1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K/A
AMENDMENT NO. 1
TO
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED COMMISSION FILE NUMBER
DECEMBER 30, 2000 0-26976
PIXAR
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CALIFORNIA 68-0086179
---------- ----------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
1200 PARK AVENUE, EMERYVILLE, CALIFORNIA 94608
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (510) 752-3000
---------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NONE SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK, NO PAR VALUE PER SHARE
(TITLE OF CLASS)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
As of March 15, 2001, there were 47,783,625 shares of the Registrant's
Common Stock outstanding and the aggregate market value of such shares held by
non-affiliates of the Registrant (based upon the closing sale price of such
shares on the Nasdaq National Market on March 15, 2001) was approximately
$576,704,788. Shares of Common Stock held by each executive officer and director
have been excluded in that such persons may be deemed to be affiliates. This
determination of affiliate status is not necessarily a conclusive determination
for other purposes.
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EXPLANATORY NOTE
This Annual Report on Form 10-K/A ("Form 10-K/A") is being filed as
Amendment No. 1 to the Registrant's Annual Report on Form 10-K filed with the
Securities and Exchange Commission on March 30, 2001 ("Form 10-K") for the
purpose of amending Items 10, 11, 12 and 13 of Part III of Registrant's Form
10-K.
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
DIRECTORS
The members of our Board of Directors as of March 15, 2001 are as follows:
Name Age Position with Pixar
- ---- --- -------------------
Steve Jobs 46 Chairman and Chief Executive Officer
Edwin E. Catmull 55 President and Director
Jill E. Barad 49 Director
Skip M. Brittenham 59 Director
Joseph A. Graziano 57 Director
Lawrence B. Levy 41 Director
Joe Roth 52 Director
Larry W. Sonsini 60 Director
Mr. Jobs is a co-founder of Pixar and has served as Chairman since March
1991, and as Chief Executive Officer since February 1986. He has been a director
of Pixar since February 1986. In addition, Mr. Jobs is currently Chief Executive
Officer and a member of the Board of Directors of Apple Computer, Inc.
("Apple"). Mr. Jobs was also a co-founder of NeXT Software, Inc. ("NeXT"), which
developed and marketed object-oriented software for client/server business
applications and the Internet, and served as the Chairman and Chief Executive
Officer of NeXT from October 1985 until February 1997, when NeXT was acquired by
Apple. Mr. Jobs then served as an advisor to Apple on a limited basis and served
as interim Chief Executive Officer until assuming his current role as Chief
Executive Officer at Apple. Mr. Jobs has also served as a director of Gap, Inc.
since September 1999.
Dr. Catmull is a co-founder of Pixar and in January 2001 was promoted to
President of Pixar. Dr. Catmull had previously served as Executive Vice
President and Chief Technical Officer since June 1995. From March 1991 to
February 1995, he served as President, from November 1988 to March 1991 he
served as Chairman and from February 1986 to November 1988 he served as
President. Prior to joining Pixar, he was Vice President of the Computer
Division of Lucasfilm. In March 2001, Dr. Catmull, along with two other Pixar
employees, received an Oscar(R) from the Academy of Motion Pictures Arts and
Sciences for Scientific and Technical Achievement for his work in developing our
RenderMan(R) software. Dr. Catmull received the Scientific and Engineering Award
from the Academy of Motion Picture Arts and Sciences in 1992 and also received
the SIGGRAPH Coons Award for lifetime contributions in 1993. Dr. Catmull was
inducted into the National Academy of Engineering in 2000 and is a member of the
Scientific and Technical Awards Committee of the Academy of Motion Picture Arts
and Sciences. Dr. Catmull received B.S. degrees in computer science and physics
and a Ph.D. in computer science from the University of Utah.
Ms. Barad has served as a director of Pixar since July 1997. She was
formerly the Chairman and Chief Executive Officer of Mattel, Inc. from January
1998 to February 2000. From January 1997 to December 1997, she was President and
Chief Executive Officer of Mattel, Inc., and from July 1992 until December 1996,
she was President and Chief Operating Officer. Ms. Barad also serves as a
director of Leap Wireless International, Inc.
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4
Mr. Brittenham has served as a director of Pixar since August 1995. He is a
senior partner with the law firm of Ziffren, Brittenham, Branca & Fischer, an
entertainment law firm, founded in 1978. Mr. Brittenham currently serves on the
board of, or is a trustee of numerous charitable organizations, including
Conservation International, KCET, the Environmental Media Association and the
Alternative Medical AIDS Foundation. Mr. Brittenham received a B.S. from the
United States Air Force Academy and a J.D. from the University of California at
Los Angeles.
Mr. Graziano has served as a director of Pixar since August 1995. From June
1989 to December 1995, he was the Executive Vice President and Chief Financial
Officer of Apple and was a member of the Board of Directors of Apple from June
1993 until October 1995. From May 1987 to June 1989, Mr. Graziano served as
Chief Financial Officer of Sun Microsystems, Inc. and from October 1981 to May
1985 as Chief Financial Officer of Apple. In addition, he has held accounting
positions with various technology companies in the Silicon Valley. Mr. Graziano
also serves as a director of Carrier Access Corporation and Packeteer, Inc. Mr.
Graziano received a B.S. in accounting from Merrimack College and is a certified
public accountant.
Mr. Levy has served as a director of Pixar since April 1999. From June 2000
to December 2000, Mr. Levy was President and Chief Executive Officer and a
director of Shockwave.com. Mr. Levy served as Executive Vice President and Chief
Financial Officer of Pixar from February 1995 to March 1999. Mr. Levy served as
Secretary of Pixar from October 1995 to March 1999. Prior to joining Pixar, he
was Vice Chairman and Chief Financial Officer of Electronics for Imaging, Inc.
(EFI), a provider of hardware products for the digital color imaging market.
Prior to his tenure at EFI, he was head of the Technology Licensing and
Distribution Department at the law firm of Wilson Sonsini Goodrich & Rosati. Mr.
Levy received a B.S. in business and accounting from Indiana University and a
J.D. from Harvard Law school.
Mr. Roth has served as a director of Pixar since October 2000. Mr. Roth
formed Revolution Studios, an independent movie studio, in January 2000. From
April 1996 to January 2000, Mr. Roth was Chairman of Walt Disney Studios. From
August 1994 to April 1996, Mr. Roth was Chairman of the Walt Disney Motion
Pictures Group. From 1992 to 1994 he ran Caravan Pictures for Disney. From July
1989 to November 1992, Mr. Roth served as Chairman of 20th Century Fox. Prior to
Fox, Mr. Roth was an independent producer/director and co-founded Morgan Creek
Pictures. Mr. Roth received a B.A. from Boston University.
Mr. Sonsini has served as a director of Pixar since April 1995 and served
as Secretary from April 1995 to October 1995. He has been an attorney with the
law firm of Wilson Sonsini Goodrich & Rosati since 1966 and currently serves as
Chairman and Chief Executive Officer. Mr. Sonsini also serves as a director for
Brocade, Inc., Commerce One, Echelon Corporation, Lattice Semiconductor
Corporation, LSI Logic Corporation, Novell, Inc. and Tibco Software, as well as
several private companies. Mr. Sonsini received A.B. and L.L.B. degrees from the
University of California, Berkeley.
EXECUTIVE OFFICERS
The information required by this item concerning our executive officers is
incorporated by reference to the information set forth in the section entitled
"Executive Officers of the Company" at the end of Part I of the Company's Form
10-K.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act ("Section 16(a)") requires our executive
officers, directors and persons who own more than ten percent of our Common
Stock, to file initial reports of ownership on Form 3 and changes in ownership
on Form 4 or Form 5 with the SEC and the National Association of Securities
Dealers, Inc. Such executive officers, directors and ten-percent shareholders
are also required by SEC rules to furnish Pixar with copies of all such forms
that they file.
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5
Based solely on its review of the copies of such forms received by us and
written representations from certain reporting persons that no Forms 5 were
required for such persons, we believe that during fiscal 2000 all Section 16(a)
filing requirements applicable to our executive officers, directors and 10%
shareholders were complied with, except that a Form 5 for John Lasseter
reporting an option granted in fiscal 2000 will be filed late.
ITEM 11. EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table shows, as to our Chief Executive Officer and each of
the five most highly compensated executive officers whose salary plus bonus
exceeded $100,000 during the last fiscal year (the "Named Officers"),
information concerning compensation paid for services to us in all capacities
during the last three fiscal years.
LONG TERM
COMPENSATION
AWARDS
------------
ANNUAL COMPENSATION SECURITIES
UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#)
- --------------------------- ---- --------- -------- ----------
Steve Jobs 2000 $ 52 $ -- --
Chairman, Chief Executive Officer 1999 52 -- --
1998 50 -- --
Edwin E. Catmull 2000 392,793 -- 500,000
President 1999 322,596 54,167 --
1998 295,846 -- --
Ann Mather 2000 400,005 -- --
Executive Vice President, Chief Financial Officer 1999 124,617(1) 203,600 500,000
1998 N/A N/A N/A
John Lasseter 2000 879,567 600,000 1,000,000
Executive Vice President, Creative Development 1999 806,726 900,000 --
1998 769,315 250,000 --
Sarah McArthur 2000 392,793 -- --
Executive Vice President, Production 1999 322,596 54,167 --
1998 300,000 -- 200,000
(1) Ms. Mather joined Pixar in September 1999.
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OPTION GRANTS IN LAST FISCAL YEAR
The following table shows, as to each of the Named Officers, information
concerning stock options granted during fiscal year 2000.
OPTION GRANTS IN FISCAL 2000
----------------------------
INDIVIDUAL
GRANTS POTENTIAL REALIZABLE
NUMBER OF % OF TOTAL VALUE AT
SECURITIES OPTIONS ASSUMED ANNUAL RATES
UNDERLYING GRANTED TO EXERCISE OF STOCK PRICE APPRECIATION
OPTIONS EMPLOYEES IN PRICE EXPIRATION FOR OPTION TERM(4)
NAME GRANTED(1) FISCAL YEAR(2) ($/SH) DATE(3) 5% 10%
---------- -------------- ------ ------- -- ---
Steve Jobs -- -- -- -- -- --
Edwin E. Catmull 500,000 (5) 9.22% $26.50 12/6/10 $8,332,854 $21,117,088
Ann Mather -- -- -- -- -- --
John Lasseter 1,000,000 (6) 18.43% $26.50 12/6/10 $16,665,708 $42,234,175
Sarah McArthur -- -- -- -- -- --
(1) All options in this table were granted under the 1995 Stock Plan and have
exercise prices equal to the fair market value on the date of grant.
(2) We granted options for 5,424,584 shares of Common Stock to employees in
fiscal 2000.
(3) Options may terminate before their expiration upon the termination of
optionee's status as an employee or consultant, the optionee's death or an
acquisition of Pixar.
(4) The 5% and 10% assumed rates of appreciation are provided in accordance
with rules of the SEC and do not represent our estimate or projection of
the future Common Stock price. This table does not take into account any
appreciation in the price of the Common Stock from the date of grant to
date.
(5) This option is a nonstatutory stock option, which vests over a four-year
period at the rate of one-fourth at the end of each year from the vesting
start date.
(6) This option is a nonstatutory stock option, which vests on an equal monthly
basis over a ten-year period, except for options that vest on the last
month will vest on the penultimate month of this ten-year period.
OPTION EXERCISES AND HOLDINGS
The following table sets forth, for each of the Named Officers, certain
information concerning stock options exercised during fiscal 2000, and the
number of shares subject to both exercisable and unexercisable stock options as
of December 30, 2000. Also reported are values for "in-the-money" options that
represent the positive spread between the respective exercise prices of
outstanding stock options and the fair market value of our Common Stock as of
December 30, 2000.
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AGGREGATED OPTION EXERCISES IN FISCAL 2000 AND FISCAL 2000
YEAR-END OPTION VALUES
SHARES NUMBER OF SECURITIES VALUE OF UNEXERCISED
ACQUIRED ON VALUE UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
EXERCISE REALIZED OPTIONS AT FISCAL YEAR END AT FISCAL YEAR END ($)(1)
-------- -------- -------------------------- -------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --- --- ----------- ------------- ----------- -------------
Steve Jobs -- $ -- -- $ -- $ -- $ --
Edwin E. Catmull 66,667 1,753,342 -- 500,000 -- 1,750,000
Ann Mather -- -- 125,000 375,000 -- --
John Lasseter -- -- 384,792 1,005,208 9,798,698 3,582,677
Sarah McArthur -- -- 104,167 220,833 1,796,881 2,084,369
(1) Market value of underlying securities based on the closing price of Pixar's
Common Stock on December 29, 2000 (the last trading day of fiscal 2000) on
the Nasdaq National Market of $30.00 minus the exercise price.
EMPLOYMENT AGREEMENTS
In March 2001, we entered into an employment agreement with John Lasseter
(the "Employment Agreement"), which has a term of 10 years. The Employment
Agreement supercedes our prior employment agreement with Mr. Lasseter, which was
entered into in February 1997. Pursuant to the Employment Agreement, Mr.
Lasseter received a signing bonus of $4,940,000. The Employment Agreement also
provides for a current annual salary of $2,500,000 with 5% annual increases. In
connection with the Employment Agreement, Mr. Lasseter was previously granted an
option to purchase 1,000,000 shares of our common stock at the fair market value
on the date of such grant. The option vests on an equal monthly basis over the
ten-year term of the agreement, except for options that vest on the last month
will vest on the penultimate month of this ten-year period. Under the Employment
Agreement, Mr. Lasseter will direct three Feature Films (a Feature Film is
defined as a feature-length animated motion picture) and he has the option to
direct certain sequels to Feature Films he has directed if we elect to produce
such sequels within 12 years of the initial release of the applicable Feature
Film. In addition, at our request, Mr. Lasseter will provide writing services
and supervisory services to create stories, treatments and screenplays for
Feature Films, and Mr. Lasseter will also provide executive producing services
on Feature Films, made-for-home videos and short-subject motion pictures that
Mr. Lasseter does not direct. During the term of the Employment Agreement, Mr.
Lasseter is prohibited from accepting other employment and from becoming
financially interested or associated with any entity engaged in a related or
competitive business. We can terminate the Employment Agreement at any time for
any reason. However, if we terminate Mr. Lasseter's employment without cause, we
must (1) pay an amount equal to 75% of the balance of the salary Mr. Lasseter
would have earned through the remainder of the term of the Employment Agreement
and (2) accelerate the unvested portion of Mr. Lasseter's option so that the
option would be exercisable in full. In addition, Mr. Lasseter would be able to
accept employment with any third party.
In September 1999, we agreed with Ann Mather that in the event that Ms.
Mather is terminated for reasons other than cause during her first 24 months of
employment, we will pay an amount equal to her then-current monthly salary times
the number of months remaining in her first 24 months of employment.
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DIRECTOR COMPENSATION
Directors who are not employees of Pixar receive a fee of $1,000 for each
meeting attended of the Board of Directors and a fee of $1,000 for each meeting
attended of a committee of the Board of Directors if such committee meeting is
not held in conjunction with a meeting of the Board of Directors. All directors
are reimbursed for expenses incurred in attending such meetings.
Non-employee directors are eligible to receive option grants pursuant to
our 1995 Director Option Plan (the "Director Plan") which was adopted by the
Board of Directors in October 1995, approved by the shareholders in November
1995 and took effect in November 1995. A total of 200,000 shares of Common Stock
has been reserved for issuance under the Director Plan. As of March 15, 2001,
there were 160,000 options outstanding under the Director Plan. The Director
Plan provides for an automatic grant of an option to purchase 30,000 shares of
Common Stock (the "First Option") to each non-employee director who first
becomes a non-employee director (other than an employee director who ceases to
be an employee but remains a director) after the effective date of the Director
Plan on the date on which such person first becomes a non-employee director.
Beginning on the third anniversary of the date he or she became an outside
director, each non-employee director will automatically be granted an option to
purchase 10,000 shares of Common Stock (a "Subsequent Option") each year on the
date of such anniversary, provided he or she is then a non-employee director.
Each non-employee director will be eligible to receive a Subsequent Option,
regardless of whether such non-employee director was eligible to receive a First
Option. First Options and each Subsequent Option will have a term of ten years.
One-third of the shares subject to a First Option will vest one year after its
date of grant and an additional one-third will vest at the end of each year
thereafter, provided that the optionee continues to serve as a director on such
dates. All of the shares subject to a Subsequent Option will vest one year after
the date of the option grant, provided that the optionee continues to serve as a
director on such date. The exercise prices of the First Option and each
Subsequent Option will be 100% of the fair market value per share of Pixar's
Common Stock on the date of the grant of the option. Mr. Roth was granted a
First Option in October 2000 at an exercise price of $29.63 per share. Ms. Barad
was a Subsequent Option in July 2000 at an exercise price of $35.00 per share.
Mr. Sonsini was granted a Subsequent Option in April 2000 at an exercise price
of $39.38 per share. Messrs. Brittenham and Graziano were each granted
Subsequent Options in August 2000 at an exercise price of $32.00 per share. Mr.
Roth and Mr. Levy, non-employee directors of Pixar, will be eligible for
Subsequent Options under the Director Plan on the third anniversary of the dates
they became directors. Messrs. Sonsini, Brittenham and Graziano and Ms. Barad,
also non-employee directors, are eligible for Subsequent Options each year on
the anniversary of the dates they became directors.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Pixar's Compensation Committee was formed in 1995 and is currently composed
of Ms. Barad and Mr. Graziano. No interlocking relationships exist between any
member of Pixar's Board of Directors or Compensation Committee and any member of
the board of directors or compensation committee of any other company, nor has
any such interlocking relationship existed in the past. No member of the
Compensation Committee is or was formerly an officer or an employee of Pixar.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of Common Stock of
Pixar as of March 15, 2001 for the following: (i) each person who is known by
Pixar to own beneficially more than 5% of the outstanding shares of Pixar's
Common Stock; (ii) each of Pixar's directors; (iii) each of the Named Officers
(as defined in "Executive Officer Compensation"); and (iv) all directors and
executive officers of Pixar as a group.
Number of Percent
Name of Beneficial Owner Shares(1) of Total(1)
- ------------------------ --------- -----------
Steve Jobs 30,000,001 62.8%
c/o Pixar
1200 Park Avenue
Emeryville, CA 94608
The TCW Group, Inc.(2) 5,168,883 10.8%
865 South Figueroa St.
Los Angeles, CA 90017
Disney Enterprises, Inc.(3) 2,500,100 5.2
500 South Buena Vista Street
Burbank, CA 91521
John Lasseter(4) 776,300 1.6
Edwin E. Catmull 422,800 *
Sarah McArthur(5) 100,000 *
Ann Mather(6) 125,000 *
Lawrence B. Levy 130,900 *
Joe Roth 0 *
Larry W. Sonsini(7) 34,528 *
Skip M. Brittenham(8) 50,000 *
Joseph A. Graziano(9) 50,000 *
Jill E. Barad (10) 31,000 *
All directors and executive officers as a
group (11 persons)(11) 31,720,529 66.4%
* Represents less than 1% of the total.
(1) Based on 47,783,625 shares outstanding on March 15, 2001. The number and
percentage of shares beneficially owned is determined under rules of the
Securities and Exchange Commission ("SEC"), and the information is not
necessarily indicative of beneficial ownership for any other purpose. Under
such rules, beneficial ownership includes any shares as to which the
individual has sole or shared voting power or investment power and also any
shares which the individual has the right to acquire within sixty days of
March 15, 2001 through the exercise of any stock option or other right.
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Unless otherwise indicated in the footnotes, each person has sole voting
and investment power (or shares such powers with his or her spouse) with
respect to the shares shown as beneficially owned.
(2) As indicated in the Schedule 13G filed by The TCW Group, Inc. pursuant to
the Exchange Act on February 14, 2001.
(3) As indicated in the Schedule 13D filed by Disney Enterprises, Inc. pursuant
to the Exchange Act on April 18, 1997. Includes 1,500,000 shares issuable
upon exercise of warrants.
(4) Includes 390,000 shares subject to options that are exercisable within 60
days of March 15, 2001.
(5) All 100,000 shares are subject to options that are exercisable within 60
days of March 15, 2001.
(6) All 125,000 shares are subject to options that are exercisable within 60
days of March 15, 2001.
(7) Includes 30,000 shares subject to options that are exercisable within 60
days of March 15, 2001.
(8) All 50,000 shares are subject to options that are exercisable within 60
days of March 15, 2001.
(9) All 50,000 shares are subject to options that are exercisable within 60
days of March 15, 2001.
(10) Includes 30,000 shares subject to options that are exercisable within 60
days of March 15, 2001.
(11) Includes 775,000 shares subject to options that are exercisable within 60
days of March 15, 2001.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We have engaged the law firm of Ziffren, Brittenham, Branca & Fischer
("ZBB&F") to handle certain matters. Skip M. Brittenham, a director of Pixar, is
a senior partner of the firm. We have also engaged the law firm of Wilson
Sonsini Goodrich & Rosati ("WSGR") to handle certain legal matters. Larry W.
Sonsini, a director of Pixar, is Chairman and Chief Executive Officer of the
firm. Payments by us to each of ZBB&F and WSGR did not exceed five percent of
either law firm's respective gross revenues in the last fiscal year of either
such firm.
We believe that all of the transactions set forth above were made on terms
no less favorable to us than could have been obtained from unaffiliated third
parties. All future transactions, including loans, between us and our officers,
directors and principal shareholders and their affiliates will be approved by a
majority of the Board of Directors, including a majority of the independent and
disinterested directors of the Board of Directors, and will be on terms no less
favorable to us than could be obtained from unaffiliated third parties.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Amendment No. 1 on
Form 10-K/A to be signed on its behalf by the undersigned, thereunto duly
authorized, on this 27th day of April, 2001.
PIXAR
By: /s/ Ann Mather
------------------------------------------
Ann Mather
Executive Vice President and Chief
Financial Officer
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