Disney Calls Truce with Kin of Founder

The Walt Disney Co. and two former directors, who have waged a bitter two-year fight, have agreed to a truce, including dropping a contentious shareholder lawsuit challenging the selection of the company’s new chief executive officer.

The agreement ends a longstanding battle over corporate governance and gives Roy E. Disney, the 75-year-old nephew of the late Walt Disney, an office at the company’s Burbank studios, a consultancy and the title "director emeritus."

In exchange, Mr. Disney and Stanley P. Gold, another dissident former director, will withdraw their lawsuit challenging Mr. Iger’s selection as chief executive. The two also agreed not to run their own slate of directors or submit shareholder resolutions for the next five years.

In a statement, the company reaffirmed its commitment to rotate members of the board’s committees as the company’s corporate governance guidelines require.

"In putting aside their differences, the company noted Mr. Disney’s long time devotion to the company and welcomed the re-establishment of a relationship with him and his family," the statement said.

It was Disney and Gold who engineered a shareholder revolt in March 2004 that resulted in Eisner being stripped of his job as board chairman, although he remained CEO of the company. Eisner announced last September that he would be stepping down in September 2006 when his current contract expires.

Disney shares rose 55 cents to close at $ 25 on the New York Stock Exchange on Friday.