Document:

Exhibit
4.2

 

THE WALT DISNEY
COMPANY

 

OFFICERS’ CERTIFICATE

 

Pursuant to Sections 2.1 and 2.3(a) of the Indenture, dated as of September 24,
2001 (the “Indenture”), between The Walt Disney Company, a Delaware corporation
(the “Company”), and Wells Fargo Bank, N.A., a national banking association, as
trustee (the “Trustee”), the undersigned Christine M. McCarthy and David K.
Thompson, the Executive Vice President-Corporate Finance and Real Estate and
Treasurer and Senior Vice President-Deputy General Counsel-Corporate and
Assistant Secretary of the Company, respectively, hereby certify on behalf of
the Company as follows:

 

(1)  Authorization.
The establishment of a series of medium-term notes of the Company (the “Medium-Term
Notes”) has been approved and authorized in accordance with the provisions of
the Indenture.  The forms of Medium-Term
Notes attached hereto as Exhibits A, B, C and D have been approved and
authorized in accordance with the provisions of the Indenture.

 

(2)  Compliance with Conditions
Precedent.  All conditions
precedent provided for in the Indenture relating to the establishment of new
forms and terms of the Medium-Term Notes have been complied with.

 

(3)  Terms.  The terms of the series of Securities
established pursuant to this Officers’ Certificate shall be as follows:

 

(a)  Title.  The title of the series of Securities is the “Medium-Term
Notes, Series D” (the “Notes”).

 

(b) Aggregate Initial Offering Price.  Subject to being increased by the Company
from time to time as shall be stated in a subsequent Officers’ Certificate, the
aggregate initial offering price of the Notes which may be authenticated and
delivered pursuant to the Indenture (except for Notes (i) authenticated
and delivered upon registration or transfer of, or in exchange for, or in lieu
of, other Notes pursuant to Sections 2.8, 2.9, 2.11, 3.6, 9.5 and 10.3 of the
Indenture or (ii) which, pursuant to Section 2.4 of the Indenture,
are deemed never to have been authenticated and delivered) is $5,000,000,000 or
the equivalent thereof at the date of issue in one or more foreign or 

 

 

composite currencies or
currency units. The Company may from time to time, without the consent of
existing holders of Notes, issue additional Notes having the same terms and
conditions (including maturity and interest payment terms) as previously issued
Notes in all respects, except for issue date, issue price and the first payment
of interest.  Additional Notes issued in
this manner will be fungible with the previously issued Notes to the extent specified
in the applicable Pricing Supplement.

 

(c)  Registered Securities in
Definitive or Book-Entry Form; Global Security; Depository.  Each Note will be issued in fully registered
book-entry form (a “Book-Entry Note”) or definitive form (a “Definitive Note”),
as set forth in the pricing supplement to the Prospectus and Prospectus
Supplement relating to such Note (the “Pricing Supplement”).  Upon issuance, all Notes in book-entry form
having the same original issue date, Stated Maturity and otherwise having
identical terms and provisions will be represented by a single global security
(each a “Global Security”); provided, however, that if by reason
of the foregoing a single Global Security would exceed $500,000,000 in
aggregate principal amount, one Global Security will be issued to represent
each $500,000,000 of aggregate principal amount and an additional Global
Security will be issued to represent any remaining principal amount.  The initial Depositary with respect to any
Global Security will be The Depository Trust Company, New York, New York.  So long as the Depositary for a Global
Security, or its nominee, is the registered owner of the Global Security, the
Depositary or its nominee, as the case may be, will be considered the sole
owner or holder of the Notes in book-entry form represented by such Global
Security for all purposes under the Indenture. 
Book-Entry Notes will not be exchangeable for Definitive Notes except
that, if the Depositary with respect to any Global Security or Securities is at
any time unwilling or unable to continue as Depositary and a successor
Depositary is not appointed by the Company within 90 days, the Company will
issue Definitive Notes in exchange for the Book-Entry Notes represented by any
such Global Security or Securities.  In
addition, the Company may at any time and in its sole discretion determine not
to have a Global Security or Securities, and, in such event, will issue
Definitive Notes in exchange for the Book Entry Notes represented by such
Global Security or Securities in accordance with the provisions of Section 2.8
of the Indenture.

 

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(d)  Persons to Whom Interest
Payable.  Unless otherwise
specified in a Note or an applicable Pricing Supplement, interest will be
payable to the person in whose name a Note is registered at the close of
business (whether or not a Business Day) on the Regular Record Date with
respect to such payment of interest; provided, however, that interest payable
at Maturity will be payable to the person to whom principal is payable.

 

(e)  Business Day. “Business Day” means any day, other than a
Saturday or Sunday, that is neither a legal holiday nor a day on which
commercial banks are authorized or required by law, regulation or executive order
to close in The City of New York; provided, however, that with
respect to Notes the payment of which is to be made in a Denominated Currency
(as defined below) other than U.S. dollars, such day is also not a day on which
commercial banks are authorized or required by law, regulation or executive
order to close in the Principal Financial Center (as defined below) of the
country of such Denominated Currency; provided, however, that,
with respect to LIBOR Notes only, such day is also a London Business Day (as
defined below); and provided,  further, that with respect to
EURIBOR Notes and notes denominated in euros only, such day is also a TARGET
Business Day (as defined below).  “London
Business Day” means any day on which commercial banks are open for business
(including dealings in the LIBOR currency) in London.  “TARGET Business Day” means any day on which
the Trans-European Automated Real-Time Gross Settlement Express Transfer System
is open.  “U.S. Government Securities
Business Day” means any day except for Saturday, Sunday or a day on which the
Bond Market Association recommends that the fixed income departments of its
members be closed for the entire day for purposes of trading in U.S. government
securities.  “Principal Financial Center”
means, as applicable, (i) the capital city of the country issuing the
payment currency, or (ii) the capital city of the country to which the
LIBOR currency relates; provided, however, that with respect to United States
dollars, Australian dollars, Canadian dollars, euros, South African rand and
Swiss francs, the “Principal Financial Center” shall be The City of New York,
Sydney, Toronto (solely in the case of the payment currency), London (solely in
the case of the LIBOR currency), Johannesburg and Zurich, respectively.

 

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(f)  Stated Maturity; Extension
of Maturity.

 

(i)            The Notes may be issued on different dates and the
principal amount of the Notes may be payable on different dates, as shall be
set forth in the Note or an applicable Pricing Supplement; provided that
the date on which the principal of any Note is payable will be on a Business
Day no less than nine months from the date of issue stated on the face thereof.

 

(ii)           The Pricing Supplement relating to each Note will
indicate whether the Company has the option to extend the Stated Maturity of
such Note for one or more whole year periods (each an “Extension Period”) up to
but not beyond the date (the “Final Maturity Date”) set forth in such Pricing
Supplement and the basis or formula, if any, for setting the interest rate or
the Spread or Spread Multiplier (as defined below), as the case may be,
applicable to any such Extension Period.

 

The Company may exercise such option with respect to a
Note by notifying the Trustee of such exercise at least 45 but not more than 60
days prior to the Stated Maturity of such Note in effect prior to the exercise
of such option (the “Original Stated Maturity Date”).  No later than 40 days prior to the Original
Stated Maturity Date, the Trustee will mail to the holder of such Note a notice
(the “Extension Notice”) relating to such Extension Period, first class,
postage prepaid, setting forth (i) the election of the Company to extend
the Stated Maturity of such Note, (ii) the new Stated Maturity, (iii) in
the case of a Fixed Rate Note, the interest rate applicable to the Extension
Period or, in the case of a Floating Rate Note, the Spread or Spread Multiplier
applicable to the Extension Period, and (iv) the provisions, if any, for
redemption during the Extension Period, including the date or dates on which or
the period or periods during which and the price or prices at which such
redemption may occur during the Extension Period. Upon the mailing by the
Trustee of an Extension Notice to the holder of a Note, the Stated Maturity of
such Note shall be extended automatically as set forth in the Extension Notice,
and, except as modified by the Extension 

 

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Notice and as described in the next paragraph, such Note will have the
same terms as prior to the mailing of such Extension Notice.

 

Notwithstanding the foregoing, not later than 20 days
prior to the Original Stated Maturity Date for a Note, the Company may, at its
option, revoke the interest rate, in the case of a Fixed Rate Note, or the
Spread or Spread Multiplier, in the case of a Floating Rate Note, provided for
in the Extension Notice and establish a higher interest rate, in the case of a
Fixed Rate Note, or a higher Spread or Spread Multiplier, in the case of a
Floating Rate Note, for the Extension Period by mailing or causing the Trustee
to mail notice of such higher interest rate or higher Spread or Spread
Multiplier, as the case may be, first class, postage prepaid, to the holder of
such Note.  Such notice shall be
irrevocable.  All Notes with respect to
which the Original Stated Maturity Date is extended will bear such higher
interest rate, in the case of a Fixed Rate Note, or higher Spread or Spread
Multiplier, in the case of a Floating Rate Note, for the Extension Period.

 

If the Company elects to extend the Stated Maturity of
a Note, the holder of such Note may, if provided for in the applicable Pricing
Supplement, have the option to elect repurchase of such Note by the Company on
the Original Stated Maturity Date at a price equal to the principal amount
thereof plus accrued interest, if any, to such date.

 

(g)           Rates of Interest; Interest
Payment Dates; Regular Record Dates; Accrual of Interest.

 

(i)            Rates of Interest. 
Interest-bearing Notes will bear interest at either a fixed rate (the “Fixed
Rate Notes”) or a rate determined by reference to one or more Base Rates (as
defined below) which may be adjusted by a Spread or Spread Multiplier (the “Floating
Rate Notes”) specified in the applicable Floating Rate Note or the applicable
Pricing Supplement.  In no event will the
rate of interest payable on any Fixed Rate Note or Floating Rate Note be in
excess of the maximum rate of interest permitted by applicable law.  

 

5

 

Discount Notes may be issued at significant discounts
from their principal amount payable at Stated Maturity and some Discount Notes
may be zero coupon Notes which will bear no interest, except in the case of
default in payment of principal upon acceleration or redemption (if
applicable), or may bear no interest for a specified period following the date
of issue.  Interest on each Fixed Rate
Note will be computed on the basis of a 360-day year of twelve 30-day months.

 

(ii)           Interest Payment Dates.  Unless
otherwise specified in a Note and the applicable Pricing Supplement, interest
on Fixed Rate Notes will be payable semiannually in arrears on February l
and August 1 of each year, commencing with the first Interest Payment Date
next succeeding the date of original issue, and at Maturity. Interest on
Floating Rate Notes will be payable in arrears on the Interest Payment Dates
applicable to such Note and at Maturity. 
Notwithstanding the foregoing, if the date of original issue of a Note
is between a Regular Record Date and the related Interest Payment Date, the
first payment of interest on such Note will be made on the Interest Payment
Date immediately following the next succeeding Regular Record Date to the
registered holder on such next succeeding Regular Record Date.

 

Except as provided below or in the applicable Pricing
Supplement, interest will be payable (1) in the case of a Floating Rate
Note which resets daily, weekly or monthly, other than an Eleventh District
Cost of Funds Rate Note (as defined below), on the third Wednesday of each
month or on the third Wednesday of March, June, September and December of
each year, as specified in the applicable Floating Rate Note and in the
applicable Pricing Supplement; (2) in the case of an Eleventh District
Cost of Funds Rate Note, on the first calendar day of each March, June, September and
December; (3) in the case of a Floating Rate Note which resets quarterly,
on the third Wednesday of March, June, September and December of each
year; (4) in the case of a Floating Rate Note which resets semiannually,
on the third Wednesday of each of the two months specified in the Floating Rate
Note and in the applicable Pricing Supplement; and (5) in the case of a 

 

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Floating Rate Note which resets annually, on the third Wednesday of the
month specified in the Floating Rate Note and in the applicable Pricing
Supplement; and, in each case, at Maturity.

 

If any Interest Payment Date (other than an Interest
Payment Date occurring on the Maturity Date) for a Floating Rate Note falls on
a day that is not a Business Day with respect to such Note, such Interest
Payment Date will be postponed to the following day that is a Business Day with
respect to such Note, except that, in the case of a LIBOR Note or a EURIBOR
Note (or a Note for which LIBOR (as defined below) or EURIBOR (as defined
below) is the applicable Base Rate), if such Business Day is in the next
succeeding calendar month, such Interest Payment Date shall be the immediately
preceding day that is a Business Day with respect to such Floating Rate
Note.  If the Maturity of a Floating Rate
Note falls on a day that is not a Business Day with respect to such Note, the
payment of principal and interest may be made on the next succeeding Business
Day with respect to such Note, and no interest on such payment shall accrue for
the period from and after the Maturity.

 

If any Interest Payment Date or Maturity of a Fixed
Rate Note or a Floating Rate Note falls on a day that is not a Business Day
with respect to such Fixed Rate Note or Floating Rate Note, the payment due on
such Interest Payment Date or at Maturity will be made on the following day
that is a Business Day with respect to such Fixed Rate Note or Floating Rate
Note as if it were made on the date such payment was due and no interest shall
accrue on the amount so payable for the period from and after such Interest
Payment Date or Maturity, as the case may be. 
However, if the Floating Rate Note is determined with reference to the
provisions under the heading “Determination of LIBOR” or “Determination of
EURIBOR” in the prospectus supplement and such following Business Day is in the
succeeding calendar month, such Interest Payment Date shall be the immediately
preceding day that is a Business Day.

 

7

 

(iii) Regular Record Dates.  Unless otherwise specified in an applicable
Pricing Supplement, with respect to Fixed Rate Notes, the Regular Record Dates
for interest payable on each February l and August 1 will be the
immediately preceding January 15 and July 15 (whether or not a
Business Day), respectively.  Unless
otherwise specified in a Floating Rate Note, the Regular Record Date or Dates
for interest payable on such Floating Rate Note will be the fifteenth day
(whether or not a Business Day) immediately preceding the related Interest
Payment Date or Dates.

 

(iv) Accrual of Interest.  Unless otherwise specified in an applicable
Pricing Supplement, each Note will bear interest from the date of original
issue at the rate per annum, or, in the case of a Floating Rate Note, pursuant
to the interest rate formula stated therein, until the principal thereof is
paid or made available for payment.  Each
interest payment shall be the amount of interest accrued from and including the
most recent Interest Payment Date in respect of which interest has been paid or
duly provided for (or from and including the date of original issue if no
interest has been paid or duly provided for with respect to such Note) to but
excluding the applicable next succeeding Interest Payment Date (an “Interest
Accrual Period”).

 

(h)  Place of Payment;
Registration of Transfer and Exchange; Notices to Company.

 

(i)  Place of Payment.  Payment of the principal of and interest on
Definitive Notes will be made at the office or agency of the Company maintained
for that purpose, initially designated to be the Corporate Trust Office of the
Trustee in Los Angeles, California, or at any additional offices or agencies
designated by the Company for such purpose; provided, however,
that at the option of the Company, payment of interest due (other than at
Maturity) may be made by check mailed to the address of the person entitled
thereto as such address shall appear in the register of Securities.  Payments of principal and any interest on
Notes in book-entry form represented by a Global Security or Securities will be
made by 

 

8

 

the Company through the Trustee to the Depository or its nominee, as
the case may be, as the holder of the Global Security or Securities
representing such Notes in book-entry form. 
At the option of the Company, payments of principal of and interest on
the Notes may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the register of Securities, provided, however, that the holder of any Note (if such
holder holds $10,000,000 or more in aggregate principal amount of the Notes)
shall be entitled to receive payments of interest on such Note by wire transfer
of immediately available funds to the account of the holder of such Note if
appropriate wire transfer instructions have been received in writing by the
Trustee not less than 15 days prior to the applicable Interest Payment Date.

 

(ii)  Registration of Exchange
and Transfer.  Definitive
Notes may be presented for exchange and registration of transfer at the office
or agency of the Company maintained for that purpose, initially designated to
be the Corporate Trust Office of the Trustee in Los Angeles, California, or at
such additional offices or agencies of any transfer agent hereafter designated
by the Company for such purpose. 
Ownership of beneficial interests in Notes in book-entry form
represented by a Global Security or Securities will be shown on, and the
transfer of that ownership will be effected only through, records maintained by
the Depository and its participants. 
Owners of beneficial interests in Notes in book-entry form represented
by a Global Security or Securities will not be considered the owners or holders
of such Notes under the Indenture.

 

(iii) Notices to Company.  Notices and demands to or upon the Company in
respect to the Notes and the Indenture may be served at The Walt Disney Company,
500 S. Buena Vista Street, Burbank, California 91521, Attention: Legal
Department.

 

(i)  Optional Redemption.  If so provided in the Note or an applicable
Pricing Supplement, such Note may, prior to its Stated Maturity, be subject to
redemption, in whole or in part, at the option 

 

9

 

of the Company on the terms set forth in the Note or the applicable
Pricing Supplement, as the case may be.

 

(j)  Sinking Fund.  Unless otherwise specified in an applicable
Pricing Supplement, the Notes will not be subject to any sinking fund or
analogous provision.

 

(k)  Denominations.  Unless a different denomination is specified
in the applicable Pricing Supplement, the Notes are issuable in denominations
of U.S. $1,000 and any amount in excess thereof which is an integral multiple
of U.S. $1,000.

 

(l)  Principal and Interest
Payable in Dollars.  Unless
otherwise specified in a Note or an applicable Pricing Supplement providing for
payments of principal and interest to be made in one or more foreign or
composite currencies, the payment of the principal of and any interest on the
Notes will be payable in U.S. dollars.

 

(m)  Determination of Interest
on Floating Rate Notes.

 

(i)            Base Rates.  Unless otherwise specified in an applicable
Pricing Supplement, interest on a Floating Rate Note will be determined by
reference to a “Base Rate,” which may be one or more of the following:  (l) the Commercial Paper Rate (as
defined below), in which case such Note will be a “Commercial Paper Rate Note”;
(2) LIBOR, in which case such Note will be a “LIBOR Note”; (3) the CD
Rate (as defined below), in which case such Note will be a “CD Rate Note”; (4) the
Federal Funds Rate (as defined below), in which case such Note will be a “Federal
Funds Rate Note”; (5) the Treasury Rate (as defined below), in which case
such Note will be a “Treasury Rate Note”; (6) the Prime Rate (as defined
below), in which case such Note will be a “Prime Rate Note”; (7) the CMT
Rate (as defined below), in which case such Note will be a “CMT Rate Note”; (8) the
J.J. Kenny Rate (as defined below), in which case such Note will be a “J.J.
Kenny Rate Note”; (9) the Eleventh District Cost of Funds Rate (as defined
below), in which case such Note will be an “Eleventh District Cost of Funds
Rate Note”; (10) EURIBOR (as defined below), in which case such Note will
be a EURIBOR Note; or 

 

10

 

(11) such other Base Rate or interest rate formula as
may be set forth in the applicable Pricing Supplement.  In addition, a Floating Rate Note may bear
interest calculated by reference to the lowest of two or more Base Rates
determined in the same manner as the Base Rates are determined for the types of
Notes described above.  Each Floating Rate
Note will specify the Base Rate or Rates applicable thereto.

 

(ii)  Calculation of Rate by
Reference to Base Rate and, as Applicable, Spread, Spread Multiplier and Index
Maturity.  The interest rate
on each Floating Rate Note will be calculated by reference to the specified
Base Rate or the lowest of two or more specified Base Rates, in either case
plus or minus the Spread, if any, or multiplied by the Spread Multiplier, if
any. The “Spread” is the number of basis points to be added to or subtracted
from the related Base Rate or Rates applicable to such Floating Rate Note.  The “Spread Multiplier” is the percentage of
the related Base Rate or Rates to be multiplied to determine the applicable
interest rate on such Floating Rate Note. 
The “Index Maturity” is the period to maturity of the instrument or
obligation with respect to which the related Base Rate or Rates are
calculated.  Each Floating Rate Note and
the applicable Pricing Supplement will specify the Index Maturity and the
Spread or Spread Multiplier, if any, applicable thereto.

 

(iii) Interest Reset Periods;
Interest Reset Date.  Each
Floating Rate Note and the applicable Pricing Supplement will specify whether
the rate of interest on such Floating Rate Note will be reset daily, weekly,
monthly, quarterly, semiannually or annually (each, an “Interest Reset Date”)
and the period between Interest Reset Dates (each, an “Interest Reset Period”).  Unless otherwise specified in a Floating Rate
Note and the applicable Pricing Supplement, the Interest Reset Date will be, in
the case of a Floating Rate Note which resets (l) daily, each Business
Day; (2) weekly, the Wednesday of each week (with the exception of weekly
reset Treasury Rate Notes, which reset the Tuesday of each week, except as
specified in paragraph (iv) below); (3) monthly, the third Wednesday
of each month, other than Eleventh District Cost 

 

11

 

of Funds Rate Notes, which will reset the first calendar day of each
month; (4) quarterly, the third Wednesday of March, June, September and
December of each year; (5) semiannually, the third Wednesday of each
of the two months specified in such Pricing Supplement; and (6) annually,
the third Wednesday of the month specified in such Pricing Supplement.  If any Interest Reset Date for any Floating
Rate Note would otherwise be a day that is not a Business Day, such Interest
Reset Date will be postponed to the next succeeding day that is a Business Day,
except that in the case of a LIBOR Note or a EURIBOR Note (or a Note for which
LIBOR or EURIBOR is the applicable Base Rate), if such Business Day is in the
next succeeding calendar month, such Interest Reset Date shall be the last
Business Day in the preceding month.

 

(iv)  Interest Determination
Date.  The interest rate
applicable to each Interest Reset Period commencing on the Interest Reset Date
or Dates with respect to such Interest Reset Period will be the rate determined
on the applicable “Interest Determination Date.” Unless otherwise specified in
an applicable Pricing Supplement, (a) the Interest Determination Date with
respect to a Commercial Paper Rate Note (the “Commercial Paper Interest
Determination Date”), a Federal Funds Rate Note (the “Federal Funds Interest
Determination Date”) and a Prime Rate Note (the “Prime Rate Interest
Determination Date”), will be the Business Day preceding each Interest Reset
Date, (b) the Interest Determination Date with respect to a CD Rate Note
(the “CD Interest Determination Date”), and a J.J. Kenny Rate Note (the “J.J.
Kenny Interest Determination Date”), will be the second Business Day preceding
each Interest Reset Date, (c) the Interest Determination Date with respect
to a LIBOR Note (the “LIBOR Interest Determination Date”) will be the second
London Business Day preceding each Interest Reset Date, (d) the Interest
Determination Date with respect to a EURIBOR Note (the “EURIBOR Interest
Determination Date”) will be the second TARGET Business Day preceding each
Interest Reset Date, (e) the Interest Determination Date with respect to
an Eleventh District Cost of Funds Rate Note (the “Eleventh District Cost 

 

12

 

of Funds Interest Determination Date”) will be the last working day of
the month immediately preceding each Interest Reset Date on which the Federal
Home Loan Bank of San Francisco publishes the Eleventh District Cost of Funds
Index and (f) the Interest Determination Date with respect to a CMT Rate
Note (the “CMT Interest Determination Date”) will be the second U.S. Government
Securities Business Day preceding each Interest Reset Date.  Unless otherwise specified in an applicable
Pricing Supplement, the Interest Determination Date with respect to a Treasury
Rate Note (the “Treasury Rate Interest Determination Date”), will be the day in
the week in which the Interest Reset Date falls on which day Treasury Bills (as
defined below) normally would be auctioned or, if no such auction is held for a
particular week, the first Business Day of that week; provided, however,
that if, as a result of a legal holiday, an auction is held on the Friday of
the week preceding the Interest Reset Date, the related Interest Determination
Date shall be such preceding Friday; and provided, further, that
if an auction shall fall on any Interest Reset Date, then the Interest Reset
Date shall instead be the first Business Day immediately following such
auction.  Unless otherwise specified in
the applicable Pricing Supplement, the Interest Determination Date pertaining
to a Note the interest rate of which is determined with reference to two or
more Base Rates will be the latest Business Day which is at least two Business
Days prior to such Interest Reset Date for such Note on which each Base Rate
shall be determinable.  Each Base Rate
shall be determined and compared on such date, and the applicable interest rate
shall take effect on the related Interest Reset Date.

 

(v)           Maximum and Minimum Limits on Interest Rates. 
Any Floating Rate Note and the applicable Pricing Supplement may specify
either or both a maximum limit and a minimum limit on the rate at which
interest may accrue during any Interest Accrual Period. In addition to any
maximum interest rate which may be applicable to any Floating Rate Note, the
interest rate on Floating Rate Notes will in no event be higher than the
maximum rate permitted by New York law, as the same may be modified by United
States law of general 

 

13

 

application. 
This limit may not apply to Floating Rate Notes in which $2,500,000 or
more has been invested.

 

(vi) Initial Interest Rate;
Interest Rate Thereafter in Effect. 
The interest rate in effect with respect to a Floating Rate Note on each
day that is not an Interest Reset Date will be the interest rate determined as
of the Interest Determination Date pertaining to the immediately preceding
Interest Reset Date and the interest rate in effect on any day that is an
Interest Reset Date will be the interest rate determined as of the Interest
Determination Date pertaining to such Interest Reset Date, subject in either
case to applicable provisions of law and any maximum or minimum interest rate
limitations referred to above; provided, however, that the
interest rate in effect with respect to a Floating Rate Note for the period
from the date of original issue to the first Interest Reset Date will be the
rate specified as such therein and in the applicable Pricing Supplement (the “Initial
Interest Rate”).

 

(vii)  Accrued Interest; Accrued
Interest Factor.  With respect
to each Floating Rate Note, accrued interest is calculated by multiplying its
face amount by an accrued interest factor. 
Such accrued interest factor is computed by adding the interest factor
calculated for each day from the date of issue, or from the last date to which
interest has been paid or duly provided for, to the date for which accrued
interest is being calculated.  The
interest factor for each such day is computed by dividing the interest rate
applicable to such day by 360, in the case of Commercial Paper Rate Notes,
LIBOR Notes, CD Rate Notes, Federal Funds Rate Notes, Prime Rate Notes J.J.
Kenny Rate Notes, Eleventh District Cost of Funds Rate Notes and EURIBOR Notes
and by the actual number of days in the year, in the case of Treasury Rate
Notes and CMT Rate Notes. Unless otherwise specified in an applicable Pricing
Supplement, the interest factor for Notes for which the interest rate is
calculated with reference to two or more Base Rates will be calculated in each
period in the same manner as if only the lowest of the applicable Base Rates
specified in the applicable Pricing Supplement applied.

 

14

 

(viii) Rounding of Percentages.  All percentages resulting from any
calculation on Floating Rate Notes will be rounded, if necessary, to the
nearest one hundred-thousandth of a percentage point, with five one-millionths
of a percentage point rounded upward (e.g., 9.876545% (or .09876545) will be
rounded upward to 9.87655% (or .0987655)), and all amounts used in or resulting
from such calculation on Floating Rate Notes will be rounded, in the case of
United States dollars, to the nearest cent, or in the case of a foreign
currency, to the nearest unit (with one-half cent or unit being rounded
upward).

 

(ix) Calculation Agents;
Calculation Date.  Unless
otherwise specified in an applicable Pricing Supplement, the Trustee will be
the “Calculation Agent” with respect to all Floating Rate Notes.  Upon the request of the holder of any
Floating Rate Note, the Trustee will provide the interest rate then in effect
and, if determined, the interest rate that will become effective as a result of
a determination made for the next Interest Reset Date with respect to such
Floating Rate Note.  If at any time the
Trustee is not the Calculation Agent, the Company will notify the Trustee of
each determination of the interest rate applicable to any such Floating Rate
Note promptly after such determination is made by any successor Calculation
Agent.  The “Calculation Date,” where
applicable, pertaining to any Interest Determination Date is the date by which
the applicable interest rate must be calculated and will be the earlier of (a) the
tenth calendar day after such Interest Determination Date, or, if any such day
is not a Business Day, the next succeeding Business Day and (b) the
Business Day preceding the applicable Interest Payment Date or Maturity Date,
as the case may be.

 

(x)            Calculation of Floating Rates.  The interest
rate in effect with respect to a Floating Rate Note from the date of issue to
the first Interest Reset Date will be the Initial Interest Rate.  The interest rate for each subsequent
Interest Reset Date will be determined by the Calculation Agent as follows:

 

15

 

(A)          Commercial Paper Rate Notes.  Commercial
Paper Rate Notes will bear interest at the interest rates (calculated with
reference to the Commercial Paper Rate and the Spread or Spread Multiplier, if
any) specified in such Commercial Paper Rate Notes and in an applicable Pricing
Supplement.

 

(l) Unless otherwise specified in an applicable
Pricing Supplement, “Commercial Paper Rate” means, with respect to any
Commercial Paper Interest Determination Date, the Money Market Yield (as
defined below) on such date of the rate for commercial paper having the Index
Maturity specified in the applicable Pricing Supplement as published in
H.15(519), under the heading “Commercial Paper-Nonfinancial.” In the event that
such rate is not published by 3:00 P.M., New York City time, on the
Calculation Date pertaining to such Commercial Paper Interest Determination
Date, then the Commercial Paper Rate will be the Money Market Yield on such
Commercial Paper Interest Determination Date of the rate for commercial paper
of the Index Maturity specified in the applicable Pricing Supplement as
published in H.15 Daily Update, or such other recognized electronic source used
for the purpose of displaying the applicable rate, under the heading “Commercial
Paper-Nonfinancial.” If such rate is not published in either H.15(519) or H.15
Daily Update by 3:00 P.M., New York City time, on such Calculation Date,
then the Commercial Paper Rate will be calculated by the Calculation Agent and
will be the Money Market Yield of the arithmetic mean of the offered rates, as
of approximately 11:00 A.M., New York City time, on such Commercial Paper
Interest Determination Date, of three leading dealers of United States dollar
commercial paper in New York, New York 

 

16

 

(which may include one or more of the Agents or their affiliates)
selected by the Calculation Agent (after consultation with the Company) for
commercial paper of the specified Index Maturity placed for an industrial
issuer whose bond rating is “AA,” or the equivalent, from a nationally
recognized statistical rating agency; provided, however, that if
the dealers selected as aforesaid by the Calculation Agent are not quoting
offered rates as mentioned in this sentence, the rate of interest in effect for
the applicable period will be the same as the interest rate in effect on such
Commercial Paper Interest Determination Date.

 

(2)           “Money Market Yield” shall be a yield (expressed as a
percentage) calculated in accordance with the following formula:

 

Money Market Yield
=       D X 360        X
100

360 - (D X M)

 

where “D” refers
to the applicable per annum rate for commercial paper quoted on a bank discount
basis and expressed as a decimal and “M” refers to the actual number of days in
the interest period for which interest is being calculated.

 

“H.15(519)” as
used in the calculation of Floating Rates means the weekly statistical release
designated as H.15(519), or any successor publication, published by the Board
of Governors of the Federal Reserve System.

 

“H.15 Daily Update”
as used in the calculation of Floating Rates means the daily update of
H.15(519), available through the world-wide-web site of the Board of Governors
of the Federal Reserve System at 

 

17

 

http:/www.federalreserve.gov/releases/h15/update/h15upd.htm,
or any successor site or publication.

 

(B)           LIBOR Notes.  LIBOR Notes will bear interest at the
interest rates (calculated with reference to LIBOR and the Spread or Spread
Multiplier, if any) specified in such LIBOR Notes and in an applicable Pricing
Supplement.  Unless otherwise specified
in an applicable Pricing Supplement, “LIBOR” means the rate determined by the
Calculation Agent in accordance with the following provisions:

 

(1)           With respect to a LIBOR Interest Determination Date,
LIBOR will be the rate for deposits in the Index Currency having the Index
Maturity designated in the applicable Pricing Supplement, commencing on the
second London Business Day immediately following that LIBOR Interest Determination
Date, that appears on the LIBOR Page (as defined below) as of 11:00 A.M.,
London time, on that LIBOR Interest Determination Date.  “LIBOR Page” means either, (a) the
display on the page specified in the applicable Pricing Supplement for the
purpose of displaying the London interbank rates of major banks for the Index
Currency; or (b) if no such page is specified in the applicable
Pricing Supplement as the method for calculating LIBOR, the display on Reuters
(or any successor service) on the LIBOR 01 page (or any other page as
may replace such page on such service) for the purpose of displaying the
London interbank rates of major banks for the Index Currency.

 

(2)           If the rate referred to in (1) does not so appear
on the LIBOR Page, LIBOR will be determined as of approximately 11:00 A.M.,
London time, on such LIBOR Interest Determination Date on the basis of the rate
at which deposits in the applicable Index Currency having the Index Maturity
specified in the applicable Pricing Supplement are offered by four major
reference banks (which may include affiliates of the Agents) in the London
interbank market selected by the Calculation Agent (after consultation with the
Company) commencing on the second London Business Day immediately 

 

18

 

following such
LIBOR Interest Determination Date and in a principal amount equal to an amount
that is representative for a single transaction in such market at such
time.  The Calculation Agent will request
the principal London office of each of such banks to provide a quotation of its
rate. If at least two such quotations are provided, then LIBOR for such LIBOR
Interest Determination Date will be the arithmetic mean of such
quotations.  If fewer than two quotations
are provided, then LIBOR for such LIBOR Interest Determination Date will be the
arithmetic mean of the rates quoted as of approximately 11:00 A.M. in the
applicable Principal Financial Center on such LIBOR Interest Determination Date
by three major banks (which may include affiliates of the Agents) in such
Principal Financial Center selected by the Calculation Agent (after
consultation with the Company) for loans in the applicable Index Currency to
leading European banks having the specified Index Maturity, and in a principal
amount equal to an amount of not less than $1,000,000 (or the equivalent in the
Index Currency, if the Index Currency is not the U.S. dollar) and that is
representative for a single transaction in such market at such time; provided,
however, that if the banks selected as aforesaid by the Calculation
Agent are not quoting as mentioned in this sentence, the rate of interest in
effect for the applicable period will be the same as the interest rate in
effect on such LIBOR Interest Determination Date.

 

“Index Currency”
means the index currency (including composite currencies) specified in the
applicable Pricing Supplement as the currency for which LIBOR shall be
calculated.  If no such index currency is
specified in the applicable Pricing Supplement, the Index Currency shall be
U.S. dollars.

 

(C)  CD Rate Notes.  CD
Rate Notes will bear interest at the interest rates (calculated with reference
to the CD Rate and the Spread or Spread Multiplier, if any) specified in such
CD Rate Notes and in an applicable Pricing Supplement.

 

19

 

Unless otherwise
indicated in the applicable Pricing Supplement, “CD Rate” means, with respect
to any CD Interest Determination Date, the rate on such date for negotiable
certificates of deposit having the Index Maturity designated in the applicable
Pricing Supplement as published in H.15(519) under the caption “CDs (secondary
market)” or, if not so published by 3:00 P.M., New York City time, on the
Calculation Date pertaining to such CD Interest Determination Date, the CD Rate
will be the rate on such CD Interest Determination Date for negotiable
certificates of deposit of the Index Maturity as published in H.15 Daily
Update, or such other recognized electronic source used for the purpose of
displaying the applicable rate, under the caption “CDs (secondary market)”.  If by 3:00 P.M., New York City time, on
the Calculation Date pertaining to such CD Interest Determination Date such
rate is not yet published in either H.15(519) or H.15 Daily Update, then the CD
Rate on such CD Interest Determination Date will be calculated by the
Calculation Agent and will be the arithmetic mean of the secondary market
offered rates as of 10:00 A.M., New York City time, on such CD Interest
Determination Date, of three leading non-bank dealers in negotiable U.S. dollar
certificates of deposit in The City of New York (which may include one or more
of the Agents or their affiliates) selected by the Calculation Agent (after
consultation with the Company) for negotiable certificates of deposit of major
United States money market banks for negotiable United States certificates of
deposit with a remaining maturity closest to the Index Maturity designated in
the applicable Pricing Supplement in an amount that is representative for a
single transaction in that market at that time; provided, however,
that if the dealers selected as aforesaid by the Calculation Agent are not
quoting offered rates as set forth above, the rate of interest in effect for
the applicable period will be the same as the interest rate in effect on such
CD Interest Determination Date.

 

(D)   Federal Funds Rate Notes.  Federal Funds Rate Notes will bear interest
at the interest rates (calculated with reference to the Federal Funds Rate and
the Spread or Spread 

 

20

 

Multiplier, if
any) specified in such Federal Funds Rate Notes and in an applicable Pricing
Supplement.

 

Unless otherwise
indicated in the applicable Pricing Supplement, “Federal Funds Rate” means,
with respect to any Federal Funds Interest Determination Date, the rate on such
date for Federal Funds as published in H.15(519) under the heading “Federal
Funds (Effective)” and displayed on Reuters (or any successor service) on page FEDFUNDS
1 (or any other page as may replace the specified page on that
service) (“FEDFUNDS 1 Page”) or, if the rate does not so appear on FEDFUNDS 1 Page or
is not so published by 3:00 P.M., New York City time, on the Calculation
Date pertaining to such Federal Funds Interest Determination Date, the Federal
Funds Rate will be the rate on such Federal Funds Interest Determination Date
for United States dollar federal funds as published in H.15 Daily Update, or
such other recognized electronic source used for the purpose of displaying the
applicable rate, under the caption “Federal Funds (Effective)”.  If, by 3:00 P.M., New York City time, on
the Calculation Date pertaining to such Federal Funds Interest Determination
Date such rate referenced above is not yet published, the Federal Funds Rate
for such Federal Funds Interest Determination Date will be calculated by the
Calculation Agent and will be the arithmetic mean of the rates for the last
transaction in overnight United States dollar Federal Funds arranged by three
leading brokers of Federal Funds transactions in The City of New York (which
may include one or more of the Agents or their affiliates), which brokers have
been selected by the Calculation Agent (after consultation with the Company) as
of 9:00 A.M., New York City time, on such Federal Funds Interest
Determination Date; provided, however, that, if the brokers
selected as aforesaid by the Calculation Agent are not quoting rates as set
forth above, the rate of interest in effect for the applicable period will be
the same as the interest rate in effect on such Federal Funds Interest
Determination Date.

 

(E)  Treasury Rate Notes. 
Treasury Rate Notes will bear interest at the interest rates (calculated
with reference to 

 

21

 

the Treasury Rate
and the Spread or Spread Multiplier, if any) specified in such Treasury Rate
Notes and in an applicable Pricing Supplement.

 

Unless otherwise
specified in an applicable Pricing Supplement, “Treasury Rate” means, with
respect to any Treasury Rate Interest Determination Date, the rate from the
auction held on the Treasury Rate Interest Determination Date (the “Auction”)
of direct obligations of the United States (“Treasury Bills”) having the Index
Maturity specified in the applicable Pricing Supplement under the caption “INVEST
RATE” on the display on Reuters (or any successor service) on page USAUCTION
10 (or any other page as may replace that page on that service) (“USAUCION
10 Page”) or page USAUCTION 11 (or any other page as may replace that
page on that service) (“USAUCTION 11 Page”) or, if not published by 3:00 P.M.,
New York City time, on the Calculation Date pertaining to such Treasury Rate
Interest Determination Date, the Bond Equivalent Yield (as defined below) of
the rate for the aplicable Treasury Bills as published in H.15 Daily Update, or
another recognized electronic source used for the purpose of displaying the
applicable rate, under the caption “U.S. Government Securities/Treasury
Bills/Auction High”, or if the rate referred to in the preceding sentence is
not so published by 3:00 P.M., New York City time, on such Calculation
Date, the Treasury Rate for that Treasury Interest Determination Date will be the Bond Equivalent Yield of the auction rate of
the applicable Treasury Bills as announced by the United States Department of
the Treasury, or if the rate referred to in the preceding sentence is not so
announced by the United States Department of the Treasury, or if the Auction is
not held, the Treasury Rate for that Treasury Rate Interest Determination Date
will be the Bond Equivalent Yield of the rate on the Treasury Rate Interest
Determination Date of the applicable Treasury Bills as published in
H.15(519) under the caption “U.S. Government Securities/Treasury Bills/Secondary
Market”, or if the rate referred to in the preceding sentence is not so
published by 3:00 P.M., New York City time, on such Calculation Date, the
Treasury Rate for that Treasury Rate Interest Determination Date will be the
rate on the Treasury 

 

22

 

Rate Interest Determination Date of the applicable Treasury Bills as
published in H.15 Daily Update, or another recognized electronic source used
for the purpose of displaying the applicable rate, under the caption “U.S.
Government Securities/Treasury Bills/Secondary Market”, or if the rate referred
to in the preceding sentence is not so published by 3:00 P.M., New York
City time, on such Calculation Date, the Treasury Rate for that Treasury Rate
Interest Determination Date will be the rate on the Treasury Rate Interest
Determination Date calculated by the Calculation Agent as the Bond Equivalent
Yield of the
arithmetic mean of the secondary market bid rates, as of approximately 3:30 P.M.,
New York City time, on such Treasury Rate Interest Determination Date, of three
leading primary United States government securities dealers (which may include
one or more of the Agents or their affiliates) selected by the Calculation
Agent (after consultation with the Company), for the issue of Treasury Bills
with a remaining maturity closest to the specified Index Maturity; provided,
however, that if the dealers selected as aforesaid by the Calculation
Agent are not quoting as set forth in this sentence, the rate of interest in
effect for the applicable period will be the same as the interest rate in
effect on such Treasury Rate Interest Determination Date.

 

“Bond Equivalent Yield” means a yield (expressed as a percentage)
calculated in accordance with the following formula:

 

	
   

  	
   

  	
   

  	
  D X N

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bond
  Equivalent Yield

  	
  =

  	
   

  	
   

  	
   

  	
  X

  	
  100

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  360 - (D X M)

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

where “D” refers to the applicable per annum rate for Treasury Bills
quoted on a bank discount basis and expressed as a decimal, “N” refers to 365
or 366, as the case may be, and “M” refers to the actual number of days in the
applicable interest reset period.

 

23

 

(F) Prime Rate Notes. 
Prime Rate Notes will bear interest at the interest rate (calculated
with reference to the Prime Rate and the Spread or Spread Multiplier, if any)
specified in such Prime Rate Notes and in an applicable Pricing Supplement,
except that the initial interest rate for each Prime Rate Note will be the rate
specified in the applicable Pricing Supplement.

 

Unless otherwise
specified in an applicable Pricing Supplement, “Prime Rate” means, with respect
to any Prime Rate Interest Determination Date, the rate published in H.15(519)
for such date under the caption “Bank Prime Loan”, or if not so published by
3:00 P.M., New York City time, on the
Calculation Date pertaining to that Prime Rate Interest Determination Date, the
rate on that Prime Rate Interest Determination Date as published in H.15 Daily
Update or such other recognized electronic source used for the purpose of
displaying the applicable rate, under the caption “Bank Prime Loan”.  If neither rate is so published by 3:00 P.M.,
New York City time, on the Calculation Date, the Prime Rate for such Prime Rate
Interest Determination Date will be calculated by the Calculation Agent as the
arithmetic mean of the prime rates quoted on the basis of the actual number of
days in the year divided by 360 as of the close of business on such Prime Rate
Interest Determination Date by three major banks (which may include one or more
of the Agents or their affiliates) in The City of New York selected by the
Calculation Agent (after consultation with the Company); provided, however,
that if the banks selected by the Calculation Agent are not quoting as
mentioned above, the “Prime Rate” for the Interest Reset Period will be the
same as the Prime Rate for the for the immediately preceding Interest Reset
Period (or, if there was no such Interest Reset Period, the rate of interest
payable on the Prime Rate Notes for which the Prime Rate is being determined
shall be the Initial Interest Rate).

 

(G)  CMT Rate Notes.  CMT
Rate Notes will bear interest at the interest rate (calculated with reference
to the 

 

24

 

CMT Rate and the
Spread or Spread Multiplier, if any) specified in the CMT Rate Notes and in the
applicable Pricing Supplement.

 

Unless otherwise specified in the applicable Pricing
Supplement, “CMT Rate” means, with respect to any CMT Interest Determination
Date relating to a CMT Rate Note or any Floating Rate Note for which the
interest rate is determined with reference to the CMT Rate,

 

if Reuters T7051 Page is specified in the applicable Pricing
Supplement:

 

(a)           the percentage
equal to the yield for United States Treasury securities at “constant maturity”
having the Index Maturity specified in the applicable Pricing Supplement as
published in H.15(519) under the caption “Treasury Constant Maturities”,
as the yield is displayed on Reuters (or any successor service) on page FRBCMT
(or any other page as may replace the specified page on that service)
(“T7051 Page”) for that CMT Interest Determination Date, or

 

(b)           if the rate
referred to in clause (a) does not so appear on T7051 Page, the
percentage equal to the yield for United States Treasury securities at “constant
maturity” having the particular Index Maturity and for that CMT Interest
Determination Date as published in H.15(519) under the caption “Treasury
Constant Maturities”, or

 

(c)           if the rate
referred to in clause (b) does not so appear in H.15(519), the rate
on that CMT Interest Determination Date for the period of the particular Index
Maturity as may then be published by either the Federal Reserve System Board of
Governors or the United States Department of the Treasury that the Calculation
Agent determines to be comparable to the rate which would otherwise have been
published in H.15(519), or

 

(d)           if the rate
referred to in clause (c) is not so published, the rate on that CMT
Interest Determination Date calculated by the Calculation Agent as a yield to
maturity based on the arithmetic mean of the secondary market bid prices at
approximately 

 

25

 

3:30 P.M., New York City time, on that CMT Interest Determination
Date of three leading primary United States government securities dealers in
The City of New York (which may include one or more of the Agents or their
affiliates) (each, a “Reference Dealer”), selected by the Calculation Agent
from five Reference Dealers selected by the Calculation Agent and eliminating
the highest quotation, or, in the event of equality, one of the highest, and
the lowest quotation or, in the event of equality, one of the lowest, for
United States Treasury securities with an original maturity equal to the
particular Index Maturity, a remaining term to maturity no more than
one year shorter than that Index Maturity and in a principal amount that
is representative for a single transaction in the securities in that market at
that time, or

 

(e)           if fewer than five
but more than two of the prices referred to in clause (d) are
provided as requested, the rate on that CMT Interest Determination Date
calculated by the Calculation Agent based on the arithmetic mean of the bid
prices obtained and neither the highest nor the lowest of the quotations shall
be eliminated, or

 

(f)            if fewer than three
prices referred to in clause (d) are provided as requested, the rate
on that CMT Interest Determination Date calculated by the Calculation Agent as
a yield to maturity based on the arithmetic mean of the secondary market bid
prices as of approximately 3:30 P.M., New York City time, on that CMT
Interest Determination Date of three Reference Dealers selected by the
Calculation Agent from five Reference Dealers selected by the Calculation Agent
and eliminating the highest quotation or, in the event of equality, one of the
highest and the lowest quotation or, in the event of equality, one of the
lowest, for United States Treasury securities with an original maturity closest
to the particular Index Maturity, a remaining term to maturity closest to that
Index Maturity and in a principal amount that is representative for a single
transaction in the securities in that market at that time, or

 

(g)           if fewer than five
but more than two prices referred to in clause (f) are provided as
requested, the rate on that CMT Interest Determination Date calculated by the
Calculation Agent based on the arithmetic mean of the bid prices obtained and
neither the highest nor the lowest of the quotations will be eliminated, or

 

26

 

(h)           if fewer than three
prices referred to in clause (f) are provided as requested, the CMT
Rate in effect on that CMT Interest Determination Date;

 

if
Reuters T7052 Page is specified in the applicable Pricing Supplement:

 

(a)           the percentage
equal to the one-week average yield for United States Treasury securities at “constant
maturity” having the Index Maturity specified in the applicable Pricing
Supplement as published in H.15(519) opposite the caption “Treasury
Constant Maturities”, as the yield is displayed on Reuters on page FEDCMT
(or any other page that may replace the specified page on that
service) (“T7052 Page”), for the week ended immediately preceding the week in
which that CMT Interest Determination Date falls, or

 

(b)           if the rate
referred to in clause (a) does not so appear on T7052 Page, the
percentage equal to the one-week average yield for United States Treasury
securities at “constant maturity” having the particular Index Maturity and for
the week preceding that CMT Interest Determination Date as published in
H.15(519) opposite the caption “Treasury Constant Maturities,” or

 

(c)           if the rate
referred to in clause (b) does not so appear in H.15(519), the
one-week average yield for United States Treasury securities at “constant
maturity” having the particular index maturity as otherwise announced by the
Federal Reserve Bank of New York for the week ended immediately preceding the
week in which that CMT Interest Determination Date falls, or

 

(d)           if the rate
referred to in clause (c) is not so published, the rate on that CMT
Interest Determination Date calculated by the Calculation Agent as a yield to
maturity based on the arithmetic mean of the secondary market bid prices at
approximately 3:30 P.M., New York City time, on that CMT Interest
Determination Date of three Reference Dealers selected by the Calculation Agent
from five Reference Dealers selected by the Calculation Agent and eliminating
the highest quotation, or, in the event of equality, one of the highest, and
the lowest quotation or, 

 

27

 

in the event of equality, one of the lowest, for United States Treasury
securities with an original maturity equal to the particular Index Maturity, a
remaining term to maturity no more than one year shorter than that Index
Maturity and in a principal amount that is representative for a single
transaction in the securities in that market at that time, or

 

(e)           if fewer than five
but more than two of the prices referred to in clause (d) are
provided as requested, the rate on that CMT Interest Determination Date calculated
by the Calculation Agent based on the arithmetic mean of the bid prices
obtained and neither the highest nor the lowest of the quotations shall be
eliminated, or

 

(f)            if fewer than three
prices referred to in clause (d) are provided as requested, the rate
on that CMT Interest Determination Date calculated by the Calculation Agent as
a yield to maturity based on the arithmetic mean of the secondary market bid
prices as of approximately 3:30 P.M., New York City time, on that CMT
Interest Determination Date of three Reference Dealers selected by the
Calculation Agent from five Reference Dealers selected by the Calculation Agent
and eliminating the highest quotation or, in the event of equality, one of the
highest and the lowest quotation or, in the event of equality, one of the
lowest, for United States Treasury securities with an original maturity greater
than the particular Index Maturity, a remaining term to maturity closest to
that Index Maturity and in a principal amount that is representative for a
single transaction in the securities in that market at the time, or

 

(g)           if fewer than five
but more than two prices referred to in clause (f) are provided as
requested, the rate on that CMT Interest Determination Date calculated by the
Calculation Agent based on the arithmetic mean of the bid prices obtained and
neither the highest or the lowest of the quotations will be eliminated, or

 

(h)           if fewer than three
prices referred to in clause (f) are provided as requested, the CMT
Rate in effect on that CMT Interest Determination Date.

 

If two United States Treasury securities with an original maturity
greater than the Index Maturity specified in the applicable Pricing 

 

28

 

Supplement have remaining terms to maturity equally close to the
particular Index Maturity, the quotes for the United States Treasury security
with the shorter original remaining term to maturity will be used.

 

(H) 
J.J. Kenny Rate Notes.  J.J. Kenny Rate Notes will bear interest at
the interest rate (calculated with
reference to the J.J. Kenny Rate and the spread or spread multiplier, if any)
specified in the J.J. Kenny Rate Notes and the applicable Pricing Supplement.

 

Unless otherwise specified in the applicable Pricing
supplement, the “J.J. Kenny Rate” means, with respect to any J.J. Kenny
Interest Determination Date, the per annum
rate on the date equal to the index made available and subsequently published
by Kenny Information Systems or its successor. The rate will be based upon
30-day yield evaluations at par of bonds of not less than five “high grade”
component issuers. The bonds evaluated will be bonds on which the interest is
excludable from gross income for federal income tax purposes under the Internal
Revenue Code of 1986, as amended (the “Code”). Kenny Information Systems will
select such issuers from time to time, including issuers of general obligation
bonds. However, the bonds on which the index is based will not include any
bonds the interest on which may trigger an “alternative minimum tax” or similar
tax under the Code, unless such tax may be imposed on all tax-exempt bonds. If
the rate is not made available by 3:00 P.M., New York City time, on the
calculation date pertaining to that J.J. Kenny Interest Determination Date, the
J.J. Kenny Rate will be the rate quoted by a successor indexing agent selected
by the Calculation Agent (after consultation with us). This rate will be equal
to the prevailing rate for bonds included in the highest short-term rating
category by Moody’s Investors Service, Inc. and Standard & Poor’s
Corporation for issuers selected by such successor indexing agent most closely
resembling the “high grade” component issuers selected by Kenny Information
Systems. The bonds for which rates are quoted will be bonds that may be
tendered by their holders for purchase on not more than seven days’ notice and
the interest on which: is variable on a weekly basis; is excludable from gross 

 

29

 

income for federal income tax purposes under the Code; and does not
give rise to an “alternate minimum tax” or similar tax under the Code, unless
all tax-exempt bonds give rise to such a tax. If a successor indexing agent is
not available, the J.J. Kenny Rate on the J.J. Kenny Interest Determination
Date will be the J.J. Kenny Rate for the immediately preceding Interest Reset
Period. If there was no such Interest Reset Period, the J.J. Kenny Rate will be
the Initial Interest Rate.

 

(I)   Eleventh District Cost of
Funds Rate Notes. Eleventh District Cost of Funds Rate Notes will
bear interest at the interest rate (calculated with reference to the Eleventh
District Cost of Funds Rate and the spread or spread multiplier, if any)
specified in the Eleventh District Cost of Funds Rate Notes and in the
applicable Pricing Supplement.

 

Unless otherwise specified in an applicable Pricing
Supplement, the “Eleventh District Cost of Funds Rate” means, with respect to
any Eleventh District Cost of Funds Interest Determination Date, the rate equal to the monthly weighted average cost of
funds for the calendar month immediately preceding the month in which such
Eleventh District Cost of Funds Interest Determination Date falls as set forth
under the caption “11th Dist COFI” on the display on Reuters (or any
successor service) on page COFI/ARMS (or any other page as may
replace the specified page on that service) (“COFI/ARMS Page”) as of 11:00 A.M.,
San Francisco time, on the Eleventh District Cost of Funds Interest
Determination Date. If such rate does not appear on the COFI/ARMS Page on
any related Eleventh District Cost of Funds Interest Determination Date, the
Eleventh District Cost of Funds Rate for the Eleventh District Cost of Funds
Interest Determination Date will be the Eleventh District Cost of Funds Rate
Index. If the FHLB of San Francisco fails to announce the rate for the calendar
month next preceding the Eleventh District Cost of Funds Interest Determination
Date, then the Eleventh District Cost of Funds Rate for that date will be the
Eleventh District Cost of Funds Rate in effect on that Eleventh District Cost
of Funds Interest Determination Date.  
The “Eleventh District Cost of Funds Rate Index” will be the monthly
weighted average cost of funds paid by member institutions of the Eleventh
Federal 

 

30

 

Home Loan Bank District that the FHLB of San Francisco most recently
announced as the cost of funds for the calendar month immediately preceding the
Eleventh District Cost of Funds Interest Determination Date.

 

(J) 
EURIBOR Notes.  EURIBOR Notes will bear interest at the interest rate (calculated with
reference to EURIBOR and the spread or spread multiplier, if any) specified in
the EURIBOR Notes and in the applicable Pricing Supplement.

 

Unless otherwise
specified in an applicable Pricing Supplement, “EURIBOR” means, with respect to
an EURIBOR Determination Date,  the rate
determined by the Calculation Agent for each Interest Reset Period as follows:

 

The
Calculation Agent will determine the offered rates for deposits in euros for
the period of the Index Maturity specified in the applicable Pricing
Supplement, commencing on the Interest Reset Date, which appears on Reuters on page EURIBOR
01 or any successor service or any page that may replace page EURIBOR
01 on that service, which is commonly referred to as “Reuters Page EUROBOR
01” as of 11:00 A.M., Brussels time, on that date. If EURIBOR cannot be
determined on a EURIBOR Determination Date as described above, then the
Calculation Agent will determine EURIBOR as follows:

 

The
Calculation Agent will select four major banks in the euro-zone interbank
market. The Calculation Agent will request that the principal euro-zone offices
of those four selected banks provide their offered quotations to prime banks in
the euro-zone interbank market at approximately 11:00 A.M., Brussels time,
on the EURIBOR Determination Date. These quotations shall be for deposits in
euros for the period of the specified Index Maturity, commencing on such
Interest Reset Date. Offered quotations must be based on a principal amount
equal to at least $1,000,000 or the approximate equivalent in euros that is
representative of a single transaction in such market at such time. If two or
more quotations are provided, EURIBOR for the Interest Reset Period will be the
arithmetic mean of the quotations. If fewer than two quotations are 

 

31

 

provided, the Calculation Agent
will select four major banks in the euro-zone and follow the steps below.

 

(1)           The Calculation Agent will then
determine EURIBOR for the Interest Reset Period as the arithmetic mean of rates
quoted by those four major banks in the euro-zone to leading European banks at
approximately 11:00 A.M., Brussels time, on the EURIBOR Determination
Date. The rates quoted will be for loans in euros, for the period of the
specified Index Maturity, commencing on the Interest Reset Date. Rates quoted
must be based on a principal amount of at least $1,000,000 or the approximate
equivalent in euros that is representative of a single transaction in such
market at such time.

 

(2)           If the banks so selected by the
Calculation Agent are not quoting rates as described above, EURIBOR for the
Interest Reset Period will be the same for the immediately preceding Interest
Reset Period. If there was no such Interest Reset Period, EURIBOR will be the
Initial Interest Rate.

 

“euro-zone” means the region
comprised of member states of the European Union that adopt the single currency
in accordance with the Treaty establishing the European Community, as amended
by the Treaty on European Union.

 

(n)  Renewable Notes. 
Notes may be issued from time to time as variable rate renewable notes
(the “Renewable Notes”) that will bear interest at the interest rate
(calculated with reference to a Base Rate and the Spread or Spread Multiplier,
if any) specified in the Renewable Notes and in the applicable Pricing
Supplement.

 

The Renewable
Notes will mature on an Interest Payment Date as specified in the applicable
Pricing Supplement (the “Initial Maturity Date”), unless the maturity of all or
any portion of the principal amount thereof is extended in accordance with the
procedures described below.  On the
Interest Payment Dates specified in the applicable Pricing Supplement (each such
Interest Payment Date, an “Election Date”), the maturity of the Renewable Notes
will be extended to the Interest Payment Date occurring twelve months after 

 

32

 

such Election
Date, unless the holder thereof elects to terminate the automatic extension of
the maturity of the Renewable Notes or of any portion thereof having a
principal amount of $1,000 or any multiple of $1,000 in excess thereof by
delivering a notice of such effect to the Trustee not less than nor more than
the number of days to be specified in the applicable Pricing Supplement prior
to such Election Date.  If no such notice
period is specified in the applicable Pricing Supplement, such notice shall be
given no less than 30 days nor more than 60 days prior to such Election
Date.  Such option may be exercised with
respect to less than the entire principal amount of the Renewable Notes; provided
that the principal amount for which such option is not exercised is at least
$1,000 or any larger amount that is an integral multiple of $1,000.  Notwithstanding the foregoing, the maturity
of the Renewable Notes may not be extended beyond the Final Maturity Date, as
specified in the applicable Pricing Supplement (the “Final Maturity Date”).  If the holder elects to terminate the
automatic extension of the maturity of any portion of the principal amount of
the Renewable Notes and such election is not revoked as described below, such
portion will become due and payable on the Interest Payment Date falling six
months (unless another period is specified in the applicable Pricing
Supplement) after the Election Date prior to which the holder made such
election.

 

An election to
terminate the automatic extension of maturity may be revoked as to any portion
of the Renewable Notes having a principal amount of $1,000 or any multiple of
$1,000 in excess thereof by delivering a notice to such effect to the Trustee
on any day following the effective date of the election to terminate the
automatic extension of maturity and prior to the date 15 days before the date
on which such portion would otherwise mature. 
Such a revocation may be made for less than the entire principal amount
of the Renewable Notes for which the automatic extension of maturity has been
terminated; provided that the principal amount of the Renewable Notes
for which the automatic extension of maturity has been terminated and for which
such a revocation has not been made is at least $1,000 or any larger amount
that is an integral multiple of $1,000. 
Notwithstanding the foregoing, a revocation may not be made during the
period from and including a Record Date to but excluding the immediately
succeeding Interest Payment Date.

 

33

 

An election to
terminate the automatic extension of the maturity of the Renewable Notes, if
not revoked as described above by the holder making the election or any
subsequent holder, will be binding upon such subsequent holder.

 

The Renewable
Notes may be redeemed in whole or in part at the option of the Company on the
Interest Payment Dates in each year specified in the applicable Pricing
Supplement, commencing with the Interest Payment Date specified in the
applicable Pricing Supplement, at a redemption price as stated in the applicable
Pricing Supplement, together with accrued and unpaid interest, if any, to the
date of redemption.  Notwithstanding
anything to the contrary in the Prospectus Supplement, notice of redemption
will be provided by mailing a notice of such redemption to each holder by first
class mail, postage prepaid, at least 180 days (unless otherwise specified in
the applicable Pricing Supplement) prior to the date fixed for redemption.

 

(o)  Amount Payable Upon Declaration of Maturity of Discount Note.  With respect to any Note which is a Discount
Note, the portion of the principal amount of any Discount Note which is payable
upon redemption prior to the Stated Maturity thereof or upon declaration of
acceleration of the Stated Maturity thereof pursuant to Section 6.2 of the
Indenture will be as provided in the applicable Note.

 

(p)  Register of Securities; Paying Agent.  The register of the Securities for the Notes
will be initially maintained at the Corporate Trust Office of the Trustee.  The Company hereby appoints the Trustee as
the initial Paying Agent.

 

(q)  Currency Indexed Notes. 
Notes may be issued, from time to time, with the principal amount
payable on any principal payment date, or the amount of interest payable on any
Interest Payment Date, to be determined by reference to the value of one or
more currencies (or composite currencies or currency units).  In such event, the currency or currencies (or
composite currencies or currency units) to which the principal amount payable
on any principal payment date or the amount of interest payable on any Interest
Payment Date is indexed, the currency in which the face amount of the Note is
denominated (the “Denominated Currency”), and the currency in 

 

34

 

which principal
and interest on the Note will be paid (the “Payment Currency”) will be set
forth in the applicable Pricing Supplement. 
The Denominated Currency and the Payment Currency may be the same
currency or different currencies.  Unless
otherwise specified in the applicable Pricing Supplement, interest on currency
indexed Notes shall be paid in the Denominated Currency based on the face
amount of the Note at the rate per annum and on the dates set forth in the
applicable Pricing Supplement.  Currency
indexed Notes may include, but are not limited to, Notes of the types described
below.

 

(i)            Currency Linked Securities (“CLS”).  CLS are Notes
pursuant to which the principal amount payable at Stated Maturity equals the
Payment Currency equivalent at Stated Maturity of a fixed amount of a
designated currency (or composite currency or currency units) (the “Indexed
Currency”).  The Denominated Currency,
the Indexed Currency and the Payment Currency will be identified in the
applicable Pricing Supplement. In addition, the fixed amount of the Indexed
Currency to which the principal of the CLS is linked will be set forth in the
applicable Pricing Supplement for a specific representative face amount of the
CLS as well as for the aggregate face amount of all CLS forming part of the
same issue.

 

If the Payment
Currency and the Indexed Currency are not the same, the Payment Currency
equivalent of the Indexed Currency amount on any date shall be determined in
the manner specified in the applicable Pricing Supplement.

 

(ii) Reverse Currency Linked Securities (“Reverse CLS”).  Reverse CLS are Notes pursuant to which the
principal amount payable at Stated Maturity equals the Payment Currency
equivalent at Stated Maturity of a fixed amount of a designated currency (or
composite currencies or currency units) (the “First Indexed Currency”) minus
the amount of the Payment Currency equivalent at Stated Maturity of a fixed
amount of another designated currency (or composite currency or currency units)
(the “Second Indexed Currency”); provided, however, that the
minimum principal amount payable at Stated Maturity shall be zero.

 

35

 

The Denominated
Currency, the First and Second Indexed Currencies and the Payment Currency will
be identified in the applicable Pricing Supplement.  In addition, the fixed amounts of the First
and Second Indexed Currencies to which the principal of the Reverse CLS is
linked shall be set forth in the applicable Pricing Supplement for a specific
representative face amount of the Reverse CLS as well as for the aggregate face
amount of all Reverse CLS forming part of the same issue.

 

If the Payment
Currency and the First Indexed Currency or the Second Indexed Currency are not
the same, the Payment Currency equivalent of the First Indexed Currency amount
or the Second Indexed Currency amount, as the case may be, on any date shall be
determined in the manner specified in the applicable Pricing Supplement.

 

(iii) Multicurrency Currency Linked Securities (“Multicurrency CLS”).  Multicurrency CLS are Notes pursuant to which
the principal amount payable at Stated Maturity equals the Payment Currency
equivalent at Stated Maturity of a fixed amount of a designated currency (or
composite currency or currency units) (the “First Indexed Currency”) plus or
minus the Payment Currency equivalent at Stated Maturity of a fixed amount of a
second designated currency (or composite currency or currency units) (the “Second
Indexed Currency”) plus or minus the Payment Currency equivalent at Stated Maturity
of a fixed amount of a third designated currency (or composite currency or
currency units) (the “Third Indexed Currency”); provided, however,
that the minimum principal amount payable at Stated Maturity shall be zero.

 

The Denominated
Currency, each Indexed Currency, the Payment Currency and whether the fixed
amounts of the Second and Third Indexed Currencies are to be added or
subtracted to determine the principal amount payable at Stated Maturity of the
Multicurrency CLS shall be set forth in the applicable Pricing Supplement.  In addition, the fixed amounts of the First,
Second and Third Indexed Currencies to which the principal of the Multicurrency
CLS is linked shall be set forth in the applicable Pricing Supplement for a
specific representative face amount of 

 

36

 

the Multicurrency
CLS as well as for the aggregate face amount of all Multicurrency CLS forming
part of the same issue.  As used herein, “Added
Indexed Currency” means the First Indexed Currency and any other Indexed
Currency that is added to determine the principal amount payable at Maturity of
the Multicurrency CLS and a “Subtracted Indexed Currency” means an Indexed
Currency that is subtracted to determine the principal amount payable at Stated
Maturity of the Multicurrency CLS.

 

If any Added Index
Currency or Subtracted Index Currency is not the same as the Payment Currency,
the Payment Currency equivalent of such Added Indexed Currency amount or
Subtracted Index Currency amount, as the case may be, on any date shall be
determined in the manner specified in the applicable Pricing Supplement.

 

(r)  Amount Payable Upon Declaration of Maturity — CLS, Reverse CLS or
Multicurrency CLS.  If the
principal amount payable at the Stated Maturity of any CLS, Reverse CLS or
Multicurrency CLS shall be declared due and payable prior to such Stated
Maturity, the amount payable with respect to such Note will be paid in the
Denominated Currency and will equal the face amount of such Note plus accrued interest
to but excluding the date of payment.

 

(s)  Commodity Linked Notes. 
Notes may be issued, from time to time, with the principal amount
payable on any principal payment date, or the amount of interest payable on any
Interest Payment Date, to be determined by reference to one or more commodity
prices, equity indices or other factors and on such other terms as may be set
forth in the applicable Pricing Supplement.

 

(t)  Amortizing Notes. 
Notes may be issued from time to time as Amortizing Notes (as defined
below).  “Amortizing Notes” are Notes for
which payments of principal and interest are made in equal installments over
the life of the Note.  Interest on each
Amortizing Note will be computed on the basis of a 360-day year of twelve
30-day months.  Payments with respect to
Amortizing Notes will be applied first to interest due and payable thereon and
then to the reduction of the unpaid principal amount thereof.  A table setting forth repayment information
in respect of each Amortizing Note will be 

 

37

 

provided to the
original purchaser and will be available upon request, to subsequent holders.

 

(u)  Persons to Establish Specific Terms.  The principal amount, any interest rate (or
manner in which interest is to be determined), any Interest Payment Dates, any
Regular Record Dates, the Stated Maturity, any Redemption Date or Dates (and if
on any such Redemption Date a premium is to be paid by the Company, the amount
of such premium) and any other relevant terms of any Note

 

38

 

will be determined
by any one of the persons whose name is set forth below.

 

	
  NAME

  	
   

  	
  OFFICE

  	
   

  	
  SPECIMEN SIGNATURE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Thomas O. Staggs

  	
   

  	
  Senior Executive
  Vice President and Chief Financial Officer

  	
   

  	
  /s/ Thomas O.
  Staggs

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Christine M.
  McCarthy

  	
   

  	
  Executive Vice
  President-Corporate Finance and Real Estate and Treasurer

  	
   

  	
  /s/ Christine M.
  McCarthy

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Jonathan
  S.Headley

  	
   

  	
  Senior Vice
  President – Corporate Finance and Assistant Treasurer

  	
   

  	
  /s/ Jonathan
  S.Headley

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mitchell K.
  Polon

  	
   

  	
  Vice President –
  Financial Risk Management, Corporate Treasury

  	
   

  	
  /s/ Mitchell K.
  Polon

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Natacha J.
  Rafalski

  	
   

  	
  Vice President –
  Corporate Finance

  	
   

  	
  /s/ Natacha J.
  Rafalski

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Carlos A. Gomez

  	
   

  	
  Director – Corporate Finance

  	
   

  	
  /s/ Carlos A. Gomez

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Suet Lai

  	
   

  	
  Vice President – Counsel

  	
   

  	
  /s/ Suet Lai

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  David K. Thompson

  	
   

  	
  Senior Vice President – Deputy General Counsel –
  Corporate and Assistant Secretary

  	
   

  	
  /s/ David K. Thompson

  

 

(v)  Forms.  Unless and
until another form is established pursuant to a subsequent Officers’
Certificate pursuant to Section 2.1 of the Indenture, the Discount Notes,
the Fixed Rate Notes, the Floating Rate Notes and the Zero Coupon Notes will be
in substantially the forms set forth in Exhibits A, B, C and D hereto,
respectively, and may have such other terms as are provided herein.

 

39

 

(w)  Additional Amounts; Redemption. If so provided in the Note,
the Company will pay additional amounts on such Note to any Holder who is a
United States Alien (including any modification in the definition of such
term), in respect of any tax, assessment or governmental charge withheld or
deducted, all on the terms specified in such Note; further, if so provided in
such Note, the Company will have the option to redeem such Note rather than pay
additional amounts, all on the terms specified in such Note.

 

All capitalized
terms used in this Officers’ Certificate and not defined herein shall have the
meanings set forth in the Indenture.

 

Each of the
undersigned, for himself, states that he has read and is familiar with the
provisions of Article Two of the Indenture relating to the establishment
of a series of Securities thereunder and the establishment of forms of
Securities representing a series of Securities thereunder and, in each case,
the definitions therein relating thereto; that he is generally familiar with
the other provisions of the Indenture and with the affairs of the Company and
its acts and proceedings and that the statements and opinions made by him in
this Certificate are based upon such familiarity; and that he has made such
examination or investigation as is necessary to enable him to determine whether
or not the covenants and conditions referred to above have been complied with;
and in his opinion, such covenants and conditions have been complied with.

 

40

 

IN WITNESS
WHEREOF, the undersigned have hereunto signed this Certificate on behalf of the
Company as of the 13th day of December, 2007

 

 

	
   

  	
  THE WALT DISNEY COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Christine M. McCarthy

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Christine M. McCarthy

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President – Corporate

  Finance and Real Estate and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David K. Thompson

  	
   

  
	
   

  	
   

  	
  Name:

  	
  David K. Thompson

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President - Deputy

  
	
   

  	
   

  	
   

  	
  General Counsel – Corporate

  
	
   

  	
   

  	
   

  	
  and Assistant Secretary

  
					

 

 

Exhibit “A”

 

	
  REGISTERED

  	
   

  	
  REGISTERED

  

 

	
  NO.

  	
   

  	
  MEDIUM-TERM NOTE, SERIES D

  (Discount)

  	
   

  	
  PRINCIPAL
  AMOUNT:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  CUSIP:

  

 

Unless and until
it is exchanged in whole or in part for Notes in definitive form, this Note may
not be transferred except as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. Unless this
certificate is presented by an authorized representative of The Depository
Trust Company, New York, New York (“DTC”), to the issuer or its agent for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or such other name as requested
by an authorized representative of DTC and any payment is made to Cede &
Co. or such other entity as requested by an authorized representative of DTC,
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has
an interest herein.

 

	
  ORIGINAL ISSUE
  DATE:

  	
   

  	
  ORIGINAL ISSUE
  DISCOUNT:

  
	
  MATURITY DATE:

  	
   

  	
  INTEREST DATE:

  
	
  ORIGINAL ISSUE
  PRICE:

  	
   

  	
  YIELD TO
  MATURITY:

  

 

 

Date:

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This is one of the
Notes of the series designated herein referred to in the within-mentioned
Indenture.

 

WELLS
FARGO BANK, N.A., as
Trustee

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized
  Signatory

  

 

 

THE WALT DISNEY COMPANY,
a corporation duly organized and existing under the laws of the State of
Delaware (herein referred to as the “Company”), for value received, hereby
promises to pay to CEDE & CO., or registered assigns, the Principal
Amount specified above on the Maturity Date specified above and to pay interest
thereon from the Original Issue Date specified above or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
semiannually in arrears as specified in the Pricing Supplement, in each year,
commencing with the first Interest Payment Date next succeeding the Original
Issue Date, at the rate per annum set forth above, until the principal hereof
is paid or made available for payment; provided, however,
that if the Original Issue Date of this Note is between a Regular Record Date
and the related Interest Payment Date, the first payment of interest on this
Note will be made on the Interest Payment Date immediately following the next
succeeding Regular Record Date to the registered Holder on such next succeeding
Regular Record Date. Interest payments for this Note will include interest
accrued to but excluding the Interest Payment Date. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture (as defined below), be paid to the Person in whose
name this Note (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date, as specified in the Pricing
Supplement (whether or not a Business Day), as the case may be, next preceding
such Interest Payment Date; provided, however,
that interest payable at Maturity shall be payable to the Person to whom
principal shall be payable. If any Interest Payment Date or Maturity with
respect to this Note falls on a day that is not a Business Day, the payment due
on such Interest Payment Date or at Maturity will be made on the following day
that is a Business Day as if it were made on the date such payment was due and
no interest shall accrue on the amount so payable for the period from and after
such Interest Payment Date or Maturity, as the case may be. Except as otherwise
provided in the Indenture, any interest not punctually paid or duly provided
for on any Interest Payment Date (herein called “Defaulted Interest”) will forthwith
cease to be payable to the Holder on the Regular Record Date with respect to
such Interest Payment Date and may either be paid to the Person in whose name
this Note (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee (as defined below), notice of which shall be given to
Holders of Notes not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Notes may be listed, and
upon such notice as may be required by such exchange, all as more fully
provided in the Indenture. In the case of a default in payment of principal
upon acceleration or at Stated Maturity, the Accreted Value (as defined below)
of this Note at the date of such default in payment shall bear interest at the
Yield to Maturity specified above plus 1% per annum (to the extent that the
payment of such interest shall be legally enforceable), which shall accrue from
the date of such default in payment to the date payment of such principal has
been made or duly provided for. Such interest will be computed on the basis of
a 360-day year of twelve 30-day months, compounded semiannually. Payment of the
principal of and interest, if any, on this Note will be made at the office or
agency of the Company maintained for that purpose, initially designated to be
the Corporate Trust Office of the Trustee in Los Angeles, California, and at
such additional offices or agencies as the Company may designate, in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however,
that at the option of the Company, payments of principal of and interest on
this Note may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the register of Securities or by wire
transfer of immediately available funds to the account of the Holder of this
Note if appropriate wire transfer instructions have been received in writing by
the Trustee not less than 15 days prior to the applicable payment date.
Notwithstanding the foregoing, the Company will make payments of interest, if
any, on any Interest Payment Date other than the Maturity Date to each
registered Holder of $10,000,000 (or, if the payment currency is other than
United States dollars, the equivalent thereof in the particular payment
currency) or more in aggregate principal amount of definitive Notes (whether
having identical or different terms and provisions) by wire transfer of
immediately available funds if the applicable registered Holder has delivered
appropriate wire transfer instructions in writing to the Trustee not less than
15 days prior to the particular Interest Payment Date.  Any wire transfer instructions received by
the Trustee shall remain in effect until revoked by the applicable registered
Holder.

 

 

The “Accreted
Value” of this Note at any date (the “Calculation Date”) shall be equal to (i) the
Original Issue Price of this Note specified above plus (ii) the accrued
amortization of Original Issue Discount specified above attributable ratably on
a daily basis to the period from and including the Original Issue Date
specified above to but excluding the Calculation Date. The calculation of
accrual of Original Issue Discount will be computed on the basis of a 360-day
year of twelve 30-day months, compounded semiannually.

 

Reference is
hereby made to the further provisions of this Note set forth below, which
further provisions shall for all purposes have the same effect as if set forth
at this place.

 

Unless the
certificate of authentication hereon has been executed by the Trustee or its
duly appointed co-authenticating agent by manual signature, this Note shall not
be entitled to any benefit under the Indenture or be valid or obligatory for
any purpose.

 

This Note is one
of a duly authorized issue of securities (herein called the “Securities”) of
the Company (which term includes any successor corporation under the Indenture
hereinafter referred to) issued and to be issued pursuant to such Indenture.
This Security is one of a series designated by the Company as its Medium-Term
Notes, Series D. The Indenture does not limit the aggregate principal
amount of the Securities.

 

The Company issued
this Note pursuant to an Indenture, dated as of September 24, 2001 (herein
called the “Indenture”), between the Company and Wells Fargo Bank, N.A., a
national banking association, as trustee (herein called the “Trustee,” which
term includes any successor trustee under the Indenture), to which Indenture
and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and Holders of the Notes and
of the terms upon which the Notes are, and are to be, authenticated and
delivered.

 

The Notes are
issuable as Registered Securities, without coupons, in denominations of $1,000
and any amount in excess thereof which is an integral multiple of $1,000. As
provided in the Indenture and subject to certain limitations therein set forth,
Notes are exchangeable for a like aggregate principal amount of Notes of like
tenor of any authorized denomination, as requested by the Holder surrendering
the same, upon surrender of the Note or Notes to be exchanged at any office or
agency described below where Notes may be presented for registration of
transfer.

 

The Company may
from time to time, without the consent of existing Note Holders, issue
additional Notes having the same terms and conditions (including maturity and
interest payment terms) as previously issued Notes in all respects, except for
issue date, issue price and the first payment of interest.  Additional Notes issued in this manner will
be fungible with the previously issued Notes to the extent specified in the
applicable Pricing Supplement.

 

This Note
may not be redeemed prior to the Maturity Date set forth above.

 

If an Event of
Default with respect to the Notes shall occur and be continuing, a portion of
the principal of this Note may be declared due and payable in the manner and
with the effect provided in the Indenture. Such portion shall be equal to the
Accreted Value of this Note at the time of such declaration. Upon payment (i) of
such Accreted Value and (ii) of interest on any overdue Accreted Value (to
the extent that the payment of such interest shall be legally enforceable), all
of the Company’s obligations in respect of the payment of the principal of and
interest on this Note shall terminate.

 

The Indenture
permits, in certain circumstances therein specified, the amendment thereof
without the consent of the Holders of the Securities. The Indenture also
permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations under the Indenture of the
Company and the rights of Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with
the consent of the Holders of a majority in aggregate principal amount of the
Securities at the

 

 

time Outstanding
of each series to be affected. The Indenture also contains provisions
permitting the Holders of a majority in aggregate principal amount of the
Securities of each series at the time Outstanding, on behalf of the Holders of
all the Securities of such series, to waive compliance by the Company with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of
such consent or waiver is made upon this Note.

 

No reference
herein to the Indenture and no provision of this Note or, subject to the
provisions for satisfaction and discharge in Article Eight of the
Indenture, of the Indenture, shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on this Note at the times, place and rate, and in the coin or currency,
herein prescribed.

 

As provided in the
Indenture and subject to certain limitations therein set forth, the transfer of
Notes is registrable in the register of Securities, upon surrender of a Note
for registration of transfer at the office or agency of the Company maintained
for that purpose, initially designated to be the Corporate Trust Office of the
Trustee in Los Angeles, California, and at such additional offices or agencies
as the Company may designate, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Registrar
duly executed by, the Holder hereof or his attorney duly authorized in writing,
and thereupon one or more new Notes of like tenor, of authorized denominations
and for the same aggregate principal amount, will be issued to the designated
transferee or transferees.

 

No service charge
shall be made by the Company, the Trustee or the Registrar for any such
registration of transfer or exchange, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith (other than exchanges pursuant to Sections 2.11, 3.6, 9.5 or 10.3 of
the Indenture, not involving any transfer).

 

Prior to due
presentment of this Note for registration of transfer, the Company, the Trustee
and any agent of the Company or the Trustee may treat the Person in whose name
this Note is registered as the owner hereof for all purposes, whether or not
this Note be overdue, and neither the Company, the Trustee nor any such agent
shall be affected by notice to the contrary.

 

The Indenture and
the Notes shall be governed by and construed in accordance with the laws of the
State of New York, including without limitation, §§ 5-1401 and 5-1402 of
the New York General Obligations Law and New York Civil Practice Law Rule 327(b).

 

All undefined
terms used in this Note which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.

 

 

IN WITNESS
WHEREOF, The Walt Disney Company has caused this Instrument to be signed by the
signature or facsimile signature of its Chairman of the Board, one of its Vice
Chairmen, its President or one of its Vice Presidents, or its Treasurer or any
Assistant Treasurer and attested by its Secretary or one of its Assistant
Secretaries by his or her signature or a facsimile thereof, and its corporate
seal or a facsimile of its corporate seal to be affixed hereunto or imprinted
hereon.

 

	
  (SEAL)

  	
  THE
  WALT DISNEY COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Christine M.
  McCarthy

  
	
   

  	
  Title:

  	
  Executive Vice
  President – Corporate Finance

  and Real Estate and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
  Attest:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  Marsha L. Reed

  	
   

  
	
  Title:

  	
  Vice
  President-Governance Administration and

  Assistant Secretary

  	
   

  
							

 

 

ABBREVIATIONS

 

The following
abbreviations, when used in the inscription on the face of this instrument,
shall be construed as though they were written out in full according to
applicable laws or regulations:

 

	
  TEN COM v

  	
  as tenants in
  common

  	
   

  	
  UNIF GIFT MIN
  ACT        Custodian
              
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Cust.)

  	
  (Minor)

  
	
  TEN ENT v 

  	
  as tenants by
  the entireties

  	
   

  	
   

  
	
   

  	
   

  	
  Under Uniform
  Gifts to Minors Act

  
	
  JT TEN v 

  	
  as joint tenants
  with right of survivorship and not as 

  	
   

  	
   

  	
   

  
	
   

  	
  tenants in
  common

  	
   

  	
  (State)

  	
   

  
							

 

Additional
abbreviations may also be used though not in the above list.

 

 

FOR VALUE
RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto

 

Please Insert
Social Security or Employer

Identification
Number of Assignee

 

 

 

Please Print or
Typewrite Name and Address

Including Postal
Zip Code of Assignee

 

 

the within
Security and all rights thereunder, hereby irrevocably constituting and
appointing                                                                                                             attorney
to transfer said Security on the books of the Company, with full power of
substitution in the premises.

 

 

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  

 

NOTICE:                                                The signature to this assignment must
correspond with the name as it appears upon the face of the within Note in
every particular, without alteration or enlargement or any change whatever.

 

 

Exhibit “B”

 

	
  REGISTERED

  	
   

  	
  REGISTERED

  

 

	
  NO.
  FXR-

  	
   

  	
  MEDIUM-TERM NOTE, SERIES D

  	
   

  	
  PRINCIPAL
  AMOUNT:

  
	
   

  	
   

  	
  (Fixed Rate)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  CUSIP:

  

 

Unless and until
it is exchanged in whole or in part for Notes in definitive form, this Note may
not be transferred except as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. Unless this
certificate is presented by an authorized representative of The Depository
Trust Company, New York, New York (“DTC”), to the issuer or its agent for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or such other name as requested
by an authorized representative of DTC and any payment is made to Cede &
Co. or such other entity as requested by an authorized representative of DTC,
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has
as interest herein.

 

	
  ORIGINAL ISSUE DATE:

  	
   

  	
  INTEREST RATE:

  
	
  MATURITY DATE:

  	
   

  	
  EARLIEST
  REDEMPTION DATE:

  
	
  ORIGINAL ISSUE PRICE:

  	
   

  	
  INTEREST PAYMENT
  DATES:

  
	
   

  	
   

  	
  REDEMPTION
  PRICE:

  ADDITIONAL AMOUNTS:

  

 

 

Date:

 

TRUSTEE’S
CERTIFICATE OF AUTHENTICATION

 

This is one of the
Notes of the series designated herein referred to in the within-mentioned
Indenture.

 

WELLS
FARGO BANK, N.A., as
Trustee

 

 

By:

Authorized
Signatory

 

 

THE WALT DISNEY COMPANY,
a corporation duly organized and existing under the laws of the State of
Delaware (herein referred to as the “Company”), for value received, hereby
promises to pay to CEDE & CO., or registered assigns, the Principal
Amount specified above on the Maturity Date specified above and to pay interest
thereon from the Original Issue Date specified above or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
semiannually in arrears as specified in the Pricing Supplement, in each year,
commencing with the first Interest Payment Date next succeeding the Original
Issue Date, at the rate per annum set forth above, until the principal hereof
is paid or made available for payment; provided, however,
that if the Original Issue Date of this Note is between a Regular Record Date
and the related Interest Payment Date, the first payment of interest on this
Note will be made on the Interest Payment Date immediately following the next
succeeding Regular Record Date to the registered Holder on such next succeeding
Regular Record Date. Interest payments for this Note will include interest
accrued to but excluding the Interest Payment Date. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture (as defined below), be paid to the Person in whose
name this Note (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date, as specified in the Pricing
Supplement (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date; provided, however,
that interest payable at Maturity shall be payable to the Person to whom
principal shall be payable. If any Interest Payment Date or Maturity with
respect to this Note falls on a day that is not a Business Day, the payment due
on such Interest Payment Date or at Maturity will be made on the following day
that is a Business Day as if it were made on the date such payment was due and
no interest shall accrue on the amount so payable for the period from and after
such Interest Payment Date or Maturity, as the case may be.  Interest on this Note will be computed on the
basis of a 360-day year of twelve 30-day months.  Except as otherwise provided in the
Indenture, any interest not punctually paid or duly provided for on any
Interest Payment Date (herein called “Defaulted Interest”) will forthwith cease
to be payable to the Holder on the Regular Record Date with respect to such
Interest Payment Date and may either be paid to the Person in whose name this
Note (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee (as defined below), notice of which shall be given to
Holders of Notes not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Notes may be listed, and
upon such notice as may be required by such exchange, all as more fully
provided in the Indenture. Payment of the principal of and interest on this
Note will be made at the office or agency of the Company maintained for that
purpose, initially designated to be the Corporate Trust Office of the Trustee
in Los Angeles, California, and at such additional offices or agencies as the
Company may designate, in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts; provided, however, that at the option
of the Company, payments of principal of and interest on this Note may be made
by check mailed to the address of the Person entitled thereto as such address
shall appear in the register of Securities or by wire transfer of immediately
available funds to the account of the Holder of this Note if appropriate wire
transfer instructions have been received in writing by the Trustee not less
than 15 days prior to the applicable payment date. Notwithstanding the
foregoing, the Company will make payments of interest on any Interest Payment
Date other than the Maturity Date to each registered Holder of $10,000,000 (or,
if the payment currency is other than United States dollars, the equivalent
thereof in the particular payment currency) or more in aggregate principal
amount of definitive Notes (whether having identical or different terms and
provisions) by wire transfer of immediately available funds if the applicable
registered Holder has delivered appropriate wire transfer instructions in
writing to the Trustee not less than 15 days prior to the particular Interest
Payment Date.  Any wire transfer
instructions received by the Trustee shall remain in effect until revoked by
the applicable registered Holder.

 

Reference is hereby made to the further provisions of this Note set
forth below, which further provisions shall for all purposes have the same
effect as if set forth at this place.

 

 

Unless the certificate of authentication hereon has been executed by
the Trustee or its duly appointed co-authenticating agent by manual signature,
this Note shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.

 

This Note is one of a duly authorized issue of securities (herein
called the “Securities”) of the Company (which term includes any successor
corporation under the Indenture hereinafter referred to) issued and to be
issued pursuant to such Indenture. This Security is one of a series designated
by the Company as its Medium-Term Notes, Series D. The Indenture does not
limit the aggregate principal amount of the Securities.

 

The Company issued this Note pursuant to an Indenture, dated as of September 24,
2001 (herein called the “Indenture”), between the Company and Wells Fargo Bank,
N.A., a national banking association, as trustee (herein called the “Trustee,”
which term includes any successor trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for
a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and Holders of the Notes and
of the terms upon which the Notes are, and are to be, authenticated and delivered.

 

The Notes are issuable as Registered Securities, without coupons, in
denominations of $2,000 and any amount in excess thereof which is an integral
multiple of $1,000. As provided in the Indenture and subject to certain
limitations therein set forth, Notes are exchangeable for a like aggregate
principal amount of Notes of like tenor of any authorized denomination, as
requested by the Holder surrendering the same, upon surrender of the Note or
Notes to be exchanged at any office or agency described below where Notes may
be presented for registration of transfer.

 

The Company may from time to time, without the consent of existing Note
Holders, issue additional Notes having the same terms and conditions (including
maturity and interest payment terms) as previously issued Notes in all
respects, except for issue date, issue price and the first payment of
interest.  Additional Notes issued in
this manner will be fungible with the previously issued Notes to the extent specified
in the applicable Pricing Supplement.

 

This Note may not be redeemed prior to the Earliest Redemption Date set
forth above. If no Earliest Redemption Date is so set forth, this Note is not
redeemable prior to the Maturity Date. This Note is redeemable at any time on
or after the Earliest Redemption Date set forth above at the option of the
Company, in whole or from time to time in part, upon not less than 30 nor more
than 60 days’ notice mailed to the registered Holder hereof, at the Redemption
Price equal to the amount set forth below, together in each case with accrued
interest to but excluding the Redemption Date.

 

Notwithstanding the preceding paragraph, installments of interest whose
Stated Maturity is prior to the Redemption Date of any Note will be payable to
the Holder of such Note, or one or more Predecessor Securities, of record at
the close of business on the relevant Regular Record Dates referred to above,
all as provided in the Indenture.

 

In the event this Note is subject to payment of Additional Amounts (as
defined below) as specified above, the Company will, subject to certain exceptions and
limitations set forth below, pay to the Holder of hereof who is a United States
Alien, as additional interest, such amounts (“Additional Amounts”) as may be
necessary in order that every net payment on this Note (including payment of
the principal of and interest on such this Note) by the Company or a Paying
Agent, after deduction or withholding for or on account of any present or
future tax, assessment or other governmental charge imposed upon or as a result
of such payment by the United States (or any political subdivision or taxing
authority thereof or therein), will not be less than the amount provided in
this Note to be then due and payable; provided, however, that the foregoing
obligation to pay Additional Amounts will not apply to:

 

(a)           any tax,
assessment or other governmental charge that would not have been so imposed but
for (i) the existence of any present or former connection between such
Holder or beneficial owner of this Note

 

 

(or between a fiduciary, settlor or beneficiary of, or a
person holding a power over, such Holder, if such Holder is an estate or a
trust, or a member or shareholder of such Holder, if such Holder is a
partnership or corporation) and the United States or any political subdivision
or taxing authority thereof or therein, including, without limitation, such
Holder (or such fiduciary, settlor, beneficiary, person holding a power, member
or shareholder) being or having been a citizen or resident of the United States
or treated as a resident thereof or being or having been engaged in a trade or
business or present therein or having or having had a permanent establishment
therein or (ii) such Holder’s or beneficial owner’s past or present
status, as applicable (under prior or current law), as a personal holding
company, foreign personal holding company, foreign private foundation or other
foreign tax-exempt organization with respect to the United States, passive
foreign investment company or controlled foreign corporation for United States
tax purposes or corporation that accumulates earnings to avoid United States
Federal income tax;

 

(b)           any
estate, inheritance, gift, excise, sales, transfer, wealth or personal property
tax or any similar tax, assessment or other governmental charge;

 

(c)           any tax,
assessment or other governmental charge that would not have been imposed but
for the presentation by the Holder of this Note for payment more than
10 days after the date on which such payment became due and payable or the
date on which payment thereof was duly provided for, whichever occurred later;

 

(d)           any tax,
assessment or other governmental charge that is payable otherwise than by
withholding from a payment on this Note;

 

(e)           any tax,
assessment or other governmental charge required to be withheld by any Paying
Agent from a payment on this Note, if such payment could be made without such
withholding by any other Paying Agent;

 

(f)            any tax,
assessment or other governmental charge that would not have been imposed but for
a failure to comply with applicable certification, information, documentation,
identification or other reporting requirements concerning the nationality,
residence, identity or connection with the United States of the Holder or
beneficial owner of this Note if such compliance is required by statute or
regulation of the United States or by an applicable tax treaty to which the
United States is a party as a precondition to relief or exemption from such
tax, assessment or other governmental charge;

 

(g)           any tax,
assessment or other governmental charge imposed on a Holder that actually or
constructively owns 10 percent or more of the combined voting power of all
classes of the Company’s stock or that is a bank receiving interest on an
extension of credit made pursuant to a loan agreement entered into in the
ordinary course of its trade or business;

 

(h)           any
withholding or deduction imposed on a payment to an individual where such
withholding or deduction is required to be made pursuant to Council Directive
2003/48/EC or any other European Union Directive implementing the conclusions
of the ECOFIN Council meeting of 26th — 27th November, 2000 on the
taxation of savings income or any law implementing or complying with, or
introduced in order to conform to, such Directive; or

 

(i)            any
combination of items (a), (b), (c), (d), (e), (f), (g) and (h);

 

nor
shall Additional Amounts be paid with respect to a payment on this Note to a
Holder that is a fiduciary or partnership or other than the sole beneficial
owner of such payment to the extent a beneficiary or settlor with respect to
such fiduciary or a member of such partnership or a beneficial owner would not
have been entitled to Additional Amounts (or payment of Additional Amounts
would not have been necessary) had such beneficiary, settlor, member or
beneficial owner been the Holder of this Note.

 

 

If (a) as a
result of any change in, or amendment to, the laws (or any regulations or
rulings promulgated thereunder) of the United States (or any political
subdivision or taxing authority thereof or therein), or any change in the
official application (including a ruling by a court of competent jurisdiction
in the United States) or interpretation of such laws, regulations or rulings,
which change or amendment is announced or becomes effective on or after the
Original Issue Date specified above, the Company becomes or will become
obligated to pay Additional Amounts as described above, or (b) any act is
taken by a taxing authority of the United States on or after the Original Issue
Date specified above, whether or not such act is taken with respect to the
Company or any affiliate, that results in a substantial likelihood that the
Company will or may be required to pay such Additional Amounts, then the
Company may, at its option, redeem, as a whole, but not in part, the Notes on
not less than 30 nor more than 60 days’ prior notice, at a redemption
price equal to 100% of the principal amount of such Notes, together with
interest accrued thereon to the date fixed for redemption; provided that the
Company determines, in its business judgment, that the obligation to pay such
Additional Amounts cannot be avoided by the use of reasonable measures
available to it, not including substitution of the obligor under the Notes or
any action that would entail a material cost to the Company. No redemption
pursuant to (b) above may be made unless the Company shall have received
an opinion of independent counsel to the effect that an act taken by a taxing
authority of the United States results in a substantial likelihood that it will
or may be required to pay Additional Amounts described above and the Company
shall have delivered to the Trustee a certificate, signed by a duly authorized
officer, stating that based on such opinion the Company is entitled to redeem
the Notes pursuant to their terms.

 

All notices of redemption shall state the Redemption Date, the
Redemption Price, if fewer than all the outstanding Notes with the same
Original Issue Date, Interest Rate and Stated Maturity are to be redeemed, the
identification (and, in the case of partial redemption, the principal amounts)
of Notes to be redeemed, that on the Redemption Date the Redemption Price will
become due and payable upon each Note, or portion thereof, to be redeemed, that
interest on each Note, or portion thereof, called for redemption will cease to
accrue on and including the Redemption Date and the place or places where Notes
may be surrendered for redemption. However, payment of the Redemption Price,
together with accrued interest to but excluding the Redemption Date, for a Note
for which a redemption notice has been delivered is conditioned upon delivery
of such Note (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or his attorney duly
authorized in writing) to the office or agency of the Company maintained for
that purpose, initially designated to be the Corporate Trust Office of the Trustee
in Los Angeles, California, and at such additional offices or agencies as the
Company may designate, at any time (whether prior to, on or after the
Redemption Date) after delivery of the redemption notice.  Payment of the Redemption Price for the Note
(or portion thereof to be redeemed), together with accrued interest to the
Redemption Date, will be made on the later of the Redemption Date or promptly
following the time of delivery of the Note. 
If fewer than all of the Notes with the same Original Issue Date,
Interest Rate and Stated Maturity are to be redeemed at any time, selection of
such Notes for redemption will be made by the Trustee by such method as the
Trustee shall deem fair and appropriate.

 

In the event of redemption of this Note in part only, a new Note or
Notes of like tenor for the aggregate principal amount equal to and in exchange
for the unredeemed portion of the principal of the Notes so surrendered will be
issued in the name of the Holder hereof upon the cancellation hereof.

 

For all purposes of this Note and the Indenture, unless the context
otherwise requires, all provisions relating to the redemption by the Company of
Notes shall relate, in the case of any Notes redeemed or to be redeemed by the
Company only in part, to the portion of the principal amount of such Notes
which has been or is to be so redeemed.

 

If an Event of
Default with respect to the Notes shall occur and be continuing, the principal
of the Notes may be declared due and payable in the manner and with the effect
provided in the Indenture.

 

The Indenture
permits, in certain circumstances therein specified, the amendment thereof
without the consent of the Holders of the Securities. The Indenture also
permits, with certain exceptions as therein provided,

 

 

the amendment
thereof and the modification of the rights and obligations under the Indenture
of the Company and the rights of Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with
the consent of the Holders of a majority in aggregate principal amount of the
Securities at the time Outstanding of each series to be affected. The Indenture
also contains provisions permitting the Holders of a majority in aggregate
principal amount of the Securities of each series at the time Outstanding, on
behalf of the Holders of all the Securities of such series, to waive compliance
by the Company with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or waiver
by the Holder of this Note shall be conclusive and binding upon such Holder and
upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Note.

 

No reference
herein to the Indenture and no provision of this Note or, subject to the
provisions for satisfaction and discharge in Article Eight of the
Indenture, of the Indenture, shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on this Note at the times, place and rate, and in the coin or
currency, herein prescribed.

 

As provided in the
Indenture and subject to certain limitations therein set forth, the transfer of
Notes is registrable in the register of Securities, upon surrender of a Note
for registration of transfer at the office or agency of the Company maintained
for that purpose, initially designated to be the Corporate Trust Office of the
Trustee in Los Angeles, California, and at such additional offices or agencies
as the Company may designate, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Registrar
duly executed by, the Holder hereof or his attorney duly authorized in writing,
and thereupon one or more new Notes of like tenor, of authorized denominations
and for the same aggregate principal amount, will be issued to the designated
transferee or transferees.

 

No service charge
shall be made by the Company, the Trustee or the Registrar for any such
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in connection
therewith (other than exchanges pursuant to Sections 2.11, 3.6, 9.5 or 10.3 of
the Indenture, not involving any transfer).

 

Prior to due
presentment of this Note for registration of transfer, the Company, the Trustee
and any agent of the Company or the Trustee may treat the Person in whose name
this Note is registered as the owner hereof for all purposes, whether or not
this Note be overdue, and neither the Company, the Trustee nor any such agent
shall be affected by notice to the contrary.

 

The Indenture and
the Notes shall be governed by and construed in accordance with the laws of the
State of New York, including without limitation, §§ 5-1401 and 5-1402 of
the New York General Obligations Law and New York Civil Practice Law Rule 327(b).

 

All undefined
terms used in this Note which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.

 

 

IN WITNESS
WHEREOF, The Walt Disney Company has caused this Instrument to be signed by the
signature or facsimile signature of its Chairman of the Board, one of its Vice
Chairmen, its President or one of its Vice Presidents, or its Treasurer or any
Assistant Treasurer and attested by its Secretary or one of its Assistant
Secretaries by his or her signature or a facsimile thereof, and its corporate
seal or a facsimile of its corporate seal to be affixed hereunto or imprinted
hereon.

 

	
  (SEAL)

  	
  THE
  WALT DISNEY COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Christine M.
  McCarthy

  
	
   

  	
  Title:

  	
  Executive Vice
  President-Corporate Finance

  and Real Estate and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
  Attest:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  Marsha L. Reed

  	
   

  
	
  Title:

  	
  Vice
  President-Governance Administration and

  Assistant Secretary

  	
   

  
							

 

 

ABBREVIATIONS

 

The following
abbreviations, when used in the inscription on the face of this instrument,
shall be construed as though they were written out in full according to
applicable laws or regulations:

 

	
  TEN COM v

  	
  as tenants in
  common

  	
   

  	
  UNIF GIFT MIN
  ACT        Custodian
              
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Cust.)

  	
  (Minor)

  
	
  TEN ENT v 

  	
  as tenants by
  the entireties

  	
   

  	
   

  
	
   

  	
   

  	
  Under Uniform
  Gifts to Minors Act

  
	
  JT TEN v 

  	
  as joint tenants
  with right of survivorship and not as 

  	
   

  	
   

  	
   

  
	
   

  	
  tenants in
  common

  	
   

  	
  (State)

  	
   

  
							

 

Additional
abbreviations may also be used though not in the above list.

 

 

FOR VALUE
RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto

 

Please Insert
Social Security or Employer

Identification
Number of Assignee

 

 

 

Please Print or
Typewrite Name and Address

Including Postal
Zip Code of Assignee

 

 

the within
Security and all rights thereunder, hereby irrevocably constituting and appointing
                                                                                                            attorney
to transfer said Security on the books of the Company, with full power of
substitution in the premises.

 

 

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  

 

NOTICE:                                                The signature to this assignment must
correspond with the name as it appears upon the face of the within Note in
every particular, without alteration or enlargement or any change whatever.

 

 

Exhibit “C”

 

	
  REGISTERED

  	
   

  	
  REGISTERED

  

 

	
  NO.
  FLR-

  	
   

  	
  MEDIUM-TERM NOTE, SERIES D

  	
   

  	
  PRINCIPAL
  AMOUNT:

  
	
   

  	
   

  	
  (Floating Rate)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  CUSIP:

  

 

Unless and until
it is exchanged in whole or in part for Notes in definitive form, this Note may
not be transferred except as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. Unless this
certificate is presented by an authorized representative of The Depository
Trust Company, New York, New York (“DTC”), to the issuer or its agent for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or such other name as requested
by an authorized representative of DTC and any payment is made to Cede &
Co. or such other entity as requested by an authorized representative of DTC,
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has
an interest herein.

 

	
  ORIGINAL ISSUE
  DATE:

  	
   

  	
  ORIGINAL ISSUE
  PRICE:

  
	
  MATURITY DATE:

  	
   

  	
  EARLIEST
  REDEMPTION DATE:

  
	
  INITIAL MATURITY
  DATE (for Renewable Notes):

  	
   

  	
   

  
	
  FINAL MATURITY
  DATE (for Renewable Notes):

  	
   

  	
   

  
	
  INITIAL INTEREST
  RATE:

  	
   

  	
  REDEMPTION
  PRICE:

  
	
  BASE RATE OR
  RATES:

  	
   

  	
  INTEREST PAYMENT
  DATES:

  
	
   

  	
  o

  	
  COMMERCIAL PAPER
  RATE

  	
   

  	
   

  
	
   

  	
  o

  	
  LIBOR:

  	
   

  	
  REGULAR RECORD
  DATES:

  
	
   

  	
   

  	
   

  
	
   

  	
  o

  	
  Reuters Monitor
  Money Rates Service

  	
   

  	
   

  
	
   

  	
  o

  	
  Index Currency

  	
   

  	
   

  
	
   

  	
  o

  	
  CD RATE

  	
   

  	
   

  
	
   

  	
  o

  	
  FEDERAL FUNDS
  RATE

  	
   

  	
  INTEREST PAYMENT
  PERIOD:

  
	
   

  	
  o

  	
  TREASURY RATE

  	
   

  	
  o

  	
  Monthly

  
	
   

  	
  o

  	
  PRIME RATE

  	
   

  	
  o

  	
  Quarterly

  
	
   

  	
  o

  	
  CMT RATE

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  o

  	
  Reuters T7051
  Page

  	
   

  	
  o

  	
  Semiannually

  
	
   

  	
   

  	
  o

  	
  Reuters T7052
  Page

  	
   

  	
  o

  	
  Annually

  
	
   

  	
   

  	
  o

  	
  CMT Maturity
  Index:

  	
   

  	
   

  	
   

  
	
   

  	
  o

  	
  J.J. KENNY RATE

  	
   

  	
   

  	
   

  
	
   

  	
  o

  	
  ELEVENTH
  DISTRICT COST OF FUNDS RATE

  	
   

  	
  ADDITIONAL
  AMOUNTS:

  
	
   

  	
  o

  	
  EURIBOR

  	
   

  	
   

  	
   

  
	
   

  	
  o

  	
  OTHER:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SPREAD: plus
       basis points

  	
   

  	
   

  
	
  (Indicate plus or minus

  	
   

  	
  INTEREST RESET
  PERIOD:

  
	
  and number of basis points)

  	
   

  	
  o

  	
  Daily

  
	
  SPREAD
  MULTIPLIER:

  	
   

  	
  o

  	
  Weekly

  
	
  INDEX MATURITY:

  	
   

  	
  o

  	
  Monthly

  
	
  o

  	
  1 Month

  	
   

  	
  o

  	
  Quarterly

  
	
  o

  	
  3 Months

  	
   

  	
  o

  	
  Semiannually

  
	
  o

  	
  6 Months

  	
   

  	
  o

  	
  Annually

  
	
  o

  	
  1 Year

  	
   

  	
   

  
	
  o

  	
  OTHER:

  	
   

  	
  INTEREST RESET
  DATES:

  
	
   

  	
   

  	
  CALCULATION
  AGENT:

  
	
   

  	
   

  	
  o

  	
  WELLS FARGO
  BANK, N.A.

  
	
  MAXIMUM INTEREST
  RATE:     %

  	
   

  	
  o

  	
  OTHER:

  
	
  MINIMUM INTEREST
  RATE:      %

  	
   

  	
   

  
								

 

 

	
  Dated:

  	
   

  	
   

  

 

 

TRUSTEE’S
CERTIFICATE OF AUTHENTICATION

 

This is one of the
Notes of the series designated herein referred to in the within-mentioned
Indenture.

 

WELLS
FARGO BANK, N.A., as
Trustee

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  

 

 

THE WALT DISNEY COMPANY,
a corporation duly organized and existing under the laws of the State of
Delaware (herein referred to as the “Company”), for value received, hereby
promises to pay to CEDE & CO., or registered assigns, the Principal
Amount specified above on the Maturity Date specified above and to pay interest
thereon from the Original Issue Date specified above or from the most recent
Interest Payment Date to which interest has been paid or duly provided for at a
rate per annum equal to the Initial Interest Rate specified above until the
first Interest Reset Date specified above following the Original Issue Date
specified above and thereafter at a rate determined in accordance with the
provisions below under the heading “Determination of Commercial Paper Rate,” “Determination
of LIBOR,” “Determination of CD Rate,” “Determination of Federal Funds Rate,” “Determination
of Treasury Rate,” “Determination of Prime Rate,” “Determination of CMT Rate,” “Determination
of J.J. Kenny Rate,” “Determination of Eleventh District Cost of Funds Rate” or
“Determination of EURIBOR” depending upon whether the applicable Base Rate
specified above is the Commercial Paper Rate, LIBOR, CD Rate, Federal Funds
Rate, Treasury Rate, Prime Rate, CMT Rate, J.J. Kenny Rate, Eleventh District
Cost of Funds Rate or EURIBOR, which rate may be adjusted by adding or
subtracting the Spread or multiplying the Base Rate by the Spread Multiplier
depending on whether a Spread or Spread Multiplier is specified above, until
the principal hereof is paid or duly made available for payment. The “Spread,”
if any, is the number of basis points to be added to or subtracted from the
Base Rate or Rates, as specified above, and the “Spread Multiplier,” if any, is
the percentage of the Base Rate or Rates, as specified above, by which such
Base Rate or Rates are to be multiplied. The “Index Maturity,” if any, is the
period to maturity of the instrument or obligation with respect to which the
related Base Rate or Rates are calculated, as designated above. If more than
one Base Rate is specified above, the applicable Base Rate shall be the lowest
of such Base Rates on the Interest Determination Date. The Company will pay
interest in arrears monthly, quarterly, semiannually or annually as specified
above under “Interest Payment Period,” commencing with the first Interest
Payment Date specified above next succeeding the Original Issue Date and
thereafter on the Interest Payment Dates as specified above, and at Maturity.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture (as defined below), be
paid to the Person in whose name this Note (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date set
forth above (whether or not a Business Day), as the case may be, next preceding
such Interest Payment Date; provided, however, that
the interest payment at Maturity shall be payable to the Person to whom
principal shall be payable. If the Maturity of this Note falls on a day that is
not a Business Day, the payment of principal and interest may be made on the
next succeeding Business Day, and no interest on such payment shall accrue for
the period from and after the Maturity. Except as otherwise provided in the
Indenture, any interest not punctually paid or duly provided for on any
Interest Payment Date (herein called “Defaulted Interest”) will forthwith cease
to be payable to the Holder on the Regular Record Date with respect to such
Interest Payment Date and may either be paid to the Person in whose name this
Note (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee (as defined below), notice of which shall be given to
Holders of Notes not less than ten days prior to such Special Record Date, or
be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Notes may be listed, and
upon such notice as may be required by such exchange, all as more fully
provided in the Indenture. Payment of the principal of and interest, if any, on
this Note will be made at the office or agency of the Company maintained for
that purpose, initially designated to be the Corporate Trust Office of the
Trustee in Los Angeles, California, and at such additional offices or agencies
as the Company may designate, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that at the
option of the Company, payments of principal of and interest on this Note may
be made by check mailed to the address of the Person entitled thereto as such
address shall appear in the register of Securities or by wire transfer of
immediately available funds to the account of the Holder of this Note if
appropriate wire transfer instructions have been received in writing by the
Trustee not less than 15 days prior to the applicable payment date.  Notwithstanding the foregoing, the Company
will make payments of interest, if any, on any Interest Payment Date other than
the Maturity Date to each registered Holder of $10,000,000 (or, if the payment
currency is other than United States dollars, the equivalent thereof in the
particular payment currency) or more in aggregate principal amount of
definitive Notes (whether having identical or different terms and provisions)
by wire transfer of immediately available funds if the applicable registered
Holder has delivered appropriate wire transfer instructions in writing

 

 

to the Trustee not less
than 15 days prior to the particular Interest Payment Date.  Any wire transfer instructions received by
the Trustee shall remain in effect until revoked by the applicable registered
Holder.

 

Reference is
hereby made to the further provisions of this Note set forth below, which
further provisions shall for all purposes have the same effect as if set forth
at this place.

 

Unless the
certificate of authentication hereon has been executed by the Trustee or its
duly appointed co-authenticating agent by manual signature, this Note shall not
be entitled to any benefit under the Indenture or be valid or obligatory for
any purpose.

 

This Note is one
of a duly authorized issue of securities (herein called the “Securities”) of
the Company (which term includes any successor corporation under the Indenture
hereinafter referred to) issued and to be issued pursuant to such Indenture.
This Security is one of a series designated by the Company as its Medium-Term
Notes, Series D. The Indenture does not limit the aggregate principal
amount of the Securities.

 

The Company issued
this Note pursuant to an Indenture, dated as of September 24, 2001 (herein
called the “Indenture”), between the Company and Wells Fargo Bank, N.A., a
national banking association, as trustee (herein called the “Trustee,” which
term includes any successor trustee under the Indenture), to which Indenture
and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and Holders of the Notes and
of the terms upon which the Notes are, and are to be, authenticated and
delivered.

 

The Notes are
issuable as Registered Securities, without coupons, in denominations of $2,000
and any amount in excess thereof which is an integral multiple of $1,000. As
provided in the Indenture and subject to certain limitations therein set forth,
Notes are exchangeable for a like aggregate principal amount of Notes of like
tenor of any authorized denomination, as requested by the Holder surrendering
the same, upon surrender of the Note or Notes to be exchanged at any office or
agency described below where Notes may be presented for registration of
transfer.

 

The Company may
from time to time, without the consent of existing Note Holders, issue
additional Notes having the same terms and conditions (including maturity and
interest payment terms) as previously issued Notes in all respects, except for
issue date, issue price and the first payment of interest.  Additional Notes issued in this manner will
be fungible with the previously issued Notes to the extent specified in the
applicable Pricing Supplement.

 

This Note may not
be redeemed prior to the Earliest Redemption Date set forth above. If no
Earliest Redemption Date is so set forth, this Note is not redeemable prior to
the Maturity Date. This Note is redeemable at any time on or after the Earliest
Redemption Date set forth above at the option of the Company, in whole or from
time to time in part, upon not less than 30 nor more than 60 days’ notice
mailed to the registered Holder hereof, at the Redemption Price equal to the
amount set forth above, together in each case with accrued interest to but
excluding the Redemption Date.

 

Notwithstanding
the preceding paragraph, installments of interest whose Stated Maturity is
prior to the Redemption Date of any Note will be payable to the Holder of such
Note, or one or more Predecessor Securities, of record at the close of business
on the relevant Regular Record Dates referred to above, all as provided in the
Indenture.

 

In the event this Note is subject to payment of Additional Amounts (as
defined below) as specified above, the Company will, subject to certain exceptions and
limitations set forth below, pay to the Holder of hereof who is a United States
Alien, as additional interest, such amounts (“Additional Amounts”) as may be
necessary in order that every net payment on this Note (including payment of
the principal of and interest on such this Note) by the Company or a Paying
Agent, after deduction or withholding for or on account of any present or
future tax, assessment or other governmental charge imposed upon or as a result
of such payment by the United States (or any political subdivision or taxing
authority thereof or therein), will not be less than the amount provided in
this Note to

 

 

be then due and
payable; provided, however, that the foregoing obligation to pay Additional
Amounts will not apply to:

 

(a)           any
tax, assessment or other governmental charge that would not have been so
imposed but for (i) the existence of any present or former connection
between such Holder or beneficial owner of this Note (or between a fiduciary,
settlor or beneficiary of, or a person holding a power over, such Holder, if
such Holder is an estate or a trust, or a member or shareholder of such Holder,
if such Holder is a partnership or corporation) and the United States or any
political subdivision or taxing authority thereof or therein, including,
without limitation, such Holder (or such fiduciary, settlor, beneficiary,
person holding a power, member or shareholder) being or having been a citizen
or resident of the United States or treated as a resident thereof or being or
having been engaged in a trade or business or present therein or having or
having had a permanent establishment therein or (ii) such Holder’s or
beneficial owner’s past or present status, as applicable (under prior or
current law), as a personal holding company, foreign personal holding company,
foreign private foundation or other foreign tax-exempt organization with
respect to the United States, passive foreign investment company or controlled
foreign corporation for United States tax purposes or corporation that
accumulates earnings to avoid United States Federal income tax;

 

(b)           any
estate, inheritance, gift, excise, sales, transfer, wealth or personal property
tax or any similar tax, assessment or other governmental charge;

 

(c)           any
tax, assessment or other governmental charge that would not have been imposed
but for the presentation by the Holder of this Note for payment more than 10 days
after the date on which such payment became due and payable or the date on which
payment thereof was duly provided for, whichever occurred later;

 

(d)           any
tax, assessment or other governmental charge that is payable otherwise than by withholding
from a payment on this Note;

 

(e)           any
tax, assessment or other governmental charge required to be withheld by any
Paying Agent from a payment on this Note, if such payment could be made without
such withholding by any other Paying Agent;

 

(f)            any
tax, assessment or other governmental charge that would not have been imposed
but for a failure to comply with applicable certification, information,
documentation, identification or other reporting requirements concerning the
nationality, residence, identity or connection with the United States of the
Holder or beneficial owner of this Note if such compliance is required by
statute or regulation of the United States or by an applicable tax treaty to
which the United States is a party as a precondition to relief or exemption
from such tax, assessment or other governmental charge;

 

(g)           any
tax, assessment or other governmental charge imposed on a Holder that actually
or constructively owns 10 percent or more of the combined voting power of
all classes of the Company’s stock or that is a bank receiving interest on an
extension of credit made pursuant to a loan agreement entered into in the
ordinary course of its trade or business;

 

(h)           any
withholding or deduction imposed on a payment to an individual where such
withholding or deduction is required to be made pursuant to Council Directive
2003/48/EC or any other European Union Directive implementing the conclusions
of the ECOFIN Council meeting of 26th — 27th November, 2000 on the
taxation of savings income or any law implementing or complying with, or
introduced in order to conform to, such Directive; or

 

(i)            any
combination of items (a), (b), (c), (d), (e), (f), (g) and (h);

 

nor
shall Additional Amounts be paid with respect to a payment on this Note to a
Holder that is a fiduciary or partnership or other than the sole beneficial
owner of such payment to the extent a beneficiary or settlor with

 

 

respect
to such fiduciary or a member of such partnership or a beneficial owner would
not have been entitled to Additional Amounts (or payment of Additional Amounts
would not have been necessary) had such beneficiary, settlor, member or
beneficial owner been the Holder of this Note.

 

If (a) as a
result of any change in, or amendment to, the laws (or any regulations or
rulings promulgated thereunder) of the United States (or any political
subdivision or taxing authority thereof or therein), or any change in the
official application (including a ruling by a court of competent jurisdiction
in the United States) or interpretation of such laws, regulations or rulings,
which change or amendment is announced or becomes effective on or after the
Original Issue Date specified above, the Company becomes or will become
obligated to pay Additional Amounts as described above, or (b) any act is
taken by a taxing authority of the United States on or after the Original Issue
Date specified above, whether or not such act is taken with respect to the
Company or any affiliate, that results in a substantial likelihood that the
Company will or may be required to pay such Additional Amounts, then the
Company may, at its option, redeem, as a whole, but not in part, the Notes on
not less than 30 nor more than 60 days’ prior notice, at a redemption
price equal to 100% of the principal amount of such Notes, together with
interest accrued thereon to the date fixed for redemption; provided that the
Company determines, in its business judgment, that the obligation to pay such
Additional Amounts cannot be avoided by the use of reasonable measures
available to it, not including substitution of the obligor under the Notes or
any action that would entail a material cost to the Company. No redemption
pursuant to (b) above may be made unless the Company shall have received
an opinion of independent counsel to the effect that an act taken by a taxing
authority of the United States results in a substantial likelihood that it will
or may be required to pay Additional Amounts described above and the Company
shall have delivered to the Trustee a certificate, signed by a duly authorized
officer, stating that based on such opinion the Company is entitled to redeem
the Notes pursuant to their terms.

 

All notices of
redemption shall state the Redemption Date, the Redemption Price, if fewer than
all the outstanding Notes with the same Original Issue Date, Base Rate or Rates
and Stated Maturity are to be redeemed, the identification (and, in the case of
partial redemption, the principal amounts) of Notes to be redeemed, that on and
including the Redemption Date the Redemption Price will become due and payable
upon each Note, or portion thereof, to be redeemed, that interest on each Note,
or portion thereof, called for redemption will cease to accrue on the
Redemption Date and the place or places where Notes may be surrendered for
redemption. However, payment of the Redemption Price, together with accrued
interest to but excluding the Redemption Date, for a Note for which a
redemption notice has been delivered is conditioned upon delivery of such Note
(with, if the Company or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by, the Holder thereof or his attorney duly authorized in
writing) to the office or agency of the Company maintained for that purpose,
initially designated to be the Corporate Trust Office of the Trustee in Los
Angeles, California, and at such additional offices or agencies as the Company
may designate, at any time (whether prior to, on or after the Redemption Date)
after delivery of the redemption notice. 
Payment of the Redemption Price for the Note (or portion thereof to be
redeemed), together with accrued interest to the Redemption Date, will be made
on the later of the Redemption Date or promptly following the time of delivery
of the Note.  If fewer than all of the
Notes with the same Original Issue Date, Base Rate or Rates and Stated Maturity
are to be redeemed at any time, selection of such Notes for redemption will be
made by the Trustee by such method as the Trustee shall deem fair and
appropriate.

 

In the event of
redemption of this Note in part only, a new Note or Notes of like tenor for the
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Notes so surrendered will be issued in the name of the
Holder hereof upon the cancellation hereof.

 

For all purposes
of this Note and the Indenture, unless the context otherwise requires, all
provisions relating to the redemption by the Company of Notes shall relate, in
the case of any Notes redeemed or to be redeemed by the Company only in part,
to the portion of the principal amount of such Notes which has been or is to be
so redeemed.

 

Commencing with
the first Interest Reset Date specified above following the Original Issue
Date, the rate at which interest on this Note is payable shall be adjusted
daily, weekly, monthly, quarterly, semiannually

 

 

or annually as specified
above under “Interest Reset Period.” If any Interest Reset Date specified above
would otherwise be a day that is not a Business Day, such Interest Reset Date
shall be postponed to the next succeeding day that is a Business Day, except
that if the rate of interest on this Note shall be determined with reference to
the provisions under the heading “Determination of LIBOR” or “Determination of
EURIBOR” below, and such Business Day is in the next succeeding calendar month,
such Interest Reset Date shall be the last Business Day in the preceding month.
If any Interest Payment Date (other than an Interest Payment Date occurring on
the Maturity Date) specified above falls on a day that is not a Business Day,
such Interest Payment Date shall be the following day that is a Business Day,
except that if the rate of interest on the Note shall be determined with
reference to the provisions under the heading “Determination of LIBOR” or “Determination
of EURIBOR” below, and such Business Day is in the next succeeding calendar
month, such Interest Payment Date shall be the immediately preceding day that
is a Business Day. “Business Day” means any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which commercial banks are
authorized or required by law, regulation or executive order to close in The
City of New York; provided, however, that with
respect to Notes the payment of which is to be made in a denominated currency
other than U.S. dollars, such day is also not a day on which commercial banks
are authorized or required by law, regulation or executive order to close in
the Principal Financial Center of the country of such denominated currency; provided, however, that with respect to LIBOR Notes only,
such day is also a London Business Day; and provided, further,
that with respect to EURIBOR Notes and notes denominated in Euros only, such
day is also a TARGET Business Day. “London Business Day” means any day on which
commercial banks are open for business (including dealings in the LIBOR
currency) in London.  “TARGET Business
Day” means any day on which the Trans-European Automated Real-Time Gross
Settlement Express Transfer System is open.  “U.S. Government Securities Business Day”
means any day except for a Saturday, Sunday or a day on which the Bond Market
Association recommends that the fixed income departments of its members be
closed for the entire day for purposes of trading in U.S. government
securities.  “Principal Financial Center”
means, as applicable: (a) the capital
city of the country issuing the payment currency; or (b) the capital city
of the country to which the LIBOR currency relates; provided,
however, that with respect to United States dollars, Australian
dollars, Canadian dollars, euros, South African rand and Swiss francs, the “Principal
Financial Center” shall be The City of New York, Sydney, Toronto (solely in the
case of the payment currency), London (solely in the case of the LIBOR
currency), Johannesburg and Zurich, respectively. The interest rate
applicable to each Interest Reset Period commencing on the Interest Reset Date
or dates with respect to such Interest Reset Period will be the rate determined
on the applicable “Interest Determination Date” determined as specified below.
The rate of interest in effect with respect to this Note on each day that is
not an Interest Reset Date will be the interest rate determined as of the
Interest Determination Date pertaining to the immediately preceding Interest Reset
Date and the interest rate in effect on any day that is an Interest Reset Date
will be the interest rate determined as of the Interest Determination Date
pertaining to such Interest Reset Date, subject in either case to any
applicable provisions of law and any Maximum Interest Rate or Minimum Interest
Rate limitations specified above; provided, however, that
the interest rate in effect with respect to this Note for the period from the
Original Issue Date to the first Interest Reset Date will be the Initial
Interest Rate specified above.

 

In addition to any
Maximum Interest Rate specified above, the interest rate on this Note will in
no event be higher than the maximum rate permitted by New York law, as the same
may be modified by United States law of general application.

 

All percentages
resulting from any calculation on this Note will be rounded, if necessary, to
the nearest one hundred-thousandth of a percentage point, with five one-millionths
of a percentage point rounded upward, and all amounts used in or resulting from
such calculation on this Note will be rounded, in the case of United States
dollars, to the nearest cent, or in the case of a foreign currency, to the
nearest unit (with one-half cent or unit being rounded upward).

 

Determination
of Commercial Paper Rate.  If the Commercial Paper Rate is the Base Rate or one of the
Base Rates specified above, the interest rate payable with respect to this Note
shall be calculated by the Calculation Agent with reference to the Commercial
Paper Rate and the Spread or Spread Multiplier, if any, specified above, in
accordance with the following provisions:

 

 

“Commercial Paper
Rate” means, with respect to any Interest Determination Date specified below (a
“Commercial Paper Interest Determination Date”), the Money Market Yield (as
defined below) on such date of the rate for commercial paper having the Index
Maturity specified above as published in H.15(519), under the heading “Commercial
Paper-Nonfinancial.” In the event that such rate is not published by 3:00 P.M.,
New York City time, on the Calculation Date pertaining to such Commercial Paper
Interest Determination Date, then the Commercial Paper Rate will be the Money
Market Yield on such Commercial Paper Interest Determination Date of the rate
for commercial paper of the Index Maturity specified above as published in H.15
Daily Update, or such other recognized electronic source used for the purpose
of displaying the applicable rate, under the heading “Commercial
Paper-Nonfinancial.” If such rate is not published in either H.15(519) or H.15
Daily Update by 3:00 P.M., New York City time, on such Calculation Date,
then the Commercial Paper Rate will be calculated by the Calculation Agent and
will be the Money Market Yield of the arithmetic mean of the offered rates, as
of approximately 11:00 A.M., New York City time, on such Commercial Paper
Interest Determination Date, of three leading dealers of United States dollar
commercial paper in New York, New York (which may include one or more of the
Agents or their affiliates) selected by the Calculation Agent (after
consultation with the Company) for commercial paper of the Index Maturity
specified above placed for an industrial issuer whose bond rating is “AA,” or
the equivalent, from a nationally recognized statistical rating agency; provided, however, that if the dealers selected as aforesaid
by the Calculation Agent are not quoting offered rates as mentioned in this
sentence, the rate of interest in effect for the applicable period will be the
same as the interest rate in effect on such Commercial Paper Interest
Determination Date.

 

“Money Market
Yield” shall be a yield (expressed as a percentage) calculated in accordance
with the following formula:

 

	
  Money Market
  Yield =

  	
   D X 360

  360 - (D X M)

  	
  X 100

  
	
   

  

 

where “D” refers
to the applicable per annum rate for commercial paper quoted on a bank discount
basis and expressed as a decimal and “M” refers to the actual number of days in
the interest period for which interest is being calculated.

 

“H.15(519)” as used herein means the weekly
statistical release designated as H.15(519), or any successor publication,
published by the Board of Governors of the Federal Reserve System.

 

“H.15 Daily Update” as used herein means the
daily update of H.15(519), available through the world-wide-web site of the
Board of Governors of the Federal Reserve System at http:/www.federalreserve.gov/releases/h15/update/h15upd.htm,
or any successor site or publication.

 

Determination
of LIBOR.  If
LIBOR is the Base Rate or one of the Base Rates specified above, the interest
rate payable with respect to this Note shall be calculated by the Calculation
Agent with reference to LIBOR and the Spread or Spread Multiplier, if any,
specified above, in accordance with the following provisions:

 

With respect to a LIBOR Interest Determination Date, LIBOR will be the
rate for deposits in the Index Currency having the Index Maturity designated in
the applicable Pricing Supplement, commencing on the second London Business Day
immediately following that LIBOR Interest Determination Date, that appears on
the LIBOR Page (as defined below) as of 11:00 A.M., London time, on
that LIBOR Interest Determination Date.  “LIBOR
Page” means either, (a) the display on the page specified in the
applicable Pricing Supplement for the purpose of displaying the London
interbank rates of major banks for the Index Currency; or (b) if no such page is
specified in the applicable Pricing Supplement as the method for calculating
LIBOR, the display on Reuters (or any successor service) on the LIBOR 01 page (or
any other page as may replace such page on such service) for the
purpose of displaying the London interbank rates of major banks for the Index Currency.

 

 

If the rate
referred to in the paragraph above does not so appear, LIBOR will be determined
as of approximately 11:00 A.M., London time, on such LIBOR Interest
Determination Date on the basis of the rate at which deposits in the applicable
Index Currency having the Index Maturity specified above are offered by four
major reference banks (which may include affiliates of the Agents) in the
London interbank market selected by the Calculation Agent (after consultation
with the Company) commencing on the second London Business Day immediately
following such LIBOR Interest Determination Date and in a principal amount
equal to an amount that is representative for a single transaction in such
market at such time. The Calculation Agent will request the principal London
office of each of such banks to provide a quotation of its rate. If at least two
such quotations are provided, then LIBOR for such LIBOR Interest Determination
Date will be the arithmetic mean of such quotations. If fewer than two
quotations are provided, then LIBOR for such LIBOR Interest Determination Date
will be the arithmetic mean of the rates quoted as of approximately 11:00 A.M.
in the applicable Principal Financial Center (as defined above), on such LIBOR
Interest Determination Date by three major banks (which may include affiliates
of the Agents) in such Principal Financial Center selected by the Calculation
Agent (after consultation with the Company) for loans in the applicable Index
Currency to leading European banks having the specified Index Maturity, and in
a principal amount equal to an amount of not less than $1,000,000 (or the
equivalent in the Index Currency, if the Index Currency is not the U.S. dollar)
and that is representative for a single transaction in such market at such
time; provided, however, that if the banks
selected as aforesaid by the Calculation Agent are not quoting as mentioned in
this sentence, the rate of interest in effect for the applicable period will be
the same as the interest rate in effect on such LIBOR Interest Determination
Date.

 

“Index Currency”
means the index currency (including composite currencies) specified above as
the currency for which LIBOR shall be calculated.  If no such index currency is specified above,
the Index Currency shall be U.S. dollars.

 

Determination
of CD Rate.  If
the CD Rate is the Base Rate specified above, the interest rate payable with
respect to this Note shall be calculated by the Calculation Agent with
reference to the CD Rate and the Spread or Spread Multiplier, if any, specified
above, in accordance with the following provisions:

 

“CD Rate” means,
with respect to any Interest Determination Date specified below (a “CD Interest
Determination Date”), the rate on such date for negotiable certificates of
deposit having the Index Maturity designated above, as such rate is published
in H.15(519) under the caption “CDs (secondary market)” or, if not so published
by 3:00 P.M., New York City time, on the Calculation Date pertaining to
such CD Interest Determination Date, the CD Rate will be the rate on such CD
Interest Determination Date for negotiable certificates of deposit of the Index
Maturity as published in H.15 Daily Update, or such other recognized electronic
source used for the purpose of displaying the applicable rate, under the
caption “CDs (secondary market)”. If by 3:00 P.M., New York City time, on
the Calculation Date pertaining to such CD Interest Determination Date such
rate is not yet published in either H.15(519) or H.15 Daily Update, then the CD
Rate on such CD Interest Determination Date will be calculated by the
Calculation Agent and will be the arithmetic mean of the secondary market
offered rates as of 10:00 A.M., New York City time, on such CD Interest
Determination Date, of three leading non-bank dealers in negotiable U.S. dollar
certificates of deposit in The City of New York (which may include one or more
of the Agents or their affiliates) selected by the Calculation Agent (after
consultation with the Company) for negotiable certificates of deposit of major
United States money market banks for negotiable United States certificates of
deposit with a remaining maturity closest to the Index Maturity specified above
in an amount that is representative for a single transaction in that market at
that time; provided, however, that if the dealers
selected as aforesaid by the Calculation Agent are not quoting offered rates as
set forth above, the rate of interest in effect for the applicable period will
be the same as the interest rate in effect on such CD Interest Determination
Date.

 

Determination
of Federal Funds Rate.  If the Federal Funds Rate is the Base Rate specified above,
the interest rate payable with respect to this Note shall be calculated by the
Calculation Agent with reference to the Federal Funds Rate and the Spread or
Spread Multiplier, if any, specified above, in accordance with the following
provisions:

 

 

“Federal Funds Rate” means, with respect to any Federal Funds Interest
Determination Date, the rate on such date for Federal Funds as published in
H.15(519) under the heading “Federal Funds (Effective)” and displayed on
Reuters (or any successor service) on page FEDFUNDS 1 (or any other page as
may replace the specified page on that service) (“FEDFUNDS 1 Page”) or, if
the rate does not so appear on FEDFUNDS 1 Page or is not so published by
3:00 P.M., New York City time, on the Calculation Date pertaining to such
Federal Funds Interest Determination Date, the Federal Funds Rate will be the
rate on such Federal Funds Interest Determination Date for United States dollar
federal funds as published in H.15 Daily Update, or such other recognized electronic
source used for the purpose of displaying the applicable rate, under the
caption “Federal Funds (Effective)”.  If,
by 3:00 P.M., New York City time, on the Calculation Date pertaining to
such Federal Funds Interest Determination Date such rate referenced above is
not yet published,
the Federal Funds Rate for such Federal Funds Interest Determination Date will
be calculated by the Calculation Agent and 

will be the
arithmetic mean of the rates for the last transaction in overnight United
States dollars Federal Funds arranged by three leading brokers of Federal Funds
transactions in The City of New York (which may include one or more of the
Agents or their affiliates), which brokers have been selected by the
Calculation Agent (after consultation with the Company), as of 9:00 A.M.,
New York City time, on such Federal Funds Interest Determination Date; provided, however, that, if the brokers selected as
aforesaid by the Calculation Agent are not quoting rates as set forth above,
the rate of interest in effect for the applicable period will be the same as
the interest rate in effect on such Federal Funds Interest Determination Date.

 

Determination
of Treasury Rate.  If
the Treasury Rate is the Base Rate specified above, the interest rate payable
with respect to this Note shall be calculated by the Calculation Agent with
reference to the Treasury Rate and the Spread or Spread Multiplier, if any,
specified above, in accordance with the following provisions:

 

“Treasury Rate” means, with respect to any Treasury Rate Interest
Determination Date, the rate from the auction held on the Treasury Rate
Interest Determination Date (the “Auction”) of direct obligations of the United
States (“Treasury Bills”) having the Index Maturity specified in the applicable
Pricing Supplement under the caption “INVEST RATE” on the display on Reuters
(or any successor service) on page USAUCTION 10 (or any other page as
may replace that page on that service) (“USAUCION 10 Page”) or page USAUCTION
11 (or any other page as may replace that page on that service) (“USAUCTION
11 Page”) or, if not published by 3:00 P.M., New York City time, on the Calculation Date pertaining to
such Treasury Rate Interest Determination Date, the Bond Equivalent Yield (as defined below) of the rate for the applicable
Treasury Bills as published in H.15 Daily Update, or another recognized
electronic source used for the purpose of displaying the applicable rate, under
the caption “U.S. Government Securities/Treasury Bills/Auction High”. If the
rate referred to in the preceding sentence is not so published by 3:00 P.M.,
New York City time, on the related Calculation Date, the Treasury Rate for that
Treasury Rate Interest Determination Date will be the Bond Equivalent Yield of
the auction rate of the applicable Treasury Bills as announced by the United
States Department of the Treasury. If the rate referred to in the preceding
sentence is not so announced by the United States Department of the Treasury,
or if the Auction is not held, the Treasury Rate for that Treasury Rate
Interest Determination Date will be the Bond Equivalent Yield of the rate on
that Treasury Rate Interest Determination Date of the applicable Treasury Bills
as published in H.15(519) under the caption “U.S. Government
Securities/Treasury Bills/Secondary Market”. If the rate referred to in the
preceding sentence is not so published by 3:00 P.M., New York City time,
on the related Calculation Date, the Treasury Rate for that Treasury Rate
Interest Determination Date will be the rate on that Treasury Rate Interest
Determination Date of the applicable Treasury Bills as published in H.15 Daily
Update, or another recognized electronic source used for the purpose of
displaying the applicable rate, under the caption “U.S. Government
Securities/Treasury Bills/Secondary Market”. 
If the rate referred to in the preceding sentence is not so published by
3:00 P.M., New York City time, on the related Calculation Date, the
Treasury Rate for that Treasury Rate Interest Determination Date will be the
rate on that Treasury Rate Interest Determination Date calculated by the
Calculation Agent as the Bond Equivalent Yield of the arithmetic mean of
the secondary market bid rates, as of approximately 3:30 P.M., New York
City time, on such Treasury Rate Interest Determination Date, of three leading
primary United States government securities dealers (which may include one or
more of the Agents or their affiliates) selected

 

 

by the Calculation Agent
(after consultation with the Company), for the issue of Treasury Bills with a
remaining maturity closest to the Index Maturity specified above; provided, however, that if the dealers selected as aforesaid
by the Calculation Agent are not quoting as set forth in this sentence, the
rate of interest in effect for the applicable period will be the same as the
interest rate in effect on such Treasury Rate Interest Determination Date.

 

“Bond Equivalent Yield” means a yield (expressed as a percentage)
calculated in accordance with the following formula:

 

	
   

  	
   

  	
  D X N

  	
   

  	
   

  
	
  Bond Equivalent Yield

  	
  =

  	
  —————————

  	
  X

  	
  100

  
	
   

  	
   

  	
  360 - (D X M)

  	
   

  	
   

  

 

where “D” refers to the applicable per annum rate for Treasury Bills
quoted on a bank discount basis and expressed as a decimal, “N” refers to 365
or 366, as the case may be, and “M” refers to the actual number of days in the
applicable Interest Reset Period.

 

Determination
of Prime Rate.  If
the Prime Rate is the Base Rate or one of the Base Rates specified above, the
interest rate payable with respect to this Note shall be calculated by the
Calculation Agent with reference to the Prime Rate and the Spread or Spread
Multiplier, if any, specified above, in accordance with the following
provisions:

 

“Prime Rate”
means, with respect to any Interest Determination Date specified below (a “Prime
Rate Interest Determination Date”), the rate published in H.15(519) for such
date under the caption “Bank Prime Loan” or, if not so published by 3:00 P.M.,
New York City time, on the Calculation Date pertaining to that Prime Rate
Interest Determination Date, the rate on that Prime Rate Interest Determination
Date as published in H.15 Daily Update or such other recognized electronic
source used for the purpose of displaying the applicable rate, under the
caption “Bank Prime Loan”.  If neither
rate is so published by 3:00 P.M., New York City time, on the Calculation
Date, the Prime Rate for such Prime Rate Interest Determination Date will be
calculated by the Calculation Agent as the arithmetic mean of the prime rates
quoted on the basis of the actual number of days in the year divided by 360 as
of the close of business on such Prime Rate Interest Determination Date by
three major banks (which may include one or more of the Agents or their
affiliates) in The City of New York selected by the Calculation Agent (after
consultation with the Company). If the banks selected
by the Calculation Agent are not quoting as mentioned in the preceding
sentence, the “Prime Rate” for the Interest Reset Period will be the same as
the Prime Rate for the immediately preceding Interest Reset Period (or, if there
was no such Interest Reset Period, the rate of interest payable on the Prime
Rate notes for which the Prime Rate is being determined shall be the Initial
Interest Rate).

 

Determination
of CMT Rate.  If CMT Rate is the Base Rate or one of the
Base Rates specified above, the interest rate payable with respect to this Note
shall be calculated by the Calculation Agent with reference to the CMT Rate and
the Spread or Spread Multiplier, if any, specified above, in accordance with
the following provisions:

 

“CMT Rate” means, with respect to any Interest Determination Date
specified below (a “CMT Interest Determination Date”) relating to a CMT Rate
Note or any Floating Rate Note for which the interest rate is determined with
reference to the CMT Rate, if Reuters T7051
Page is specified above:

 

(a)           the
percentage equal to the yield for United States Treasury securities at “constant
maturity” having the Index Maturity specified above as published in
H.15(519) under the caption “Treasury Constant Maturities”, as the yield
is displayed on Reuters (or any successor service) on page FRBCMT (or any
other page as may replace the specified page on that service) (“T7051
Page”) for that CMT Interest

 

 

Determination Date, or

 

(b)           if the rate referred to in clause (a) does not so appear on
the T7051 Page, the percentage equal to the yield for United States
Treasury securities at “constant maturity” having the particular index maturity
and for that CMT Interest Determination Date as published in
H.15(519) under the caption “Treasury Constant Maturities”, or

 

(c)           if
the rate referred to in clause (b) does not so appear in H.15(519),
the rate on that CMT Interest Determination Date for the period of the
particular Index Maturity as may then be published by either the Federal Reserve
System Board of Governors or the United States Department of the Treasury that
the Calculation Agent determines to be comparable to the rate which would
otherwise have been published in H.15(519), or

 

(d)           if
the rate referred to in clause (c) is not so published, the rate on
that CMT Interest Determination Date calculated by the Calculation Agent as a
yield to maturity based on the arithmetic mean of the secondary market bid
prices at approximately 3:30 P.M., New York City time, on that CMT
Interest Determination Date of three leading primary United States government
securities dealers in The City of New York (which may include one or more of
the Agents or their affiliates) (each, a “Reference Dealer”), selected by the
Calculation Agent from five Reference Dealers selected by the Calculation Agent
and eliminating the highest quotation, or, in the event of equality, one of the
highest, and the lowest quotation or, in the event of equality, one of the
lowest, for United States Treasury securities with an original maturity equal
to the particular Index Maturity, a remaining term to maturity no more than one year
shorter than that Index Maturity and in a principal amount that is
representative for a single transaction in the securities in that market at
that time, or

 

(e)           if
fewer than five but more than two of the prices referred to in clause (d) are
provided as requested, the rate on that CMT Interest Determination Date
calculated by the Calculation Agent based on the arithmetic mean of the bid
prices obtained and neither the highest nor the lowest of the quotations shall
be eliminated, or

 

(f)            if
fewer than three prices referred to in clause (d) are provided as
requested, the rate on that CMT Interest Determination Date calculated by the
Calculation Agent as a yield to maturity based on the arithmetic mean of the
secondary market bid prices as of approximately 3:30 P.M., New York City
time, on that CMT Interest Determination Date of three Reference Dealers
selected by the Calculation Agent from five Reference Dealers selected by the
Calculation Agent and eliminating the highest quotation or, in the event of
equality, one of the highest and the lowest quotation or, in the event of
equality, one of the lowest, for United States Treasury securities with an
original maturity closest to the particular Index Maturity, a remaining term to
maturity closest to that Index Maturity and in a principal amount that is
representative for a single transaction in the securities in that market at
that time, or

 

(g)           if
fewer than five but more than two prices referred to in clause (f) are
provided as requested, the rate on that CMT Interest Determination Date
calculated by the Calculation Agent based on the arithmetic mean of the bid
prices obtained and neither the highest nor the lowest of the quotations will
be eliminated, or

 

(h)           if
fewer than three prices referred to in clause (f) are provided as
requested, the CMT Rate in effect on that CMT Interest Determination Date;

 

if
Reuters T7052 Page is specified above:

 

(a)           the
percentage equal to the one-week average yield for United States Treasury
securities at “constant maturity” having the Index Maturity specified above as
published in H.15(519) opposite the caption “Treasury Constant Maturities”,
as the yield is displayed on Reuters (or any
successor service) on page FEDCMT (or any other page that may replace
the specified page on that service) (“T7052 Page”), for the week

 

 

ended immediately preceding the week in which that CMT Interest
Determination Date falls, or

 

(b)           if
the rate referred to in clause (a) does not so appear on T7052 Page,
the percentage equal to the one-week average yield for United States Treasury
securities at “constant maturity” having the particular Index Maturity and for
the week preceding that CMT Interest Determination Date as published in
H.15(519) opposite the caption “Treasury Constant Maturities,” or

 

(c)           if
the rate referred to in clause (b) does not so appear in H.15(519),
the one-week average yield for United States Treasury securities at “constant maturity”
having the particular Index Maturity as otherwise announced by the Federal
Reserve Bank of New York for the week ended immediately preceding the week in
which that CMT Interest Determination Date falls, or

 

(d)           if
the rate referred to in clause (c) is not so published, the rate on
that CMT Interest Determination Date calculated by the Calculation Agent as a
yield to maturity based on the arithmetic mean of the secondary market bid
prices at approximately 3:30 P.M., New York City time, on that CMT Interest
Determination Date of three Reference Dealers selected by the Calculation Agent
from five Reference Dealers selected by the Calculation Agent and eliminating
the highest quotation, or, in the event of equality, one of the highest, and
the lowest quotation or, in the event of equality, one of the lowest, for
United States Treasury securities with an original maturity equal to the
particular Index Maturity, a remaining term to maturity no more than one year
shorter than that Index Maturity and in a principal amount that is
representative for a single transaction in the securities in that market at
that time, or

 

(e)           if
fewer than five but more than two of the prices referred to in clause (d) are
provided as requested, the rate on that CMT Interest Determination Date
calculated by the Calculation Agent based on the arithmetic mean of the bid
prices obtained and neither the highest nor the lowest of the quotations shall
be eliminated, or

 

(f)            if
fewer than three prices referred to in clause (d) are provided as
requested, the rate on that CMT Interest Determination Date calculated by the
Calculation Agent as a yield to maturity based on the arithmetic mean of the
secondary market bid prices as of approximately 3:30 P.M., New York City
time, on that CMT Interest Determination Date of three Reference Dealers
selected by the Calculation Agent from five Reference Dealers selected by the
Calculation Agent and eliminating the highest quotation or, in the event of
equality, one of the highest and the lowest quotation or, in the event of
equality, one of the lowest, for United States Treasury securities with an
original maturity greater than the particular Index Maturity, a remaining term
to maturity closest to that Index Maturity and in a principal amount that is representative
for a single transaction in the securities in that market at the time, or

 

(g)           if
fewer than five but more than two prices referred to in clause (f) are
provided as requested, the rate on that CMT Interest Determination Date
calculated by the Calculation Agent based on the arithmetic mean of the bid
prices obtained and neither the highest or the lowest of the quotations will be
eliminated, or

 

(h)           if
fewer than three prices referred to in clause (f) are provided as
requested, the CMT Rate in effect on that CMT Interest Determination Date.

 

If two United States Treasury securities with an original maturity
greater than the Index Maturity specified above have remaining terms to
maturity equally close to the particular Index Maturity, the quotes for the
United States Treasury security with the shorter original remaining term to
maturity will be used.

 

Determination
of J.J. Kenny Rate.
If the J.J. Kenny Rate is the Base Rate or
one of the Base Rates specified above, the interest rate payable with respect
to this Note shall be calculated by the Calculation Agent with reference to the
J.J. Kenny Rate and the Spread or Spread Multiplier, if any, specified above,
in accordance with the following provisions:

 

“J.J. Kenny Rate”
means, with respect to any Interest Determination Date specified below (a “J.J.
Kenny Rate Interest Determination Date”), the per annum rate on the date equal
to the index

 

 

made available and
subsequently published by Kenny Information Systems or its successor. The rate
will be based upon 30-day yield evaluations at par of bonds of not less than
five “high grade” component issuers. The bonds evaluated will be bonds on which
the interest is excludable from gross income for federal income tax purposes
under the Internal Revenue Code of 1986, as amended (the “Code”). Kenny
Information Systems will select such issuers from time to time, including
issuers of general obligation bonds. However, the bonds on which the index is
based will not include any bonds the interest on which may trigger an “alternative
minimum tax” or similar tax under the Code, unless such tax may be imposed on
all tax-exempt bonds. If such rate is not
made available by 3:00 P.M., New York City time, on the Calculation Date
pertaining to that J.J. Kenny Interest Determination Date, the J.J. Kenny Rate
will be the rate quoted by a successor indexing agent selected by the
Calculation Agent (after consultation with Disney). This rate will be equal to
the prevailing rate for bonds included in the highest short-term rating category
by Moody’s Investors Service, Inc. and Standard & Poor’s
Corporation for issuers selected by such successor indexing agent most closely
resembling the “high grade” component issuers selected by Kenny Information
Systems. The bonds for which rates are quoted will be bonds that may be
tendered by their holders for purchase on not more than seven days’ notice and
the interest on which: is variable on a weekly basis; is excludable from gross
income for federal income tax purposes under the Code; and does not give rise
to an “alternate minimum tax” or similar tax under the Code, unless all tax-exempt
bonds give rise to such a tax. If a successor indexing agent is not available,
the J.J. Kenny Rate on the J.J. Kenny Interest Determination Date will be the J.J.
Kenny Rate for the immediately preceding Interest Reset Period. If there was no
such Interest Reset Period, the J.J. Kenny Rate will be the Initial Interest
Rate.

 

Determination of Eleventh District Cost of Funds Rate.  If the Eleventh District Cost of Funds Rate
is the Base Rate or one of the Base Rates specified above, the interest rate
payable with respect to this Note shall be calculated by the Calculation Agent
with reference to the Eleventh District Cost of Funds Rate and the Spread or
Spread Multiplier, if any, specified above, in accordance with the following
provisions:

 

“Eleventh District Cost of Funds Rate” means, with
respect to any Interest Determination Date specified below (an “Eleventh
District Cost of Funds Interest Determination Date”), the rate equal to the
monthly weighted average cost of funds for the calendar month immediately
preceding the month in which the Eleventh District Cost of Funds Interest
Determination Date falls as set forth under the caption “11th Dist
COFI” on the display on Reuters (or any successor service) on page COFI/ARMS
(or any other page as may replace the specified page on that service)
(“COFI/ARMS Page”) as of 11:00 A.M., San Francisco time, on the Eleventh
District Cost of Funds Interest Determination Date. If such rate does not
appear on the COFI/ARMS Page on any related Eleventh District Cost of
Funds Interest Determination Date, the Eleventh District Cost of Funds Rate for
the Eleventh District Cost of Funds Interest Determination Date will be the
Eleventh District Cost of Funds Rate Index. If the FHLB of San Francisco fails
to announce the rate for the calendar month next preceding the Eleventh
District Cost of Funds Interest Determination Date, then the Eleventh District
Cost of Funds Rate for that date will be the Eleventh District Cost of Funds
Rate in effect on that Eleventh District Cost of Funds Interest Determination
Date.

 

The “Eleventh District Cost of Funds Rate Index”
will be the monthly weighted average cost of funds paid by member institutions
of the Eleventh Federal Home Loan Bank District that the FHLB of San Francisco
most recently announced as the cost of funds for the calendar month immediately
preceding the Eleventh District Cost of Funds Interest Determination Date.

 

Determination of EURIBOR.  If EURIBOR is the
Base Rate or one of the Base Rates specified above, the interest rate payable
with respect to this Note shall be calculated by the Calculation Agent with
reference to EURIBOR and the Spread or Spread Multiplier, if any, specified above,
in accordance with the following provisions:

 

“EURIBOR” means,
with respect to any Interest Determination Date specified below (a “EURIBOR
Interest Determination Date”), the offered
rates for deposits in Euros for the period of the Index Maturity

 

 

specified above, commencing on the Interest Reset Date, which appears
on Reuters on page EURIBOR 01, or any successor service or any page that
may replace page EURIBOR 01 on that service, which is commonly referred to
as “Reuters Page EURIBOR 01” as of 11:00 A.M., Brussels time, on that
date.  If EURIBOR cannot be determined on
a EURIBOR Interest Determination Date as described in the preceding sentence,
then the Calculation Agent will select four major banks in the Euro-zone
interbank market and request that the principal Euro-zone offices of those four
selected banks provide their offered quotations to prime banks in the Euro-zone
interbank market at approximately 11:00 A.M., Brussels time, on the
EURIBOR Determination Date. These quotations shall be for deposits in Euros for
the period of the specified Index Maturity, commencing on such Interest Reset
Date. Offered quotations must be based on a principal amount equal to at least
$1,000,000 or the approximate equivalent in Euros that is representative of a single
transaction in such market at such time. If two or more quotations are
provided, EURIBOR for the Interest Reset Period will be the arithmetic mean of
the quotations. If fewer than two quotations are provided, the Calculation
Agent will select four major banks in the Euro-zone and then determine EURIBOR
for the Interest Reset Period as the arithmetic mean of rates quoted by those
four major banks in the Euro-zone to leading European banks at approximately
11:00 A.M., Brussels time, on the EURIBOR Determination Date. The rates
quoted will be for loans in Euros, for the period of the specified Index
Maturity, commencing on the Interest Reset Date. Rates quoted must be based on
a principal amount of at least $1,000,000 or the approximate equivalent in Euros
that is representative of a single transaction in such market at such
time.  If the banks so selected by the
Calculation Agent are not quoting rates as described above, EURIBOR for the
Interest Reset Period will be the same for the immediately preceding Interest
Reset Period. If there was no such Interest Reset Period, EURIBOR will be the
Initial Interest Rate.

 

“Euro-zone” means the region comprised of member states of the European
Union that adopt the single currency in accordance with the Treaty establishing
the European Community, as amended by the Treaty on European Union.

 

Renewable
Notes.  If this Note is designated as a Renewable
Note above (a “Renewable Note”), the following provisions will apply:

 

A Renewable Note
will bear interest at the Base Rate specified above and the interest rate
payable with respect to a Renewable Note shall be calculated by the Calculation
Agent with reference to the specified Base Rate or Base Rates and the Spread or
Spread Multiplier, if any, specified above.

 

A Renewable Note
will mature on an Interest Payment Date as specified above (the “Initial
Maturity Date”), unless the maturity of all or any portion of the principal
amount hereof is extended in accordance with the procedures described
below.  On the Interest Payment Dates
specified above (each such Interest Payment Date, an “Election Date”), the
maturity of a Renewable Note will be extended to the Interest Payment Date
occurring twelve months after such Election Date, unless the Holder hereof
elects to terminate the automatic extension of the maturity of a Renewable Note
or of any portion hereof having a principal amount of $1,000 or any multiple of
$1,000 in excess thereof by delivering a notice of such effect to the Trustee
not less than nor more than a number of days to be specified in the Pricing
Supplement prior to such Election Date. 
If no notice period is specified in the Pricing Supplement, such notice
shall be given no less than 30 days and no more than 60 days prior to such
Election Date.  Such option may be
exercised with respect to less than the entire principal amount of a Renewable
Note; provided that the principal amount for which such option is not exercised
is at least $1,000 or any larger amount that is an integral multiple of $1,000.  Notwithstanding the foregoing, the maturity
of a Renewable Note may not be extended beyond the Final Maturity Date
specified above (the “Final Maturity Date”). 
If the Holder hereof elects to terminate the automatic extension of the
maturity of any portion of the principal amount of a Renewable Note and such
election is not revoked as described below, such portion will become due and
payable on the Interest Payment Date falling six months (unless another period
is specified in the Pricing Supplement) after the Election Date prior to which
the Holder made such election.

 

 

An election to
terminate the automatic extension of maturity may be revoked as to any portion
of a Renewable Note having a principal amount of $1,000 or any multiple of
$1,000 in excess thereof by delivering a notice to such effect to the Trustee
on any day following the effective date of the election to terminate the
automatic extension of maturity and prior to the date 15 days before the date
on which such portion would otherwise mature. 
Such a revocation may be made for less than the entire principal amount
of a Renewable Note for which the automatic extension of maturity has been
terminated; provided that the principal amount of a Renewable Note for which
the automatic extension of maturity has been terminated and for which such a
revocation has not been made is at least $1,000 or any larger amount that is an
integral multiple of $1,000. Notwithstanding the foregoing, a revocation may
not be made during the period from and including a Record Date to but excluding
the immediately succeeding Interest Payment Date.

 

An election to
terminate the automatic extension of the maturity of a Renewable Note, if not
revoked as described above by the Holder hereof making the election or any
subsequent Holder, will be binding upon such subsequent Holder.

 

A Renewable Note
may be redeemed in whole or in part at the option of the Company on the
Interest Payment Dates in each year specified above, commencing with the
Interest Payment Date specified above, at a redemption price as stated above,
together with accrued and unpaid interest to the date of redemption.  Notwithstanding anything to the contrary
herein, notice of redemption will be provided by mailing a notice of such redemption
to each Holder by first class mail, postage prepaid, at least 180 days (unless
otherwise specified in the Pricing Supplement) prior to the date fixed for
redemption.

 

Applicable
Interest Determination Date and Calculation Date. 
The interest rate applicable to each Interest Reset Period commencing on
the Interest Reset Date or Dates with respect to such Interest Reset Period
will be the rate determined on the applicable “Interest Determination Date.”
The Commercial Paper Interest Determination Date, the Federal Funds Interest
Determination Date and the Prime Rate Interest Determination Date will be the
Business Day preceding each Interest Reset Date.  The CD Interest Determination Date and the
J.J. Kenny Interest Determination Date will be the second Business Day
preceding such Interest Reset Date. The LIBOR Interest Determination Date will
be the second London Business Day preceding such Interest Reset Date. The
EURIBOR Interest Determination Date will be the second TARGET Business Day
preceding such Interest Reset Date.  The
Eleventh District Cost of Funds Interest Determination Date will be the last
working day of the month immediately preceding each Interest Reset Date on
which the Federal Home Loan Bank of San Francisco publishes the Eleventh
District Cost of Funds Index.  The CMT
Interest Determination Date will be the second U.S. Government Securities
Business Day preceding each such Interest Reset Date. The Treasury Rate
Interest Determination Date will be the day in the week in which the Interest
Reset Date falls on which day Treasury Bills would normally be auctioned or, if
no such auction is held for a particular week, the first Business Day of that
week; provided, however, that if, as a result
of a legal holiday, an auction is held on the Friday of the week preceding the
Interest Reset Date, the related Interest Determination Date shall be such
preceding Friday; and provided, further, that
if an auction shall fall on any Interest Reset Date, then the Interest Reset
Date shall instead be the first Business Day immediately following such
auction. The Interest Determination Date pertaining to a Note the interest rate
of which is determined with reference to two or more Base Rates will be the
latest Business Day which is at least two Business Days prior to such Interest
Reset Date for such a Note on which each Base Rate shall be determinable. Each
Base Rate shall be determined and compared on such date, and the applicable
interest rate shall take effect on the related Interest Reset Date.

 

The “Calculation
Date,” if applicable, pertaining to any Interest Determination Date, shall be
the earlier of (a) the tenth calendar day after such Interest
Determination Date, or, if any such day is not a Business Day, the next
succeeding Business Day and (b) the Business Day preceding the applicable
Interest Payment Date or Maturity Date, as the case may be. The Trustee will,
upon the request of the Holder of this Note, provide to such Holder the
interest rate hereon then in effect and, if determined, the interest rate that
will become effective as a result of the determination made for the next
Interest Reset Date.

 

 

The Calculation
Agent shall calculate the interest rate on this Note in accordance with the
foregoing rate or rates on or before each Calculation Date and shall promptly
thereafter notify the Company of such interest rate. Any such calculation by
the Calculation Agent shall be conclusive and binding on the Company, the
Trustee and the Holder of this Note, absent manifest error.

 

Interest payments
for this Note will include interest accrued to but excluding the Interest
Payment Date. Accrued interest hereon from the Original Issue Date or from the
last date to which interest hereon has been paid or duly provided for, as the
case may be, shall be an amount calculated by multiplying the face amount
hereof by an accrued interest factor. Such accrued interest factor shall be
computed by adding the interest factor calculated for each day from the
Original Issue Date or from the last date to which interest shall have been
paid or duly provided for, to the date for which accrued interest is being
calculated. The interest factor for each such day shall be computed by dividing
the interest rate applicable to such day by 360, in the case of the Commercial
Paper Rate, LIBOR, CD Rate, Federal Funds Rate, Prime Rate, J.J. Kenny Rate,
Eleventh District Cost of Funds Rate and EURIBOR and by the actual number of
days in the year, in the case of the Treasury Rate and CMT Rate. Unless
otherwise specified above, if the interest rate for this Note is calculated with
reference to two or more Base Rates, the interest factor for this Note will be
calculated in each period in the same manner as if only the lowest of the
applicable Base Rates applied.

 

If an Event of
Default with respect to the Notes shall occur and be continuing, the principal
of the Notes may be declared due and payable in the manner and with the effect
provided in the Indenture.

 

The Indenture
permits, in certain circumstances therein specified, the amendment thereof
without the consent of the Holders of the Securities. The Indenture also
permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations under the Indenture of the
Company and the rights of Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with
the consent of the Holders of a majority in aggregate principal amount of the
Securities at the time Outstanding of each series to be affected. The Indenture
also contains provisions permitting the Holders of a majority in aggregate
principal amount of the Securities of each series at the time Outstanding, on
behalf of the Holders of all the Securities of such series, to waive compliance
by the Company with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of
this Note shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of
such consent or waiver is made upon this Note.

 

No reference
herein to the Indenture and no provision of this Note or, subject to the
provisions for satisfaction and discharge in Article Eight of the
Indenture, of the Indenture, shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on this Note at the times, place and rate, and in the coin or
currency, herein prescribed.

 

As provided in the
Indenture and subject to certain limitations therein set forth, the transfer of
Notes is registrable in the register of Securities, upon surrender of a Note
for registration of transfer at the office or agency of the Company maintained
for that purpose, initially designated to be the Corporate Trust Office of the
Trustee in Los Angeles, California, and at such additional offices or agencies
as the Company may designate, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Registrar
duly executed by, the Holder hereof or his attorney duly authorized in writing,
and thereupon one or more new Notes of like tenor, of authorized denominations
and for the same aggregate principal amount, will be issued to the designated
transferee or transferees.

 

No service charge
shall be made by the Company, the Trustee or the Registrar for any such
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith (other than exchanges pursuant to Sections 2.11, 3.6,
9.5 or 10.3 of the Indenture, not involving any transfer).

 

 

Prior to due
presentment of this Note for registration of transfer, the Company, the Trustee
and any agent of the Company or the Trustee may treat the Person in whose name
this Note is registered as the owner hereof for all purposes, whether or not
this Note be overdue, and neither the Company, the Trustee nor any such agent
shall be affected by notice to the contrary.

 

The Indenture and
the Notes shall be governed by and construed in accordance with the laws of the
State of New York, including without limitation, §§ 5-1401 and 5-1402 of
the New York General Obligations Law and New York Civil Practice Law Rule 327(b).

 

All undefined
terms used in this Note which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.

 

 

IN WITNESS
WHEREOF, The Walt Disney Company has caused this Instrument to be signed by the
signature or facsimile signature of its Chairman of the Board, one of its Vice
Chairmen, its President or one of its Vice Presidents, or its Treasurer or any
Assistant Treasurer and attested by its Secretary or one of its Assistant
Secretaries by his or her signature or a facsimile thereof, and its corporate
seal or a facsimile of its corporate seal to be affixed hereunto or imprinted
hereon.

 

	
  (SEAL)

  	
  THE
  WALT DISNEY COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Christine M.
  McCarthy

  
	
   

  	
  Title:

  	
  Executive Vice
  President-Corporate Finance

    and Real Estate and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
  Attest:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  Marsha L. Reed

  	
   

  
	
  Title:

  	
  Vice
  President-Governance Administration and

  Assistant Secretary

  	
   

  
							

 

 

ABBREVIATIONS

 

The following
abbreviations, when used in the inscription on the face of this instrument,
shall be construed as though they were written out in full according to
applicable laws or regulations:

 

	
  TEN COM v

  	
  as tenants in
  common

  	
   

  	
  UNIF GIFT MIN
  ACT        Custodian
              
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Cust.)

  	
  (Minor)

  
	
  TEN ENT v 

  	
  as tenants by
  the entireties

  	
   

  	
   

  
	
   

  	
   

  	
  Under Uniform
  Gifts to Minors Act

  
	
  JT TEN v 

  	
  as joint tenants
  with right of survivorship and not as 

  	
   

  	
   

  	
   

  
	
   

  	
  tenants in
  common

  	
   

  	
  (State)

  	
   

  
							

 

Additional
abbreviations may also be used though not in the above list.

 

 

FOR VALUE
RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto

 

Please Insert
Social Security or Employer

Identification
Number of Assignee

 

 

 

 

Please Print or
Typewrite Name and Address

Including Postal
Zip Code of Assignee

 

 

the within
Security and all rights thereunder, hereby irrevocably constituting and
appointing                                                                                                             attorney
to transfer said Security on the books of the Company, with full power of
substitution in the premises.

 

 

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  

 

NOTICE:                                                The signature to this assignment must
correspond with the name as it appears upon the face of the within Note in
every particular, without alteration or enlargement or any change whatever.

 

 

Exhibit “D”

 

	
  REGISTERED

  	
   

  	
  REGISTERED

  

 

	
  NO.

  	
   

  	
  MEDIUM-TERM NOTE, SERIES D

  (Zero Coupon)

  	
   

  	
  PRINCIPAL
  AMOUNT:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  CUSIP:

  

 

Unless and until
it is exchanged in whole or in part for Notes in definitive form, this Note may
not be transferred except as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. Unless this
certificate is presented by an authorized representative of The Depository
Trust Company, New York, New York (“DTC”), to the issuer or its agent for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or such other name as requested
by an authorized representative of DTC and any payment is made to Cede &
Co. or such other entity as requested by an authorized representative of DTC, ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL since the registered owner hereof, Cede & Co., has an
interest herein.

 

	
  ORIGINAL ISSUE
  DATE:

  	
   

  	
  ORIGINAL ISSUE
  PRICE:

  
	
  MATURITY DATE:

  	
   

  	
  ORIGINAL ISSUE
  DISCOUNT:

  
	
   

  	
   

  	
  YIELD TO
  MATURITY:

  

 

 

Date:

 

TRUSTEE’S
CERTIFICATE OF AUTHENTICATION

 

This is one of the
Notes of the series designated herein referred to in the within-mentioned
Indenture.

 

WELLS
FARGO BANK, N.A., as
Trustee

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized
  Signatory

  

 

 

THE WALT DISNEY COMPANY,
a corporation duly organized and existing under the laws of the State of
Delaware (herein referred to as the “Company”), for value received, hereby
promises to pay to CEDE & CO., or registered assigns, the Principal
Amount specified above on the Maturity Date specified above. If Maturity with
respect to this Note falls on a day that is not a Business Day, the payment due
at Maturity will be made on the following day that is a Business Day as if it
were made on the date such payment was due and no interest shall accrue on the
amount so payable for the period from and after Maturity.  The principal of this Note shall not bear
interest except in the case of a default in payment of principal upon
acceleration or at Stated Maturity, and in such case, the Accreted Value (as
defined below) of this Note at the date of such default in payment shall bear
interest at the Yield to Maturity specified above plus 1% per annum (to the
extent that the payment of such interest shall be legally enforceable), which
shall accrue from the date of such default in payment to the date payment of
such principal has been made or duly provided for. Such interest will be
computed on the basis of a 360-day year of twelve 30-day months, compounded
semiannually. Payment of the principal of and any such interest on this Note
will be made at the office or agency of the Company maintained for that
purpose, initially designated to be the Corporate Trust Office of the Trustee
in Los Angeles, California, and at such additional offices or agencies as the
Company may designate, in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts; provided, however, that at the option of
the Company, payments of principal of and interest on this Note may be made by
check mailed to the address of the Person entitled thereto as such address
shall appear in the register of Securities or by wire transfer of immediately
available funds to the account of the Holder of this Note if appropriate wire
transfer instructions have been received in writing by the Trustee not less
than 15 days prior to the applicable payment date. Notwithstanding the
foregoing, the Company will make payments of interest, if any, on any Interest
Payment Date other than the Maturity Date to each registered Holder of
$10,000,000 (or, if the payment currency is other than United States dollars,
the equivalent thereof in the particular payment currency) or more in aggregate
principal amount of definitive Notes (whether having identical or different
terms and provisions) by wire transfer of immediately available funds if the
applicable registered Holder has delivered appropriate wire transfer
instructions in writing to the Trustee not less than 15 days prior to the
particular Interest Payment Date.  Any
wire transfer instructions received by the Trustee shall remain in effect until
revoked by the applicable registered Holder.

 

The “Accreted
Value” of this Note at any date (the “Calculation Date”) shall be equal to (i) the
Original Issue Price of this Note specified above plus (ii) the accrued
amortization of Original Issue Discount specified above attributable ratably on
a daily basis to the period from and including the Original Issue Date
specified above to but excluding the Calculation Date. The calculation of
accrual of Original Issue Discount will be computed on the basis of a 360-day
year of twelve 30-day months, compounded semiannually.

 

Reference is
hereby made to the further provisions of this Note set forth below, which
further provisions shall for all purposes have the same effect as if set forth
at this place.

 

Unless the
certificate of authentication hereon has been executed by the Trustee or its
duly appointed co-authenticating agent by manual signature, this Note shall not
be entitled to any benefit under the Indenture or be valid or obligatory for
any purpose.

 

This Note is one
of a duly authorized issue of securities (herein called the “Securities”) of
the Company (which term includes any successor corporation under the Indenture
hereinafter referred to) issued and to be issued pursuant to such Indenture.
This Security is one of a series designated by the Company as its Medium-Term
Notes, Series D. The Indenture does not limit the aggregate principal
amount of the Securities.

 

The Company issued
this Note pursuant to an Indenture, dated as of September 24, 2001 (herein
called the “Indenture”), between the Company and Wells Fargo Bank, N.A., a
national banking association, as trustee (herein called the “Trustee,” which
term includes any successor trustee under the Indenture), to which Indenture
and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and Holders of the Notes and
of the terms upon which the Notes are, and are to be, authenticated and
delivered.

 

 

The Notes are
issuable as Registered Securities, without coupons, in denominations of $1,000
and any amount in excess thereof which is an integral multiple of $1,000. As
provided in the Indenture and subject to certain limitations therein set forth,
Notes are exchangeable for a like aggregate principal amount of Notes of like
tenor of any authorized denomination, as requested by the Holder surrendering
the same, upon surrender of the Note or Notes to be exchanged at any office or
agency described below where Notes may be presented for registration of
transfer.

 

The Company may from time to time, without the consent of existing Note
Holders, issue additional Notes having the same terms and conditions (including
maturity and interest payment terms) as previously issued Notes in all
respects, except for issue date, issue price and the first payment of interest.  Additional Notes issued in this manner will
be fungible with the previously issued Notes to the extent specified in the
applicable Pricing Supplement.

 

This Note
may not be redeemed prior to the Maturity Date set forth above.

 

If an Event of
Default with respect to the Notes shall occur and be continuing, a portion of
the principal of this Note may be declared due and payable in the manner and
with the effect provided in the Indenture. Such portion shall be equal to the
Accreted Value of this Note at the time of such declaration. Upon payment (i) of
such Accreted Value and (ii) of interest on any overdue Accreted Value (to
the extent that the payment of such interest shall be legally enforceable), all
of the Company’s obligations in respect of the payment of the principal of and
interest on this Note shall terminate.

 

The Indenture
permits, in certain circumstances therein specified, the amendment thereof
without the consent of the Holders of the Securities. The Indenture also
permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations under the Indenture of the
Company and the rights of Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with
the consent of the Holders of a majority in aggregate principal amount of the
Securities at the time Outstanding of each series to be affected. The Indenture
also contains provisions permitting the Holders of a majority in aggregate
principal amount of the Securities of each series at the time Outstanding, on
behalf of the Holders of all the Securities of such series, to waive compliance
by the Company with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or waiver
by the Holder of this Note shall be conclusive and binding upon such Holder and
upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Note.

 

No reference
herein to the Indenture and no provision of this Note or, subject to the
provisions for satisfaction and discharge in Article Eight of the
Indenture, of the Indenture, shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest, if any, on this Note at the times, place and rate, and in the coin or
currency, herein prescribed.

 

As provided in the
Indenture and subject to certain limitations therein set forth, the transfer of
Notes is registrable in the register of Securities, upon surrender of a Note
for registration of transfer at the office or agency of the Company maintained
for that purpose, initially designated to be the Corporate Trust Office of the
Trustee in Los Angeles, California, and at such additional offices or agencies
as the Company may designate, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Registrar
duly executed by, the Holder hereof or his attorney duly authorized in writing,
and thereupon one or more new Notes of like tenor, of authorized denominations
and for the same aggregate principal amount, will be issued to the designated
transferee or transferees.

 

No service charge
shall be made by the Company, the Trustee or the Registrar for any such
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any tax or other

 

 

governmental
charge payable in connection therewith (other than exchanges pursuant to
Sections 2.11, 3.6, 9.5 or 10.3 of the Indenture, not involving any transfer).

 

Prior to due
presentment of this Note for registration of transfer, the Company, the Trustee
and any agent of the Company or the Trustee may treat the Person in whose name
this Note is registered as the owner hereof for all purposes, whether or not
this Note be overdue, and neither the Company, the Trustee nor any such agent
shall be affected by notice to the contrary.

 

The Indenture and
the Notes shall be governed by and construed in accordance with the laws of the
State of New York, including without limitation, §§ 5-1401 and 5-1402 of
the New York General Obligations Law and New York Civil Practice Law Rule 327(b).

 

All undefined
terms used in this Note which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.

 

 

IN WITNESS WHEREOF, The
Walt Disney Company has caused this Instrument to be signed by the signature or
facsimile signature of its Chairman of the Board, one of its Vice Chairmen, its
President or one of its Vice Presidents, or its Treasurer or any Assistant
Treasurer and attested by its Secretary or one of its Assistant Secretaries by
his or her signature or a facsimile thereof, and its corporate seal or a
facsimile of its corporate seal to be affixed hereunto or imprinted hereon.

 

	
  (SEAL)

  	
  THE
  WALT DISNEY COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Christine M.
  McCarthy

  
	
   

  	
  Title:

  	
  Executive Vice
  President-Corporate Finance and

  Real Estate and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
  Attest:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  Marsha L. Reed

  	
   

  
	
  Title:

  	
  Vice
  President-Governance Administration and

  Assistant Secretary

  	
   

  
							

 

 

ABBREVIATIONS

 

The following
abbreviations, when used in the inscription on the face of this instrument,
shall be construed as though they were written out in full according to
applicable laws or regulations:

 

	
  TEN COM v

  	
  as tenants in
  common

  	
   

  	
  UNIF GIFT MIN
  ACT        Custodian
              
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Cust.)

  	
  (Minor)

  
	
  TEN ENT v 

  	
  as tenants by
  the entireties

  	
   

  	
   

  
	
   

  	
   

  	
  Under Uniform
  Gifts to Minors Act

  
	
  JT TEN v 

  	
  as joint tenants
  with right of survivorship and not as 

  	
   

  	
   

  	
   

  
	
   

  	
  tenants in
  common

  	
   

  	
  (State)

  	
   

  
							

 

Additional
abbreviations may also be used though not in the above list.

 

 

FOR VALUE
RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto

 

Please Insert
Social Security or Employer

Identification
Number of Assignee

 

 

 

 

Please Print or
Typewrite Name and Address

Including Postal
Zip Code of Assignee

 

 

 

the within
Security and all rights thereunder, hereby irrevocably constituting and
appointing                                                                                                             attorney
to transfer said Security on the books of the Company, with full power of
substitution in the premises.

 

 

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  

 

NOTICE:                                                The signature to this assignment must
correspond with the name as it appears upon the face of the within Note in
every particular, without alteration or enlargement or any change whatever.Exhibit 10.1

 

AMENDED AND RESTATED CHANGE OF CONTROL AGREEMENT

 

This Amended and Restated Change of Control
Agreement (the “Agreement”) is made and entered into effective as of December 14,
2007, by and between Kathryn A. Tunstall (the “Employee”) and Conceptus, Inc.,
a Delaware corporation (the “Company”).

 

R E C I T A L S

 

A.            The Company and Employee entered into that certain Change
of Control Agreement effective as of May 13, 1997 (the “Original Agreement”)
and now wish to amend and restate the Original Agreement.

 

B.            It is expected that another company or other entity may
from time to time
consider the
possibility of acquiring the Company or that a change of control may otherwise  occur, with or without the approval of the Company’s
Board of Directors (the “Board”).  The  Board
recognizes that such consideration can be a distraction to the Employee, the
Chairman of the Board of the Company, and can cause the Employee to consider
alternative opportunities.  The Board has determined that it is in the best interests
of the Company and
its
stockholders to assure that the Company will have the continued dedication and  objectivity of the Employee, notwithstanding the
possibility, threat or occurrence of a Change of Control (as defined below) of
the Company.

 

C.            The Board believes that it is in the best
interests of the Company and its stockholders to provide the Employee with an
incentive to continue his or her employment with the
Company.

 

D.            The Board believes that it is imperative to provide the
Employee with certain benefits upon a Change of Control and, under certain
circumstances, upon termination of the Employee’s employment in connection with
a Change of Control, which benefits are intended to provide the Employee with
financial security and provide sufficient income and encouragement to the
Employee to remain with the Company notwithstanding the possibility of a Change
of Control.

 

E.             To accomplish the foregoing objectives, the Board of
Directors has directed the Company, upon execution of this Agreement by the
Employee, to agree to the terms provided in this Agreement.

 

F.             Certain capitalized terms used in the Agreement are
defined in Section 4 below.

 

In consideration of the mutual covenants contained
in this Agreement, and in consideration of the continuing employment of
Employee by the Company, the parties agree as follows:

 

1.             At-Will Employment. The Company and the
Employee acknowledge  that the
Employee’s employment is
and shall continue to be at-will, as defined under  applicable law.   If the
Employee’s employment
terminates for any reason, 

 

 

 

including (without  limitation) any termination prior to a Change
of Control, the Employee shall not be entitled  to any payments or benefits, other than as
provided by this Agreement, or as may otherwise  be available in accordance with the terms of
the Company’s then existing
employee plans and  written
policies in effect at the time of termination.  The terms of
this Agreement shall  terminate upon
the earlier of (i) the date on which Employee ceases to be employed as the
Chairman of the Board of the Company, other than as a result of an involuntary
termination by the  Company without
Cause (ii) the date that all obligations of the parties hereunder have
been  satisfied, or (iii) two
(2) years after a Change of Control. A termination of the terms of this  Agreement pursuant to the
preceding sentence shall be effective for all purposes, except that  such termination shall not
affect the payment or provision of compensation or benefits on  account of a termination of
employment occurring prior to the termination of the terms of this  Agreement.

 

2.             Stock
Options and other Equity Awards. 
Subject to Sections 5 and 6 below, in the event of a Change of Control
and regardless of whether Employee’s employment with the Company is terminated
in connection with the Change of Control, each stock option or other equity
award granted for the Company’s securities held by the Employee shall become
fully vested and immediately exercisable and any contractual restrictions on
transfer will thereupon lapse on the effective date of the transaction and
shall be exercisable to the extent so vested in accordance with the provisions
of the Stock Option Agreement or other agreement and Stock Option Plan or other
equity plan pursuant to which such stock option or other equity award was
granted.

 

3.             Change
of Control.

 

(a)           Termination Following A Change of
Control.  Subject to Section 5
and 6 below, if the Employee’s employment with the Company is terminated at any
time within two (2) years after a Change of Control, then the Employee
shall be entitled to receive severance benefits as follows:

 

(i)            Voluntary
Resignation.  If the Employee
voluntarily resigns from the Company (other than as an Involuntary Termination
(as defined below) or if the Company terminates the Employee’s employment for
Cause (as defined below)), then the Employee shall not be entitled to receive
severance payments.  Subject to Section 3(b),
the Employee’s benefits will be terminated under the terms of the Company’s
then existing benefit plans and policies in accordance with such plans and
policies in effect on the date of termination or as otherwise determined by the
Board of Directors of the Company.

 

(ii)           Involuntary
Termination.  If the Employee’s
employment is terminated as a result of an Involuntary Termination other than
for Cause, the Employee shall be entitled to receive the following
benefits:  (i) severance payments
during the period from the date of the Employee’s termination until the date 18
months after the effective date of the termination (the “Severance Period”)
equal to the salary which the Employee was receiving at the time of such
termination, which payments shall be paid in substantially equal bi-weekly
installments during the Severance Period; (ii) 

 

2

 

continuation of all health and life insurance benefits
through the end of the Severance Period substantially identical to those to
which the Employee was entitled immediately prior to the termination, or to
those being offered to officers of the Company, or a successor corporation, if
the Company’s benefit programs are changed during the Severance Period (and the
Employee shall be eligible to invoke her rights under Section 3(b) thereafter);
and (iii) reimbursement for additional health care premiums during or
after the Severance Period and not already covered by clause (ii) with a
total value not to exceed $15,000.  For
purposes of Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”) (including, without limitation, for purposes of Treasury
Regulation Section 1.409A-2(b)(2)(iii)), the Employee’s right to receive
the installment payments above shall be treated as a right to receive a series
of separate payments and, accordingly, each installment payment shall at all
times be considered a separate and distinct payment.

 

(iii)          Involuntary
Termination for Cause.  If the
Employee’s employment is terminated for Cause, then the Employee shall not be
entitled to receive severance payments. 
The Employee’s benefits will be terminated under the Company’s then
existing benefit plans and policies in accordance with such plans and policies
in effect on the date of termination.

 

(b)           Termination Apart from A Change of
Control; Health Care Coverage.  In
the event the Employee’s employment terminates for any reason, either prior to
the occurrence of a Change of Control or after the two year period following
the effective date of a Change of Control, then the Employee shall not be
entitled to receive any severance payments under this Agreement.  The Employee’s benefits will be terminated
under the terms of the Company’s then existing benefit plans and policies in
accordance with such plans and policies in effect on the date of termination or
as otherwise determined by the Board of Directors of the Company.  Notwithstanding the foregoing but not in
diminution of any other provision of this Agreement, if the Employee’s
employment with the Company terminates at anytime due to Employee’s retirement
or for any other reason, then at the Employee’s request, the Company shall use
its best efforts to make health care benefits coverage available to the
Employee, and if the Employee elects such coverage, the Employee shall pay the
incremental out-of-pocket costs incurred by the Company in connection with
obtaining such coverage for the Employee.

 

4.             Definition
of Terms.  The following terms
referred to in this Agreement shall have the following meanings:

 

(a)           Change of Control.  “Change of Control” shall mean the occurrence
of any of the following events:

 

(i)            Ownership.  Any “Person” (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended) is or becomes the “Beneficial Owner” (as defined in Rule 13d-3
under said Act), directly or indirectly, of securities of the Company
representing twenty percent (20%) or more of the 

 

3

 

total voting power represented by the Company’s then
outstanding voting securities without the
approval of the Board of Directors of the Company; or

 

(ii)           Merger/Sale of
Assets.  A merger or consolidation of
the Company whether or not approved by the Board of Directors of the Company,
other than a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) at least fifty percent (50%) of the total
voting power represented by the voting securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation, or
the stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company’s assets.

 

(iii)          Change in Board
Composition.  A change in the
composition of the Board of Directors of the Company, as a result of which
fewer than a majority of the directors are Incumbent Directors. “Incumbent Directors”
shall mean directors who either (A) are directors of the Company as of May 13,
1997 or (B) are elected, or nominated for election, to the Board of
Directors of the Company with the affirmative votes of at least a majority of
the Incumbent Directors at the time of such election or nomination (but shall
not include an individual whose election or nomination is in connection with an
actual or threatened proxy contest relating to the election of directors to the
Company).

 

(b)           Cause.  “Cause” shall mean (i) gross negligence
or willful misconduct in the performance of the Employee’s duties to the
Company where such gross negligence or willful misconduct has resulted or is
likely to result in substantial and material damage to the Company or its
subsidiaries, (ii) repeated unexplained or unjustified absence from the
Company, (iii) a material and willful violation of any federal or state
law; (iv) commission of any act of fraud with respect to the Company; or (v) conviction
of a felony or a crime involving moral turpitude causing material harm to the
standing and reputation of the Company, in each case as determined in good
faith by the Board of Directors of the Company.

 

(c)           Involuntary Termination.  “Involuntary Termination” means the Employee’s
Separation from Service (as defined below) 
with the Company other than for Cause and the Employee’s Separation from
Service with the Company by reason of resignation, upon 30 days prior written
notice to the Company, following (i) any material reduction of the Employee’s
base compensation (other than in connection with a general decrease in base
salaries for most similarly situated employees of the successor corporation);
or (ii) a material change in the geographic location at which the Employee
performs services for the Company.  The Employee’s Separation from Service by
reason of resignation from employment with the Company shall be an “Involuntary
Termination” only if the Employee provides notice to the Company of the
condition giving rise to her Involuntary Termination within 90 days after the
initial existence of such condition.

 

4

 

(d)           “Separation from Service” with
respect to the Employee means the Employee’s “separation from service” as  defined in the Treasure Regulation Section 1.409A-1(h).

 

5.             Limitation
on Payments.  To the extent that any
of the payments or benefits provided for in this Agreement to the Employee
constitute “parachute payments” within the meaning of Section 280G of the
Code and, but for this Section 5, would be subject to the excise tax
imposed by Section 4999 of the Code, the Company shall reduce the
aggregate amount of such payments and benefits such that the present value
thereof (as determined under the Code and the applicable regulations) is equal
to 2.99 times the Employee’s “base amount” as defined in Section 280G(b)(3) of
the Code.

 

6.             Successors.  Any successor to the Company (whether direct
or indirect and whether by purchase, lease, merger, consolidation, liquidation
or otherwise) to all or substantially all of the Company’s business and/or
assets shall assume the obligations under this Agreement and agree expressly to
perform the obligations under this Agreement in the same manner and to the same
extent as the Company would be required to perform such obligations in the
absence of a succession.  The terms of
this Agreement and all of the Employee’s rights hereunder shall inure to the
benefit of, and be enforceable by, the Employee’s personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.

 

7.             Notice.  Notices and all other communications
contemplated by this Agreement shall be in writing and shall be deemed to have
been duly given when personally delivered or when mailed by U.S. registered or
certified mail, return receipt requested and postage prepaid.  Mailed notices to the Employee shall be
addressed to the Employee at the home address which the Employee most recently
communicated to the Company in writing. 
In the case of the Company, mailed notices shall be addressed to its
corporate headquarters, and all notices shall be directed to the attention of
its Secretary.

 

8.             Miscellaneous
Provisions.

 

(a)           Notwithstanding
anything to the contrary in this Agreement, if at the time of the Employee’s
termination of employment with the Company, the Employee is a “specified
employee” as defined in Code Section 409A, as determined by the Company in
accordance with Section 409A of the Code, and the deferral of the
commencement of any payments or benefits otherwise payable hereunder as a
result of such termination of employment is necessary in order to prevent any
accelerated or additional tax under Section 409A of the Code, then the
Company will defer the commencement of the payment of any such payments or
benefits hereunder (without any reduction in the payments or benefits
ultimately paid or provided to Employee) until the date that is at least six (6) months
following the Employee’s termination of employment with the Company (or the
earliest date permitted under Section 409A of the Code), whereupon the
Company will pay the Employee a lump-sum amount equal to the cumulative amounts
that would have otherwise been previously paid to the Employee under this
Agreement during the period in which such payments or 

 

5

 

benefits were deferred. 
Thereafter, payments will resume in accordance with this Agreement.

 

(b)           No
Duty to Mitigate.  The Employee shall
not be required to mitigate the amount of any payment contemplated by this
Agreement (whether by seeking new employment or in any other manner), nor,
except as otherwise provided in this Agreement, shall any such payment be
reduced by any earnings that the Employee may receive from any other source.

 

(e)           Waiver.  No provision of this Agreement shall be
modified, waived or discharged unless the modification, waiver or discharge is
agreed to in writing and signed by the Employee and by an authorized officer of
the Company (other than the Employee). No waiver by either party of any breach
of, or of compliance with, any condition or provision of this Agreement by the
other party shall be considered a waiver of any other condition or provision or
of the same condition or provision at another time.

 

(f)            Whole Agreement.  No agreements, representations or
understandings (whether oral or written and whether express or implied) which
are not expressly set forth in this Agreement have been made or entered into by
either party with respect to the subject matter hereof.  This Agreement supersedes any agreement of
the same title and concerning similar subject matter dated prior to the date of
this Agreement, including the Original Agreement, and by execution of this
Agreement both parties agree that any such predecessor agreement shall be
deemed null and void.

 

(g)           Choice of Law.  The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the State of
California without reference to conflict of laws provisions.

 

(h)           Severability.  If any term or provision of this Agreement or
the application thereof to any circumstance shall, in any jurisdiction and to
any extent, be invalid or unenforceable, such term or provision shall be
ineffective as to such jurisdiction to the extent of such invalidity or
unenforceability without invalidating or rendering unenforceable the remaining
terms and provisions of this Agreement or the application of such terms and
provisions to circumstances other than those as to which it is held invalid or
unenforceable, and a suitable and equitable term or provision shall be
substituted therefor to carry out, insofar as may be valid and enforceable, the
intent and purpose of the invalid or unenforceable term or provision.

 

(i)            Arbitration.  Any dispute, claim or controversy based on,
arising out of or relating to the Employee’s employment or this Agreement
shall, at the option of either party hereto, be settled by final and binding
arbitration in San Clara County, California, before a single neutral arbitrator
in accordance with the National Rules for the Resolution of Employment
Disputes (the “Rules”) of the American Arbitration
Association, and judgment on the award rendered by the arbitrator may be
entered in any court having jurisdiction. 
Arbitration may be compelled pursuant to the California Arbitration Act
(Code of Civil Procedure §§ 1280 et seq.).  If the parties are unable to agree upon an
arbitrator, one shall be appointed by the AAA in accordance with 

 

6

 

its Rules.  Each party shall pay the fees of its own
attorneys, the expenses of its witnesses and all other expenses connected with
presenting its case; however,
the Employee and the Company agree that, to the extent permitted by law, the
arbitrator may, in his discretion, award reasonable attorneys’ fees to the
prevailing party.  Other costs of the
arbitration, including the cost of any record or transcripts of the
arbitration, AAA’s administrative fees, the fee of the arbitrator, and all
other fees and costs, shall be borne by the Company.  If either of the parties hereto elect to
submit a dispute, claim or controversy to arbitration in accordance with this Section 8(i),
this Section 8(i) is intended to be the exclusive method for
resolving any and all claims by the parties against each other for payment of
damages under this Agreement or relating to the Employee’s employment; provided, however, that neither this
Agreement nor the submission to arbitration shall limit the parties’ right to
seek provisional relief, including, without limitation, injunctive relief, in
any court of competent jurisdiction pursuant to California Code of Civil
Procedure § 1281.8 or any similar statute of an applicable jurisdiction.  Seeking any such relief shall not be deemed
to be a waiver of such party’s right to compel arbitration. Pursuant to
California Civil Code Section 1717, each party warrants that it was
represented by counsel in the negotiation and execution of this Agreement,
including the attorneys’ fees provision herein

 

(j)            Legal Fees and Expenses.  The parties shall each bear their own
expenses, legal fees and other fees incurred in connection with this Agreement.

 

(k)           No Assignment of Benefits.  The rights of any person to payments or
benefits under this Agreement shall not be made subject to option or
assignment, either by voluntary or involuntary assignment or by operation of
law, including (without limitation) bankruptcy, garnishment, attachment or
other creditor’s process, and any action in violation of this subsection (i) shall
be void.

 

(l)            Employment Taxes.  All payments made pursuant to this Agreement
will be subject to withholding of applicable income and employment taxes.

 

(m)          Assignment by Company.  The Company may assign its rights under this
Agreement to an affiliate, and an affiliate may assign its rights under this
Agreement to another affiliate of the Company or to the Company; provided,
however, that no assignment shall be made if the net worth of the assignee is
less than the net worth of the Company at the time of assignment. In the case
of any such assignment, the term “Company” when used in a section of this
Agreement shall mean the corporation that actually employs the Employee.

 

(n)           Counterparts.  This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together will
constitute one and the same instrument.

 

7

 

IN WITNESS WHEREOF, each of the parties has
executed this Agreement, in the case of the Company by its duly authorized
officer, as of the day and year first above written.

 

	
  CONCEPTUS, INC.

  	
  KATHRYN A. TUNSTALL

  
	
   

  	
   

  
	
  /s/ Mark Sieczkarek

  	
  /s/ Kathryn A. Tunstall

  
	
   

  	
   

  
	
  By:

  	
  Mark Sieczkarek

  	
   

  
	
   

  	
   

  
	
  Title:

  	
  President and Chief
  Executive Officer

  	
   

  
				

 

8

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