THE WALT DISNEY COMPANY
AMENDED AND RESTATED
1995 STOCK INCENTIVE PLAN
1. PURPOSES
The purposes of the Amended and Restated 1995 Stock Incentive Plan (the
"Plan") are to provide long-term incentives and rewards to employees of The Walt
Disney Company ("Disney") and its Affiliates (as defined below), to assist
Disney in attracting and retaining employees with experience and/or ability on a
basis competitive with industry practices and to associate the interests of such
employees with those of Disney's stockholders. The Plan permits Disney to make
awards in shares of The Walt Disney Company Common Stock (the "Common Stock").
2. EFFECTIVE DATE
The Plan, as amended and restated as provided herein, is effective as of
March 20, 2001.
3. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Compensation Committee of the Board of
Directors of Disney (the "Board") with respect to all matters affecting eligible
individuals who are not 162(m) Executives (as defined below) and by the
Executive Performance Subcommittee of the Compensation Committee with respect to
all matters affecting eligible individuals who are subject to, or in the opinion
of the Executive Performance Subcommittee, are likely to become subject to
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code")
(the "162(m) Executives"), or in either such case by such other committee or
committees of the Board as may be designated by the Board (the Compensation
Committee, the Executive Performance Subcommittee or any other such committee,
when acting pursuant to authority delegated to it in respect of the Plan by the
Board, being hereinafter referred to, collectively, as the "Committee"). The
Executive Performance Subcommittee and the Compensation Committee shall be so
constituted and empowered as to permit awards granted under the Plan to comply
with the "non-employee director" requirements under Rule 16b-3 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and with respect to the
Executive Performance Subcommittee, so as to comply with the "outside director"
requirement of Section 162(m) of the Code. Members of any committee acting as
the Committee hereunder shall serve at the pleasure of the Board.
The Committee shall have all the powers vested in it by the terms of the
Plan, such powers to include exclusive authority (within the limitations
described herein) to select the employees to be granted awards under the Plan,
to determine the series and/or class of stock in respect of which any awards
will be granted, to determine the type, size and terms of awards to be made to
each employee selected, to determine the time when awards will be granted, when
they will vest, when they may be exercised and when they will be paid, to amend
awards previously granted and to establish objectives and conditions, if any,
for earning awards and whether awards will be paid after the end of the award
period. The Committee shall have full power and authority to administer and
interpret the Plan and to adopt such rules, regulations, agreements, guidelines
and instruments for the administration of the Plan and for the conduct of its
business as the Committee deems necessary or advisable and to interpret same.
The Committee's interpretation of the Plan, and all actions taken and
determinations made by the Committee pursuant to the powers vested in it
hereunder, shall be conclusive and binding on all parties concerned, including
Disney, its Affiliates, stockholders, any participants in the Plan and any other
employee of Disney or any of its Affiliates.
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All employees of Disney and all employees of Disney's Affiliates shall be
eligible to participate in the Plan. The Committee, in its sole discretion,
shall from time to time designate from among those eligible to participate those
employees who are to receive awards under and thereby become participants in the
Plan. For purposes of the Plan, "Affiliate" shall mean any entity, as may from
time to time be designated by the Committee, that is a subsidiary corporation of
Disney (within the meaning of Section 424 of the Code), and each other entity
directly or indirectly controlling or controlled by or under common control with
Disney. For purposes of this definition, "control" means the power to direct the
management and policies of such entity, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meaning correlative to the foregoing.
4. AWARDS
(a) TYPES. Awards under the Plan shall be made with reference to shares of
Common Stock and may include, but need not be limited to, stock options
(including nonqualified stock options and incentive stock options qualifying
under Section 422 of the Code), stock appreciation rights (including
free-standing, tandem and limited stock appreciation rights), warrants, dividend
equivalents, stock awards, restricted stock, phantom stock, performance shares
or other securities or rights that the Committee determines to be consistent
with the objectives and limitations of the Plan. The Committee may provide for
the issuance of shares of Common Stock as a stock award for no consideration
other than services rendered or, to the extent permitted by applicable state
law, to be rendered. In the event of an award under which shares of Common Stock
are or may in the future be issued for any other type of consideration, the
amount of such consideration shall be equal or greater than the amount (such as
the par value of such shares) required to be received by Disney in order to
assure compliance with applicable state law. The Committee may make any other
type of award which it shall determine is consistent with the objectives and
limitations of the Plan.
(b) PERFORMANCE GOALS. The Committee may, but need not, establish performance
goals to be achieved within such performance periods as may be selected by it in
its sole discretion, using such measures of the performance of Disney and/or any
one or more of its Affiliates as it may select, for purposes of the granting,
vesting, payment or other entitlement to awards under the Plan.
(c) RULES AND POLICIES. The Committee may adopt from time to time written
rules and policies implementing the Plan. Such rules and policies may include,
but need not be limited to, the type, size and term of awards to be made to
participants and the conditions for the exercise or payment of such awards.
Rules relating to stock options and free-standing and tandem stock appreciation
rights (as distinguished from all other awards, including, without limitation,
warrants), attached hereto as Appendix A, have been approved by the Committee.
The rules set forth in Appendix A may be amended by the Committee in accordance
with the provisions and subject to the limitations set forth in Section 10 of
the Plan. The Committee shall determine, in its sole discretion, the extent to
which rules and policies that it may adopt in the future shall be subject to the
approval of the Disney stockholders and/or limitations on the Committee's
authority to amend such rules or policies.
(d) MAXIMUM AWARDS. A participant may be granted multiple awards under the
Plan. The maximum numbers of shares of Common Stock subject to awards of stock
options, warrants and stock appreciation rights under the Plan that may be
granted during any period of five consecutive calendar years to any one
individual shall be limited to 30,000,000 shares, determined both individually
with respect to each such type of award and in the aggregate with respect to all
such types of awards. With respect to awards of stock, restricted stock, phantom
stock, performance shares or other forms of award conveying a similar economic
benefit (but excluding stock options, warrants and stock appreciation rights):
(i) the maximum numbers of shares of Common Stock that may be awarded during any
period of five consecutive calendar years to any one individual shall be
6,000,000 shares, and (ii) the maximum numbers of shares of Common Stock that
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may be granted under such awards to all participants under the Plan shall be
30,967,650 shares, determined both individually with respect to each such type
of award and in the aggregate with respect to all such types of awards.
5. SHARES OF STOCK SUBJECT TO THE PLAN
The shares of Common Stock that may be delivered or purchased or used for
reference purposes under the Plan shall not exceed an aggregate of 300,283,369
shares. Shares of Common Stock issued under the Plan may be either authorized
but unissued shares or shares held in the Disney's treasury. Any shares subject
to an award which for any reason expires or is terminated unexercised or unpaid
as to such shares shall again be available for issuance under the Plan.
6. PAYMENT OF AWARDS
The Committee shall determine the extent to which awards shall be payable in
cash, shares of Common Stock or any combination thereof or in any other form.
The Committee may determine that all or a portion of a payment to a participant
under the Plan, whether it is to be made in cash, shares of Common Stock or a
combination thereof or any other form, shall be deferred. Deferrals shall be for
such periods and upon such terms, conditions and/or limitations as the Committee
may determine in its sole discretion.
7. VESTING
The Committee may determine that all or a portion of a payment to a
participant under the Plan, whether it is to be made in cash, shares of Common
Stock or a combination thereof or any other form, or the right of a participant
to exercise an award under the Plan, shall be vested at such times and upon such
terms as may be selected by it in its sole discretion.
8. DILUTION AND OTHER ADJUSTMENT
In the event of any change in the outstanding shares of Common Stock by
reason of any split, stock dividend, recapitalization, merger, consolidation,
spin-off, reorganization, combination or exchange of shares or other similar
corporate change or any other change affecting the Common Stock, such equitable
adjustments, if any, may be made in the Plan and the awards thereunder as the
Committee, in its sole discretion determines are necessary or appropriate,
including, if necessary, any adjustments in the number, kind or character of
shares that may be subject to existing or future awards under the Plan
(including by substitution of shares of another corporation including, without
limitation, any successor of Disney), adjustments in the exercise, purchase or
base price of an outstanding award and any adjustments in the maximum numbers of
shares referred to in Section 4 or Section 5 of the Plan. All such adjustments
shall be conclusive and binding for all purposes of the Plan.
9. MISCELLANEOUS PROVISIONS
(a) RIGHTS AS STOCKHOLDER. A participant under the Plan shall have no rights
as a holder of Common Stock with respect to awards hereunder, unless and until
certificates for shares of such stock are issued to the participant.
(b) ASSIGNMENT OR TRANSFER. No award under this Plan shall be transferable by
the participant or shall be subject in any manner to alienation, sale, transfer,
assignment, pledge, encumbrance or charge (other than by or to Disney), except
(i) by will or the laws of descent and distribution (with all references herein
to the rights or duties of holders or participants to be deemed to include the
beneficiaries or legal representatives of the holder or participant unless the
context otherwise expressly requires); or (ii) subject to the prior approval
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of the Committee, for transfers to "family members" (as defined below),
charitable institutions or such other persons or entities approved by the
Committee (subject to such limitations as the Committee in its discretion may
impose, if necessary, to comply with applicable securities laws), in each case
subject to the condition that the Committee be satisfied that such transfer is
being made by the participant for estate planning, tax planning or donative
purposes and no consideration (other than nominal consideration or interests in
a family partnership, family corporation or other family-related entity) is
received by the participant therefor. Except as provided above, during the
lifetime of a participant, awards hereunder are exercisable only by, and payable
only to, the participant.
For purposes hereof, a "family member" shall mean any child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling,
niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law, including adoptive relationships, any person
sharing the participant's household (other than a tenant or employee), a trust
in which these persons have more than fifty percent of the beneficial interest,
a foundation in which these persons (or the participant) control the management
of assets, and any other entity in which these persons (or the participant) own
more than fifty percent of the voting interests.
(c) AGREEMENTS. All awards granted under the Plan shall be evidenced by
agreements in such form and containing such terms and conditions (not
inconsistent with the Plan) as the Committee shall adopt.
(d) COMPLIANCE WITH LEGAL REGULATIONS. During the term of the Plan and the
term of any awards granted under the Plan, Disney will at all times reserve and
keep available such number of shares as may be issuable under the Plan, and will
seek to obtain from any regulatory body having jurisdiction, any requisite
authority required in the opinion of counsel for Disney in order to grant shares
of Common Stock, or options to purchase such stock or other awards hereunder,
and transfer, issue or sell such number of shares of Common Stock as shall be
sufficient to satisfy the requirements of any options or other awards. If in the
opinion of counsel for Disney the transfer, issue or sale of any shares of its
stock under the Plan shall not be lawful for any reason, including the inability
of Disney to obtain from any regulatory body having jurisdiction authority
deemed by such counsel to be necessary to such transfer, issuance or sale,
Disney shall not be obligated to transfer, issue or sell any such shares. In any
event, Disney shall not be obligated to transfer, issue or sell any shares to
any participant unless a registration statement which complies with the
provisions of the Securities Act of 1933, as amended (the "Securities Act"), is
in effect at the time with respect to such shares or other appropriate action
has been taken under and pursuant to the terms and provisions of the Securities
Act and any other applicable securities laws, or Disney receives evidence
satisfactory to the Committee that the transfer, issuance or sale of such
shares, in the absence of an effective registration statement or other
appropriate action, would not constitute a violation of the terms and provisions
of the Securities Act. Disney's obligation to issue shares upon the exercise of
any award granted under the Plan shall in any case be subject to Disney being
satisfied that the shares purchased are being purchased for investment and not
with a view to the distribution thereof, if at the time of such exercise a
resale of such shares would otherwise violate the Securities Act in the absence
of an effective registration statement relating to such shares.
(e) WITHHOLDING TAXES. Disney shall have the right to deduct from all awards
hereunder paid in cash any federal, state, local or foreign taxes required by
law to be withheld with respect to such awards and, with respect to awards paid
in Common Stock, to require the payment (through withholding from the
participant's salary or otherwise) of any such taxes. The obligation of Disney
to make delivery of awards in cash or Common Stock shall be subject to currency
or other restrictions imposed by any government.
(f) NO RIGHTS TO AWARD. No employee or other person shall have any right to
be granted an award under the Plan. Neither the Plan nor any action taken
hereunder shall be construed as giving any participant any right to be retained
in the employ of Disney or any of its Affiliates, or shall interfere with or
restrict in any
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way the rights of Disney or any of its Affiliates, which are hereby reserved, to
discharge the employee at any time for any reason whatsoever, with or without
good cause.
(g) COSTS AND EXPENSES. The costs and expenses of administering the Plan
shall be borne by Disney and not charged to any award or to any participant
receiving an award.
(h) FUNDING OF PLAN. The Plan shall be unfunded. Disney shall not be required
to establish any special or separate fund or to make any other segregation of
assets to assure the payment of any award under the Plan.
10. AMENDMENTS AND TERMINATION
(a) AMENDMENTS. The Committee may at any time terminate or from time to time
amend the Plan in whole or in part, but no such action shall adversely affect
any rights or obligations with respect to any awards theretofore made under the
Plan.
Unless the holders of at least a majority of the voting power of the
outstanding shares of Common Stock present, or represented, and entitled to vote
at a meeting of stockholders shall have first approved thereof, no amendment of
the Plan shall be effective which would (i) increase the maximum numbers of
shares referred to in Section 5 of the Plan or the maximum awards that may be
granted pursuant to Section 4(d) of the Plan to any one individual or (ii)
extend the maximum period during which awards may be granted under the Plan.
With the consent of the participant, if adversely affected, the Committee may
amend outstanding agreements evidencing awards under the Plan in a manner not
inconsistent with the terms of the Plan.
(b) TERMINATION. Unless the Plan shall theretofore have been terminated as
above provided, the Plan (but not the awards theretofore granted under the Plan)
shall terminate on and no awards shall be granted after March 6, 2011.
11. CHANGE IN CONTROL
(a) ACCELERATED VESTING. Except to the extent an award agreement provides for
a different result (in which case the award agreement will govern and this
Section 11 of the Plan shall not be applicable), notwithstanding anything
elsewhere in the Plan or any rules adopted by the Committee pursuant to the Plan
to the contrary, if a Triggering Event shall occur within the 12-month period
beginning with a Change in Control of Disney, then, effective immediately prior
to such Triggering Event, (i) each outstanding stock option, warrant and stock
appreciation right, to the extent that it shall not otherwise have become vested
and exercisable, shall automatically become immediately and fully vested and
exercisable, (ii) each outstanding award of restricted stock shall become
immediately and fully vested and all transfer restrictions under the terms of
the award shall lapse and (iii) each outstanding award of phantom stock,
performance shares or similar award shall become immediately and fully vested,
all performance or other conditions related to the payment of or rights under
the award shall lapse, and the award shall be immediately paid in the form
specified in the award agreement.
(b) DEFINITIONS. For purposes of this Section 11, the following terms shall
have the meanings set forth below.
(1) CHANGE IN CONTROL. For purposes hereof, a "Change in Control" of
Disney shall mean:
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(i) the occurrence of (A) an acquisition by any individual, entity
or group (within the meaning of section 13(d)(3) or 14(d)(2) of the Exchange
Act) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of a percentage of the combined voting power
of the then outstanding voting securities of Disney entitled to vote generally
in the election of directors (the "Disney Voting Securities") (but excluding (1)
any acquisition directly from Disney (other than an acquisition by virtue of the
exercise of a conversion privilege of a security that was not acquired directly
from Disney), (2) any acquisition by Disney or an Affiliate and (3) any
acquisition by an employee benefit plan (or related trust) sponsored or
maintained by Disney or any Affiliate) (an "Acquisition") that is thirty percent
(30%) or more of the Disney Voting Securities; and (B) the termination of
employment, within six (6) months following the Acquisition, of the individual
who is the Chief Executive Officer of Disney immediately prior to the
Acquisition, for any reason other than death, permanent and total disability,
Cause, or voluntary resignation (but excluding any termination for "good reason"
under any employment agreement and any resignation that was requested by the
Board or any such Person (or its employees or representatives) that completes an
Acquisition);
(ii) at any time during a period of two (2) consecutive years or
less, individuals who at the beginning of such period constitute the Board (and
any new directors whose election by the Board or nomination for election by
Disney's stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning of the
period or whose election or nomination for election was so approved) cease for
any reason (except for death, disability or voluntary retirement) to constitute
a majority thereof;
(iii) an Acquisition that is fifty percent (50%) or more of the
Disney Voting Securities;
(iv) the consummation of a merger, consolidation, reorganization or
similar corporate transaction, whether or not Disney is the surviving company in
such transaction, other than a merger, consolidation, or reorganization that
would result in the Persons who are beneficial owners of the Disney Voting
Securities outstanding immediately prior thereto continuing to beneficially own,
directly or indirectly, in substantially the same proportions, at least fifty
percent (50%) of the combined voting power of the Disney Voting Securities (or
the voting securities of the surviving entity) outstanding immediately after
such merger, consolidation or reorganization;
(v) the sale or other disposition of all or substantially all of the
assets of Disney;
(vi) the approval by the stockholders of Disney of a complete
liquidation or dissolution of Disney; or
(vii) the occurrence of any transaction or event, or series of
transactions or events, designated by the Board in a duly adopted resolution as
representing a change in the effective control of the business and affairs of
Disney, effective as of the date specified in any such resolution.
(2) TRIGGERING EVENT. For purposes hereof, the term "Triggering Event"
shall mean (i) the termination of employment of a participant by Disney or an
Affiliate (or any successor thereof) other than on account of death, permanent
and total disability or Cause, (ii) the occurrence of a Constructive Termination
or (iii) any failure by Disney (or a successor entity) to assume, replace,
convert or otherwise continue any award in connection with the Change in Control
(or another corporate transaction or other change effecting the Common Stock) on
the same terms and conditions as applied immediately prior to such transaction,
except for equitable adjustments to reflect the changes in the Common Stock
pursuant to Section 8 hereof.
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(3) CAUSE. For purposes hereof, the term "Cause" shall mean a
determination by the Committee that a participant (i) has been convicted of, or
entered a plea of NOLO CONTENDERE to, a crime that constitutes a felony under
federal or state law, (ii) has engaged in willful gross misconduct in the
performance of his or her duties to Disney or an Affiliate or (iii) has
committed a material breach of any written agreement with Disney or any
Affiliate with respect to confidentiality, noncompetition, nonsolicitation or
similar restrictive covenant. Subject to the first sentence of Section 11(a)
hereof, in the event that a participant is a party to an employment agreement
with Disney or any Affiliate that defines a termination on account of "Cause"
(or a term having similar meaning), such definition shall apply as the
definition of a termination on account of "Cause" for purposes hereof, but only
to the extent that such definition provides the participant with greater rights.
A termination on account of Cause shall be communicated by written notice to the
participant, and shall be deemed to occur on the date such notice is delivered
to the participant.
(4) CONSTRUCTIVE TERMINATION. For purposes hereof, the term "Constructive
Termination" shall mean a termination of employment by a participant within
sixty (60) days following the occurrence of any one or more of the following
events without the participant's written consent (i) any reduction in position,
title (for Vice Presidents or above), overall responsibilities, level of
authority, level of reporting (for Vice Presidents or above), base compensation,
annual incentive compensation opportunity, aggregate employee benefits, or a
request that the participant's location of employment be relocated by more than
fifty (50) miles. Subject to the first sentence of Section 11(a) hereof, in the
event that a participant is a party to an employment agreement with Disney or
any Affiliate (or a successor entity) that defines a termination on account of
"Constructive Termination", "Good Reason", "Breach of Agreement" (or a term
having a similar meaning), such definition shall apply as the definition of
"Constructive Termination" for purposes hereof in lieu of the foregoing, but
only to the extent that such definition provides the participant with greater
rights. A Constructive Termination shall be communicated by written notice to
the Committee, and shall be deemed to occur on the date such notice is delivered
to the Committee, unless the circumstances giving rise to the Constructive
Termination are cured within five (5) days of such notice.
(c) EXCISE TAX LIMIT. In the event that the vesting of the awards together
with all other payments and the value of any benefit received or to be received
by the participant would result in all or a portion of such payment being
subject to excise tax under Section 4999 of the Code, then the participant's
payment shall be either (A) the full payment or (B) such lesser amount that
would result in no portion of the payment being subject to excise tax under
Section 4999 of the Code (the "Excise Tax"), whichever of the foregoing amounts,
taking into account the applicable Federal, state, and local employment taxes,
income taxes, and the Excise Tax, results in the receipt by the participant, on
an after-tax basis, of the greatest amount of the payment notwithstanding that
all or some portion of the payment may be taxable under Section 4999 of the
Code. All determinations required to be made under this Section 11 shall be made
by PricewaterhouseCoopers or any other nationally recognized accounting firm
which is Disney's outside auditor immediately prior to the event triggering the
payments that are subject to the Excise Tax (the "Accounting Firm"). Disney
shall cause the Accounting Firm to provide detailed supporting calculations of
its determinations to Disney and participant. All fees and expenses of the
Accounting Firm shall be borne solely by Disney. The Accounting Firm's
determinations must be made with substantial authority (within the meaning of
Section 6662 of the Code). With respect to awards outstanding on June 26, 2000,
for the purposes of all calculations under Section 280G of the Code and the
application of this Section 11, all determinations as to present value shall be
made using 120 percent of the applicable Federal rate (determined under Section
1274(d) of the Code) compounded semiannually, as in effect on June 26, 2000.
12. GOVERNING LAW
The validity and construction of the Plan and any agreements entered into
thereunder shall be governed by the laws of the State of Delaware.
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APPENDIX A
TO
THE WALT DISNEY COMPANY
AMENDED AND RESTATED
1995 STOCK INCENTIVE PLAN
RULES RELATING TO STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
Pursuant to Section 4(c) of the Plan, the Committee herein sets forth rules
under which stock options and stock appreciation rights with respect to Common
Stock may be granted to eligible participants of Disney or its Affiliates under
the Plan. All such grants are subject to the terms and provisions of the Plan.
Defined terms used herein and not otherwise defined shall have the meanings set
forth in the Plan.
1. AWARD OF OPTIONS
Subject to the provisions of the Plan, the Committee may from time to time,
in its sole discretion, award to participants in the Plan stock options to
purchase shares of Common Stock. In connection therewith, the Committee shall
have full and final authority, INTER ALIA, in its discretion, subject to the
provisions of the Plan, (a) to determine the participants to whom options are to
be awarded, (b) in the case of each option awarded, to determine whether the
same shall be an incentive stock option pursuant to Section 422 of the Code (an
"incentive stock option"), or an option which does not qualify under such
Section 422 (a "non-qualified option"), (c) to determine the number of shares
subject to each option, (d) to determine the time or times at which options will
be awarded and will expire, (e) to determine the option price of the shares
subject to each option, which price shall not be less than the minimum specified
in Section 2 hereof, (f) to determine the time or times when each option vests
and when it becomes exercisable and to determine the duration of the exercise
period and limits on exercise and vesting, (g) to prescribe the form or forms of
the instruments evidencing any options awarded under the Plan (the "Stock Option
Agreement"), (h) to prescribe the manner in which, and the form of consideration
for which, the option price should be paid and (i) to make any and all
adjustments and/or conversions contemplated by the Plan.
2. OPTION PRICE
The option price shall be determined by the Committee at the time any option
is awarded and shall not be less than 100% of the fair market value of the
Common Stock on the date on which the option is granted. Subject to any
limitations that may be imposed by the Committee to comply with any applicable
rule, regulation or guideline or to accomplish any other objective, the option
price shall be paid in cash (whether or not such cash is loaned by Disney to the
participant for such purpose) or by the surrender, at the fair market value on
the date on which the option is exercised, of shares of Common Stock, or by any
combination of cash and such shares.
The purchase price for shares being purchased upon exercise of non-qualified
options may also be paid in any other manner approved by the Committee,
including, without limitation, by delivery to Disney of (a) a cash amount which
shall not be less than the par value of the Common Stock multiplied by the
number of shares being purchased and (b) a binding, joint and several obligation
of the participant and a financial institution or broker approved by the
Committee, to pay the balance of the purchase price upon such terms and
conditions as may be specified from time to time by the Committee. For purposes
of this Appendix A, the "fair market value" of a share of Common Stock shall be
the average of the highest and lowest of the New York Stock Exchange composite
tape market prices at which the shares of Common Stock shall have
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been sold regular way on the date as of which fair market value is to be
determined or, if there shall be no such sale on such date, the next preceding
day on which such a sale shall have occurred.
3. DURATION AND PERIOD FOR EXERCISE OF OPTIONS
Subject to earlier termination as provided in Section 4 hereof, an option
granted under the Plan shall expire ten years after the date the option is
granted, unless otherwise provided by the Committee. The Committee shall specify
at the time each option is granted, and shall state in the Stock Option
Agreement, the time or times at which, and in what proportions, that option
becomes vested and may be exercised prior to its expiration or earlier
termination, provided that, except as provided in Section 4 hereof, the
participant is employed by Disney or an Affiliate on each such vesting date or
on a date no more than three months prior to such vesting date. The Committee
shall also determine at the time each option is granted, and shall state in the
Stock Option Agreement, whether that option is to be treated as an incentive
stock option.
4. CONDITIONS TO EXERCISE OPTIONS
Except as provided in this Section 4, Sections 3 or 10 hereof or as otherwise
may be provided by the Committee, no option may be exercised at any time unless
the participant is then employed by Disney or one of its Affiliates.
The option of any participant whose employment with Disney or one of its
Affiliates is terminated for any reason shall terminate on the earlier of (a)
the date that the option expires in accordance with its terms (including any
terms required under Section 422 of the Code if the option is an incentive stock
option) or (b) termination of employment or the expiration of such period after
termination of employment as the Committee shall specify in the Stock Option
Agreement, provided that such period shall not be less than: (i) twelve months
if employment ceased due to permanent and total disability, (ii) eighteen months
if employment ceased at a time when the optionee is eligible to elect immediate
commencement of retirement benefits under a pension plan to which Disney or any
of its Affiliates had made contributions, (iii) eighteen months if the
participant died while employed by Disney or any of its Affiliates, or (iv)
three months if employment ceased for any other reason, except termination for
cause (as described below). During such period as described above, except as
otherwise specified in the Stock Option Agreement or in the event employment was
terminated by the death of the participant, the option may be exercised by such
participant in respect of the same number of shares, in the same manner, and to
the same extent as if he had continued as an employee during the first three
months of such period; but no additional rights shall vest after such three
months. The Committee shall have authority to determine in each case whether an
authorized leave of absence shall be deemed a termination of employment for
purposes hereof, as well as the effect of a leave of absence on the vesting and
exercisability of an option.
Notwithstanding the foregoing or any other provision herein to the contrary,
in the event of termination of employment or discharge of a participant "for
cause", as determined by the Committee in its sole discretion (the basis for
which may, but need not be, specified in the Stock Option Agreement), then,
subject to the terms of the Stock Option Agreement, any option or options held
by such participant under the Plan, not theretofore exercised, shall terminate
immediately upon such termination or discharge and may not be exercised
thereafter. The Committee may authorize any officer or officers of Disney or its
Affiliates to have standing authority to suspend the exercise of options by any
participant with respect to whom grounds for a "for cause" termination may
exist, as determined in the sole discretion of such officer or officers. Any
such duly authorized officer may suspend the ability of any such participant to
exercise an option pending the final determination of the Committee at its next
regularly scheduled meeting.
Except as otherwise provided by the Committee in the Stock Option Agreement,
all stock options of any participant who dies while employed by Disney or any of
its Affiliates may be exercised by the participant's
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beneficiary as designated by the participant on such forms and in accordance
with such procedures as are required or authorized by the Committee (a
"Designated Beneficiary") or, in the absence of an authorized designation, a
legatee or legatees of such options under the participant's last will, or by
such participant's executors, personal representatives or distributees, in
respect of all or any part of the total number of shares subject to such options
at the time of such participant's death (whether or not, at the time of death,
the deceased participant would have been entitled to exercise such options to
the extent of all or any of the shares covered thereby). However, except as
otherwise provided by the Committee, in the event of the death of the
participant after the date of termination of employment with Disney or any of
its Affiliates and while any options remain outstanding, then such deceased
participant's options shall expire in accordance with their terms, at the same
time they would have expired if such participant had not died. Except as
otherwise provided by the Committee in the Stock Option Agreement, the stock
options of a participant who dies after he severed employment with Disney or any
of its Affiliates may be exercised prior to their expiration by a Designated
Beneficiary, a legatee or legatees of the options under the participant's last
will, or by such participant's executors, personal representatives or
distributees, in respect to the same number of shares, in the same manner and to
the same extent as if such participant were then living.
The Committee may accelerate vesting and exercisability or waive
exercisability or vesting conditions of an option, and may extend the period of
exercise of an option following termination of employment (subject to its
maximum term), in any circumstances as it deems appropriate.
For purposes hereof, the Committee shall have the sole power to make all
determinations regarding the termination of any participant's employment,
including, but not limited to, the effective time thereof for the purposes of
this Plan, the cause(s) therefor and the consequences thereof. Unless otherwise
provided by the Committee, if an entity ceases to be an Affiliate of Disney or
otherwise ceases to be qualified under the Plan or if all or substantially all
of the assets of an Affiliate of Disney are conveyed (other than by
encumbrance), such cessation or action, as the case may be, shall be deemed for
purposes hereof to be a termination of the employment of each employee of that
entity.
5. METHOD OF EXERCISING OPTIONS
Any option granted under the Plan may be exercised by the participant, by the
participant's Designated Beneficiary as designated in accordance with Section 4
hereof, by a legatee or legatees of such option under such participant's last
will, or by such participant's executors, personal representatives or
distributees or such other persons as may be approved by the Committee by
delivering to Disney at its main office (attention of its Secretary or such
other individual or department as may be provided by Disney from time to time)
written notice of the number of shares with respect to which the option is being
exercised accompanied by full payment to Disney of the purchase price of the
shares being purchased (in accordance with Section 2 hereof) and satisfaction of
all applicable tax withholdings (in accordance with Section 9(e) of the Plan).
6. INCENTIVE STOCK OPTIONS
(a) AWARD OF ISOS. Incentive stock options may be granted only to those
persons who are employees of Disney or any subsidiary corporation or parent
corporation of Disney, within the meaning of Section 424 of the Code.
Notwithstanding the foregoing, an incentive stock option shall not be granted to
any such person if immediately after such grant he is the owner or would be
deemed in accordance with Section 424 of the Code to be the owner of more than
10% of the total combined voting power or value of all classes of stock of
Disney or any of its subsidiary or parent corporations.
(b) ANNUAL LIMITS. No incentive stock option shall be granted to a
participant if as a result of which the aggregate fair market value (determined
as of the date of grant) of the stock with respect to which incentive stock
options are exercisable for the first time in any calendar year under the Plan,
and any other stock
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option plans of Disney or any subsidiary or any parent corporation, would exceed
$100,000, determined in accordance with Section 422 of the Code. This limitation
shall be applied by taking options into account in the order in which granted.
(c) TERMS AND CONDITIONS; NONTRANSFERABILITY. Any incentive stock option
granted under the Plan shall contain such terms and conditions, not inconsistent
with the terms of the Plan, as are deemed necessary or desirable by the
Committee. Such terms, together with the terms of this Plan, shall be intended
and interpreted to cause such incentive stock option to qualify as an "incentive
stock option" under Section 422 of the Code. Such terms shall include a term of
exercise of the option which is not greater than ten years from the date of
grant, and additional limitations on the period of exercise of the option
following termination of employment. An incentive stock option shall by its
terms be nontransferable otherwise than by will or by the laws of descent and
distribution, and shall be exercisable, during the lifetime of a participant,
only by such participant.
(d) DISQUALIFYING DISPOSITIONS. If shares of Common Stock acquired by
exercise of an incentive stock option are disposed of within two years following
the date of grant or one year following the transfer of such shares to the
participant upon exercise, the participant shall be required, within 30 days
after such disposition, to notify Disney in writing of the date and terms of
such disposition and provide such other information regarding the disposition as
the Committee may reasonably require.
7. GRANT AND EXERCISE OF STOCK APPRECIATION RIGHTS ( "SARS ")
(a) AWARD OF SARS. The Committee may grant SARs to such optionees as the
Committee may select from time to time, either on a free-standing basis (without
regard to the grant of a stock option) or on a tandem basis (related to the
grant of an underlying stock option). SARs granted on a free-standing basis may
be awarded by the Committee for a number of shares, at a base price, upon terms
for vesting and exercise and upon such other terms and conditions as are
consistent with such comparable terms applicable to the grant of stock options
under the Plan (including this Appendix A), except to the extent specifically
provided herein with respect to SARs. SARs granted on a tandem basis in
connection with any stock option granted under the Plan (either at the time such
option is granted or thereafter at any time prior to the exercise, termination
or expiration of such option) shall be subject to the same terms and conditions
as the related stock option and shall be exercisable only to the extent such
option is exercisable. Upon exercise of a tandem SAR and surrender of a related
stock option, the number of shares to be charged against the number of shares
referred to in Section 5 of the Plan shall be the number of shares subject to
the surrendered stock options, and the number of shares shall be reduced
accordingly. Upon exercise of a freestanding SAR, the number of shares to be
charged against the number of shares referred to in Section 5 of the Plan shall
be the number of shares subject to the freestanding SARs so exercised, and the
number of shares shall be reduced accordingly.
(b) AMOUNT OF PAYMENT UPON EXERCISE OF SARS. An SAR shall entitle the
recipient thereof to receive, subject to the provisions of the Plan and such
rules and regulations as may be established by the Committee, a payment having
an aggregate value equal to the product of (i) the excess of (A) the fair market
value on the exercise date of one share over (B) the base price per share, times
(ii) the number of shares called for by the SAR, or portion thereof, which is
exercised. In the case of exercise of a tandem SAR, such payment shall be made
in exchange for the surrender of the unexercised related stock option (or any
portion or portions thereof which the recipient from time to time determines to
surrender for this purpose).
(c) FORM OF PAYMENT UPON EXERCISE OF SARS. The Committee shall, in its sole
discretion, determine whether the payment upon exercise of an SAR shall be made
in the form of all cash, all shares, or any combination thereof. The Committee
may impose such restrictions upon the forms of payment upon exercise of an SAR
as it may deem necessary or appropriate to comply with the requirements for
exemption under
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Rule 16b-3 of the Exchange Act. If upon settlement of the exercise of an SAR a
participant is to receive a portion of such payment in shares of Common Stock,
the number of shares shall be determined by dividing such portion by the fair
market value of a share of Common Stock on the exercise date. No fractional
shares will be issued and the Committee shall determine whether cash shall be
given in lieu of such fractional shares or whether such fractional shares shall
be eliminated.
8. TRANSFERABILITY OF OPTIONS AND SARS
The Committee may provide, in the Stock Option or SAR Agreement, or any
amendment thereto, evidencing the award, the extent to which a stock option or
SAR granted under the Plan shall be transferable by the participant during his
lifetime or upon his death. The terms and conditions of any such transferability
shall be established by the Committee in accordance with the requirements of
Section 9(b) of the Plan. Incentive stock options shall not be transferable
except as provided in Section 6 hereof. A beneficiary designation authorized
pursuant to any other provision hereof shall not be deemed to be an assignment,
transfer or encumbrance for purposes hereof.
9. STOCK OPTION AND SAR AGREEMENTS
Each option or SAR awarded under the Plan shall be evidenced by a Stock
Option Agreement or SAR Agreement (which need not be identical to other Stock
Option or SAR Agreements) executed on behalf of Disney by a member of the
Committee or by an officer designated by the Committee and by the participant
which shall set forth the terms and conditions of the option and SAR, if any
(including, in the case of incentive stock options, such terms as shall be
requisite in the judgment of the Committee pursuant to Section 422 of the Code),
either expressly or by reference to the Plan and which may contain other
provisions provided they are neither inconsistent with nor prohibited by the
Plan. The Committee may make modifications to a Stock Option or SAR Agreement as
are not inconsistent with or prohibited by the Plan. However, no modification of
any Stock Option or SAR Agreement shall be effective unless explicitly set forth
in a written instrument executed on behalf of Disney by a member of the
Committee or by an officer designated by the Committee and, if adverse to the
optionee, by the optionee. Except as provided in the immediately preceding
sentence, no statement, undertaking or representation purporting to confer or
affect any rights under the Plan, whether oral or written, made by any director,
officer or employee of Disney or any Affiliate shall modify the terms of any
Stock Option or SAR Agreement or constitute a grant of additional options or
rights under the Plan.
10. SPECIAL RULES RELATING TO STOCK OPTIONS ORIGINALLY GRANTED FOR GO.COM COMMON
STOCK
Notwithstanding the provisions in Section 4 of this Appendix A, this Section
10 applies to options that were granted for the purchase of the Disney Internet
Group Common Stock under the Plan and subsequently converted to options for the
purchase of the Common Stock pursuant to Section 8 of the Plan (the "Former
GO.com Options").
Unless otherwise provided by the Committee in the Stock Option Agreement,
the Former GO.com Option of any participant whose employment with Disney or one
of its Affiliates is terminated for any reason shall terminate on the date which
is 60 days following the participant's termination of employment, other than in
cases of termination on account of death or permanent and total disability (as
provided below), and shall remain exercisable following such termination of
employment only as to those shares that were exercisable on the date of
participant's termination of employment. The Committee shall have authority in
its discretion to determine in each case whether an authorized leave of absence
shall be deemed a termination of employment for purposes hereof, as well as the
effect of a leave of absence on the vesting and exercisability of a Former
GO.com Option.
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Notwithstanding the foregoing or any other provision herein to the contrary,
in the event of termination of employment or discharge of a participant "for
cause", as determined by the Committee in its sole discretion (the basis for
which may, but need not be, specified in the Stock Option Agreement), then,
subject to the terms of the Stock Option Agreement, any Former GO.com Option
held by such participant under the Plan, not theretofore exercised, shall
terminate immediately upon such termination or discharge and may not be
exercised thereafter. The Committee may authorize any officer or officers of
Disney or its Affiliates to have standing authority to suspend the exercise of
Former GO.com Options by any participant with respect to whom grounds for a "for
cause" termination may exist, as determined in the sole discretion of such
officer or officers. Any such duly authorized officer may suspend the ability of
any such participant to exercise a Former GO.com Option pending the final
determination of the Committee at its next regularly scheduled meeting.
Except as otherwise provided by the Committee in the Stock Option Agreement,
in the event employment is terminated by the participant's death, any shares
subject to a Former GO.com Option that would otherwise have become exercisable
within the twelve-month period following the date of death shall immediately
vest and become fully exercisable upon the date of death (and no additional
shares shall vest), and all such shares and all previously vested but
unexercised shares shall be exercisable until the expiration of such
twelve-month period. However, except as otherwise provided by the Committee in
the Stock Option Agreement, in the event of the death of the participant after
the date of termination of employment with Disney or any of its Affiliates and
while any Former GO.com Options remain outstanding, no further vesting shall
occur and such deceased participant's vested Former GO.com Options shall expire
on the date that is 60 days following the participant's death. All vested Former
GO.com Options of any participant who dies prior to the expiration of such
option may be exercised by the participant's beneficiary as designated by the
participant on such forms and in accordance with such procedures as are required
or authorized by the Committee (a "Designated Beneficiary") or, in the absence
of an authorized designation, a legatee or legatees of the Former GO.com Options
under the participant's last will, or by such participant's executors, personal
representatives or distributees.
Except as otherwise provided by the Committee in the Stock Option Agreement,
in the event employment is terminated by the participant's permanent and total
disability, any shares subject to a Former GO.com Option that would otherwise
have become exercisable within the first three months following the date of
permanent and total disability shall continue to vest in accordance with their
terms (and no additional shares shall vest), and all such shares and previously
vested shares shall be exercisable until the date that is twelve months
following the date of permanent and total disability. The Committee shall have
the authority, in its discretion, to determine whether a participant's
employment has been terminated on account of permanent and total disability.
The Committee may accelerate vesting and exercisability or waive
exercisability or vesting conditions of a Former GO.com Option, and may extend
the period of exercise of a Former GO.com Option following termination of
employment (subject to its maximum term), in any circumstances as it deems
appropriate.
For purposes hereof, the Committee shall have the sole power to make all
determinations regarding the termination of any participant's employment,
including, but not limited to, the effective time thereof for the purposes of
this Plan, the cause(s) therefor and the consequences thereof. Unless otherwise
provided by the Committee, if an entity ceases to be an Affiliate of Disney or
otherwise ceases to be qualified under the Plan or if all or substantially all
of the assets of an Affiliate of Disney are conveyed (other than by
encumbrance), such cessation or action, as the case may be, shall be deemed for
purposes hereof to be a termination of the employment of each employee of that
entity.
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1995 Stock Incentive Plan - The Walt Disney Co.
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