Disney ( DIS) said in a Securities and Exchange Commission filing that it has employed relatives of three of its board members during the last year, a circumstance that might require it to reduce the size of the board in light of the New York Stock Exchange's new rules on director independence.

The company said in the filing that adult children of directors Reveta Bowers, Stanley Gold and Raymond Watson had worked for Disney in the last year, although Bowers' son Craig Bowers has since left the company. The three directors had previously been considered independent.

In fiscal 2001, Craig Bowers was paid $81,863, while Jennifer Gold received $85,111 and David Watson earned $152,608.

Currently, Disney's governance rules bar directors from being considered independent if they have immediate family members who work for the company. But that definition of "immediate family member" previously didn't include independent adult children.

Disney said its board is reviewing appropriate steps to ensure ongoing compliance with applicable rules and corporate best practices guidelines. "These steps will include a reduction in the board's size and reorganization and reduction in size of board committees." It hopes to complete the moves by the end of 2002.

The disclosure came the same day Disney Chief Executive Michael Eisner filed sworn and signed financial statements with the SEC.