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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 31, 1996 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.)
1001 WEST CUTTING BOULEVARD, RICHMOND, CALIFORNIA 94804
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (510) 236-4000
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Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of he 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. /X/
As of March 20, 1997, there were 40,141,461 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 20, 1997) was approximately
$167,113,835. Shares of Common Stock held by each executive officer and director
and by each entity that owns 5% or more of the outstanding Common Stock 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.
DOCUMENTS INCORPORATED BY REFERENCE
Certain sections of Pixar's Annual Report to Shareholders for the year ended
December 31, 1996 (the "1996 Annual Report") are incorporated by reference in
Parts II and IV of this Form 10-K to the extent stated herein.
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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 31, 1997 ("Form 10-K") for the
purpose of amending Items 10, 11, 12 and 13 of Part III of Pixar's Form 10-K.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
DIRECTORS
<TABLE>
<CAPTION>
NAME AGE(1) POSITION WITH PIXAR
- ------------------------ ------ -------------------------------------------------------------
<S> <C> <C>
Steven P. Jobs.......... 42 Chairman, Chief Executive Officer and Office of the President
Larry W. Sonsini........ 56 Director
Skip M. Brittenham...... 55 Director
Joseph A. Graziano...... 53 Director
</TABLE>
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(1) As of April 16, 1997.
Mr. Jobs is a co-founder of Pixar and has served as its Chairman since
March 1991, as its Chief Executive Officer since February 1986 and in the Office
of the President since February 1995. He has been a director of Pixar since
February 1986 and served as Chairman from February 1986 to November 1988. 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 Computer,
Inc. ("Apple"). Mr. Jobs currently serves as an advisor to Apple on a limited
basis. Mr. Jobs was a co-founder of Apple, where he co-designed the Apple II and
led the development, manufacturing and marketing of the Macintosh and
LaserWriter printer. Mr. Jobs was awarded the National Technology Medal in 1985,
the Jefferson Award for Public Service in 1987 and was named Entrepreneur of the
Decade by Inc. magazine. Mr. Jobs attended Reed College in Portland, Oregon.
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 the Chairman of the firm's Executive Committee. Mr. Sonsini also
serves as a director of Lattice Semiconductor Corporation and Novell, Inc. Mr.
Sonsini received A.B. and L.L.B. degrees from the University of California,
Berkeley.
Mr. Brittenham has served as a director of Pixar since August 1995. He
has been an attorney with the law firm of Ziffren, Brittenham, Branca & Fischer,
an entertainment law firm, since 1978. Mr. Brittenham currently serves on the
board of, or is a trustee of, numerous charitable organizations, including
Conservation International, the American Oceans Campaign, 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 IntelliCorp, Inc. Mr. Graziano
received a B.S. in accounting from Merrimack College and is a certified public
accountant.
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EXECUTIVE OFFICERS
The information required by this item concerning the executive officers
of Pixar 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
this Form 10-K.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act ("Section 16(a)") requires Pixar's
executive officers, directors and persons who own more than ten percent of
Pixar's 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.
Based solely on its review of the copies of such forms received by
Pixar and written representations from certain reporting persons that no Forms 5
were required for such persons, Pixar believes that during fiscal 1996 all
Section 16(a) filing requirements applicable to its executive officers,
directors and ten-percent shareholders were complied with.
ITEM 11. EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table shows, as to the Chief Executive Officer and each
of the four most highly compensated executive officers whose salary plus bonus
exceeded $100,000 during the last fiscal year (the "Named Officers"),
information concerning compensation paid for services to Pixar in all capacities
during the last three fiscal years.
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
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ANNUAL COMPENSATION SECURITIES
NAME AND PRINCIPAL POSITION -------------------- UNDERLYING
YEAR SALARY($) BONUS($) OPTIONS(#)
- --------------------------------------------------------------- ---- --------- -------- ----------
<S> <C> <C> <C> <C>
Steven P. Jobs................................................. 1996 $ -- $ -- $ --
Chairman, Chief Executive Officer and Office of the 1995 -- -- --
President 1994 -- -- --
Edwin E. Catmull............................................... 1996 198,512 -- --
Executive Vice President, Chief Technical Officer and 1995 182,646 -- 1,600,000
Office of the President 1994 170,697 -- --
Lawrence B. Levy (1)........................................... 1996 197,789 -- --
Executive Vice President, Chief Financial Officer and 1995 158,509 -- 1,600,000
Office of the President 1994 -- -- --
John Lasseter.................................................. 1996 256,203 -- --
Vice President, Creative Development 1995 200,463 35,000 1,600,000
1994 149,396 -- --
William T. Reeves.............................................. 1996 211,899 -- --
Technical Director, Feature Films 1995 172,430 -- 840,000
1994 133,374 -- --
</TABLE>
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(1) Mr. Levy joined Pixar in February 1995.
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OPTION GRANTS IN LAST FISCAL YEAR
There were no stock options granted to the Named Officers during the
fiscal year ended December 31, 1996.
OPTION EXERCISES AND HOLDINGS
The following table sets forth, for each of the Named Officers, certain
information concerning stock options exercised during fiscal 1996, and the
number of shares subject to both exercisable and unexercisable stock options as
of December 31, 1996. 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 Pixar's Common Stock as
of December 31, 1996.
AGGREGATED OPTION EXERCISES IN FISCAL 1996 AND
FISCAL 1996 YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
ACQUIRED ON VALUE OPTIONS AT FISCAL YEAR END FISCAL YEAR END ($)(1)
EXERCISE REALIZED ---------------------------- ----------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------- ---------- ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Steven P. Jobs................. -- $ -- -- -- $ -- $ --
Edwin E. Catmull............... 260,000 3,617,063 606,667 483,333 7,765,338 6,186,662
Lawrence B. Levy............... 105,000 1,771,125 628,334 866,666 8,042,676 11,093,325
John Lasseter.................. 180,000 2,422,250 686,667 483,333 8,789,338 6,186,662
William T. Reeves.............. 50,000 1,006,875 165,833 24,167 2,122,662 309,338
</TABLE>
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(1) Market value of underlying securities based on the closing price of Pixar's
Common Stock on December 31, 1996 (the last trading day of fiscal 1996) on
the Nasdaq National Market of $13.00 minus the exercise price.
EMPLOYMENT AGREEMENTS
Pixar has employment agreements with Edwin E. Catmull and William T.
Reeves that extend until the earlier of (i) the delivery of Pixar's animated
feature film that has the working title Bugs, (ii) the date the Feature Film
Agreement terminates or (iii) July 31, 1998. During the term of their employment
agreements, Mr. Catmull and Mr. Reeves are prohibited from seeking other
employment, except during the last six months of the term of the agreement, and
from becoming financially interested or associated with any entity engaged in a
related or competitive business. The employment agreements can be terminated by
Pixar only upon the respective employee's death or disability or, subject to the
consent of Disney, for cause. The employment agreements provide for a current
annual salary of $214,000 for Mr. Catmull and $219,350 for Mr. Reeves, with 7%
annual increases for each.
In February 1997, Pixar entered into a new employment agreement with
John Lasseter that extends until February 23, 2004. Pursuant to the agreement,
Mr. Lasseter received a signing bonus of $1,250,000 and was granted additional
stock options to purchase 125,000 shares of Pixar's Common Stock which vest over
four years. The agreement provides for a current annual salary of $700,000 with
8% annual increases. The agreement also provides for the payment of a bonus (the
"Motion Picture Bonus") based upon domestic theatrical box office gross receipts
from feature-length animated motion pictures ("Feature Films") directed by Mr.
Lasseter. Under the agreement, Mr. Lasseter will direct three Feature Films and
has the option to direct certain sequels to Feature Films he directed if Pixar
elects to produce such sequels within twelve years after the initial release of
the applicable picture. During the term of the 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. Pixar can terminate the agreement at any time for any reason. However,
if Pixar terminates Mr. Lasseter's employment without cause, Pixar must pay Mr.
Lasseter (i) an amount equal to 75% of the balance of the salary Mr. Lasseter
would have earned through the remainder of the term of the agreement and (ii)
any portion of the
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Motion Picture Bonus as and if due. In addition, the vesting of Mr. Lasseter's
stock options would accelerate so that they would be exercisable in full and Mr.
Lasseter could accept employment with any third party.
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 Pixar's 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 April 16, 1997,
there were no 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 shares of Pixar's
Common Stock on the date of the grant of the option. Messrs. Brittenham,
Graziano and Sonsini, all of whom are non-employee directors of Pixar, will be
eligible for Subsequent Options under the Director Plan on the third anniversary
of the date they became directors.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Pixar's Compensation Committee was formed in October 1995 and is
currently composed of Messrs. Brittenham and Graziano. No interlocking
relationship exists 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 April 16, 1997 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;
and (iv) all directors and executive officers of Pixar as a group.
<TABLE>
<CAPTION>
NUMBER OF PERCENT
NAME OF BENEFICIAL OWNER SHARES (1) OF TOTAL(1)
- -------------------------------------------------------------------- ---------- -----------
<S> <C> <C>
Steven P. Jobs...................................................... 30,000,001 72.9%
c/o Pixar
1001 West Cutting Boulevard
Richmond, CA 94804
Disney Enterprises, Inc. (2)........................................ 2,500,100 5.9
500 South Buena Vista Street
Burbank, CA 91521
John Lasseter (3)................................................... 1,046,667 2.5
Edwin E. Catmull (4)................................................ 855,167 2.1
Lawrence B. Levy (5)................................................ 818,334 2.0
William T. Reeves (6)............................................... 740,833 1.8
Larry W. Sonsini (7)................................................ 10,000 *
Skip M. Brittenham (8).............................................. 10,000 *
Joseph A. Graziano (9).............................................. 10,000 *
All directors and executive officers as a group (10 persons) (10)... 34,272,752 78.3
</TABLE>
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* Represents less than 1% of the total.
(1) Based on 41,148,036 shares outstanding on April 16, 1997. 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
April 16, 1997 through the exercise of any stock option or other right.
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) Includes 1,500,000 shares issuable upon exercise of warrants.
(3) Includes 706,667 shares subject to options that are exercisable within 60
days of April 16, 1997.
(4) Includes 406,667 shares subject to options that are exercisable within 60
days of April 16, 1997.
(5) Includes 718,334 shares subject to options that are exercisable within 60
days of April 16, 1997.
(6) Includes 140,833 shares subject to options that are exercisable within 60
days of April 16, 1997.
(7) Includes 10,000 shares subject to options that are exercisable within 60
days of April 16, 1997.
(8) Includes 10,000 shares subject to options that are exercisable within 60
days of April 16, 1997.
(9) Includes 10,000 shares subject to options that are exercisable within 60
days of April 16, 1997.
(10) Includes 2,596,751 shares subject to options that are exercisable within 60
days of April 16, 1997.
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In December 1993, Pixar advanced $15,000 to Edwin Catmull, an executive
officer of Pixar, pursuant to a promissory note that bore interest at the annual
rate of 5%. The principal and accrued interest, which totaled $16,976, was
repaid in August 1996.
In May 1995, Pixar loaned $200,000 to Edwin E. Catmull, an executive
officer of Pixar, for the purchase of a new principal residence pursuant to a
promissory note that bore interest of 6.62%, compounded annually. The principal
and accrued interest, which totaled $217,490, was repaid in August 1996.
Pixar has 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. Pixar has also engaged the law firm of Wilson
Sonsini Goodrich & Rosati ("WSGR") to handle certain legal matters. Larry W.
Sonsini, a director of Pixar, is a member of the firm. Payments by Pixar 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.
Pixar believes that all of the transactions set forth above were made
on terms no less favorable to Pixar than could have been obtained from
unaffiliated third parties. All future transactions, including loans, between
Pixar and its 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 Pixar than could be
obtained from unaffiliated third parties.
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SIGNATURE
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 30th day of April 1997.
PIXAR
By: /s/ Lawrence B. Levy
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Lawrence B. Levy
Executive Vice President and Chief
Financial Officer
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