- The Washington Times - Monday, March 1, 2004

LOS ANGELES (AP) — The Walt Disney Co. issued an urgent letter yesterday to shareholders, asking them to support the company’s current leadership in the face of an escalating attack from former board members Roy E. Disney and Stanley Gold.

Mr. Disney and Mr. Gold have waged a three-month campaign against Chairman and Chief Executive Officer Michael Eisner. They resigned from the board of the Burbank, Calif., entertainment giant in November.

The letter came after another plea from Mr. Disney and Mr. Gold asking shareholders to use their votes to show dissatisfaction with Mr. Eisner.

“Your vote for each of the director nominees is important to keep the momentum of the Walt Disney Co. going,” the company’s letter read.

By voting for the current board, shareholders are “realizing the full potential of our creative strength and enhancing thereby shareholder value,” it said.

Mr. Disney, the nephew of company co-founder Walt Disney, and his business partner Mr. Gold hope at tomorrow’s shareholders meeting to persuade at least 20 percent of them to withhold their approval for Mr. Eisner and three other board members.

The company is preparing for a dissenting vote as high as 30 percent.

In a letter on their Web site yesterday, Mr. Disney and Mr. Gold wrote: “We urge you to vote today and send an unmistakable message that it is time for a change in the senior management and board of the Walt Disney Co. Tell the board you believe it is time to replace Michael Eisner.”

Mr. Disney and Mr. Gold were traveling to Philadelphia yesterday and could not be immediately reached for comment.

Mr. Eisner’s re-election to the 11-member board is not in doubt because he is running unopposed, but shareholders’ votes could send a signal to the board of his weakening position.

Most shareholders have until 11:59 p.m. PST today to submit their votes. For current and former Disney employees, the deadline is 8:59 a.m. today.

The board, which will convene immediately after the shareholders meeting, must decipher the message behind the votes.

It could ask Mr. Eisner, 61, to step down. More likely, the board will separate the positions of chairman and chief executive officer — something it has been unwilling to do despite calls from influential proxy advisory firms and pension funds.

Mr. Eisner, who has spent the past 20 years with Disney, has lost favor with some influential institutional investors in recent weeks, including several large public pension funds along with the largest, the California Public Employees’ Retirement System (Calpers).

The dissension started with a three-month campaign by Mr. Disney and Gold and snowballed after an unsolicited takeover bid by cable giant Comcast Corp. and the collapse of talks with Pixar Animation Studios to extend their lucrative partnership.

In the past week, Calpers said it would withhold its support from Mr. Eisner and some board members. A handful of other large funds, including those from New York state, North Carolina, Florida, Ohio, New Jersey and Connecticut, also have said they will not support Mr. Eisner’s re-election.

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