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War Over Eisner Vote Details Heats Up Between Disney & Disney

The ongoing war between The Walt Disney Co. and ex-Disney board members Roy E. Disney and Stanley P. Gold has flared up again with the two sides debating the actual percentage of No Confidence votes received by Disney ceo and former chairman Michael Eisner and board member and newly elected chairman George Mitchell.

Disney and Gold claim that records from the company confirm that Eisner received a No Confidence vote from 72.5% of the votes cast by the Walt Disney Co. 401K trustee at the company's 2004 annual meeting and that Mitchell received a No Confidence vote from 63.7%.

"The simple fact is that the vast majority of people who participate in the company's 401K plans and voted their shares at the annual meeting have No Confidence in either their ceo or their newly-elected chairman," said Disney and Gold. "It is hard to imagine how Mr. Eisner can do what needs to be done at this company without the support of the company's employees. Despite an attempted Disney spin to the contrary, we believe this vote by the company's 401K participants is a meaningful barometer of employee dissatisfaction with the way The Walt Disney Co. is being run. The vote was strictly confidential. Plan participants, which include both current and former employees, were given a chance to express their views on Mr. Eisner and the board without fear of reprisal. As anyone who has done any polling knows, you only need a small sample to get a statistically valid survey.

"We believe it would be hard to argue that these results are not statistically valid. This overwhelming rejection by employees voting their shares in the 401K plans, together with the 45.4% No Confidence vote from the company's shareholders at the annual meeting, makes it undisputedly clear that Michael Eisner is a lame duck and the company's Board of Directors must address this untenable leadership vacuum. The question remains, how long will this board ignore the will of the company's shareholders and now, its employees? The message couldn't be clearer: action must be taken to replace Michael Eisner now."

Disney Co. spokesman John Spelich countered these accusations saying, "This is another blatant distortion and manipulation of data in an attempt to continue to mislead Disney shareholders."

Data records provide to AWN from Disney Co. state that "less than 9,400 of the about 36,000 participants in the employee savings plans actually cast a ballot, which is a turnout of just more than 25%. Of the 36,000, only approximately 22,500 are active employees. [The company work force is 112,000.] While [the company] won't know for certain until later this week if the 9,400 ballots were cast proportionately, if so, fewer that 6,000 would have been cast by active employees and it is completely uncertain at this point how many of those active employees actually cast votes to withhold. Per its previously announced procedure, Fidelity [the fund's manager] simply voted the entire group of 28.6 million employee plan shares in the same pro-rata proportion as those ballots actually cast. The number of shares cast is less than 1.5% of total shares outstanding."

Disney and Gold's retort was: "For the Disney PR department to 'spin' these facts in any other way is insulting and demeaning to the many loyal and dedicated employees who work for Disney; they deserve better -- shareholders expect better."

Disney and Gold are also calling for the board to re-examine their appointment of Mitchell to the post of chairman. More on this heated debate when it bubbles over again.

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Rick DeMott
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