Walt Disney Company (DIS)

Approval of the Amended and Restated 2005 Stock Incentive Plan

The Board of Directors unanimously recommends that shareholders approve an amendment to the Company’s Amended and Restated 2005 Stock Incentive Plan (which we refer to as the 2005 Plan). The amendment increases the maximum number of shares of common stock we may issue under the 2005 Plan by 31,000,000 shares from 27,000,000 to 58,000,000 shares and increases the maximum number of shares that can be issued pursuant to restricted and unrestricted stock and stock unit awards by an aggregate of 7,000,000 shares from an aggregate of 10,000,000 to an aggregate of 17,000,000 shares.

The purpose of this amendment is to secure adequate shares to fund expected awards under the Company’s long-term incentive program through the next annual award in January 2008. The Board believes that this number represents a reasonable amount of potential equity dilution and allows the Company to continue awarding equity incentives, which are an important component of our compensation program. The Company expects that it will need to seek shareholder approval in 2008 for additional shares to continue the program beyond 2008.

The affirmative vote of the holders of a majority of shares represented in person or by proxy and entitled to vote on this item will be required for approval of the amendments to the 2005 Plan. Abstentions will be counted as represented and entitled to vote and will therefore have the effect of a negative vote. Broker non-votes (as described under “Information About Voting and the Meeting—Voting”) will not be considered entitled to vote on this item and therefore will not be counted in determining the number of shares necessary for approval.