makes Disney special and attacking bonuses to the CEO and increased compensation for Board members while the Company falters and shareholder value erodes. He and his family have a very large financial stake in the Company. Unlike Messrs. Watson and Murphy who have asked to be replaced, Roy has sought even more involvement only to be told that his input in animation will continue to be minimized and that his role as a Director is no longer welcome. This Board has become an enabler to entrenched management and, in so doing, is not effectively discharging its duties to the shareholders. This conduct has resulted in yet another valuable human asset of the Company slipping away. Within the last year this Board will have managed to cull from its ranks Andrea Van de Kamp and now Roy, two of the staunchest critics of Michael Eisner and the Company’s poor performance. I cannot sit idly by as this Board continues to ignore and disenfranchise those who raise questions about the performance of management.

As this Board knows, during my tenure I have tried to be an active, engaged Director. I believe a board should not merely rubber stamp decisions of senior management. I decided in August of 2002 that it was not enough just to express my views in the limited time set aside for our infrequent Board meetings. I therefore began a series of written communications to the Board regarding the Company, its management and the Board. I wrote to express my disagreement and growing concern with management, its policies and the effectiveness of the Board. I focused on the failed initiatives of the Company over the past five or six years and admonished the Board for not actively engaging in serious discussions regarding the Company’s flawed plans and management’s unmet projections and unfulfilled promises. In particular, I have urged the Board to concentrate on the Company’s “poor performance, lack of credibility and accountability and poor capital allocation.” In an effort to get Directors to seriously assess

management’s 5-year strategic plan (a plan that is only discussed with this Board, but not submitted for Board approval), I wrote to the Board to detail the Company’s unsatisfactory financial performance for the past several years and to suggest a process, a so-called Diagnostic Review, designed to give the non-management directors the tools necessary to evaluate performance and establish a comprehensive framework and baseline from which the Board could be active partners in developing plans to maximize the value of Disney’s existing assets and businesses. That approach was opposed by management and then, not surprisingly, rejected by the Board. The Board and its Chairman even criticized me for putting on paper these serious questions about fundamental matters.

I believe the Board’s adoption of its Corporate Governance Guidelines was yet another example of this Board’s commitment to image over substance. Among other things, those Guidelines were carefully crafted to stifle dissent while allowing those supportive of senior management to continue business as usual. This was apparent when the Board applied its Guidelines to conclude that I was not “independent” despite the fact that I frequently challenged management at Board meetings and criticized both the Board’s and the Company’s performance. That decision was initially based on my daughter’s employment in a non-executive position at Disney and, then, after that reason became insufficient under the new NYSE Governance Guidelines, because of my association with Roy. This resulted in my further isolation as I was no longer permitted to serve on the Governance and Nominating Committee or the Compensation Committee. On the other hand, John Bryson was deemed “independent” and appointed Chairman of the Nominating and Governance Committee despite the fact that his wife is an executive officer at Lifetime Entertainment Television, a 50% owned subsidiary of Disney, where she earned in excess of $1 million in total compensation in fiscal 2001. In addition, Senator Mitchell was appointed Presiding Director, despite having been recently employed as a Company consultant and notwithstanding that the law firm of which he was chairman received in excess of $1 million for legal services on behalf of the Company in fiscal 2001.

At the time the Company’s new Corporate Governance Guidelines were being considered, I also urged the Board to separate the positions of Chairman of the Board and CEO. This separation would empower the Board and help establish its independence and oversight role. Not only did the Board reject that initiative, the Board failed to give the newly established Presiding Director any real substantive powers.

Continuing through March of this year I wrote to express my concerns regarding the financial performance of the Company and the repeated failures of management to achieve its forecasts. I urged this Board to feel a sense of urgency in dealing with the issues of leadership, performance, operations and accountability. Those efforts failed. Instead, Mr. Eisner was awarded a bonus of $5 million in Disney shares by the Compensation Committee despite objections by Roy and me. I believe that bonuses for senior management must be tied to performance; by that measure, no bonus was warranted.

In a similar vein, I recently wrote to express my objection to the Compensation and Governance Committee’s joint recommendation that fees paid to Disney Directors be increased dramatically, that stock grants to Directors be substituted for options (and thereby render meaningless the requirement that Directors own $100,000 in Disney shares) and that greater compensation be paid to the Presiding Director. Raises for the Disney Directors at this time are inappropriate based on my assessment of the Company’s performance. I objected to the increase for the Presiding Director on the grounds that it did not reflect a reasonable payment for the only slightly increased duties. Finally, I could not make sense of a share ownership requirement for Directors that would be satisfied by a direct issuance from the Company at the same time Directors’ cash compensation was being increased.

It is clear to me that this Board is unwilling to tackle the difficult issues I believe this Company continues to face—management failures and accountability for those failures, operational deficiencies,

imprudent capital allocations, the cannibalization of certain Company icons for short-term gain, the enormous loss of creative talent over the last years, the absence of succession planning and the lack of strategic focus. Instead, the Board seems determined to devote its time and energies to adopting policies that focus not on substance, but on process and, in reality, only serve to muzzle and isolate those Directors who recognize that their role is to be active participants in shaping the Company and planning for executive succession. Further, this Board isolates those Directors who believe that Michael Eisner (when measured by the dismal results over the last 7 years) is not up to the challenge. Perhaps acting independently, from outside the Boardroom, not hamstrung by a recently enacted Board policy barring Board members from communicating with shareholders and the media, I can have greater success in shaping the policies, practices and operations of Disney than I had as a member of the Board.

In accordance with Item 6 of Form 8-K and Item 7 of Schedule 14A, I request that you disclose this letter and that you file a copy of this letter as an exhibit to a Company Form 8-K.

Very truly yours,

/s/ Stanley P. Gold