Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On November 20, 2022, The Walt Disney Company (the "Company") appointed Robert
A. Iger as Chief Executive Officer for a term ending December 31, 2024. The
Company's Board of Directors (the "Board") also appointed Mr. Iger to serve as a
Director on the Board with a term expiring at the 2023 Annual Meeting. The
Company exercised its right to terminate without cause the employment of Robert
A. Chapek as Chief Executive Officer. Effective as of the termination, Mr.
Chapek also resigned from the Board pursuant to the terms of his employment
agreement. In connection with his termination, Mr. Chapek will receive the
separation benefits payable in accordance with the terms of his previously
disclosed employment agreement.
Mr. Iger, 71, served as Executive Chairman of the Company from February 2020
through December 2021. Previously, Mr. Iger served as Chief Executive Officer of
the Company from September 2005 to February 2020. Mr. Iger served on the Board
from January 2000 through December 2021. In light of the Company's business and
structure, Mr. Iger's 27 years of experience in the entertainment industry and
with the Company, including as the Chief Executive Officer of the Company, are
expected to contribute to the Board and the Company.
Under his prior employment agreement, for the five-year period following his
retirement at December 31, 2021, Mr. Iger is to provide consulting services, and
continue to receive certain security benefits provided to Mr. Iger as an officer
of the Company, in each case for five years following his termination. These
post-employment arrangements will be tolled during his period of employment,
with the parties commitments under these arrangements to be fulfilled for the
remaining term when his employment ends.
In connection with his appointment as Chief Executive Officer, Mr. Iger entered
into an employment agreement with the Company (the "Employment Agreement")
providing that Mr. Iger's annual rate of base salary is $1 million. The
Employment Agreement provides that Mr. Iger is also eligible for an annual,
performance-based bonus under the Company's applicable annual incentive plan
(currently, the Company's Management Incentive Bonus Program) with a target
equal to 100% of the annual base salary. The actual amount payable to Mr. Iger
as an annual bonus will be dependent upon the achievement of performance
objectives, which will be substantially the same as the objectives established
under the plan for other executive officers of the Company. Depending on
performance, the actual amount payable as an annual bonus to Mr. Iger may be
less than, greater than or equal to the stated target bonus (and could be zero).
The Employment Agreement also provides that Mr. Iger is entitled to participate
in the Company's equity-based long-term incentive plans and programs generally
made available to executive officers of the Company. For each fiscal year ended
during the term of the Agreement, Mr. Iger will be granted a long-term incentive
award having a target value of $25 million. Sixty percent (60%) of this target
award value will be provided in the form of performance-based restricted stock
units and the remaining forty percent (40%) will be in the form of stock
options. The other terms of these awards will be subject to substantially the
same terms and conditions (except for (i) two year vesting and performance
conditions for the performance-based stock units and (ii) full vesting of the
stock option awards on December 31, 2024, if Mr. Iger remains in employment
through such date), as will be established for other executive officers of the
Company in accordance with the Board's policies for the grant of equity-based
awards, as in effect at the time of the award, and do not guarantee Mr. Iger any
minimum amount of compensation. The actual amounts payable to Mr. Iger in
respect of such opportunities will be determined based on the extent to which
any performance conditions and/or service conditions applicable to such awards
are satisfied and on the value of the Company's stock. Accordingly, Mr. Iger may
receive compensation in respect of any such award that is greater or less than
the stated target value, depending on whether, and to what extent, the
applicable performance and other conditions are satisfied, and on the value of
the Company's stock.
Mr. Iger's employment may be terminated by the Company for "cause," which is
defined to include a felony conviction, unauthorized disclosure of confidential
information, failure to substantially perform his duties, or any other
significant policy violation that is significantly injurious to the Company.
Mr. Iger has the right to terminate his employment for "good reason," which is
defined as (i) a reduction in any of his base salary, annual target bonus
opportunity or annual target long-term incentive award opportunity; (ii) removal
from the position of Chief Executive Officer; (iii) a material reduction in his
duties and responsibilities; (iv) the assignment to him of duties that are
materially inconsistent with his position as Chief Executive Officer or duties
--------------------------------------------------------------------------------
or that materially impair his ability to function as Chief Executive Officers or
any other position in which he is then serving; (vi) relocation of his principal
office to a location that is more than 50 miles outside of the greater Los
Angeles area; or (vii) a material breach of any material provision of the
Agreement by the Company. Following a change in control of the Company, as
defined in the Company's stock plans, good reason also includes any event that
is a triggering event as defined in the plans. A triggering event is defined to
include a termination of employment by the Company other than for "cause" or a
termination of employment by the participant following a reduction in position,
pay or other "constructive termination."
In the event that Mr. Iger's employment is terminated by the Company without
"cause" or by Mr. Iger for "good reason," he will be entitled to termination
benefits, which include the following: (i) a lump sum payment of the base salary
that would have been payable over the remaining term of the Agreement; (ii) a
pro-rated bonus for the year of termination (any prior-year bonus not yet paid
at time of termination is also paid); and (iii) the outstanding unvested stock
options and outstanding unvested restricted stock unit awards that could vest in
accordance with their scheduled vesting provisions if Mr. Iger's employment had
continued through the remaining term of the Agreement will be eligible to vest
at the same time and subject to the same performance conditions as though he
continued in the Company's employ, and all stock options, whether vested on the
date of termination or vesting thereafter as described above, shall vest and
remain exercisable to the same extent as if his employment had continued through
the term of the Agreement.
To qualify for the above described cash severance benefit, pro-rated bonus (and
prior-year bonus, if not already paid), opportunity to vest in unvested equity
awards available under each Agreement and extended exercisability of stock
options following an involuntary termination by the Company without cause, or a
termination by Mr. Iger for good reason, he must execute a release in favor of
the Company
Under the Employment Agreement, Mr. Iger is entitled to participate in employee
benefits and perquisites generally made available to executive officers of the
Company. The Employment Agreement provides that Mr. Iger will enter into the
Company's standard officer indemnification agreement.
The foregoing descriptions are qualified by reference to the terms of the
Employment Agreement, which is filed herewith as Exhibit 10.1 and is
incorporated herein by reference. A copy of the press release issued by the
Company on November 20, 2022, is attached as Exhibit 99.1 hereto.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit
Number Description
10.1 Employment Agreement Dated as of November 20, 2022, between the Company and
Robert A. Iger
99.1 Press Release dated November 20, 2022
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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