01—Abstract
Summary
Summary of the 8-K filed September 30, 2022. Cited figures are marked; the original filing is the authoritative source.
The Walt Disney Company (DIS) announced on September 30, 2022, an agreement with activist investor Third Point LLC, settling a proxy dispute.
The core of the agreement involves the addition of Carolyn Everson to Disney's Board of Directors, effective November 21, 2022, and her nomination for the 2023 annual meeting. This move is supported by Third Point and aims to bring new perspectives to the board. In exchange for Everson's board seat and other concessions, Third Point has agreed to a standstill period extending until at least the conclusion of the 2024 annual meeting or April 15, 2024.
During this period, Third Point will abide by certain restrictions, including limits on stock ownership, and will vote its shares in accordance with the Board's recommendations on director elections and other proposals. This agreement effectively concludes Third Point's immediate activist campaign and provides a period of stability for the company's governance.
02—Key points
Key Highlights
- Disney appointed Carolyn Everson to its Board of Directors, effective November 21, 2022, as part of a Support Agreement with Third Point LLC.
- Third Point LLC, an activist investor, supports Everson's addition to the Board.
- The agreement includes a standstill provision that restricts Third Point's actions until at least the 2024 annual meeting or April 15, 2024.
- During the standstill period, Third Point agreed not to exceed 2.0% beneficial ownership of DIS stock, seek board removal, propose new nominees, or solicit proxies.
- Third Point has committed to voting its shares in favor of the Board's director nominees and in accordance with the Board's recommendations on other proposals during the standstill period.
- The Board's size was increased from 11 to 12 directors to accommodate the new appointment.
- Carolyn Everson will receive standard director compensation and has no reportable transactions with the Company at this time.
03—Questions
Frequently Asked Questions
What is the significance of the Support Agreement with Third Point LLC?
The Support Agreement signifies a resolution to an activist investor's campaign. It involves Disney adding a director nominated with Third Point's backing to its Board, thereby avoiding a potentially contentious proxy fight and gaining a period of governance stability.
Who is Carolyn Everson and why was she appointed?
Carolyn Everson is the newly appointed director. Her appointment, supported by Third Point, is intended to bring new perspectives to Disney's Board of Directors. She will be formally added to the Board on November 21, 2022, and nominated for election at the 2023 annual meeting.
What are the terms of the 'standstill' provision?
The standstill provision restricts Third Point's activist actions. It limits their beneficial ownership to 2.0% of outstanding shares, prevents them from proposing alternative director nominees or seeking to remove current directors, and requires them to vote their shares in line with the Board's recommendations on director elections and other proposals until at least April 15, 2024, or the conclusion of the 2024 annual meeting.
Does this agreement mean Third Point will no longer be involved with Disney's governance?
No, Third Point will continue to be involved as a shareholder. However, under the terms of the agreement, their ability to actively campaign for board changes or shareholder proposals is significantly limited during the standstill period. They have agreed to support the Board's slate of directors and recommendations on other matters.
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