Registration Statement for Securities Offered Pursuant to a Transaction — Form S-3
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-3 Registration Statement for Securities Offered 37 217K
Pursuant to a Transaction
2: EX-1.1 Underwriting Agreement 21 105K
3: EX-1.5 Underwriting Agreement 70 219K
4: EX-4.1 Instrument Defining the Rights of Security Holders 10 58K
12: EX-4.10 Instrument Defining the Rights of Security Holders 2 17K
5: EX-4.2 Instrument Defining the Rights of Security Holders 17 64K
6: EX-4.4 Instrument Defining the Rights of Security Holders 82 345K
7: EX-4.5 Instrument Defining the Rights of Security Holders 94 342K
8: EX-4.6 Instrument Defining the Rights of Security Holders 30 96K
9: EX-4.7 Instrument Defining the Rights of Security Holders 35 109K
10: EX-4.8 Instrument Defining the Rights of Security Holders 34 108K
11: EX-4.9 Instrument Defining the Rights of Security Holders 31 111K
13: EX-5.1 Opinion re: Legality 7 28K
14: EX-12.1 Statement re: Computation of Ratios 1 12K
15: EX-23.2 Consent of Experts or Counsel 1 8K
16: EX-23.3 Consent of Experts or Counsel 1 9K
17: EX-25.1 Statement re: Eligibility of Trustee 4 23K
18: EX-25.2 Statement re: Eligibility of Trustee 5 23K
19: EX-25.3 Statement re: Eligibility of Trustee 6 33K
S-3 — Registration Statement for Securities Offered Pursuant to a Transaction
Document Table of Contents
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 14, 1998
REGISTRATION NO. 333-
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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THE WALT DISNEY COMPANY
(Exact name of registrant as specified in its charter)
[Download Table]
DELAWARE 95-4545390
(State or other jurisdiction (I.R.S. employer
of identification
incorporation or organization) number)
500 SOUTH BUENA VISTA STREET BURBANK, CALIFORNIA 91521
(818) 560-1000
(Address, including zip code, and telephone number,
including area code, of registrant's
principal executive offices)
DAVID K. THOMPSON
SENIOR VICE PRESIDENT--ASSISTANT GENERAL COUNSEL
THE WALT DISNEY COMPANY
500 SOUTH BUENA VISTA STREET BURBANK, CALIFORNIA 91521
(818) 560-1000
(Name, address, including zip code, and
telephone number, including area code,
of agent for service)
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COPY TO:
JEFFREY H. COHEN
Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue, Suite 3400
Los Angeles, California 90071
(213) 687-5000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after this Registration Statement becomes effective.
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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/
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CALCULATION OF REGISTRATION FEE
[Enlarge/Download Table]
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING
SECURITIES TO BE REGISTERED REGISTERED(1) PER UNIT(2) PRICE(1)(3)
Debt Securities(5)................................. (2) -- (2)
Preferred Stock(5)................................. (2) -- (2)
Common Stock(5)(6)................................. (2) -- (2)
Depositary Shares(7)............................... (2) -- (2)
Warrants(5)........................................ (2) -- (2)
Total(8)........................................... $5,000,000,000 -- $5,000,000,000
TITLE OF EACH CLASS OF AMOUNT OF
SECURITIES TO BE REGISTERED REGISTRATION FEE(4)
Debt Securities(5)................................. (2)
Preferred Stock(5)................................. (2)
Common Stock(5)(6)................................. (2)
Depositary Shares(7)............................... (2)
Warrants(5)........................................ (2)
Total(8)........................................... $1,268,500
(SEE FOOTNOTES ON NEXT PAGE.)
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The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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(FOOTNOTES FROM PREVIOUS PAGE)
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(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 (such as European Currency Units). 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, the issue price of any
Common Stock, and the issue price of any Warrants (but not the exercise
price of any Securities issuable upon the exercise of such Warrants).
(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 or Common Stock that may be issuable upon conversion of or
in exchange for convertible or exchangeable Debt Securities or Preferred
Stock (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 to purchase
Debt Securities, Preferred Stock and Common Stock, and such indeterminate
principal amount of Debt Securities, or number of shares of Preferred Stock
or Common Stock as may be issued upon conversion of, or in exchange for, or
upon exercise of, convertible or exchangeable Debt Securities or Preferred
Stock or Warrants (including any securities issuable upon stock splits and
similar transactions pursuant to Rule 416 under the Securities Act).
(6) Shares of Common Stock are accompanied by the Registrant's preferred stock
purchase rights issued pursuant to a Rights Agreement dated as of November
8, 1995 between the Registrant and the Bank of New York, as rights agent.
Until the occurrence of certain prescribed events, these rights are not
exercisable, are evidenced by the certificates for the Common Stock and will
be transferred along with and only with such securities.
(7) Such indeterminate number of Depositary Shares to be evidenced by Depositary
Receipts issued pursuant to a Deposit Agreement. 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.
(8) The $5,000,000,000 of Securities offered hereby is comprised of $700,000,000
of securities registered pursuant to Registration Statement No. 33-62777
initially filed September 20, 1995 and included herein under Rule 429, for
which the filing fee was previously paid, and $4,300,000,000 registered
hereby. Accordingly, the filing fee paid herewith is $1,268,500
($4,300,000,000 multiplied by .000295). 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.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BY ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION DATED MAY 14, 1998
PROSPECTUS
THE WALT DISNEY COMPANY
SECURITIES
----------------
The Walt Disney Company may offer from time to time the following types of
securities ("Securities"):
- debt securities, which may be senior debt securities, senior subordinated
debt securities or subordinated debt securities, in each case consisting
of notes or other unsecured evidences of indebtedness;
- shares of preferred stock, which may be issued in the form of depositary
receipts representing a fraction of a share of preferred stock;
- shares of common stock; or
- warrants to purchase debt securities, preferred stock or common stock.
The Securities will have an aggregate initial offering price of up to
$5,000,000,000 or an equivalent amount in U.S. dollars if any Securities are
denominated in a currency other than U.S. dollars or in currency units. The
Securities may be offered separately or together in any combination and as
separate series. The amounts, prices, form, designation, specific terms and
offering terms of each issuance of Securities will be determined at the time of
sale and will be set forth in a Prospectus Supplement. Where applicable, the
Prospectus Supplement will also contain information about certain material
United States Federal income tax considerations relating to the Securities and
any listing of the Securities on a national securities exchange.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
--------------------------
The Securities may be sold directly, through agents designated from time to
time or to or through underwriters or dealers. See "Plan of Distribution." If
any agents or underwriters are involved in the sale of any Securities, their
names and any applicable commissions or discounts will be set forth in a
Prospectus Supplement. The net proceeds to the issuer from the sale of
Securities also will be set forth in a Prospectus Supplement.
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, 1998
AVAILABLE INFORMATION
The Walt Disney Company ("Disney") is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith, files reports, proxy and information
statements and other information with the Securities and Exchange Commission
(the "Commission"). Such reports, proxy and information statements and other
information can be inspected and copied at the public reference facilities
maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549; 7 World Trade Center, 13th Floor, New York, New York
10048; and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material can be obtained at prescribed rates from
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Such reports, proxy and information statements and other
information may also be inspected at the offices of the New York Stock Exchange,
20 Broad Street, New York, New York 10005 and the Pacific Exchange, 115 Sansome
Street, Suite 1104, San Francisco, California 94104. In addition, the Commission
maintains a Web site (http://www.sec.gov) that contains reports, proxy and
information statements and other information regarding registrants, such as
Disney, that file electronically with the Commission.
Disney has filed with the Commission in Washington, D.C. a registration
statement on Form S-3 (including all amendments thereto, the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the Securities offered hereby. As permitted by the rules and
regulations of the Commission, this Prospectus does not contain all of the
information set forth in the Registration Statement and the exhibits and
schedules thereto. Such additional information is available for inspection and
copying at the offices of the Commission. Statements contained in this
Prospectus, in any Prospectus Supplement or in any document incorporated by
reference herein or therein as to the contents of any contract or other document
referred to herein or therein are not necessarily complete, and in each instance
reference is made to the copy of such contract or other document filed as an
exhibit to, or incorporated by reference in, the Registration Statement, each
such statement being qualified in all respects by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed by Disney (File No. 1-11605) with
the Commission under the Exchange Act are incorporated herein by reference:
(a) Disney's Annual Report on Form 10-K for the fiscal year ended
September 30, 1997; and
(b) Disney's Quarterly Reports on Form 10-Q for the quarters ended
December 31, 1997 and March 31, 1998.
All documents filed by Disney pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act prior to the termination of the offering of the Securities
made hereby, shall be deemed to be incorporated by reference into this
Prospectus and to be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes hereof to the extent that a statement contained herein (or in any
other subsequently filed document that is or is deemed to be incorporated by
reference herein) modifies or supersedes such previous statement. Any statement
so modified or superseded shall not be deemed to constitute a part hereof except
as so modified or superseded.
Disney will provide without charge to each person to whom a copy of this
Prospectus has been delivered, on the written or oral request of such person, a
copy of any or all of the documents referred to above which have been or may be
incorporated by reference in this Prospectus other than exhibits to such
documents, unless such exhibits are also specifically incorporated by reference
herein. Requests for such copies should be directed to The Walt Disney Company,
500 South Buena Vista Street, Burbank, California 91521, Attention: Corporate
Secretary; telephone number (818) 560-1000.
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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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2
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS OR
ANY PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE ISSUER
OR ANY UNDERWRITER OR AGENT. THIS PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT DO
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER AND
THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE
INFORMATION HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THEIR
RESPECTIVE DATES.
3
THE COMPANY
The Walt Disney Company, a Delaware corporation ("Disney" or the "Company"),
is a diversified international entertainment company with operations in the
businesses of Creative Content, Broadcasting and Theme Parks and Resorts. On
February 9, 1996, the Company completed its acquisition of ABC, Inc. ("ABC"),
which resulted in a new parent company, with the name "The Walt Disney Company",
replacing the old parent company of the same name. For convenience, unless the
context otherwise requires, the terms "Company" and "Disney" are used in this
Prospectus to refer to both the old and the new parent company and to refer
collectively to the parent company and the subsidiaries through which its
various businesses are actually conducted.
The Company's principal executive offices are located at 500 South Buena
Vista Street, Burbank, California 91521, and its telephone number is (818)
560-1000.
CREATIVE CONTENT
The Company produces and acquires live-action and animated motion pictures
for distribution to the theatrical, home video and television markets. The
Company also produces original television programming for the network and
first-run syndication markets. The Company distributes its filmed product
through its own distribution and marketing companies in the United States and
most foreign markets. The success of the Company's Creative Content operations
is heavily dependent upon public taste, which is unpredictable and subject to
change. In addition, filmed entertainment operating results fluctuate due to the
timing and performance of theatrical and home video releases. Release dates are
determined by several factors, including timing of vacation and holiday periods
and competition.
The Company licenses the name "Walt Disney," as well as the Company's
characters, visual and literary properties and songs and music, to various
consumer manufacturers, retailers, show promoters and publishers throughout the
world. The Company also engages in direct retail distribution principally
through The Disney Stores, and produces books and magazines for the general
public in the United States and Europe. In addition, the Company produces audio
products for all markets, as well as film, video and computer software products
for the educational marketplace. Operating results for the licensing and retail
distribution business are influenced by seasonal consumer purchasing behavior
and by the timing and performance of animated theatrical releases.
BROADCASTING
The Company operates the ABC Television Network, which has affiliated
stations providing coverage to U.S. television households. The Company also owns
television and radio stations, most of which are affiliated with the ABC
Television Network and the ABC Radio Networks. The Company's cable and
international broadcast operations are principally involved in the production
and distribution of cable television programming, the licensing of programming
to domestic and international markets and investing in joint ventures in
foreign-based television operations and television production and distribution
entities. The primary domestic cable programming services, which operate
principally through joint ventures, are ESPN, the A&E Television Networks,
Lifetime Television and E! Entertainment Television. The Company provides
programming for and operates Disney Channel, a cable and satellite television
programming service.
THEME PARKS AND RESORTS
The Company operates the Walt Disney World Resort-Registered Trademark- in
Florida, and Disneyland Park-Registered Trademark-, the Disneyland Hotel and the
Disneyland Pacific Hotel in California. The Walt Disney World Resort includes
the Magic Kingdom, Epcot and the Disney-MGM Studios, thirteen resort hotels and
a complex of villas and suites, a nighttime entertainment complex, a shopping
village, conference centers, campgrounds, golf courses, water parks and other
recreational facilities. The Company earns royalties generated by the Tokyo
Disneyland-Registered Trademark- theme park near Tokyo, Japan, which is owned
and operated by an unrelated Japanese corporation. The Company also has an
investment in Euro Disney S.C.A., a publicly held French corporation that
operates Disneyland Paris. The Company's Walt Disney Imagineering unit designs
and develops new theme park concepts and attractions, as well as resort
properties. The Company also manages and markets vacation ownership interests in
the Disney Vacation Club. Included in Theme Parks and Resorts are the Company's
National Hockey League franchise, the
4
Mighty Ducks of Anaheim, and its ownership interest in the Anaheim Angels, a
Major League Baseball team. Historically, the theme parks and resorts business
experiences fluctuations in park attendance and resort occupancy resulting from
the nature of vacation travel. Peak attendance and resort occupancy generally
occur during the summer months when school vacations occur and during
early-winter and spring holiday periods.
USE OF PROCEEDS
Unless otherwise indicated in an accompanying Prospectus Supplement, Disney
intends to use the net proceeds from the sale of the Securities for general
corporate purposes.
RATIOS OF EARNINGS TO FIXED CHARGES
Set forth below are the consolidated ratios of earnings to fixed charges for
Disney for the six-month periods ended March 31, 1998 and 1997 and for each of
the years in the five-year period ended September 30, 1997:
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SIX MONTHS ENDED
YEAR ENDED
MARCH 31, SEPTEMBER 30,
-------------------- ------------------------------------------
1998 1997 1997 1996 1995 1994
--------- --------- --------- --------- --------- ---------
Ratio of Earnings to Fixed Charges (1)(2)(3)...................... 5X 5X 5X 4X 9X 9X
1993
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Ratio of Earnings to Fixed Charges (1)(2)(3)...................... 7X
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(1) For purposes of these ratios, earnings are calculated by adding to
(subtracting from) income from continuing operations before income taxes and
cumulative effect of accounting changes, the following: fixed charges,
excluding capitalized interest; and losses and (undistributed earnings)
recognized with respect to less than 50% owned equity investments. Fixed
charges consist of interest on borrowings, that portion of rental expense
that approximates interest and amortized debt expense, if any.
(2) The Company's acquisition of ABC was consummated on February 9, 1996.
Accordingly, the ratios set forth above for periods before and after the
acquisition are not comparable.
(3) Disney's ratios of earnings to combined fixed charges and preferred stock
dividends for the periods indicated above is the same as the ratios of
earnings to fixed charges set forth above because Disney had no shares of
preferred stock outstanding during the periods indicated and currently has
no such shares outstanding.
5
CERTAIN FINANCIAL INFORMATION
The following table sets forth selected historical consolidated financial
information of Disney and has been derived from and should be read in
conjunction with Disney's audited consolidated financial statements and
unaudited interim consolidated financial statements, including the notes
thereto, which are incorporated by reference in this Prospectus. Unaudited
interim data reflect, in the opinion of Disney's management, all adjustments
considered necessary for a fair presentation of results for such interim
periods. Results of operations for unaudited interim periods are not necessarily
indicative of results which may be expected for any other interim or annual
period.
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SIX MONTHS ENDED YEAR ENDED
MARCH 31, SEPTEMBER 30,
-------------------- -----------------------------------------------------
1998 1997(1) 1997(1) 1996(2) 1995 1994 1993(3)
--------- --------- --------- --------- --------- --------- ---------
(IN MILLIONS, EXCEPT PER SHARE DATA)
INCOME STATEMENT DATA:
Revenues.................................. $ 11,581 $ 11,759 $ 22,473 $ 18,739 $ 12,151 $ 10,090 $ 8,531
Operating income.......................... 2,341 2,426 4,447 3,033 2,466 1,972 1,722
Income before cumulative effect of
accounting changes...................... 1,139 1,082 1,966 1,214 1,380 1,110 671
Earnings per share before cumulative
effect of accounting changes(4)
Diluted................................. 1.65 1.58 2.86 1.96 2.60 2.04 1.23
Basic................................... 1.68 1.60 2.92 1.99 2.65 2.07 1.26
Cash dividends per share.................. .29 .24 .51 .42 .35 .29 .24
BALANCE SHEET DATA (AT END OF PERIOD):
Total assets.............................. $ 39,317 $ 39,137 $ 37,776 $ 36,626 $ 14,606 $ 12,826 $ 11,751
Borrowings................................ 11,450 12,848 11,068 12,342 2,984 2,937 2,386
Stockholders' equity...................... 18,626 16,857 17,285 16,086 6,651 5,508 5,031
Book value per share...................... 27.41 25.03 25.76 23.87 12.69 10.51 9.39
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(1) 1997 results include a $135 million gain from the Company's sale of KCAL-TV.
The diluted earnings per share impact of the gain was $.11.
(2) 1996 results include a $300 million non-cash charge pertaining to the
implementation of SFAS 121 ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED
ASSETS AND FOR LONG-LIVED ASSETS TO BE DISPOSED OF, and a $225 million
charge for costs related to the acquisition of ABC. The diluted earnings per
share impacts of these charges were $.30 and $.22, respectively.
(3) In 1993, the Company changed its accounting policy for project-related
pre-opening costs, adopted SFAS 106 EMPLOYERS' ACCOUNTING FOR POSTRETIREMENT
BENEFITS OTHER THAN PENSION and adopted SFAS 109 ACCOUNTING FOR INCOME
TAXES. The cumulative effect of these accounting changes on the 1993 results
follows:
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DILUTED EARNINGS BASIC EARNINGS
NET INCOME PER SHARE PER SHARE
----------- ----------------- ---------------
Expense pre-opening costs as incurred................. $ (271) $ (.50) $ (.51)
Adopt SFAS 106........................................ (130) (.24) (.24)
Adopt SFAS 109........................................ 30 .06 .06
----- ----- -----
$ (371) $ (.68) $ (.69)
----- ----- -----
----- ----- -----
Operating and net income for 1993 also reflect a $350 million charge to
fully reserve the Company's outstanding receivables from Euro Disney S.C.A.
and the Company's commitment to provide certain financing to Euro Disney
S.C.A. for a limited period. The diluted earnings per share impact of the
charge, net of income tax benefit, was $.40.
(4) During the quarter ended December 31, 1997, earnings per share for each
fiscal year presented were restated for the adoption of SFAS 128 EARNINGS
PER SHARE.
In addition, in compliance with the rules and regulations of the Commission
pertaining to the provision of separate financial statements of significant
acquired businesses, Disney hereby incorporates by reference its Current Report
on Form 8-K dated March 30, 1996 that was previously filed with the Commission,
which report contains the audited consolidated financial statements of Capital
Cities/ABC, Inc. for the three years ended December 31, 1995.
6
DESCRIPTION OF THE DEBT SECURITIES
The following description sets forth certain general terms and provisions of
the debt securities (the "Debt Securities") of Disney to which any Prospectus
Supplement may relate. The particular terms of the Debt Securities offered by
any Prospectus Supplement and the extent, if any, to which such general
provisions may apply to the Debt Securities so offered will be described in the
Prospectus Supplement relating to such Debt Securities.
The Debt Securities may be issued, from time to time, in one or more series,
and will constitute either senior debt securities (the "Senior Debt
Securities"), senior subordinated debt securities (the "Senior Subordinated Debt
Securities") or subordinated debt securities (the "Subordinated Debt
Securities"). Senior Debt Securities may be issued from time to time under the
Indenture, dated as of March 7, 1996 (the "Senior Debt Securities Indenture"),
between Disney and Citibank, N.A., a national banking association, as trustee
(the "Senior Debt Securities Trustee"). Senior Subordinated Debt Securities may
be issued from time to time under an Indenture (the "Senior Subordinated Debt
Securities Indenture") to be entered into between Disney and Chase Manhattan
Bank and Trust Company, National Association, as trustee (the "Senior
Subordinated Debt Securities Trustee"). Subordinated Debt Securities may be
issued from time to time under an Indenture (the "Subordinated Debt Securities
Indenture") to be entered into between Disney and The First National Bank of
Chicago, as trustee (the "Subordinated Debt Securities Trustee").
The Senior Debt Securities Indenture, the Senior Subordinated Debt
Securities Indenture, and the Subordinated Debt Securities Indenture are
referred to herein individually as an "Indenture" and, collectively, as the
"Indentures," and the Senior Debt Securities Trustee, the Senior Subordinated
Debt Securities Trustee and the Subordinated Debt Securities Trustee are
referred to herein individually as the "Trustee" and collectively as the
"Trustees." The forms of the Indentures are filed, or incorporated by reference,
as exhibits to the Registration Statement. Capitalized terms used in this
section which are not otherwise defined in this Prospectus shall have the
meanings set forth in the Indentures to which they relate. The following
summaries of certain provisions of the Debt Securities and the Indentures do not
purport to be complete and are subject to, and are qualified in their entirety
by express reference to, all the provisions of the Indentures, including the
definitions therein of certain terms. As used in this section of the Prospectus,
"Disney" does not include its subsidiaries.
GENERAL
The Debt Securities will be direct, unsecured obligations of Disney.
The Indentures do not limit the aggregate principal amount of Debt
Securities that may be issued thereunder and provide that Debt Securities may be
issued thereunder from time to time in one or more series.
Under the Indentures, Disney will have the ability to issue Debt Securities
with terms different from, or the same as, those of Debt Securities previously
issued, without the consent of the holders of previously issued series of Debt
Securities, in an aggregate principal amount determined by Disney.
Securities may be issued as Discount Securities, which may be sold at a
discount below their principal amount. Even if Securities are not issued at a
discount below their principal amount, such Securities may, for United States
Federal income tax purposes, be deemed to have been issued with "original issue
discount" ("OID") because of certain interest payment characteristics. Special
United States Federal income tax considerations applicable to Securities issued
with original issue discount, including Discount Securities, will be described
in more detail in any applicable Prospectus Supplement. In addition, special
United States Federal tax considerations or other restrictions or terms
applicable to any Debt Securities which are issuable in bearer form, offered
exclusively to Non-United States Holders or denominated in a currency other than
United States dollars will be set forth in a Prospectus Supplement relating
thereto.
The applicable Prospectus Supplement or Prospectus Supplements will
describe, among other things, the following terms of the Debt Securities offered
thereby (the "Offered Debt Securities"):
(a) the title of the Offered Debt Securities;
(b) any limit on the aggregate principal amount of the Offered Debt Securities;
7
(c) whether the Offered Debt Securities are to be issuable as registered
securities or bearer securities or both and whether the Offered Debt
Securities may be represented initially by a Debt Security in temporary or
permanent global form, and if so, the initial Depositary with respect to
such temporary or permanent global Debt Security and whether and the
circumstances under which beneficial owners of interests in any such
temporary or permanent global Debt Security may exchange such interests for
Debt Securities of such series and of like tenor of any authorized form and
denomination;
(d) the price or prices at which the Offered Debt Securities will be issued;
(e) the person to whom any interest will be payable on any Offered Debt Security
that is a registered security, if other than the person in whose name the
Offered Debt Security is registered at the close of business on the Regular
Record Date for the payment of such interest;
(f) the manner in which, or the person to whom, any interest on any Offered Debt
Security that is a bearer security will be payable, if other than upon
presentation and surrender of the coupons appertaining thereto, and the
extent to which, or the manner in which, any interest payable on a temporary
or definitive global security on an Interest Payment Date will be paid;
(g) the date or dates on which the principal of the Offered Debt Securities is
payable or the method of determination thereof;
(h) the rate or rates at which the Offered Debt Securities will bear interest or
the method of calculating such rate or rates, if any, the date or dates from
which such interest, if any, will accrue, the Stated Maturities (as defined
below) of installments of interest (the "Interest Payment Dates"), if any,
on which any interest on the Offered Debt Securities will be payable and the
Regular Record Dates for any interest payable on any Offered Debt Securities
which are registered securities;
(i) the place or places where and the manner in which the principal of and
premium, if any, and interest, if any, on such Offered Debt Securities will
be payable and the place or places where such Offered Debt Securities may be
presented for transfer and, if applicable, conversion or exchange and
notices and demands to or upon the Company in respect of the Securities of
the series may be served;
(j) the period or periods within which, the price or prices at which and the
terms and conditions upon which, Debt Securities of the series may be
redeemed, in whole or in part, at the option of the Company;
(k) the obligation, if any, of Disney to redeem or purchase Debt Securities of
the series pursuant to any sinking fund or analogous provisions or at the
option of a holder thereof, the conditions, if any, giving rise to such
obligation, and the period or periods within which, the price or prices at
which and the terms and conditions upon which Debt Securities of the series
shall be redeemed or purchased, in whole or part, and any provisions for the
remarketing of such Debt Securities;
(l) the denominations in which any Offered Debt Security that is a registered
security shall be issuable, if other than denominations of $1,000 and any
integral multiple thereof, and the denominations in which any Offered Debt
Security that is a bearer security shall be issuable, if other than
denominations of $5,000 and $100,000;
(m) the currency or currencies, including composite currencies or currency
units, of payment of principal of and interest, if any, on the Offered Debt
Securities, if other than U.S. dollars, and, if other than U.S. dollars,
whether the Offered Debt Securities may be satisfied and discharged other
than as provided in the Indenture;
(n) if the amount of payments of principal of and interest, if any, on the
Offered Debt Securities is to be determined by reference to an index or
formula, or based on a coin or currency or currency unit other than that in
which the Offered Debt Securities are stated to be payable, the manner in
which such amounts are to be determined and the calculation agent, if any,
with respect thereto;
(o) if other than the principal amount thereof, the portion of the principal
amount of the Offered Debt Securities which will be payable upon declaration
or acceleration of the maturity thereof pursuant to an Event of Default;
(p) whether such Offered Debt Securities are convertible or exchangeable into
other debt or equity securities, and, if so, the terms and conditions upon
which such conversion or exchange will be effected including the
8
initial conversion or exchange price or rate and any adjustments thereto,
the conversion or exchange period and other conversion or exchange
provisions;
(q) any terms applicable to such Offered Debt Securities issued at an issue
price below their stated principal amount, including the issue price thereof
and the rate or rates at which such original issue discount will accrue;
(r) any deletions from, modifications of or additions to the Events of Default
or covenants of Disney with respect to such Offered Debt Securities, whether
or not such Events of Default or covenants are consistent with the Events of
Default or covenants set forth herein;
(s) any special United States Federal income tax considerations applicable to
the Offered Debt Securities;
(t) if the Offered Debt Securities may be issued or delivered (whether upon
original issuance or upon exchange of a temporary Security of such series or
otherwise), or any installment of principal or any interest is payable only,
upon receipt of certain certificates or other documents or satisfaction of
other conditions in addition to those specified in the Indenture, the form
and terms of such certificates, documents or conditions; and
(u) any other terms of the Offered Debt Securities not inconsistent with the
provisions of the applicable Indenture.
The applicable Prospectus Supplement will also describe the following terms
of any series of Subordinated or Senior Subordinated Debt Securities offered
hereby in respect of which this Prospectus is being delivered:
(i) the rights, if any, to defer payments of interest on the Subordinated or
Senior Subordinated Debt Securities of such series by extending the
interest payment period, and the duration of such extension; and
(ii) the subordination terms of the Subordinated or Senior Subordinated Debt
Securities of such series.
The foregoing is not intended to be an exclusive list of the terms that may
be applicable to any Offered Debt Securities and shall not limit in any respect
the ability of Disney to issue Debt Securities with terms different from or in
addition to those described above or elsewhere in this Prospectus provided that
such terms are not inconsistent with the applicable Indenture and this
Prospectus. Any such Prospectus Supplement will also describe any special
provisions for the payment of additional amounts with respect to the Offered
Debt Securities.
CONSEQUENCES OF HOLDING COMPANY STATUS
The operations of Disney are conducted almost entirely through subsidiaries.
Accordingly, the cash flow and the consequent ability to service debt of Disney,
including the Debt Securities, are dependent upon the earnings of its
subsidiaries and the distribution of those earnings to Disney, whether by
dividends, loans or otherwise. The payment of dividends and the making of loans
and advances to Disney by its subsidiaries may be subject to statutory or
contractual restrictions, are contingent upon the earnings of those subsidiaries
and are subject to various business considerations. Any right of Disney to
receive assets of any of its subsidiaries upon their liquidation or
reorganization (and the consequent right of the holders of the Debt Securities
to participate in those assets) will be effectively subordinated to the claims
of that subsidiary's creditors (including trade creditors), except to the extent
that Disney is itself recognized as a creditor of such subsidiary, in which case
the claims of Disney would still be subordinate to any security interests in the
assets of such subsidiary and any indebtedness of such subsidiary senior to that
held by Disney.
FORM, EXCHANGE, REGISTRATION AND TRANSFER
The Debt Securities of a series may be issued solely as registered
securities, solely as bearer securities (with or without coupons attached) or as
both registered securities and bearer securities. Debt Securities of a series
may be issuable in whole or in part in the form of one or more global Debt
Securities, as described below under "Global Debt Securities." Unless otherwise
indicated in an applicable Prospectus Supplement, registered securities will be
issuable in denominations of $1,000 and integral multiples thereof, and bearer
securities will be issuable in denominations of $5,000 and $100,000.
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Registered securities of any series will be exchangeable for other
registered securities of the same series of any authorized denominations and of
a like aggregate principal amount and tenor. In addition, if Debt Securities of
any series are issuable as both registered securities and as bearer securities,
at the option of the holder, subject to the terms of the applicable Indenture,
bearer securities (accompanied by all unmatured coupons, except as provided
below, and all matured coupons in default) of such series will be exchangeable
for registered securities of the same series of any authorized denominations and
of a like aggregate principal amount and tenor. Unless otherwise indicated in an
applicable Prospectus Supplement, any bearer security surrendered in exchange
for a registered security between a Regular Record Date or a Special Record Date
and the relevant date for payment of interest will be surrendered without the
coupon relating to such date for payment of interest and interest will not be
payable in respect of the registered security issued in exchange for such bearer
security, but will be payable only to the holder of such coupon when due in
accordance with the terms of the applicable Indenture. Bearer securities may not
be issued in exchange for registered securities.
Debt Securities may be presented for exchange as provided above, and unless
otherwise indicated in an applicable Prospectus Supplement, registered
securities may be presented for registration of transfer, at the office or
agency of Disney designated as registrar or co-registrar with respect to any
series of Debt Securities, without service charge and upon payment of any taxes,
assessments or other governmental charges as described in the applicable
Indenture. Such transfer or exchange will be effected on the books of the
registrar or any other transfer agent appointed by Disney upon such registrar or
transfer agent, as the case may be, being satisfied with the documents of title
and identity of the person making the request. Disney intends to initially
appoint the Trustee as registrar and the name of any different or additional
registrar designated by Disney with respect to the Offered Debt Securities will
be included in the Prospectus Supplement relating thereto. If a Prospectus
Supplement refers to any transfer agents (in addition to the registrar)
designated by Disney with respect to any series of Debt Securities, Disney may
at any time rescind the designation of any such transfer agent or approve a
change in the location through which any such transfer agent acts, except that,
if Debt Securities of a series are issuable only as registered securities,
Disney will be required to maintain a transfer agent in each Place of Payment
for such series and, if Debt Securities of a series are issuable as bearer
securities, Disney will be required to maintain (in addition to the registrar) a
transfer agent in a Place of Payment for such series located outside the United
States. Disney may at any time designate additional transfer agents with respect
to any series of Debt Securities.
Unless otherwise indicated in an applicable Prospectus Supplement, the
Indentures do not include covenants limiting the amount of indebtedness that may
be incurred or otherwise restricting Disney's ability to enter into a highly
leveraged transaction, including a reorganization, restructuring, merger or
similar transaction involving Disney that may adversely affect the holders of
the Debt Securities, if such transaction is a permissible consolidation, merger
or similar transaction. In addition, unless otherwise specified in an applicable
Prospectus Supplement, the Indentures do not afford the holders of the Debt
Securities the right to require Disney to repurchase or redeem the Debt
Securities in the event of a highly leveraged transaction. See "Mergers and Sale
of Assets."
In the event of any partial redemption of Debt Securities of any series,
Disney will not be required to (i) issue, register the transfer of or exchange
Debt Securities of that series during a period beginning at the opening of
business 15 days before any selection of Debt Securities of that series to be
redeemed and ending at the close of business on (a) if Debt Securities of the
series are issuable only as registered securities, the day of mailing of the
relevant notice of redemption, and (b) if Debt Securities of the series are
issuable as bearer securities, the day of the first publication of the relevant
notice of redemption or, if Debt Securities of the series are also issuable as
registered securities and there is no publication, the mailing of the relevant
notice of redemption; (ii) register the transfer of or exchange any registered
security, or portion thereof, called for redemption, except the unredeemed
portion of any registered security being redeemed in part; or (iii) exchange any
bearer security called for redemption, except to exchange such bearer security
for a registered security of that series and of like tenor and principal amount
that is immediately surrendered for redemption.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and interest, if any, on registered securities will be made at
the office of such paying agent or paying agents as Disney may
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designate from time to time, except that at the option of Disney payment of
principal or interest may be made by check or by wire transfer to an account
maintained by the payee. Unless otherwise indicated in an applicable Prospectus
Supplement, payment of any installment of interest on registered securities will
be made to the person in whose name such registered security is registered at
the close of business on the Regular Record Date for such interest.
Unless otherwise indicated in an applicable Prospectus Supplement, interest
shall be computed on the basis of a 360-day year comprised of twelve 30-day
months.
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and interest, if any, on bearer securities will be payable,
subject to any applicable laws and regulations, at the offices of such paying
agents outside the United States as Disney may designate from time to time, or
by check or by transfer to an account maintained by the payee outside the United
States. Unless otherwise indicated in an applicable Prospectus Supplement, any
payment of interest on any bearer securities will be made only against surrender
of the coupon relating to such interest installment.
Unless otherwise indicated in an applicable Prospectus Supplement, the
Trustee will be designated as Disney's sole paying agent for payments with
respect to Debt Securities which are issuable solely as registered securities
and as Disney's paying agent in the Borough of Manhattan, The City of New York,
for payments with respect to Debt Securities (subject to any limitations
described in any applicable Prospectus Supplement) which are issuable as bearer
securities. Any paying agents outside the United States and any other paying
agents in the United States initially designated by Disney for the Offered Debt
Securities will be named in an applicable Prospectus Supplement. Disney may at
any time designate additional paying agents or rescind the designation of any
paying agent or approve a change in the office through which any paying agent
acts, except that, if Debt Securities of a series are issuable only as
registered securities, Disney will be required to maintain a paying agent in
each Place of Payment for such series and, if Debt Securities of a series are
issuable as bearer securities, Disney will be required to maintain (i) a paying
agent in the Borough of Manhattan, The City of New York for payments with
respect to any registered securities of the series (and for payments with
respect to bearer securities of the series in the circumstances described in the
Indenture, but not otherwise), and (ii) a paying agent in a Place of Payment
located outside the United States where Debt Securities of such series and any
related coupons may be presented and surrendered for payment.
All moneys paid by Disney to a paying agent for the payment of principal of
or interest, if any, on any Debt Security which remains unclaimed at the end of
two years after such principal or interest shall have become due and payable
will be repaid to Disney, and the holder of such Debt Security or any coupon
will thereafter look only to Disney for payment thereof.
GLOBAL DEBT SECURITIES
The Debt Securities of a series may be issued in whole or in part in global
form. A Debt Security in global form will be deposited with, or on behalf of, a
Depositary, which will be identified in an applicable Prospectus Supplement. A
global Debt Security may be issued in either registered or bearer form and in
either temporary or permanent form. A Debt Security in global form may not be
transferred except as a whole to the Depositary for such Debt Security or to a
nominee or successor of such Depositary. If any Debt Securities of a series are
issuable in global form, the applicable Prospectus Supplement will describe the
circumstances, if any, under which beneficial owners of interests in any such
global Debt Security may exchange such interests for definitive Debt Securities
of such series and of like tenor and principal amount in any authorized form and
denomination, the manner of payment of principal of and interest, if any, on any
such global Debt Security and the specific terms of the depositary arrangement
with respect to any such global Debt Security.
MERGERS AND SALES OF ASSETS
Each Indenture provides that Disney may not consolidate with or merge into
any other person or convey, transfer or lease its properties and assets
substantially as an entirety to another person, unless, among other things, (i)
the resulting, surviving or transferee person (if other than Disney) is a
corporation, partnership or trust organized and existing under the laws of the
United States, any state thereof or the District of Columbia and such person
expressly assumes all obligations of Disney under the applicable Debt Securities
and the
11
Indenture, and (ii) immediately after giving effect to such transaction, no
event which is, or after notice or passage of time or both would be, an Event of
Default (any such event, a "Default") or Event of Default shall have occurred or
be continuing under the Indenture. Upon the assumption of Disney's obligations
by a person to whom such properties or assets are conveyed, transferred or
leased, subject to certain exceptions, Disney shall be discharged from all
obligations under the applicable Debt Securities and the applicable Indenture.
EVENTS OF DEFAULT
Each Indenture provides that, if an Event of Default specified therein shall
have occurred and be continuing, with respect to each series of the Debt
Securities outstanding thereunder individually, the Trustee or the holders of
not less than 25% in aggregate principal amount of the outstanding Debt
Securities of such series may declare the principal amount (or, if any of the
Debt Securities of such series are Discount Securities, such portion of the
principal amount of such Debt Securities as may be specified by the terms
thereof) of the Debt Securities of such series to be immediately due and
payable. Under certain circumstances, the holders of a majority in aggregate
principal amount of the outstanding Debt Securities of such series may rescind
such a declaration.
Under each Indenture, an Event of Default is defined as, with respect to
each series of Debt Securities outstanding thereunder individually, any of the
following: (i) default in payment of the principal of any Debt Security of such
series; (ii) default in payment of any interest on any Debt Security of such
series when due, continuing for 30 days (or 60 days, in the case of Senior
Subordinated or Subordinated Debt Securities); (iii) failure by Disney to comply
with its other agreements in the Debt Securities of such series or such
Indenture for the benefit of the holders of Debt Securities of such series upon
the receipt by Disney of notice of such Default by the Trustee or the holders of
at least 25% in aggregate principal amount of the outstanding Debt Securities of
such series and Disney's failure to cure such Default within 60 days after
receipt by Disney of such notice; (iv) certain events of bankruptcy or
insolvency; and (v) any other Event of Default set forth in an applicable
Prospectus Supplement.
The Trustee shall give notice to holders of the Debt Securities of any
continuing Default known to the Trustee within 90 days after the occurrence
thereof; PROVIDED, that the Trustee may withhold such notice, as to any Default
other than a payment Default, if it determines in good faith that withholding
the notice is in the interests of the holders.
The holders of a majority in principal amount of the outstanding Debt
Securities of any series may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee with respect to the Debt Securities of such
series; PROVIDED that such direction shall not be in conflict with any law or
the Indenture and subject to certain other limitations. Before proceeding to
exercise any right or power under the Indenture at the direction of such
holders, the Trustee shall be entitled to receive from such holders reasonable
security or indemnity satisfactory to it against the costs, expenses and
liabilities which might be incurred by it in complying with any such direction.
With respect to each series of Debt Securities, no holder will have any right to
pursue any remedy with respect to the Indenture or the Debt Securities, unless
(i) such holder shall have previously given the Trustee written notice of a
continuing Event of Default with respect to the Debt Securities of such series;
(ii) the holders of at least 25% in aggregate principal amount of the
outstanding Debt Securities of such series shall have made a written request to
the Trustee to pursue such remedy; (iii) such holder or holders have offered to
the Trustee reasonable indemnity satisfactory to the Trustee; (iv) the holders
of a majority in aggregate principal amount of the outstanding Debt Securities
of such series have not given the Trustee a direction inconsistent with such
request within 60 days after receipt of such request; and (v) the Trustee shall
have failed to comply with the request within such 60-day period.
Notwithstanding the foregoing, the right of any holder of any Debt Security
or coupon to receive payment of the principal of and interest in respect of such
Debt Security or payment of such coupon on the date specified in such Debt
Security or coupon representing such installment of interest as the fixed date
on which an amount equal to the principal of such Debt Security or an
installment of principal thereof or interest thereon is due and payable (the
"Stated Maturity" or "Stated Maturities") or to institute suit for the
enforcement of any such payments shall not be impaired or adversely affected
without such holder's consent. The holders of at least a
12
majority in aggregate principal amount of the outstanding Debt Securities of any
series may waive an existing Default with respect to such series and its
consequences, other than (i) any Default in any payment of the principal of, or
interest on, any Debt Security of such series or (ii) any Default in respect of
certain covenants or provisions in the Indenture which may not be modified
without the consent of the holder of each outstanding Debt Security of such
series affected as described in "Modification and Waiver," below.
Each Indenture provides that Disney shall deliver to the Trustee within 120
days after the end of each fiscal year of Disney an officers' certificate
stating whether or not the signers know of any Default that occurred during such
period.
MODIFICATION AND WAIVER
Disney and the applicable Trustee may execute a supplemental indenture
without the consent of the holders of the Debt Securities or any related coupons
(i) to add to the covenants, agreements and obligations of Disney for the
benefit of the holders of all the Debt Securities of any series or to surrender
any right or power conferred in the applicable Indenture upon Disney; (ii) to
evidence the succession of another corporation to Disney and the assumption by
it of the obligations of Disney under the applicable Indenture and the Debt
Securities; (iii) to provide that bearer securities may be registrable as to
principal, to change or eliminate any restrictions (including restrictions
relating to payment in the United States) on the payment of principal of or
interest, if any, on bearer securities, to permit bearer securities to be issued
in exchange for registered securities, to permit bearer securities to be issued
in exchange for bearer securities of other authorized denominations or to permit
the issuance of Debt Securities in uncertificated form; (iv) to establish the
form or terms of Debt Securities of any series or coupons as permitted by the
applicable Indenture; (v) to provide for the acceptance of appointment under the
applicable Indenture of a successor Trustee with respect to the Debt Securities
of one or more series and to add to or change any provisions of such Indenture
as shall be necessary to provide for or facilitate the administration of the
trusts by more than one Trustee; (vi) to cure any ambiguity, defect or
inconsistency; (vii) to add to, change or eliminate any provisions (which
addition, change or elimination may apply to one or more series of Debt
Securities), PROVIDED that any such addition, change or elimination neither (a)
applies to any Debt Security of any series created prior to the execution of
such supplemental indenture and is entitled to the benefit of such provision nor
(b) modifies the rights of the holder of any such Debt Security with respect to
such provision; (viii) to secure the Debt Securities; or (ix) to make any other
change that does not adversely affect the rights of any Securityholder.
Each Indenture provides that, with the consent of the holders of not less
than a majority in aggregate principal amount of the outstanding Debt Securities
of the series affected by such supplemental indenture, Disney and the Trustee
may also execute a supplemental indenture to add provisions to, or change in any
manner or eliminate any provisions of, the Indenture with respect to such series
of Debt Securities or modify in any manner the rights of the holders of the Debt
Securities of such series and any related coupons under such Indenture; PROVIDED
that no such supplemental indenture will, without the consent of the holder of
each such outstanding Debt Security affected thereby (i) change the stated
maturity of the principal of, or any installment of principal or interest on,
any such Debt Security or any premium payable upon redemption thereof, or reduce
the amount of principal of any Debt Security that is a Discount Security and
that would be due and payable upon declaration of acceleration of maturity
thereof; (ii) reduce the principal amount of, or the rate of interest on, any
such Debt Security; (iii) change the place or currency of payment of principal
or interest, if any, on any such Debt Security; (iv) impair the right to
institute suit for the enforcement of any payment on or with respect to any such
Debt Security; (v) reduce the above-stated percentage of holders of Debt
Securities of any series necessary to modify or amend such Indenture; (vi)
modify the foregoing requirements or reduce the percentage in principal amount
of outstanding Debt Securities of any series necessary to waive any covenant or
past default; or (vii) in the case of Senior Subordinated or Subordinated Debt
Securities, amend or modify any of the provisions of such Indenture relating to
subordination of the Debt Securities in any manner adverse to the holders of
such Debt Securities. Holders of not less than a majority in principal amount of
the outstanding Debt Securities of any series may waive certain past Defaults
and may waive compliance by Disney with certain of the restrictive covenants
described above with respect to the Debt Securities of such series.
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DISCHARGE AND DEFEASANCE
Unless otherwise indicated in an applicable Prospectus Supplement, each
Indenture provides that Disney may satisfy and discharge obligations thereunder
with respect to the Debt Securities of any series by delivering to the Trustee
for cancellation all outstanding Debt Securities of such series or depositing
with the Trustee, after such outstanding Debt Securities have become due and
payable, cash sufficient to pay at Stated Maturity all of the outstanding Debt
Securities of such series and paying all other sums payable under the Indenture
with respect to such series.
In addition, unless otherwise indicated in an applicable Prospectus
Supplement, each Indenture provides that: Disney (a) shall be discharged from
its obligations in respect of the Debt Securities of such series ("defeasance
and discharge"), or (b) may cease to comply with certain restrictive covenants
("covenant defeasance") including those described under "Mergers and Sales of
Assets" and any such omission shall not be an Event of Default with respect to
the Debt Securities of such series, in each case at any time prior to the Stated
Maturity or redemption thereof, when Disney has irrevocably deposited with the
Trustee, in trust, (i) sufficient funds in the currency or currency unit in
which the Debt Securities are denominated to pay the principal of (and premium,
if any) and interest to Stated Maturity (or redemption) on, the Debt Securities
of such series, or (ii) such amount of direct obligations of, or obligations the
principal of (and premium, if any) and interest on which are fully guaranteed
by, the government which issued the currency in which the Debt Securities are
denominated, and which are not subject to prepayment, redemption or call, as
will, together with the predetermined and certain income to accrue thereon
without consideration of any reinvestment thereof, be sufficient to pay when due
the principal of (and premium, if any) and interest to Stated Maturity (or
redemption) on, the Debt Securities of such series. Such defeasance and
discharge and covenant defeasance are conditioned upon, among other things,
Disney's delivery of an opinion of counsel to the effect that (i) in the case of
covenant defeasance, the holders of the Debt Securities of such series will not
recognize income, gain or loss for United States Federal income tax purposes as
a result of such defeasance, and will be subject to tax in the same manner as if
no covenant defeasance had occurred and (ii) in the case of defeasance and
discharge, either the Company has received from, or there has been published by,
the Internal Revenue Service a ruling or there has been a change in applicable
federal income tax law, and based thereon, the holders of the Debt Securities of
such series will not recognize income, gain or loss for United States Federal
income tax purposes as a result of such defeasance. Upon such defeasance and
discharge, the holders of the Debt Securities of such series shall no longer be
entitled to the benefits of the Indenture, except for the purposes of
registration of transfer and exchange of the Debt Securities of such series and
replacement of lost, stolen or mutilated Debt Securities and shall look only to
such deposited funds or obligations for payment.
THE TRUSTEES
The Senior Debt Securities Trustee is a national banking association, is a
participating lender under various credit arrangements with Disney's subsidiary,
Disney Enterprises, Inc., and its subsidiaries and is also the fiscal agent with
respect to certain debt securities of Disney Enterprises, Inc. The Senior Debt
Securities Trustee is also an affiliate of the administrative agent under
Disney's credit agreements. Each of the Trustees is a lender under Disney's
credit agreements. Each Trustee will be permitted to engage in other
transactions with Disney, Disney Enterprises, Inc., and each of their respective
subsidiaries; HOWEVER, if any Trustee acquires any conflicting interest, it must
eliminate such conflict or resign.
DESCRIPTION OF PREFERRED STOCK
Disney may issue, from time to time, shares of one or more series or classes
of its preferred stock (the "Preferred Stock"). The following description sets
forth certain general terms and provisions of the Preferred Stock to which any
Prospectus Supplement may relate. The particular terms of any series of
Preferred Stock and the extent, if any, to which such general provisions may
apply to the series of Preferred Stock so offered will be described in the
Prospectus Supplement relating to such Preferred Stock. The following summary of
certain provisions of the Preferred Stock does not purport to be complete and is
subject to, and is qualified in its entirety by express reference to, the
provisions of Disney's Restated Certificate of Incorporation (the "Disney
Certificate of Incorporation") and the Certificate of Designation relating to a
specific series of the Preferred Stock (the "Certificate of Designation"), which
will be in the form filed as an exhibit to, or incorporated by
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reference in, the Registration Statement of which this Prospectus is a part at
or prior to the time of issuance of such series of Preferred Stock.
GENERAL
Under the Disney Certificate of Incorporation, Disney has the authority to
issue 100,000,000 shares of Preferred Stock. As of the date hereof, there have
been reserved for issuance 7,000,000 shares of Preferred Stock designated as
Series R Preferred Stock that may be issued solely pursuant to the Disney Rights
Plan. See "Description of Common Stock--Rights Plan." No shares of Series R
Preferred Stock are currently outstanding.
The Board of Directors of Disney is authorized to issue shares of Preferred
Stock, in one or more series or classes, and to fix for each such series voting
powers and such preferences and relative, participating, optional or other
special rights and such qualifications, limitations or restrictions as are
permitted by the Delaware General Corporation Law.
The Board of Directors of Disney shall be authorized to determine for each
series of Preferred Stock, and the Prospectus Supplement shall set forth with
respect to such series: (i) the designation of such shares and the number of
shares that constitute such series, (ii) the dividend rate (or the method of
calculation thereof), if any, on the shares of such series and the priority as
to payment of dividends with respect to other classes or series of capital stock
of Disney, (iii) the dividend periods (or the method of calculation thereof),
(iv) the voting rights of the shares, (v) the liquidation preference and the
priority as to payment of such liquidation preference with respect to other
classes or series of capital stock of Disney and any other rights of the shares
of such series upon any liquidation or winding-up of Disney, (vi) whether or not
and on what terms the shares of such series will be subject to redemption or
repurchase at the option of Disney, (vii) whether and on what terms the shares
of such series will be convertible into or exchangeable for other debt or equity
securities, (viii) whether depositary shares representing shares of such series
of Preferred Stock will be offered and, if so, the fraction of a share of such
series of Preferred Stock represented by each depositary share (see "Description
of Depositary Shares" below), (ix) whether the shares of such series of
Preferred Stock will be listed on a securities exchange, (x) any special United
States Federal income tax considerations applicable to such series, and (xi) the
other rights and privileges and any qualifications, limitations or restrictions
of such rights or privileges of such series.
DIVIDENDS
Holders of shares of Preferred Stock shall be entitled to receive, when and
as declared by the Board of Directors of Disney out of funds of Disney legally
available therefor, an annual cash dividend payable at such dates and at such
rates, if any, per share per annum as set forth in the applicable Prospectus
Supplement.
Unless otherwise set forth in the applicable Prospectus Supplement, each
series of Preferred Stock will rank junior as to dividends to any preferred
stock that may be issued in the future that is expressly senior as to dividends
to such Preferred Stock. If at any time Disney has failed to pay accrued
dividends on any such senior shares at the time such dividends are payable,
Disney may not pay any dividend on the junior Preferred Stock or redeem or
otherwise repurchase shares of junior Preferred Stock until such accumulated but
unpaid dividends on such senior shares have been paid or set aside for payment
in full by Disney.
Unless otherwise set forth in the applicable Prospectus Supplement, no
dividends (other than in common stock or other capital stock ranking junior to
the Preferred Stock of any series as to dividends and upon liquidation) shall be
declared or paid or set aside for payment, nor shall any other distribution be
declared or made upon the common stock, or any other capital stock of Disney
ranking junior to or on a parity with the Preferred Stock of such series as to
dividends, nor shall any common stock or any other capital stock of Disney
ranking junior to or on a parity with the Preferred Stock of such series as to
dividends be redeemed, purchased or otherwise acquired for any consideration (or
any moneys be paid to or made available for a sinking fund for the redemption of
any shares of any such stock) by Disney (except by conversion into or exchange
for other capital stock of Disney ranking junior to the Preferred Stock of such
series as to dividends) unless (i) if such series of Preferred Stock has a
cumulative dividend, full cumulative dividends on the Preferred Stock of such
series have been or contemporaneously are declared and paid or declared and a
sum sufficient for the payment thereof set apart for all past dividend periods
and the then current dividend period and (ii) if such series of Preferred Stock
does not have a cumulative dividend, full dividends on the Preferred Stock of
such series have
15
been or contemporaneously are declared and paid or declared and a sum sufficient
for the payment thereof set apart for payment for the then current dividend
period; provided, however, that any monies theretofore deposited in any sinking
fund with respect to any preferred stock in compliance with the provisions of
such sinking fund may thereafter be applied to the purchase or redemption of
such preferred stock in accordance with the terms of such sinking fund,
regardless of whether at the time of such application full cumulative dividends
upon shares of the Preferred Stock outstanding on the last dividend payment date
shall have been paid or declared and set apart for payment; and provided,
further, that any such junior or parity preferred stock or common stock may be
converted into or exchanged for stock of Disney ranking junior to the Preferred
Stock as to dividends.
The amount of dividends payable for the initial dividend period or any
period shorter than a full dividend period shall be computed on the basis of a
360-day year of twelve 30-day months. Accrued but unpaid dividends will not bear
interest.
CONVERTIBILITY
No series of Preferred Stock will be convertible into, or exchangeable for,
other securities or property except as set forth in the applicable Prospectus
Supplement.
REDEMPTION AND SINKING FUND
No series of Preferred Stock will be redeemable or receive the benefit of a
sinking fund except as set forth in the applicable Prospectus Supplement.
LIQUIDATION RIGHTS
Unless otherwise set forth in the applicable Prospectus Supplement, in the
event of any liquidation, dissolution or winding up of Disney, the holders of
shares of each series of Preferred Stock are entitled to receive out of assets
of Disney available for distribution to stockholders, before any distribution of
assets is made to holders of (i) any other shares of preferred stock ranking
junior to such series of Preferred Stock as to rights upon liquidation,
dissolution or winding up and (ii) shares of common stock, liquidating
distributions per share in the amount of the liquidation preference specified in
the applicable Prospectus Supplement for such series of Preferred Stock plus any
dividends accrued and accumulated but unpaid to the date of final distribution;
but the holders of each series of Preferred Stock will not be entitled to
receive the liquidating distribution of, plus such dividends on, such shares
until the liquidation preference of any shares of Disney's capital stock ranking
senior to such series of the Preferred Stock as to the rights upon liquidation,
dissolution or winding up shall have been paid (or a sum set aside therefor
sufficient to provide for payment) in full. If upon any liquidation, dissolution
or winding up of Disney, the amounts payable with respect to the Preferred
Stock, and any other Preferred Stock ranking as to any such distribution on a
parity with the Preferred Stock are not paid in full, the holders of the
Preferred Stock and such other parity preferred stock will share ratably in any
such distribution of assets in proportion to the full respective preferential
amount to which they are entitled. Unless otherwise specified in a Prospectus
Supplement for a series of Preferred Stock, after payment of the full amount of
the liquidating distribution to which they are entitled, the holders of shares
of Preferred Stock will not be entitled to any further participation in any
distribution of assets by Disney. Neither a consolidation or merger of Disney
with another corporation nor a sale of securities shall be considered a
liquidation, dissolution or winding up of Disney.
VOTING RIGHTS
Holders of Preferred Stock will not have any voting right except as set
forth below or in the applicable Prospectus Supplement or as otherwise from time
to time required by law. Whenever dividends on any applicable series of
Preferred Stock or any other class or series of capital stock ranking on a
parity with the applicable series of Preferred Stock with respect to the payment
of dividends shall be in arrears for the equivalent of six quarterly dividend
periods, whether or not consecutive, the holders of shares of such series of
Preferred Stock (voting separately as a class with all other series of preferred
stock then entitled to such voting rights) will be entitled to vote for the
election of two of the authorized number of directors of Disney at the next
annual meeting of stockholders and at each subsequent meeting until all
dividends accumulated on such series
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of Preferred Stock shall have been fully paid or set apart for payment. The term
of office of all directors elected by the holders of such Preferred Stock shall
terminate immediately upon the termination of the right of the holders of such
Preferred Stock to vote for directors. Unless otherwise set forth in the
applicable Prospectus Supplement, holders of shares of Preferred Stock will have
one vote for each share held.
So long as any shares of any series of Preferred Stock remain outstanding,
Disney shall not, without the consent of holders of at least two-thirds of the
shares of such series of Preferred Stock outstanding at the time, voting
separately as a class with all other series of preferred stock of Disney upon
which like voting rights have been conferred and are exercisable, (i) issue or
increase the authorized amount of any class or series of capital stock ranking
prior to the outstanding Preferred Stock as to dividends or upon liquidation or
(ii) amend, alter or repeal the provisions of Disney's Certificate of
Incorporation or of the resolutions contained in the Certificate of Designation
relating to such series of Preferred Stock, whether by merger, consolidation or
otherwise, so as to materially adversely affect any power, preference or special
right of such series of Preferred Stock or the holders thereof; PROVIDED,
HOWEVER, that any increase in the amount of the authorized common stock or
authorized preferred stock or any increase or decrease in the number of shares
of any series of preferred stock or the creation and issuance of other series of
common stock or preferred stock ranking on a parity with or junior to Preferred
Stock as to dividends and upon liquidation, dissolution or winding up shall not
be deemed to materially adversely affect such powers, preferences or special
rights.
MISCELLANEOUS
The holders of Preferred Stock will have no preemptive rights. The Preferred
Stock, upon issuance against full payment of the purchase price therefor, will
be fully paid and nonassessable. Shares of Preferred Stock redeemed or otherwise
reacquired by Disney shall resume the status of authorized and unissued shares
of preferred stock undesignated as to series, and shall be available for
subsequent issuance. There are no restrictions on repurchase or redemption of
the Preferred Stock while there is any arrearage on sinking fund installments
except as may be set forth in an applicable Prospectus Supplement. Payment of
dividends on any series of Preferred Stock may be restricted by loan agreements,
indentures and other transactions entered into by Disney. Any material
contractual restrictions on dividend payments will be described or incorporated
by reference in the applicable Prospectus Supplement.
NO OTHER RIGHTS
The shares of a series of Preferred Stock will not have any preferences,
voting powers or relative, participating, optional or other special rights
except as set forth above or in the applicable Prospectus Supplement, the
Certificate of Incorporation or the applicable Certificate of Designation or as
otherwise required by law.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for each series of Preferred Stock will be
designated in the applicable Prospectus Supplement.
DESCRIPTION OF DEPOSITARY SHARES
GENERAL
Disney may, at its option, elect to offer fractional shares rather than full
shares of the Preferred Stock of a series. In the event such option is
exercised, Disney will issue receipts for Depositary Shares, each of which will
represent a fraction (to be set forth in the Prospectus Supplement relating to a
particular series of Preferred Stock) of a share of a particular series of
Preferred Stock as described below.
17
The shares of any series of Preferred Stock represented by Depositary Shares
will be deposited under one or more Deposit Agreements (each, a "Deposit
Agreement") among Disney, a depositary to be named in the applicable Prospectus
Supplement (the "Depositary"), and the holders from time to time of depositary
receipts issued thereunder. Subject to the terms of the applicable Deposit
Agreement, each holder of a Depositary Share will be entitled, in proportion to
the applicable fraction of a share of Preferred Stock represented by such
Depositary Share, to all the rights and preferences of the Preferred Stock
represented thereby (including, as applicable, dividend, voting, redemption,
subscription and liquidation rights).
The Depositary Shares will be evidenced by depositary receipts issued
pursuant to the Deposit Agreement ("Depositary Receipts"). Depositary Receipts
will be distributed to those persons purchasing the fractional shares of the
related series of Preferred Stock.
The following description sets forth certain general terms and provisions of
the Depositary Shares to which any Prospectus Supplement may relate. The
particular terms of the Depositary Shares to which any Prospectus Supplement may
relate and the extent, if any, to which such general provisions may apply to the
Depositary Shares so offered will be described in the applicable Prospectus
Supplement. The forms of Deposit Agreement and Depositary Receipt are or will be
filed as exhibits to the Registration Statement. The following summary of
certain provisions of the Depositary Shares and Deposit Agreement does not
purport to be complete and is subject to, and is qualified in its entirety by
express reference to, all the provisions of the Deposit Agreement and the
applicable Prospectus Supplement, including the definitions therein of certain
terms.
Immediately following Disney's issuance of shares of a series of Preferred
Stock that will be offered as fractional shares, Disney will deposit such shares
with the Depositary, which will then issue and deliver the Depositary Receipts
to the purchasers thereof. Depositary Receipts will only be issued evidencing
whole Depositary Shares. A Depositary Receipt may evidence any number of whole
Depositary Shares.
Pending the preparation of definitive engraved Depositary Receipts, the
Depositary may, upon the written order of Disney, issue temporary Depositary
Receipts substantially identical to (and entitling the holders thereof to all
the rights pertaining to) the definitive Depositary Receipts but not in
definitive form. Definitive Depositary Receipts will be prepared thereafter
without unreasonable delay, and such temporary Depositary Receipts will be
exchangeable for definitive Depositary Receipts at Disney's expense.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all cash dividends or other cash
distributions received in respect of the related series of Preferred Stock to
the record holders of Depositary Shares relating to such series of Preferred
Stock in proportion to the number of such Depositary Shares owned by such
holders.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto in proportion to the number of Depositary Shares owned by such
holders, unless the Depositary determines that such distribution cannot be made
proportionately among such holders or that it is not feasible to make such
distributions, in which case the Depositary may, with the approval of Disney,
adopt such method as it deems equitable and practicable for the purpose of
effecting such distribution, including the sale (at public or private sale) of
the securities or property thus received, or any part thereof, at such place or
places and upon such terms as it may deem proper.
The amount distributed in any of the foregoing cases will be reduced by any
amounts required to be withheld by Disney or the Depositary on account of taxes
or other governmental charges.
REDEMPTION OF DEPOSITARY SHARES
If any series of the Preferred Stock underlying the Depositary Shares is
subject to redemption, the Depositary Shares will be redeemed from the proceeds
received by the Depositary resulting from any redemption, in whole or in part,
of such series of the Preferred Stock held by the Depositary. The redemption
price per Depositary Share will be equal to the applicable fraction of the
redemption price per share payable with respect to such series of the Preferred
Stock. If Disney redeems shares of a series of Preferred Stock held by the
Depositary, the Depositary will redeem as of the same redemption date the number
of Depositary Shares representing the shares of Preferred Stock so redeemed. If
less than all the Depositary Shares are to be
18
redeemed, the Depositary Shares to be redeemed will be selected by lot or
substantially equivalent method determined by the Depositary.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares will cease, except the right to receive the
moneys payable upon such redemption and any money or other property to which the
holders of such Depositary Shares were entitled upon such redemption, upon
surrender to the Depositary of the Depositary Receipts evidencing such
Depositary Shares. Any funds deposited by Disney with the Depositary for any
Depositary Shares that the holders thereof fail to redeem will be returned to
Disney after a period of two years from the date such funds are so deposited.
VOTING THE UNDERLYING PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of any series of
the Preferred Stock are entitled to vote, the Depositary will mail the
information contained in such notice of meeting to the record holders of the
Depositary Shares relating to such series of Preferred Stock. Each record holder
of such Depositary Shares on the record date (which will be the same date as the
record date for the related series of Preferred Stock) will be entitled to
instruct the Depositary as to the exercise of the voting rights pertaining to
the number of shares of the series of Preferred Stock represented by such
holder's Depositary Shares. The Depositary will endeavor, insofar as
practicable, to vote or cause to be voted the number of shares of Preferred
Stock represented by such Depositary Shares in accordance with such
instructions, provided the Depositary receives such instructions sufficiently in
advance of such meeting to enable it to so vote or cause to be voted the shares
of Preferred Stock, and Disney will agree to take all reasonable action that may
be deemed necessary by the Depositary in order to enable the Depositary to do
so. The Depositary will abstain from voting shares of the Preferred Stock to the
extent it does not receive specific instructions from the holders of Depositary
Shares representing such Preferred Stock.
WITHDRAWAL OF STOCK
Upon surrender of the Depositary Receipts at the corporate trust office of
the Depositary and upon payment of the taxes, charges and fees provided for in
the Deposit Agreement and subject to the terms thereof, the holder of the
Depositary Shares evidenced thereby is entitled to delivery at such office, to
or upon his or her order, of the number of whole shares of the related series of
Preferred Stock and any money or other property, if any, represented by such
Depositary Shares. Holders of Depositary Shares will be entitled to receive
whole shares of the related series of Preferred Stock, but holders of such whole
shares of Preferred Stock will not thereafter be entitled to deposit such shares
of Preferred Stock with the Depositary or to receive Depositary Shares therefor.
If the Depositary Receipts delivered by the holder evidence a number of
Depositary Shares in excess of the number of Depositary Shares representing the
number of whole shares of the related series of Preferred Stock to be withdrawn,
the Depositary will deliver to such holder or upon his or her order at the same
time a new Depositary Receipt evidencing such excess number of Depositary
Shares.
AMENDMENT AND TERMINATION OF A DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares of any
series and any provision of the applicable Deposit Agreement may at any time and
from time to time be amended by agreement between Disney and the Depositary.
However, any amendment that materially adversely alters the rights of the
holders of Depositary Shares of any series will not be effective unless such
amendment has been approved by the holders of at least a majority of the
Depositary Shares of such series then outstanding. Every holder of a Depositary
Receipt at the time such amendment becomes effective will be deemed, by
continuing to hold such Depositary Receipt, to be bound by the Deposit Agreement
as so amended. Notwithstanding the foregoing, in no event may any amendment
impair the right of any holder of any Depositary Shares, upon surrender of the
Depositary Receipts evidencing such Depositary Shares and subject to any
conditions specified in the Deposit Agreement, to receive shares of the related
series of Preferred Stock and any money or other property represented thereby,
except in order to comply with mandatory provisions of applicable law. The
Deposit Agreement may be terminated by Disney at any time upon not less than 60
days prior written notice to the Depositary, in which case, on a date that is
not later than 30 days after the date of such notice, the Depositary shall
deliver or make
19
available for delivery to holders of Depositary Shares, upon surrender of the
Depositary Receipts evidencing such Depositary Shares, such number of whole or
fractional shares of the related series of Preferred Stock as are represented by
such Depositary Shares. The Deposit Agreement shall automatically terminate
after all outstanding Depositary Shares have been redeemed or there has been a
final distribution in respect of the related series of Preferred Stock in
connection with any liquidation, dissolution or winding up of Disney and such
distribution has been distributed to the holders of Depositary Shares.
CHARGES OF DEPOSITARY
Disney will pay all transfer and other taxes and the governmental charges
arising solely from the existence of the depositary arrangements. Disney will
pay the charges of the Depositary, including charges in connection with the
initial deposit of the related series of Preferred Stock and the initial
issuance of the Depositary Shares and all withdrawals of shares of the related
series of Preferred Stock, except that holders of Depositary Shares will pay
transfer and other taxes and governmental charges and such other charges as are
expressly provided in the Deposit Agreement to be for their accounts.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Depositary may resign at any time by delivering to Disney written notice
of its election to do so, and Disney may at any time remove the Depositary, any
such resignation or removal to take effect upon the appointment of a successor
Depositary, which successor Depositary must be appointed within 60 days after
delivery of the notice of resignation or removal and must be a bank or trust
company having its principal office in the United States and having a combined
capital and surplus of at least $50,000,000.
MISCELLANEOUS
The Depositary will forward to the holders of Depositary Shares all reports
and communications from Disney that are delivered to the Depositary and which
Disney is required to furnish to the holders of the related Preferred Stock.
The Depositary's corporate trust office will be identified in the applicable
Prospectus Supplement. Unless otherwise set forth in the applicable Prospectus
Supplement, the Depositary will act as transfer agent and registrar for
Depositary Receipts and if shares of a series of Preferred Stock are redeemable,
the Depositary will act as redemption agent for the corresponding Depositary
Receipts.
DESCRIPTION OF COMMON STOCK
Disney may issue, from time to time, shares of its common stock (the "Common
Stock"), the general terms and provisions of which are summarized below. This
summary does not purport to be complete and is subject to, and is qualified in
its entirety by express reference to, the provisions of the Disney Certificate
of Incorporation, Disney's Bylaws and the applicable Prospectus Supplement.
AUTHORIZED SHARES
Under the Disney Certificate of Incorporation, Disney has the authority to
issue 1,200,000,000 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 such stock
out of assets legally available for distribution when, as and if authorized and
declared by Disney's Board of Directors. The payment of dividends on the Common
Stock will be a business decision to be made by Disney's Board of Directors from
time to time based upon the results of operations and financial condition of
Disney and such other factors as Disney's Board of Directors considers relevant.
Payment of dividends on the Common Stock may be restricted by loan agreements,
indentures and other transactions entered into by Disney from time to time. The
applicable Prospectus Supplement will describe any material contractual
restrictions on dividend payments.
20
VOTING RIGHTS
Holders of Common Stock are entitled to one vote per share on all matters
voted on generally by the stockholders, including the election of directors,
and, except as otherwise required by law or except as provided with respect to
any series of preferred stock, the holders of such shares possess all voting
power. The Disney Certificate of Incorporation does not provide for cumulative
voting for the election of directors. As a result, under the Delaware General
Corporation Law, the holders of more than one-half of the outstanding shares of
Common Stock generally will be able to elect all the directors of Disney then
standing for election and holders of the remaining shares will not be able to
elect any director.
LIQUIDATION RIGHTS
Subject to any preferential rights of any series of preferred stock, holders
of shares of Common Stock are entitled to share ratably in the assets of Disney
legally available for distribution to its stockholders in the event of its
liquidation, dissolution or winding up.
ABSENCE OF OTHER RIGHTS
Holders of Common Stock have no preferences, preemptive, conversion or
exchange rights.
MISCELLANEOUS
The Common Stock, upon issuance against full payment of the purchase price
therefor, will be fully paid and nonassessable.
TRANSFER AGENT AND REGISTRAR
The principal transfer agent and registrar for the Common Stock is Disney.
RIGHTS PLAN
In November 1995, Disney adopted a stockholders' rights plan (the "Disney
Rights Plan") and, in connection therewith, entered into a Rights Agreement
dated as of November 8, 1995, between Disney and The Bank of New York, as rights
agent (the "Disney Rights Agreement"). To implement the Disney Rights Plan,
Disney's Board of Directors authorized the issuance of one Disney Right (as
defined below) for each share of Common Stock issued at or following the
effective time of the Company's acquisition of ABC, Inc. and until the earlier
of the Distribution Date (as defined below) or the date on which the Disney
Rights expire or are redeemed. Each "Disney Right" entitles the registered
holder thereof to purchase from Disney one one-hundredth (1/100) of a share of
Disney's Series R Preferred Stock at an initial purchase price of $350.00,
subject to adjustment. All terms and conditions of the Disney Rights and the
Series R Preferred Stock are contained in the Disney Rights Agreement and the
Disney Certificate of Incorporation.
The Distribution Date is defined as the earlier to occur of (i) the tenth
day following a public announcement that a person or group of affiliated or
associated persons (each, an "Acquiring Person") has acquired, or obtained the
right to acquire, beneficial ownership of 25% or more of the outstanding Common
Stock (the "Stock Acquisition Date") or (ii) a date fixed by Disney's Board of
Directors which is not later than the nineteenth business day after the
commencement by any person or group of, or the first public announcement of the
intent of any person or group to commence, a tender or exchange offer which
would result in that person or group owning 25% or more of the outstanding
Common Stock.
Until the close of business on the Distribution Date, the Disney Rights will
be represented by and transferred only with the Common Stock, and the Disney
Rights are not exercisable until the Distribution Date. The Disney Rights will
expire at the close of business on June 30, 1999, unless redeemed earlier as
described below.
The Series R Preferred Stock will be nonredeemable and, unless otherwise
provided in connection with the creation of a subsequent series of Preferred
Stock, subordinate to all other series of Preferred Stock. The Series R
Preferred Stock may not be issued except upon exercise of the Disney Rights.
Each share of Series R
21
Preferred Stock will be entitled to receive, when, as and if declared by
Disney's Board of Directors, (i) a cash dividend in an amount per share equal to
400 times the aggregate per share amount of all cash dividends declared or paid
on the Common Stock and (ii) a quarterly dividend in an amount equal to $1.00
per share less the per share amount of all cash dividends declared on the Series
R Preferred Stock pursuant to the preceding clause (i) since the last quarterly
dividend. In addition, the Series R Preferred Stock is entitled to 400 times any
other cash or non-cash distribution declared on the Common Stock (other than
cash dividends payable pursuant to the immediately preceding sentence and
distributions of Disney's equity securities or debt securities convertible into
equity securities of Disney), payable to the holders of Series R Preferred Stock
in like kind. In the event of liquidation, the holders of Series R Preferred
Stock will be entitled to receive a liquidation payment in an amount equal to
the greater of $100.00 per share (plus an amount equal to accumulated and unpaid
dividends and distributions) and 400 times the liquidation payment made per
share of Common Stock. Each share of Series R Preferred Stock will have 400
votes and shall be entitled to vote together with the Common Stock and not as a
separate class unless otherwise required by law or the Disney Certificate of
Incorporation. In the event of any merger, consolidation or other transaction in
which common shares are exchanged, each share of Series R Preferred Stock will
be entitled to receive 400 times, subject to adjustment, the amount received per
share of Common Stock.
The rights of the Series R Preferred Stock as to dividends, voting rights
and liquidation are protected by antidilution provisions. In addition, the
Purchase Price payable and the number of shares of Series R Preferred Stock or
other securities or property issuable upon exercise of the Disney Rights are
subject to adjustment from time to time to prevent dilution in the event of a
stock dividend on, or a subdivision, split, reverse split, combination,
consolidation or reclassification of, the Series R Preferred Stock.
If (i) any person becomes the beneficial owner of 25% or more of the then
outstanding shares of Common Stock, other than pursuant to a purchase or series
of related purchases of shares of Common Stock that Disney's Board of Directors,
taking into account the long-term value of Disney and all other factors that
Disney's Board of Directors considers relevant, determines to be fair and
otherwise in the best interests of the holders of Common Stock (a "Permitted
Transaction"), or (ii) any Acquiring Person or any of its affiliates or
associates engages in one or more "self-dealing" transactions as described in
the Disney Rights Agreement, then each holder of a Disney Right, other than the
Acquiring Person, will have the right to receive, upon payment of the Purchase
Price, in lieu of Series R Preferred Stock, a number of shares of Common Stock
having a market value equal to twice the Purchase Price. To the extent that
insufficient shares of Common Stock are available for the exercise in full of
the Disney Rights, holders of Disney Rights will receive upon exercise shares of
Common Stock to the extent available and then cash, assets or other securities
of Disney (which may be accompanied by a reduction in the Purchase Price), in
proportions determined by Disney, so that the aggregate net value received is
equal to twice the Purchase Price. Disney Rights are not exercisable following
the acquisition of shares of Common Stock by an Acquiring Person as described in
this paragraph until the expiration of the period during which the Disney Rights
may be redeemed as described below. In addition, after the occurrence of an
event described in the first sentence of this paragraph, Disney Rights that are
(or, under certain circumstances, Disney Rights that were) beneficially owned by
an Acquiring Person will be null and void.
Unless the Disney Rights are redeemed earlier, if, after the Stock
Acquisition Date, Disney is acquired in a merger or other business combination
(in which Disney is not the surviving corporation or in which any shares of
Common Stock are converted or exchanged) or more than 50% of the assets or
earning power of Disney and its subsidiaries (taken as a whole) are sold or
transferred in one transaction or a series of related transactions, the Disney
Rights Agreement provides that proper provision shall be made so that each
holder of record of a Disney Right will from and after that time have the right
to receive, upon payment of the Purchase Price, that number of shares of common
stock of the acquiring company which has a market value at the time of such
transaction equal to twice the Purchase Price.
Fractions of shares of Series R Preferred Stock may, at the election of
Disney, be evidenced by depositary receipts. Disney may also issue cash in lieu
of fractional shares of Series R Preferred Stock which are not integral
multiples of one one-hundredth of a share.
At any time until ten days following the Stock Acquisition Date (subject to
extension by Disney's Board of Directors), Disney's Board of Directors may cause
Disney to redeem the Disney Rights in whole, but not in part,
22
at a price of $.01 per Disney Right, subject to adjustment to reflect any stock
split, stock dividend or similar transaction. Immediately upon the action of
Disney's Board of Directors authorizing redemption of the Disney Rights, the
right to exercise the Disney Rights will terminate, and the holders of the
Disney Rights will only be entitled to receive the redemption price without any
interest thereon.
As long as the Disney Rights are redeemable, Disney may, except with respect
to the redemption price, the number of one one-hundredths of a share of Series R
Preferred Stock for which a Disney Right is exercisable, or the date of
expiration of the Disney Rights, amend the Disney Rights in any manner,
including an amendment to extend the time period in which the Disney Rights may
be redeemed. At any time when the Disney Rights are not redeemable, subject to
the foregoing exceptions and except for certain limitations regarding amendments
of time periods (including the time period during which the Disney Rights may be
redeemed), Disney may amend the Disney Rights in any manner that does not
adversely affect the interests of holders of the Disney Rights as such.
Until a Disney Right is exercised, the holder, as such, will have no rights
as a stockholder of Disney, including, without limitation, the right to vote or
to receive dividends.
The foregoing description of the Disney Rights does not purport to be
complete and is qualified in its entirety by reference to the Disney Rights
Agreement, which is incorporated by reference as an exhibit to the Registration
Statement of which this Prospectus is a part.
CERTAIN ANTI-TAKEOVER EFFECTS
GENERAL. Certain provisions of the Disney Certificate of Incorporation and
the Delaware General Corporation Law (the "DGCL") may have the effect of
impeding the acquisition of control of Disney by means of a tender offer, a
proxy fight, open market purchases or otherwise in a transaction not approved by
Disney's Board of Directors. The provisions described below have the effect of
reducing the vulnerability of Disney to an unsolicited proposal for the
restructuring or sale of all or substantially all of the assets of Disney or an
unsolicited takeover attempt which is unfair to Disney stockholders. The summary
of such provisions set forth below does not purport to be complete and is
qualified in its entirety by reference to the Disney Certificate of
Incorporation and the DGCL.
Disney's Board of Directors has no present intention to introduce additional
measures that might have an anti-takeover effect; however, Disney's Board of
Directors expressly reserves the right to introduce such measures in the future.
CLASSIFIED BOARD UNTIL 2001. The Disney Certificate of Incorporation
provides that Disney's Board of Directors shall consist of not less than nine
nor more than 21 directors, with the exact number of directors to be determined
from time to time by Disney's Board of Directors. Disney's Board of Directors is
currently divided into three classes, and each director who was elected during
the annual meeting of Disney's stockholders in 1998 or prior thereto will serve
for the full three-year term for which he or she was elected. Following the
annual meeting of Disney's stockholders in 1998, however, the Disney Certificate
of Incorporation provides that each newly elected director shall serve only
until the first annual meeting following the annual meeting at which he or she
is elected, which will have the effect of phasing out the classification of
Disney's Board of Directors. Commencing with the annual meeting of Disney's
stockholders in 2001, Disney's Certificate of Incorporation provides that the
foregoing classification of Disney's Board of Directors shall cease, and all
directors shall be of one class.
BUSINESS COMBINATIONS. Section 203 of the DGCL restricts a wide range of
transactions ("business combinations") between a corporation and an interested
stockholder. An "interested stockholder" is, generally, any person who
beneficially owns, directly or indirectly, 15% or more of the corporation's
outstanding voting stock. Business combinations are broadly defined to include
(i) mergers or consolidations with, (ii) sales or other dispositions of more
than 10% of the corporation's assets to, (iii) certain transactions resulting in
the issuance or transfer of any stock of the corporation or any subsidiary to,
(iv) certain transactions resulting in an increase in the proportionate share of
stock of the corporation or any subsidiary owned by, or (v) receipt of the
benefit (other than proportionately as a stockholder) of any loans, advances or
other financial benefits by, an interested stockholder. Section 203 provides
that an interested stockholder may not engage in a business combination with
23
the corporation for a period of three years from the time of becoming an
interested stockholder unless (a) the board of directors approved either the
business combination or the transaction which resulted in the person becoming an
interested stockholder prior to the time such person became an interested
stockholder; (b) upon consummation of the transaction which resulted in the
person becoming an interested stockholder, that person owned at least 85% of the
corporation's voting stock (excluding shares owned by persons who are directors
and also officers and shares owned by certain employee stock plans); or (c) the
business combination is approved by the board of directors and authorized by the
affirmative vote of at least 66 2/3% of the outstanding voting stock not owned
by the interested stockholder. The restrictions on business combinations with
interested stockholders contained in Section 203 of the DGCL do not apply to a
corporation whose certificate of incorporation contains a provision expressly
electing not to be governed by the statute; however, the Disney Certificate does
not contain a provision electing to "opt-out" of Section 203.
SUPERMAJORITY REQUIREMENTS. In addition to the requirements of Section 203
of the DGCL, the Disney Certificate of Incorporation provides that the
affirmative vote of four-fifths of the outstanding stock of Disney entitled to
vote shall be required for (i) any merger or consolidation to which Disney, or
any of its subsidiaries, and an Interested Person (as defined below) are
parties; (ii) any sale or other disposition by Disney, or any of its
subsidiaries, of all or substantially all of its assets to an Interested Person;
(iii) any purchase or other acquisition by Disney, or any of its subsidiaries,
of all or substantially all of the assets or stock of an Interested Person; and
(iv) any other transaction with an Interested Person which requires the approval
of the stockholders of Disney under the DGCL; except that the foregoing shall
not apply to any transaction if (a) such transaction is authorized by a
resolution of Disney's Board of Directors, provided that a majority of the
members of Disney's Board of Directors voting for the approval of such
transaction were duly elected and acting members of Disney's Board of Directors
prior to the date that the person, firm or corporation, or any group thereof,
with whom such transaction is proposed, became an Interested Person, or (b) the
provision of a vote in excess of that required by the DGCL for such transaction
violates the express provisions of the DGCL. An "Interested Person" is any
person, firm or corporation, or any group thereof, acting or intending to act in
concert, including any person directly or indirectly controlling or controlled
by or under direct or indirect common control with such person, firm or
corporation or group, which owns of record or beneficially, directly or
indirectly, five percent (5%) or more of any class of voting securities of
Disney.
SPECIAL MEETINGS. Pursuant to the DGCL, a special meeting of stockholders
may be called by the board of directors or by any other person authorized to do
so in the certificate of incorporation or the bylaws. The Disney Certificate of
Incorporation provides that special meetings of stockholders may only be called
by Disney's Board of Directors, the Chairman of Disney's Board of Directors, or
the President of Disney.
RIGHTS PLAN. The Disney Rights issued under the Disney Rights Plan have
certain anti-takeover effects because they will result in substantial dilution
to a person or group that attempts to acquire, or merge with, Disney without
conditioning the offer on the Disney Rights being rendered inapplicable. See
"Description of Common Stock--Rights Plan."
ADDITIONAL AUTHORIZED SHARES OF CAPITAL STOCK. The additional shares of
authorized Common Stock and Preferred Stock available for issuance under the
Disney Certificate of Incorporation could be issued at such times, under such
circumstances and with such terms and conditions as to impede a change in
control of Disney.
DESCRIPTION OF WARRANTS
Disney may issue, together with other Securities or separately, warrants for
the purchase of (i) Debt Securities ("Debt Warrants"), (ii) Preferred Stock
("Preferred Stock Warrants"), or (iii) Common Stock ("Common Stock Warrants"
and, together with the Debt Warrants and the Preferred Stock Warrants, the
"Warrants").
24
The Warrants will be issued under Warrant Agreements (as defined below) to
be entered into between Disney and a bank or trust company, as warrant agent
(the "Warrant Agent"), all to be set forth in the applicable Prospectus
Supplement relating to any or all Warrants in respect of which this Prospectus
is being delivered. Copies of the form of agreement for each Warrant (each a
"Debt Securities Warrant Agreement", a "Preferred Stock Warrant Agreement" or a
"Common Stock Warrant Agreement", as the case may be, or collectively the
"Warrant Agreements"), including the forms of certificates representing the
Warrants (the "Debt Warrant Certificates", the "Preferred Stock Warrant
Certificates" or the "Common Stock Warrant Certificates", as the case may be, or
collectively, the "Warrant Certificates"), and reflecting the provisions to be
included in such agreements that will be entered into with respect to the
particular offerings of each type of warrant, are or will be filed as exhibits
to the Registration Statement of which this Prospectus forms a part.
The following description sets forth certain general terms and provisions of
the Warrants to which any Prospectus Supplement may relate. The particular terms
of the Warrants to which any Prospectus Supplement may relate and the extent, if
any, to which such general provisions may apply to the Warrants so offered will
be described in the applicable Prospectus Supplement. The following summary of
certain provisions of the Warrants, Warrant Agreements and Warrant Certificates
does not purport to be complete and is subject to, and is qualified in its
entirety by express reference to, all the provisions of the Warrant Agreements
and Warrant Certificates, including the definitions therein of certain terms.
GENERAL
The Prospectus Supplement shall set forth the terms of the Warrants in
respect of which this Prospectus is being delivered as well as the related
Warrant Agreement and Warrant Certificates, including the following, where
applicable: (a) the principal amount of Debt Securities and/or the number of
shares of Preferred Stock or Common Stock, as the case may be, purchasable upon
exercise of the Warrants; (b) the designation and terms of the Debt Securities
or Preferred Stock, as the case may be, purchasable upon exercise thereof and of
any related Debt Securities or Preferred Stock with which such Warrants are
issued; (c) the procedures and conditions relating to the exercise of the
Warrants; (d) the date, if any, on and after which such Warrants and the related
Debt Securities or Preferred Stock, as the case may be, will be separately
transferable; (e) the offering price of the Warrants, if any; (f) the principal
amount of Debt Securities or the number of shares of Preferred Stock or Common
Stock, as the case may be, purchasable upon exercise of each Warrant and the
initial price at which such principal amount of Debt Securities or shares of
Preferred Stock or Common Stock, as the case may be, may be purchased upon such
exercise; (g) the date on which the right to exercise the Warrants shall
commence and the date on which such right shall expire; (h) a discussion of any
material United States federal income tax considerations applicable to the
exercise of the Warrants; (i) whether the Warrants represented by the Warrant
Certificates will be issued in registered or bearer form, and, if registered,
where they may be transferred and registered; (j) call provisions of the
Warrants, if any; (k) antidilution provisions of the Warrants, if any; and (l)
any other material terms of the Warrants.
EXERCISE OF WARRANTS
Each Warrant will entitle the holder to purchase for cash such principal
amount of Debt Securities or such number of shares of Preferred Stock or Common
Stock, as the case may be, at such exercise price as shall in each case be set
forth in, or be determinable as set forth in, the applicable Prospectus
Supplement relating to the Warrants offered thereby. Unless otherwise specified
in the applicable Prospectus Supplement, Warrants may be exercised at the
corporate trust office of the Warrant Agent or any other office indicated in the
applicable Prospectus Supplement at any time up to 5:00 p.m. New York City time
on the expiration date set forth in the applicable Prospectus Supplement. After
5:00 p.m. New York City time on the expiration date, unexercised Warrants will
become void. Upon receipt of payment and the Warrant Certificate properly
completed and duly executed, Disney will, as soon as practicable, issue the Debt
Securities, Preferred Stock or Common Stock, as the case may be, purchasable
upon such exercise. If less than all of the Warrants represented by such Warrant
Certificate are exercised, a new Warrant Certificate will be issued for the
remaining amount of Warrants.
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NO RIGHTS OF SECURITY HOLDER PRIOR TO EXERCISE
Prior to the exercise of their Warrants, holders of Warrants will not have
any of the rights of holders of the Debt Securities, Preferred Stock or Common
Stock, as the case may be, purchasable upon such exercise and will not be
entitled to (i) in the case of Debt Warrants, payments of principal of (and
premium, if any) or interest, if any, on the Debt Securities purchasable upon
such exercise or (ii) in the case of Preferred Stock Warrants and Common Stock
Warrants, the right to vote or to receive dividend payments on the Preferred
Stock or Common Stock, as the case may be, purchasable upon such exercise.
EXCHANGE OF WARRANT CERTIFICATES
Warrant Certificates will be exchangeable for new Warrant Certificates of
different denominations at the corporate trust office of the Warrant Agent or
any other office indicated in the applicable Prospectus Supplement.
PLAN OF DISTRIBUTION
Disney may sell Securities to one or more underwriters for public offering
and sale by them or may sell Securities to investors directly or through agents
or dealers. Any such underwriter, agent or dealer involved in the offer and sale
of the Securities will be named in the applicable Prospectus Supplement.
Securities offered pursuant to a particular Prospectus Supplement are referred
to herein as "Offered Securities." The Company may also sell Offered Securities
to an agent as principal.
Underwriters may offer and sell the Offered Securities at a fixed price or
prices, which may be changed, or from time to time at market prices prevailing
at the time of sale, at prices related to such prevailing market prices or at
negotiated prices. Disney also may, from time to time, authorize underwriters
acting as its agents to offer and sell the Offered Securities upon the terms and
conditions set forth in any Prospectus Supplement. In connection with the sale
of Offered Securities, underwriters may be deemed to have received compensation
from Disney in the form of underwriting discounts or commissions and may also
receive commissions from purchasers of Offered Securities for whom they may act
as agent. Underwriters may sell Offered Securities to or through dealers, and
such dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions (which may be changed from
time to time) from the purchasers for whom they may act as agent.
If a dealer is utilized in the sale of the Offered Securities in respect of
which this Prospectus is delivered, Disney will sell such Offered Securities to
such dealer, as principal. The dealer may then resell such Offered Securities to
the public at varying prices to be determined by such dealer at the time of
resale.
Any underwriting compensation paid by Disney to underwriters or agents in
connection with the offering of Offered Securities, and any discounts,
concessions or commissions allowed by underwriters to participating dealers,
will be set forth in an applicable Prospectus Supplement. Underwriters, dealers
and agents participating in the distribution of the Offered Securities may be
deemed to be underwriters under the Securities Act, and any discounts and
commissions received by them and any profit realized by them on resale of the
Offered Securities may be deemed to be underwriting discounts and commissions
under the Securities Act. Underwriters, dealers and agents may be entitled under
agreements with Disney to indemnification against and contribution toward
certain civil liabilities, including liabilities under the Securities Act, and
to reimbursement by Disney for certain expenses.
If so indicated in an applicable Prospectus Supplement, Disney will
authorize dealers acting as its agents to solicit offers by certain institutions
to purchase Offered Securities from Disney at the public offering price set
forth in such Prospectus Supplement pursuant to Delayed Delivery Contracts
("Contracts") providing for payment and delivery on the date or dates stated in
such Prospectus Supplement. Each Contract will be for an amount not less than,
and the aggregate principal amount or offering price of Offered Securities sold
pursuant to Contracts shall not be less nor more than, the respective amounts
stated in such Prospectus Supplement. Institutions with whom Contracts, when
authorized, may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and other institutions, but will in all cases be subject to the
approval of Disney.
26
Offered Securities may also be offered and sold, if so indicated in the
Prospectus Supplement, in connection with a remarketing upon their purchase, in
accordance with a redemption or repayment pursuant to their terms, or otherwise,
by one or more firms ("remarketing firms"), acting as principals for their own
accounts or as agents for the Company. Any remarketing firm will be identified
and the terms of its agreement, if any, with the Company and its compensation
will be described in the Prospectus Supplement. Remarketing firms may be deemed
to be underwriters in connection with the Offered Securities remarketed thereby.
Remarketing firms may be entitled under agreements which may be entered into
with the Company to indemnification by the Company against certain liabilities,
including liabilities under the Securities Act.
The Securities may or may not be listed on a national securities exchange or
a foreign securities exchange. No assurances can be given that there will be a
market for any of the Securities.
LEGAL MATTERS
Certain legal matters with respect to the legality of the Securities being
offered hereby will be passed upon for Disney by Skadden, Arps, Slate, Meagher &
Flom LLP, Los Angeles, California.
EXPERTS
The consolidated financial statements and related schedules of Disney
incorporated in this Prospectus by reference to Disney's Annual Report on Form
10-K for the year ended September 30, 1997 have been so incorporated in reliance
on the report of Price Waterhouse LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
The consolidated financial statements of Capital Cities/ABC, Inc.
incorporated by reference in this Prospectus from Disney's Current Report on
Form 8-K dated March 30, 1996 have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such financial statements referred to above
are incorporated herein by reference in reliance upon such report, given upon
the authority of such firm as experts in accounting and auditing.
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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.
[Download Table]
SEC registration fee................................................. $1,268,500
Accountants' fees and expenses....................................... 20,000
Legal fees and expenses.............................................. 50,000
Printing and engraving expenses...................................... 75,000
Rating agencies' fees................................................ 750,000
Trustee's and registrar's fees and expenses.......................... 25,000
Miscellaneous........................................................ 61,500
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Total:............................................................. $2,250,000
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ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant's Restated Certificate of Incorporation and Bylaws, as
amended to date, provide that the Registrant shall indemnify to the full extent
authorized or permitted by law (as now or hereafter in effect) any person made,
or threatened to be made, a defendant or witness to any action, suit or
proceeding (whether civil or criminal or otherwise) by reason of the fact that
he, his testator or intestate, is or was a director or officer of the Registrant
or by reason of the fact that such director or officer, at the request of the
Registrant, is or was serving any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise, in any capacity.
Under Section 145 of the Delaware General Corporation Law, a corporation may
indemnify a director, officer, employee or agent of the corporation (or a person
who is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise) against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by the person if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. In the case of an action brought by or in the right of a
corporation, the corporation may indemnify a director, officer, employee or
agent of the corporation (or a person who is or was serving at the request of
the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise) against
expenses (including attorneys' fees) actually and reasonably incurred by him if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation, except that no indemnification
may be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the corporation unless and only to the
extent a court finds that, in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses as the
court shall deem proper.
The Registrant's Restated Certificate of Incorporation and Bylaws further
provide that (i) Registrant may purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee or agent of Registrant or is
serving at the request of Registrant as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise against any liability asserted against him and incurred by
him in any such capacity, or arising out of his status as such, whether or not
Registrant would have the power to indemnify him against such liability under
the provisions of law, and (ii) Registrant may create a trust fund, grant a
security interest and/or use other means (including, without limitation, letters
of credit, surety bonds and/or similar arrangements), as well as enter into
contracts providing for indemnification to the full extent authorized or
permitted by law and including as part thereof provisions with respect to any
and all of the foregoing to ensure the payment of such amounts as may become
necessary to effect indemnification as provided therein, or elsewhere.
II-1
Registrant maintains an officer's and director's liability insurance policy
insuring its officers and directors against certain liabilities and expenses
incurred by them in their capacities as such, and insuring Registrant under
certain circumstances, in the event that indemnification payments are made to
such officers and directors.
Registrant has also entered into indemnification agreements (the
"Indemnification Agreements") with certain of its directors and officers
(individually, the "Indemnitee"). The Indemnification Agreements, among other
things, provide for indemnification to the fullest extent permitted by law
against any and all expenses, judgments, fines, penalties and amounts paid in
settlement of any claim. The Indemnification Agreements provide for the prompt
advancement of all expenses to the Indemnitee and for reimbursement to
Registrant if it is found that such Indemnitee is not entitled to such
indemnification under applicable law. The Indemnification Agreements also
provide that after a Change in Control (as defined in the Indemnification
Agreements) of Registrant which is not approved by the Board of Directors of
Registrant, all determinations regarding a right to indemnity and the right to
advancement of expenses shall be made by independent legal counsel selected by
the Indemnitee and approved by the Board of Directors. In addition, in the event
of a Potential Change In Control (as defined in the Indemnification Agreements),
the Indemnitee may require Registrant to establish a trust for his or her
benefit and to fund such trust in amounts reasonably anticipated or proposed to
be paid to satisfy Registrant's indemnification obligations under the
Indemnification Agreements.
The foregoing summaries are necessarily subject to the complete text of the
statute, the Registrant's Restated Certificate of Incorporation and Bylaws, and
the arrangements referred to above and are qualified in their entirety by
reference thereto.
II-2
ITEM 16. EXHIBITS
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EXHIBIT NO. DESCRIPTION
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1.1 Form of Underwriting Agreement with respect to Debt Securities.
*1.2 Form of Underwriting Agreement with respect to Preferred Stock.
*1.3 Form of Underwriting Agreement with respect to Common Stock.
*1.4 Form of Underwriting Agreement with respect to Warrants.
1.5 Form of Distribution Agreement with respect to Debt Securities.
4.1 Restated Certificate of Incorporation of Registrant.
4.2 Amended Bylaws of Registrant.
4.3 Indenture, dated as of March 7, 1996, between Registrant and Citibank, N.A., a national banking association, as
trustee, pertaining to the Senior Debt Securities (incorporated by reference from the Registrant's Current
Report on Form 8-K dated March 7, 1996).
4.4 Form of Senior Subordinated Debt Securities Indenture.
4.5 Form of Subordinated Debt Securities Indenture.
4.6 Form of Debt Securities Warrant Agreement (including form of Debt Warrant Certificate).
4.7 Form of Preferred Stock Warrant Agreement (including form of Preferred Stock Warrant Certificate).
4.8 Form of Common Stock Warrant Agreement (including form of Common Stock Warrant Certificate).
4.9 Form of Deposit Agreement (including form of Depositary Receipts).
4.10 Specimen Common Stock Certificate.
4.11 Rights Agreement dated as of November 8, 1995 between Registrant and the Bank of New York, as rights agent
(incorporated by reference from the Registration Statement on Form S-4 of Registrant under its former name,
DC Holdco, Inc., filed on November 13, 1995).
*4.12 Certificate of Designation of Preferred Stock.
*4.13 Form of Preferred Stock Certificate.
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP regarding the Securities.
12.1 Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in their opinion filed as Exhibit 5.1).
23.2 Consent of Independent Accountants (Price Waterhouse LLP).
23.3 Consent of Independent Auditors (Ernst & Young LLP).
24 Powers of Attorney (included on the signature page hereto).
25.1 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of Citibank, N.A., as
Trustee under the Senior Debt Securities Indenture.
25.2 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of Chase Manhattan Bank
and Trust Company, National Association, as Trustee under the Senior Subordinated Debt Securities Indenture.
25.3 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The First National Bank
of Chicago, as Trustee under the Subordinated Debt Securities Indenture.
------------------------
* To be filed by a post-effective amendment to the Registration Statement or
incorporated by reference from a Current Report on Form 8-K.
II-3
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
Provided, however, that paragraphs (i) and (ii) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof; and
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Burbank, State of California, on the 14th day of May,
1998.
[Download Table]
THE WALT DISNEY COMPANY
By: /s/ MICHAEL D. EISNER
------------------------------------------
Michael D. Eisner
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
POWER OF ATTORNEY
We, the undersigned directors and officers of The Walt Disney Company, do
hereby severally constitute and appoint Sanford M. Litvack, Richard D. Nanula,
Paul Saleh 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.
[Download Table]
SIGNATURE TITLE DATE
------------------------------ -------------------------- ----------------
Chairman of the Board and
/s/ MICHAEL D. EISNER Chief Executive Officer
------------------------------ (Principal Executive May 14, 1998
(Michael D. Eisner) Officer)
/s/ ROY E. DISNEY
------------------------------ Vice Chairman of the Board May 14, 1998
(Roy E. Disney)
Senior Executive Vice
/s/ SANFORD M. LITVACK President, Chief of
------------------------------ Corporate Operations and May 14, 1998
(Sanford M. Litvack) Director
Senior Executive Vice
President and Chief
/s/ RICHARD D. NANULA Financial Officer
------------------------------ (Principal May 14, 1998
(Richard D. Nanula) Financial and Accounting
Officer)
II-5
[Download Table]
SIGNATURE TITLE DATE
------------------------------ -------------------------- ----------------
/s/ REVETA F. BOWERS
------------------------------ Director May 14, 1998
(Reveta F. Bowers)
/s/ STANLEY P. GOLD
------------------------------ Director May 14, 1998
(Stanley P. Gold)
/s/ IGNACIO E. LOZANO, JR.
------------------------------ Director May 14, 1998
(Ignacio E. Lozano, Jr.)
/s/ GEORGE J. MITCHELL
------------------------------ Director May 14, 1998
(George J. Mitchell)
/s/ THOMAS S. MURPHY
------------------------------ Director May 14, 1998
(Thomas S. Murphy)
/s/ RICHARD A. NUNIS
------------------------------ Director May 14, 1998
(Richard A. Nunis)
/s/ LEO J. O'DONOVAN, S.J.
------------------------------ Director May 14, 1998
(Leo J. O'Donovan, S.J.)
/s/ SIDNEY POITIER
------------------------------ Director May 14, 1998
(Sidney Poitier)
/s/ IRWIN E. RUSSELL
------------------------------ Director May 14, 1998
(Irwin E. Russell)
/s/ ROBERT A.M. STERN
------------------------------ Director May 14, 1998
(Robert A.M. Stern)
/s/ E. CARDON WALKER
------------------------------ Director May 14, 1998
(E. Cardon Walker)
/s/ RAYMOND L. WATSON
------------------------------ Director May 14, 1998
(Raymond L. Watson)
/s/ GARY L. WILSON
------------------------------ Director May 14, 1998
(Gary L. Wilson)
II-6
EXHIBIT INDEX
[Enlarge/Download Table]
EXHIBIT NO. DESCRIPTION
----------- ---------------------------------------------------------------------------------------------------------------
1.1 Form of Underwriting Agreement with respect to Debt Securities.
*1.2 Form of Underwriting Agreement with respect to Preferred Stock.
*1.3 Form of Underwriting Agreement with respect to Common Stock.
*1.4 Form of Underwriting Agreement with respect to Warrants.
1.5 Form of Distribution Agreement with respect to Debt Securities.
4.1 Restated Certificate of Incorporation of Registrant.
4.2 Amended Bylaws of Registrant.
4.3 Indenture, dated as of March 7, 1996, between Registrant and Citibank, N.A., a national banking association, as
trustee, pertaining to the Senior Debt Securities (incorporated by reference from the Registrant's Current
Report on Form 8-K dated March 7, 1996).
4.4 Form of Senior Subordinated Debt Securities Indenture.
4.5 Form of Subordinated Debt Securities Indenture.
4.6 Form of Debt Securities Warrant Agreement (including form of Debt Warrant Certificate).
4.7 Form of Preferred Stock Warrant Agreement (including form of Preferred Stock Warrant Certificate).
4.8 Form of Common Stock Warrant Agreement (including form of Common Stock Warrant Certificate).
4.9 Form of Deposit Agreement (including form of Depositary Receipts).
4.10 Specimen Common Stock Certificate.
4.11 Rights Agreement dated as of November 8, 1995 between Registrant and the Bank of New York, as rights agent
(incorporated by reference from the Registration Statement on Form S-4 of Registrant under its former name,
DC Holdco, Inc., filed on November 13, 1995).
*4.12 Certificate of Designation of Preferred Stock.
*4.13 Form of Preferred Stock Certificate.
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP regarding the Securities.
12.1 Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in their opinion filed as Exhibit 5.1).
23.2 Consent of Independent Accountants (Price Waterhouse LLP).
23.3 Consent of Independent Auditors (Ernst & Young LLP).
24 Powers of Attorney (included on the signature page hereto).
25.1 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of Citibank, N.A., as
Trustee under the Senior Debt Securities Indenture.
25.2 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of Chase Manhattan Bank
and Trust Company, National Association, as Trustee under the Senior Subordinated Debt Securities Indenture.
25.3 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The First National Bank
of Chicago, as Trustee under the Subordinated Debt Securities Indenture.
------------------------
* To be filed by a post-effective amendment to the Registration Statement or
incorporated by reference from a Current Report on Form 8-K.
Dates Referenced Herein and Documents Incorporated by Reference
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