As of September 12, 2006
Mr. Wesley Coleman
3749 N.W. DeVoto Lane
Portland, Oregon 97229
Dear Mr. Coleman:
This letter (the “Agreement”) confirms the terms of your employment by The Walt Disney Company (“Disney”).
The term of your employment hereunder shall commence on October 2, 2006 and expire on October 1, 2009, unless earlier terminated as hereinafter provided (the “term”).
In consideration for all rights and services provided by you hereunder, you shall receive an annual salary of $600,000 for the first year, $625,000 for the second year, and $650,000 for the third year of the term. Salary payments shall be made in equal installments in accordance with Disney’s then prevailing payroll policy.
(a) Commencing with Disney’s 2007 fiscal year, you shall be eligible to participate in Disney’s Management Incentive Bonus Program (or any successor plans thereto), subject to and in accordance with its terms. Bonus compensation thereunder, if any, shall be at the discretion of Disney. (For the avoidance of doubt, awards for fiscal year 2007, the first year of eligibility for you, are currently anticipated to be paid in January 2008.)
(b) In addition to the foregoing, you shall receive a special one-time signing bonus in the amount of $300,000 (less statutory withholdings) payable within ten business days following the later of (i) Disney’s receipt of this Agreement signed by you or (ii) your commencement of employment hereunder.
(a) Disney shall recommend to the Compensation Committee (“Committee”) of its Board of Directors that you be granted:
(i) non-qualified stock options pursuant to a stock incentive plan of Disney to purchase 185,000 shares of common stock of Disney, it being understood that such options shall have an exercise price of 100% of fair market value of the common stock of Disney at the date of grant by the Committee (the “Grant Date”) and that such options shall vest at the rate of 50% on the second anniversary of the Grant Date and 25% on each of the third and fourth anniversaries of the Grant Date (subject to your continued employment by Disney and to the other provisions of the applicable stock incentive plan); and
(ii) 40,000 restricted stock units pursuant to a Disney stock incentive plan, it being understood that such restricted stock units shall be scheduled to vest at the rate of 50% on the second anniversary of the Grant Date and 50% on the fourth anniversary of the Grant Date (subject to your continued employment by Disney and to the other provisions of the applicable Disney stock incentive plan and of the restricted stock unit award).
(b) Commencing with Disney’s 2008 fiscal year ( i . e ., commencing with respect to awards currently anticipated to be made in January 2008), you shall be eligible to participate in Disney’s annual long-term incentive program for so long as the program remains in effect. However, there is no assurance that any future award will be made or, if made, that it will be of any particular magnitude, and the grant of any such award would in any event be at the sole discretion of Disney and may be subject to such terms and conditions (including performance-based vesting conditions) as the Committee in its sole discretion deems appropriate.
You are being employed hereunder with the title of Executive Vice President and Chief Human Resources Officer of Disney. In such capacity you shall report to the Chief Executive Officer of Disney, or the Chief Operating Officer, President or such other senior officer of Disney, as determined from time to time by the Chief Executive Officer.
You shall personally and diligently perform, on a full-time and exclusive basis, such services as Disney or any of its subsidiaries may reasonably require provided they are not inconsistent with your title and position as hereinabove provided (unless voluntarily accepted by you). You shall observe all lawful rules and regulations adopted by Disney in connection with the operation of its business, including but not limited to the standards and policies set forth in “The Walt Disney Company and Associated Companies Standards of Business Conduct” booklet, and carry out to the best of your ability all instructions of Disney.
To the extent you incur necessary and reasonable business expenses, including, without limitation, expenses for travel (including first class air travel in accordance with Disney’s policies as in effect from time to time) and entertainment in the course of your employment, you shall be reimbursed for such expenses, subject to Disney’s then current policies regarding reimbursement of such business expenses.
Disney will provide for your use of an automobile pursuant to Disney’s standard policy as in effect from time to time for persons in comparable positions with Disney. Disney’s current policy includes the option of an automobile allowance of $940.00 per month, less statutory withholdings. Should you choose the auto allowance, you will be responsible for the costs of purchasing or leasing an automobile as well as for paying all costs related to such automobile, including without limitation maintenance, registration costs, fuel and insurance. Notwithstanding the foregoing, Disney shall have, at its sole option, the right to change its current automobile policy at any time and from time to time.
(a) You shall be entitled to those benefits that are standard from time to time for persons in comparable executive positions with Disney (excluding, however, for the avoidance of doubt, participation by you in Disney’s Family Income Assurance Plan). You shall be eligible to receive financial counseling services pursuant to Disney’s executive financial counseling program as in effect from time to time.
(b) In connection with your current relocation to the Los Angeles area, you shall be entitled to relocation assistance in accordance with, and subject to, Disney’s policies and practices. Attached hereto is a summary of relocation benefits applicable to you and a copy of a related “Disney Relocation Agreement” required to be signed by you as a condition to receiving relocation benefits.
(a) During the term of your employment by Disney you will not compete in any manner, directly or indirectly, whether as a principal, employee, agent or owner, with Disney or any affiliate thereof, except that the foregoing will not prevent you from holding at any time less than 5% of the outstanding capital stock of any company whose stock is publicly traded.
(b) To the extent permitted by law, all rights worldwide with respect to any and all intellectual or other property of any nature produced, created or suggested by you during the term of your employment or resulting from your services shall be deemed to be a work made for hire and shall be the sole and exclusive property of Disney. You agree to execute, acknowledge and deliver to Disney at Disney’s request, such further documents as Disney finds appropriate to evidence Disney’s rights in such property. Any confidential and/or proprietary information of Disney or any affiliate thereof shall not be used by you or disclosed or made available by you to any person except as required in the course of your employment (or as required by law, or by any administrative equivalent to a judicial subpoena or legal power of compulsion, to respond to any demand for any such confidential and/or proprietary information from any court, governmental entity or governmental agency, provided that if you are so required to respond, you agree to provide Disney with prompt notice thereof so that Disney may seek a protective order or other appropriate remedy), and upon expiration or earlier termination of the term of your employment, you shall return to Disney all such information that exists in written or other physical form (and all copies thereof) under your control. Without limiting the generality of the foregoing, you acknowledge signing and delivering “The Walt Disney Company and Associated Companies Confidentiality Agreement” and you agree that all terms and conditions contained therein, and all of your obligations and commitments provided for therein, shall be deemed, and hereby are, incorporated into this Agreement as if set forth in full herein. The provisions of this paragraph shall survive the expiration or earlier termination of this Agreement.
You recognize that your services hereunder are of a special, unique, unusual, extraordinary and intellectual character giving them a peculiar value, the loss of which cannot be reasonably or adequately compensated for in damages, and in the event of a breach of this Agreement by you (particularly, but without limitation, with respect to the provisions hereof relating to the exclusivity of your services and the provisions of paragraph 10 hereof), Disney shall, in addition to all other remedies available to it, be entitled to equitable relief by way of injunction and any other legal or equitable remedies.
(a) Disney may terminate your employment hereunder for:
(i) gross negligence,
(iii) nonfeasance in the performance of your duties hereunder,
(iv) material breach of this Agreement,
(v) your resignation or quitting or other termination (or purported termination) by you of your employment hereunder without the prior written consent of Disney, other than as a result of a material breach of this Agreement by Disney which is not cured pursuant to paragraph 12(d) hereof, or
(vi) other good cause,
subject, however (except in cases where the cause for termination is based on gross misconduct or is not in the reasonable opinion of Disney curable), to your failure to cure, within five (5) days of receipt by you of Disney’s written notice of intent to terminate, which notice shall identify the reason or cause for termination in reasonable detail. In the event of any such termination, all obligations of Disney hereunder shall immediately terminate, except for Disney’s obligation to pay salary through date of termination of employment, to reimburse all expenses incurred in accordance with the policies of Disney prior to termination of employment and to pay any amounts, and/or provide such accrued benefits to which you were unconditionally entitled at the time of termination under any employee welfare plans of Disney, it being understood that any such payment and/or provision of amounts and/or benefits shall be made s