This excerpt taken from the DIS DEF 14A filed Jan 6, 2005.
In January 2004, the Board enhanced its Corporate Governance Guidelines by, among other things, adopting a definition of director independence that meets and in some areas exceeds the listing standards of the New York Stock Exchange. In November 2004, the Board updated the Guidelines to reflect changes to the New York Stock Exchange listing standards. The portion of the Guidelines addressing Director independence is attached to this proxy statement as Annex I, and the full text of the Guidelines can be found in the Investor Relations section of the Companys website (www.disney.com/investors). A copy may also be obtained upon request from the Companys Corporate Secretary.
Pursuant to the Guidelines, the Board undertook its annual review of Director independence in November 2004. During this review, the Board considered transactions and relationships between each Director or any member of his or her immediate family and the Company and its subsidiaries and affiliates, including those reported under Certain Relationships and Related TransactionsWhat related party transactions involved Directors? below. The Board also examined transactions and relationships between Directors or their affiliates and members of the Companys senior management or their affiliates. As provided in the Guidelines, the purpose of this review was to determine whether any such relationships or transactions were inconsistent with a determination that the Director is independent.
As a result of this review, the Board affirmatively determined that all of the Directors nominated for election at the annual meeting are independent of the Company and its management under the standards set forth in the Corporate Governance Guidelines, with the exception of Michael Eisner, Robert Iger and John Bryson. Messrs. Eisner and Iger are considered inside Directors because of their employment as senior executives of the Company. Mr. Bryson is considered a non-independent outside Director as a result of the dollar amount of business transactions during fiscal 2004 between the Company and its subsidiaries and Lifetime Entertainment Television, a company that employs Mr. Brysons wife in an executive capacity. During fiscal 2004, Lifetime acquired programming and purchased advertising time from, and sold advertising time to, Company subsidiaries in an aggregate amount that exceeded 2% of Lifetimes total revenues for that year. We provide additional information regarding compensation provided to Mr. Brysons wife under Certain Relationships and Related TransactionsWhat related party transactions involved Directors? below.
In determining that each of the other Directors is independent, the Board considered that the Company and its subsidiaries in the ordinary course of business sell products and services to, and/or purchase products and services from, companies at which certain Directors, including Messrs. Chen, Langhammer, Lewis, Matschullat and Wilson and Ms. Lozano, serve (or recently served or are expected to serve in the coming year) as an
executive officer or Chairman of the Board. In each case, the amount paid to or received from these companies in each of the last three years did not approach the 2% of total revenue threshold in the Guidelines, reaching approximately 1% of the total revenue in one case and in the other cases falling well below 1%. The Board also determined that these transactions were not otherwise material to the other company or to the Company and that none of our Directors had a material interest in the transactions with these companies. The Board therefore determined that none of these relationships impaired the independence of the Directors. The Board also considered that some Directors were directors (but not officers) of companies or institutions that the Company sells products and services to or purchases products and services from, but determined that these relationships did not impair the independence of those Directors.