Walt Disney Company (DIS)

agreement extends through January 31, 2013. The new employment agreement increased the minimum target bonus for Mr. Iger from $7.25 million to $10 million and increased the minimum fair value of his annual long-term target incentive compensation award from $8 million to $9 million.

As an inducement to enter into the new agreement, Mr. Iger was awarded a stock option in respect of 3,000,000 shares of the Company’s common stock with an exercise price of $29.51 (the market value of the Company’s stock on the date of award), which is reflected in the Grants of Plan Based Awards table on page 35 and the Outstanding Equity Awards Table on page 37.

The Compensation Committee recommended to the Board, and the Board (excluding Mr. Iger) approved, the new employment agreement because of Mr. Iger’s successful management of the Company during the initial two years of his tenure as president and chief executive officer and the resulting desire to provide incentives for him to remain at the Company for a period extending beyond the termination of his initial employment agreement. The size and terms of the equity award made in connection with the agreement and the new target amounts for bonus and equity awards were provided in exchange for extending the term of his agreement and arrived at through negotiation with Mr. Iger and in consultation with the Committee’s independent consultant and in light of information provided to the Committee and the Board by the consultant regarding compensation awarded to similarly situated officers of other companies.

Other Named Executive Officers.    The Company entered into a new employment agreement with Mr. Staggs on January 31, 2008, which became effective April 1, 2008, upon expiration of the term of his prior agreement. The term of the new agreement expires March 31, 2013. The new employment agreement sets forth a new salary schedule and establishes minimum target bonus and long-term incentive compensation awards as described in the following sections. As an

inducement for Mr. Staggs to enter into the agreement, the Company awarded Mr. Staggs a one-time grant of 250,000 restricted stock units, which are reflected in the Grants of Plan Based Awards table on page 35 and the Outstanding Equity Awards Table on page 37.

The Company entered into a new employment agreement with Mr. Braverman on October 3, 2008, which became effective as of October 1, 2008, upon expiration of the term of his prior agreement. The term of the new agreement expires September 30, 2013. The new employment agreement sets forth a minimum annual salary and establishes minimum target bonus and long-term incentive compensation awards as described in the following sections. As an inducement for Mr. Braverman to enter into the agreement, the Company awarded Mr. Braverman a one-time grant of 100,000 restricted stock units and agreed to award Mr. Braverman an additional 50,000 restricted stock units on substantially similar terms if he takes on any significant increase in his responsibilities during the term of the agreement. The restricted stock units (which are not reflected in the Grants of Plan Based Awards table or the Outstanding Equity Awards Table because they were made after the completion of fiscal 2008) are scheduled to vest with respect to half of the award on each of the second and fourth anniversaries of the award, in each case subject to determination that the test to assure eligibility under Section 162(m) was satisfied.

The Company entered into an employment agreement with Mr. Mayer on October 6, 2008, which became effective as of October 1, 2008. The term of the agreement expires September 30, 2012. The agreement sets forth a minimum annual salary and a minimum target bonus as described below.

The Compensation Committee approved the terms of the employment agreements for each of Mr. Staggs, Mr. Braverman and Mr. Mayer based on the recommendation of Mr. Iger and in light of the desire to provide incentives for each of them to remain at the Company through the term

of their respective agreements. The Committee reviewed changes in job responsibility, historical salary levels, performance and contribution made to the Company, the impact on total compensation, competitive conditions and the relationship of compensation to that of other Company officers and determined that the compensation awarded was appropriate to reward performance, ensure retention and maintain appropriate compensation differentials among officers of the Company. In each case, the Committee consulted with the Committee’s independent consultant in connection with its approval of the terms of the employment agreement.