Walt Disney Company (DIS)

Annual bonuses for other bonus eligible employees

Beginning in fiscal year 2005, the size of the pool of funds from which bonuses may be awarded to corporate executives other than those named in the Summary Compensation Table as well as business segment executives and other eligible employees depends upon performance against financial goals and other measures established at the outset of the fiscal year.

At the corporate level, 70% of the bonus pool determination is based on performance against the same financial measures used for bonus determinations for executive officers named in the Summary Compensation Table, as described above under “Setting Company performance goals.” The remaining 30% is based on an assessment by senior management and the Committee of other performance factors.

For the Company’s business segments, 50% of the bonus pool determination is based on performance against segment-level financial goals, 30% is based on other segment-level performance factors and 20% is based on the Company’s overall performance against the Company performance goals described above under “Setting Company performance goals.” Beginning in fiscal 2006, the bonuses for leaders of significant business units will be determined outside of the pool for their respective segments. For these business unit leaders, 45% of the bonus will be based on performance against segment-level financial goals, 25% will be based on other performance factors and 30% will be based on the Company’s overall performance against the Company performance goals.

As in the past, actual bonus awards from the bonus pool to individual eligible employees will be recommended by Corporate and segment leaders based on their discretionary assessment of performance, reviewed by senior management and approved by the Committee. The Committee retains discretion in circumstances it determines are appropriate to authorize awards that might exceed amounts available in the bonus pool calculated according to the program.

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Table of Contents

The Walt Disney Company Notice of 2006 Annual Meeting and Proxy Statement

Annual bonuses for other bonus eligible employees

Beginning in fiscal year 2005, the size of the pool of funds from which bonuses may be awarded to corporate executives other than those named in the Summary Compensation Table as well as business segment executives and other eligible employees will depend upon performance against financial goals and other measures established at the outset of the fiscal year.

At the corporate level, 70% of the bonus pool determination will be based upon performance against the same financial measures used for bonus determinations for executive officers named in the Summary Compensation Table, as described above under “Setting Company performance goals.” The remaining 30% will be based on an assessment by senior management and the Committee of other performance factors.

For the Company’s business segments, 50% of the bonus pool determination will be based upon performance against segment-level financial goals, 30% will be based on other segment-level performance factors and 20% will be based on the Company’s overall performance against the Company performance goals described above under “Setting Company performance goals.”

As in the past, actual bonus awards to individual eligible employees will remain subject to the overall discretion of the Committee.