DIS Walt Disney Co

Blackwells Capital LLC (together with its affiliates, “Blackwells” or “we”) today issued a letter to fellow shareholders regarding the need for boardroom enhancement at The Walt Disney Company (NYSE: DIS).

We invite all shareholders to learn more about our nominees and mission at www.TheFutureOfDisney.com.

The full letter to shareholders follows:

Dear Fellow Disney Shareholder:

As you may know, on January 3, 2024, The Walt Disney Company (“Disney” or the “Company”) issued a press release announcing an “Information-Sharing Arrangement” between the Company and ValueAct Capital Management, L.P. (“ValueAct”). The press release contained a glowing endorsement by ValueAct of Disney’s board of directors (the “Board”) and management of Disney.

The Board has repeatedly trumpeted ValueAct’s endorsement in proxy materials mailed to millions of shareholders, press releases, letters to shareholders, one-off engagements with shareholders, and in a recent presentation delivered to proxy advisory firm, Institutional Shareholder Services (“ISS”). 1  

Blackwells diligence revealed that the Board failed to disclose in the press release that ValueAct or its affiliates have been managing over $350 million of Disney’s pension fund assets, and that ValueAct has been earning fees ranging from approximately $55 million to $95 million for the services provided to Disney’s pension fund since as early as 2013.2

ValueAct’s management of Disney’s pension funds is not disclosed anywhere in any of the referenced communications. Meanwhile, Disney’s entire shareholder franchise population has been led to believe that ValueAct provided its independent and unqualified support of the Board independently.

We believe shareholders should consider the following:

• Can this Board believe that shareholders are able to evaluate the significance of ValueAct’s endorsement without a full understanding of the relationship?
• Did the Board know about ValueAct’s management of Disney’s pension funds prior to authorizing the January 3rd press release?
  • If yes, how could they hide this information from shareholders?
  • Did the Audit Committee of the Board review this matter in advance?

• How could the Board not know of this relationship when their own investor presentation dated March 11, 2024, mentions Trian’s identical role in managing Disney pension fund assets?
• Why didn’t ValueAct and its principal, Mason Morfit, insist on disclosing ValueAct’s management of Disney’s pension funds in the January 3 press release—when, as fiduciaries to these funds, they certainly knew about these facts?
  • Why didn’t Mr. Morfit mention these important facts in his presentation in support of the Board in front of hundreds of attendees at the Council of Institutional Investors conference last week?
• Did the Board violate Disney’s Code of Ethics3 and commitment to transparency4 by failing to disclose ValueAct’s management of Disney’s pension funds after publicly accepting ValueAct’s endorsement?

On numerous occasions, Blackwells has publicly demanded disclosure of Disney’s relationship with ValueAct, including the release of the Information-Sharing Agreement. On February 16, 2024, Blackwells submitted a formal demand under Delaware law that this information be made available to Blackwells.5 The Board denied our demand, asserting that we had not explained sufficiently our reasons to believe the Company’s relationship with ValueAct might be important.6

The Information-Sharing Agreement, the information shared under it, and details of the pre-existing, and current, Disney/ValueAct relationship on long standing is material information for shareholders. Blackwells’ diligence is proof positive that these disclosures must be made immediately.

We urge fellow shareholders to join us in demanding that the Board immediately take all necessary steps to file updated proxy materials with full disclosure of the ValueAct arrangement—so that shareholders can have the information needed to cast votes that are fully informed.  

Blackwells has nominated three incredibly qualified nominees for election at Disney’s 2024 annual meeting of shareholders (the “Annual Meeting”): Craig Hatkoff, Jessica Schell and Leah Solivan.   Our nominees add expertise in the needed areas of content, media, technology and best in class governance.

For more information about our campaign, including our thoughts on improving governance such that Disney will limit future issues like the ValueAct one, please visit www.TheFutureOfDisney.com.

Sincerely,

Jason Aintabi

Chief Investment Officer

Blackwells Capital LLC

To learn more about Blackwells’ three nominees Jessica Schell, Craig Hatkoff and Leah Solivan, fellow Disney shareholders are encouraged to visit www.TheFutureOfDisney.com. Blackwells campaign website includes materials for shareholders to evaluate and help make the most informed voting decisions possible.

Please vote your proxy today on the GREEN universal proxy card “FOR” each of the Blackwells nominees and the Blackwells proposal.

If you have any questions about voting your proxy or need replacement proxy materials, contact:

Morrow Sodali LLC+1 (800) 662-5200 (toll-free for shareholders)+1 (203) 658-9400 (call collect for banks, brokers, trustees and other nominees)Blackwells@morrowsodali.com

About Blackwells Capital

Blackwells Capital was founded in 2016 by Jason Aintabi, its Chief Investment Officer. Since that time, it has made investments in public securities, engaging with management and boards, both publicly and privately, to help unlock value for stakeholders, including shareholders, employees and communities. Throughout their careers, Blackwells’ principals have invested globally on behalf of leading public and private equity firms and have held operating roles and served on the boards of media, energy, technology, insurance and real estate enterprises. For more information, please visit www.blackwellscap.com.

Contacts

Media:Gagnier CommunicationsDan Gagnier & Riyaz Lalani646-569-5897blackwells@gagnierfc.com

Shareholders:Morrow SodaliMichael Verrechia & William Dooley(800) 662-5200blackwells@morrowsodali.com

IMPORTANT ADDITIONAL INFORMATION

Blackwells Onshore I LLC, Blackwells Capital LLC, Jason Aintabi, Craig Hatkoff, Jessica Schell and Leah Solivan (collectively, the “Participants”) are participants in the solicitation of proxies from the shareholders of The Walt Disney Company (the “Company”) for the 2024 Annual Meeting of Shareholders. On February 6, 2024, the Participants filed with the U.S. Securities and Exchange Commission (the “SEC”) their definitive proxy statement and accompanying GREEN Proxy Card in connection with their solicitation of proxies from the shareholders of the Company for the 2024 Annual Meeting of Shareholders. ALL SHAREHOLDERS OF THE COMPANY ARE ADVISED TO READ THE DEFINITIVE PROXY STATEMENT, THE ACCOMPANYING GREEN PROXY CARD AND OTHER DOCUMENTS RELATED TO THE SOLICITATION OF PROXIES BY THE PARTICIPANTS, AS THEY CONTAIN IMPORTANT INFORMATION, INCLUDING ADDITIONAL INFORMATION RELATED TO THE PARTICIPANTS AND THEIR DIRECT OR INDIRECT INTERESTS IN THE COMPANY, BY SECURITY HOLDINGS OR OTHERWISE.

The definitive proxy statement and an accompanying GREEN proxy card will be furnished to some or all of the Company’s shareholders and is, along with other relevant documents, publicly available at no charge on the SEC’s website at http://www.sec.gov/. In addition, the Participants will provide copies of the definitive proxy statement without charge, when available, upon request. Requests for copies should be directed to Blackwells Onshore I LLC.

1 See, e.g., soliciting materials filed on DEFA14 by Disney with the Securities Exchange Commission on March 11, 2024, February 14, 2024, February 12, 2024, February 5, 2024, February 1, 2024. 2 See, Schedule C to Form 5500 of The Walt Disney Company Retirement Plan Master Trust for fiscal years 2013 through 2022. In each year beginning in 2013, ValueAct (and/or its affiliates) has been disclosed as an entity receiving compensation in connection with services to the plan on Schedule C of The Walt Disney Company Retirement Plan Master Trust’s Form 5500.3 See, The Walt Disney Company, Code of Business Conduct and Ethics For Directors at page 1. “Directors must avoid conflicts of interest. …[for example] (iv) accepting, or having a member of a Director’s immediate family accept, a gift from persons or entities that deal with the Company, in cases where the gift is being made in order to influence the Directors’ actions as a member of the Board, or where acceptance of the gift could otherwise reasonably create the appearance of a conflict of interest.”4 See, The Walt Disney Company Standards of Business Conduct at page 14. “Our policies are designed to…promote transparency—we don’t engage in any activity that would compromise our professional judgment or suggest favorable or preferential treatment.”5 See, Blackwells’ Demand to The Walt Disney Company under Section 220 of the Delaware General Corporation Law, dated February 16, 2024, available at https://thefutureofdisney.com/wp-content/uploads/2024/03/Blackwells-DIS-ValueAct-220-Demand.pdf. 6 See, The Walt Disney Company’s Response Letter, dated February 26, 2024, available at https://thefutureofdisney.com/wp-content/uploads/2024/03/Blackwells-220-Demand-Response-Signed-1.pdf.