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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
PIXAR
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(Exact Name- --------------------------------------------------------------------------------
(Name of Registrant as Specified in itsIn Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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[PIXAR LOGO]
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 26, 2000SEPTEMBER 14, 2001
To the Shareholders:
Notice is hereby given that the Annual Meeting of Shareholders (the "Annual
Meeting") of Pixar, a California corporation, will be held on Thursday, October
26, 2000Friday, September
14, 2001 at 10:00 a.m., local time, in the Wattis Theater at the San Francisco
Museum of Modern Art located at 151 Third Street, San Francisco, California
94103, for the following purposes:
1. To approve an amendment to Pixar's Bylaws to increase the
authorized number ofre-elect eight directors to a range of six to eleven directors, with
the exact number to be fixed at eight.
2. To re-elect seven directors and elect one new director to serve for the ensuing year or until
their successors are duly elected and qualified.
3.2. To approve an amendment to Pixar's 1995 Stock Plan to increase the
number of shares reserved for issuance thereunder by 3,350,000750,000 shares.
4.3. To ratify the appointment of KPMG LLP as independent auditors of
Pixar for the fiscal year ending December 30, 2000.
5.29, 2001.
4. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only holders of record of Pixar's common stock at the close of business on
September 22, 2000August 10, 2001 are entitled to notice of and to vote at the Annual Meeting.
All shareholders are cordially invited to attend the Annual Meeting in
person. However, to assure your representation at the Annual Meeting, you are
urged to mark, sign, date and return the enclosed proxy card as promptly as
possible in the postage-prepaid envelope enclosed for that purpose. Any
shareholder attending the Annual Meeting may vote in person even if he or she
has returned a proxy card.
By Order of the Board of Directors
/s/ ANN MATHER
Ann Mather
Executive Vice President,
Chief Financial Officer and Secretary
Richmond,Emeryville, California
October 5, 2000August 22, 2001
IMPORTANT: WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO
COMPLETE AND PROMPTLY RETURN THE ENCLOSED PROXY CARD IN THE ENVELOPE PROVIDED.
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PIXAR
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PROXY STATEMENT
FOR
20002001 ANNUAL MEETING OF SHAREHOLDERS
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PROCEDURAL MATTERS
GENERAL
The enclosed proxy is solicited on behalf of the Board of Directors of
Pixar, a California corporation, for use at Pixar's Annual Meeting of
Shareholders (the "Annual Meeting") to be held on Thursday, October 26, 2000Friday, September 14, 2001 at
10:00 a.m., local time, and at any adjournment thereof, for the purposes set
forth herein and in the accompanying Notice of Annual Meeting of Shareholders.
The Annual Meeting will be held in the Wattis Theater at the San Francisco
Museum of Modern Art located at 151 Third Street, San Francisco, California
94103. Pixar's headquarters are located at 1001 West Cutting Boulevard,
Richmond,1200 Park Avenue, Emeryville,
California 94804,94608, and the telephone number at that location is (510) 236-4000.752-3000.
This Proxy Statement and the enclosed proxy card, together with Pixar's
2000 Annual Report to shareholders, were mailed on or about October 5, 2000 together with Pixar's 1999 Annual Report to Shareholders,August 22, 2001 to
all shareholders entitled to vote at the Annual Meeting.
Pixar's 19992000 fiscal year began on January 3, 19992, 2000 and ended January 1,on December 30,
2000. All references in this Proxy Statement to fiscal 19992000 refer to the period
from January 3, 19992, 2000 through January 1,December 30, 2000.
RECORD DATE
Only holders of record of Pixar's common stock, no par value (the "Common
Stock"), at the close of business on September 22, 2000August 10, 2001 (the "Record Date") are
entitled to notice of and to vote at the Annual Meeting. As of the Record Date,
47,446,81448,326,859 shares of Pixar's Common Stock were outstanding. For information
regarding security ownership by management and by the beneficial owners of more
than 5% of Pixar's Common Stock, see "Security Ownership of Certain Beneficial
Owners and Management."
PROXIES; REVOCABILITY OF PROXIES
All shares entitled to vote and represented by properly executed proxies
received prior to the Annual Meeting, and not revoked, will be voted at the
Annual Meeting in accordance with the instructions indicated on those proxies.
If no instructions are indicated on a properly executed proxy, the shares
represented by that proxy will be voted as recommended by the Board of
Directors. If any other matters are properly presented for consideration at the
Annual Meeting, the persons named in the enclosed proxy and acting thereunder
will have discretion to vote on those matters in accordance with their best
judgment. Pixar does not currently anticipate that any other matters will be
raised at the Annual Meeting.
A shareholder may revoke any proxy given pursuant to this solicitation at
any time before it is voted by delivering to Pixar's Corporate Secretary a
written notice of revocation or a duly executed proxy bearing a date later than
that of the previously submitted proxy, or by attending the Annual Meeting and
voting in person.
VOTING AND SOLICITATION
Each shareholder is entitled to one vote for each share of Common Stock on
all matters presented at the Annual Meeting. Shareholders do not have the right
to cumulate their votes in the election of directors.
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The cost of soliciting proxies will be borne by Pixar. Pixar may reimburse
brokerage firms and other persons representing beneficial owners of shares for
their reasonable expenses in forwarding solicitation materials to such
beneficial owners. Proxies may also be solicited by certain of Pixar's
directors, officers, and regular employees, without additional compensation,
personally or by telephone, telegram, letter or facsimile.
QUORUM; ABSTENTIONS; BROKER NON-VOTES
The presence at the Annual Meeting, either in person or by proxy, of the
holders of a majority of the outstanding shares of Common Stock entitled to vote
shall constitute a quorum for the transaction of business. Pixar intends to
include abstentions and broker non-votes as present or represented for purposes
of establishing a quorum for the transaction of business, but to exclude
abstentions and broker non-votes from the calculation of shares entitled to
vote.
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS
Any proposal of a shareholder of Pixar which is intended to be presented by
such shareholder at Pixar's Annual Meeting of Shareholders in 20012002 must be
received by Pixar no later than December 16, 2000January 15, 2002 in order for such proposal to
be considered for inclusion in Pixar's proxy statement and form of proxy
relating to such meeting.
The attached proxy card grants the persons named as proxies discretionary
authority to vote on any matter raised at the Annual Meeting that is not
included in this Proxy Statement. If a shareholder intends to present a proposal
at Pixar's Annual Meeting of Shareholders in 20012002, and the shareholder does not
give appropriate notice to Pixar on or before February 28, 2001March 31, 2002, the persons named
as proxies may use their discretionary voting authority to vote on the proposal.
PROPOSAL NO. 1
APPROVALELECTION OF AMENDMENT TO BYLAWS
GENERAL
Section 3.2 of Article III ofDIRECTORS
NOMINEES
Pixar's Amended and Restatedcurrent Bylaws (the
"Bylaws") currently provides that the authorized number of directors shall be a
minimum of four and a maximum of seven, with the exact number of directors to be
fixed from time to time within such range by the Board of Directors or the
shareholders. The Board of Directors has adopted, subject to shareholder
approval, an amendment to the Bylaws that would increase the authorized number
of directors toauthorize a range of six to eleven directors,
with the exact numbercurrently set at eight, to be
fixed at eight.
AMENDMENT TO BYLAWS
Theserve on Pixar's Board of Directors believes that this proposed Bylaw amendment will
enable the Board to take timely advantage of the availability of well-qualified
candidates for appointment to the Board, in particular, candidates from outside
Pixar whose skills and experience will benefit Pixar.
If approved, Section 3.2 of Article III of the Bylaws would be amended to
read as follows:
"3.2 Number of Directors
The number of directors of the corporation shall be not less than six
(6) nor more than eleven (11). The exact number of directors shall be eight
(8) until changed, within the limits specified above, by a bylaw amending
this section 3.2 duly adopted by the board of directors or by the
shareholders. The indefinite number of directors may be changed, or a
definite number may be fixed without provision for an indefinite number, by
a duly adopted amendment to the articles of incorporation or by an
amendment to this bylaw duly adopted by the vote or written consent of
holders of a majority of the outstanding shares entitled to vote; provided,
however, that if the authorized number of directors is five (5) or more, an
amendment reducing the fixed number or the minimum number of directors to a
number less than five
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(5) cannot be adopted if the votes cast against its adoption at a meeting,
or the shares not consenting in the case of an action by written consent,
are equal to more than sixteen and two-thirds percent (16 2/3%) of the
outstanding shares entitled to vote thereon. No amendment may change the
stated maximum number of authorized directors to a number greater than two
(2) times the stated minimum number of directors minus one (1).
No reduction of the authorized number of directors shall have the
effect of removing any director before that director's term of office
expires."
REQUIRED VOTE
The affirmative vote of the holders of a majority of the Common Stock
entitled to vote at the Annual Meeting is required to approve the amendment to
the Bylaws.
RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE
AMENDMENT TO PIXAR'S BYLAWS.
PROPOSAL NO. 2
ELECTION OF DIRECTORS
NOMINEESDirectors. A board of eight
directors is to be elected at the Annual Meeting. Unless otherwise instructed,
the proxy holders will vote the proxies received by them for Pixar's eight
nominees named below, all of whom are presently directors of Pixar other than Joe Roth.Pixar. In the event
that any nominee of Pixar is unable or declines to serve as a director at the
time of the Annual Meeting, the proxies will be voted for any nominee who shall
be designated by the present Board of Directors to fill the vacancy. It is not
expected that any nominee will be unable or will decline to serve as a director.
The term of office of each person elected as a director will continue until the
next annual meeting of shareholders or until a successor has been duly elected
and qualified.
Pixar's current Bylaws authorize a maximum of seven directors to serve on
Pixar's Board of Directors. If the shareholders do not approve Proposal No. 1,
which would amend Pixar's Bylaws to increase the authorized number of directors
to a maximum of eleven, then Joe Roth will not serve as a director on Pixar's
Board of Directors.2
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The name and certain information regarding each nominee are set forth
below. There are no family relationships among directors or executive officers
of Pixar.
NAME AGE(1) POSITION WITH PIXAR
---- ------ -------------------
Steve Jobs........................... 4546 Chairman and Chief Executive Officer
Larry W. Sonsini..................... 59Edwin E. Catmull..................... 56 Director and President
Jill E. Barad........................ 50 Director
Skip M. Brittenham................... 59 Director
Joseph A. Graziano................... 5657 Director
Jill E. Barad........................ 49 Director
Edwin E. Catmull..................... 55 Director, Executive Vice President and Chief
Technical Officer
Lawrence B. Levy..................... 4142 Director
Joe Roth............................. 5253 Director
Larry W. Sonsini..................... 60 Director
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(1) As of September 22, 2000.July 31, 2001.
Mr. Jobs co-founded Pixar in 1986 and has served as its Chief Executive
Officer and a Director since then. In addition, Mr. Jobs is the Chief Executive
Officer and a Director of Apple. Mr. Jobs also serves as a Director of Gap, Inc.
Dr. Catmull is a co-founder of Pixar and hasin January 2001 was promoted to
President of Pixar. Dr. Catmull had previously served as its ChairmanExecutive 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
its Chief Executive Officer since February 1986. He has been a
directorPresident. Prior to joining Pixar, he was Vice President of the Computer
Division of Lucasfilm. In March 2001, Dr. Catmull, along with two other Pixar
since February 1986. In addition, Mr. Jobsemployees, received an Oscar(R) from the Academy of Motion Picture 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 currently Chief
Executive Officer and a member of the
BoardScientific and Technical Awards Committee of DirectorsThe Academy of Apple Computer,
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Inc. ("Apple"). Mr. Jobs was alsoMotion Picture Arts
and Sciences. Dr. Catmull received B.S. degrees in computer science and physics
and a co-founderPh.D. in computer science from the University 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. SonsiniUtah.
Ms. Barad 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 asJuly 1997. She was
formerly the Chairman and Chief Executive Officer of the firm'sMattel, Inc. from January
1998 to February 2000. From January 1997 to December 1997, she was President and
Chief Executive Management Committee. Mr. SonsiniOfficer 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 Brocade Communications Systems,Leap Wireless International, Inc., Echelon
Corporation, Lattice Semiconductor Corporation, Novell, Inc. and TIBCO Software,
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 attorneyis a
senior partner with the law firm of Ziffren, Brittenham, Branca & Fischer, an
entertainment law firm, sincefounded in 1978. Mr. Brittenham currently serves on the
board of, or is a trustee of, numerous charitable organizations, including
Conservation International, the American Oceans Campaign,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 Packeteer, Inc. and Talk City,Packeteer, Inc. Mr. Graziano received a B.S.
in accounting from Merrimack College and is a certified public accountant.
Ms. Barad has served as a director of Pixar since July 1997. From January
1998 to February 2000, she was the Chairman and Chief Executive Officer of
Mattel, Inc. 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.
Dr. Catmull is a co-founder of Pixar and has 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. 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 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.
Mr. Levy has served as a director of Pixar since April 1999. InFrom June 2000
to December 2000, Mr. Levy becamewas 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 served1999, and as Secretary of
Pixar from October 1995 to March 1999. Prior to joining Pixar, he was Vice
Chairman and Chief
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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 and 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, a media company focusing onan independent movie and
television production, internet content development and soundtracks,studio, in January 2000. From
April 1996 to January 2000, heMr. Roth was the Chairman of Walt Disney Studios.
From August 1994 to April 1996, Mr. Roth was Chairman of the Walt
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Pictures Group. From 1992 to 1994 he ran Caravan Pictures for Disney. From July
1989 to November 1992, Mr. Roth served as Chairman of 20(th)20th Century Fox. Prior to
Fox, Roth was an independent producer/director and cofoundedco-founded Morgan Creek
Pictures. Mr. Roth received a BA 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 of
Brocade, Inc., Commerce One, Echelon Corporation, Lattice Semiconductor
Corporation, LSI Logic Corporation, Novell, Inc. and TIBCO Software, Inc., as
well as several private companies. Mr. Sonsini also serves as a member of the
Board of Directors of the New York Stock Exchange. Mr. Sonsini received A.B. and
L.L.B. degrees from the University of California, Berkeley.
BOARD MEETINGS AND COMMITTEES
The Board of Directors held a total of fourtwo meetings (including regularly
scheduled and special meetings) during fiscal 19992000 and also took certain actions
by written consent. No incumbent director during the last fiscal year attended
fewer than 75% of the aggregate of (i) the total number of meetings of the Board
of Directors and (ii) the total number of meetings held by all committees on
which he or she served, except for Larry Sonsini who attended 50% of the
meetings.Sonsini.
The Board of Directors of Pixar has two standing committees which were
established in October 1995: an Audit Committee and a Compensation Committee.
Pixar has no nominating committee or a committee performing a similar function.
The Audit Committee, which currently consists of Messrs. Brittenham,
Graziano and Sonsini, is responsible for (i) recommending engagement of Pixar's
independent auditors, (ii) approving the services performed by such auditors,
(iii) consulting with such auditors and reviewing with them the results of their
examination,reviews and audits, (iv) reviewing and approving any material accounting policy
changes affecting Pixar's operating results, (v) reviewing Pixar's control
procedures and personnel, and (vi) reviewing and evaluating Pixar's accounting
principles and its system of internal accounting controls. During fiscal 2000,
Mr. Brittenham iswas an alternate member of the Audit Committee and will serve whenwould have
served if another member iswas unable to attend a committee meeting. Mr.
Brittenham became a member of the Audit Committee in June 2001. The Audit
Committee held two meetingsone meeting during fiscal 1999.2000.
The Compensation Committee, which currently consists of Ms. Barad and Mr.
Graziano, is responsible for (i) reviewing and approving the compensation and
benefits for Pixar's officers and other employees, (ii) administering Pixar's
stock option plans and (iii) making recommendations to the Board of Directors
regarding such matters. The Compensation Committee did not hold any meetings
during fiscal 1999,2000, but Pixar's Board of Directors performed similar functions
during fiscal 1999.2000.
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
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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 September 22, 2000
there were 130,000 options outstandingJuly 31, 2001 a total of 20,000 shares remained available for future
grant 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 10
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 5
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share of
Pixar's Common Stock on the date of the grant of the option.
Ms. BaradMr. Roth was granted a First Option in July 1997October 2000 at an exercise price of
$15.125$29.63 per share andshare. Ms. Barad was granted 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 1998 at an exercise price of $30.75 per share, in August 1999 at an
exercise price of $33.50 per share and in August 2000 at an exercise
price of $32.00. Mr. Sonsini was granted Subsequent Options in April 1998 at an exercise
price of $43.50 per share, in April 1999 at an exercise price of $40.875 per
share and in April 2000 at an exercise price of $39.375$32.00 per share. If elected to
the Board of Directors, Mr. Roth will receive a First Option.and Mr. Levy, a
non-employee directordirectors of
Pixar, will be eligible for a Subsequent OptionOptions under the Director Plan in April 2002.on the
third anniversary of the dates they became non-employee 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.
REQUIRED VOTE
The eight nominees receiving the highest number of affirmative votes of the
shares present or represented and entitled to be voted for them shall be elected
as directors. Votes withheld from any director are counted for purposes of
determining the presence or absence of a quorum for the transaction of business,
but have no other legal effect under California law.
RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
ELECTION OF MR. ROTH AND THE RE-ELECTION OF MESSRS. JOBS, SONSINI, BRITTENHAM,
GRAZIANO, CATMULL AND LEVY AND MS. BARAD.THE NOMINEES LISTED ABOVE.
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PROPOSAL NO. 32
APPROVAL OF AMENDMENTSAMENDMENT TO PIXAR'S 1995 STOCK PLAN
GENERAL
Pixar's 1995 Stock Plan was adopted by the Board of Directors and approved
by the shareholders in May 1995 and provides for the granting to employees
(including employee directors and officers) of Pixar of incentive stock options
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"), and for the granting of nonstatutory stock options and
stock purchase rights to employees and consultants of Pixar. A total of
21,891,16623,320,167 shares of Common Stock has been reserved for issuance by the
Board of
Directorsshareholders under the 1995 Stock Plan. The number of shares of Common Stock
available for issuance under the 1995 Stock Plan is automatically increased on
the first day of each calendar year by an amount equal to three percent of the
number of shares of Common Stock outstanding on such date. As of September 22,
2000July 31, 2001 a
total of 3,394,2671,144,493 shares remained available for future grant under the 1995
Stock Plan.
PROPOSAL
In September 1999 and SeptemberDecember 2000, the Board of Directors adopted, subject to shareholder
approval, amendmentsan amendment to the 1995 Stock Plan to increase the number of shares
reserved for issuance by an additional 1,500,000 and
1,850,000750,000 shares of Common Stock, respectively, for an
aggregate of 21,891,16624,070,167 shares reserved for issuance thereunder. These amendmentsThis amendment
will enable Pixar to continue to grant options to eligible employees and
consultants under the terms and conditions of the 1995 Stock Plan.
The Board of Directors believes that the approval of the amendmentsamendment to the
1995 Stock Plan is in the best interests of Pixar and its shareholders, as the
availability of an adequate number of shares for issuance under the 1995 Stock
Plan and the ability to grant stock options is an important factor in
attracting, motivating and retaining qualified personnel essential to the
success of Pixar.
REQUIRED VOTE
The affirmative vote of the holders of a majority of the Common Stock
entitled to vote at the Annual Meeting is required to approve the amendment to
the 1995 Stock Plan.
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RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
AMENDMENTSAMENDMENT TO THE 1995 STOCK PLAN.
SUMMARY OF 1995 STOCK PLAN
The following summary of the 1995 Stock Plan is qualified in its entirety
by the specific language of the 1995 Stock Plan, a copy of which is available to
any shareholder upon written request to the Corporate Secretary.Plan.
Purposes. The purposes of the 1995 Stock Plan are to attract and retain the
best available personnel for positions of substantial responsibility, to provide
additional incentive to employees and consultants of Pixar, and to promote the
success of Pixar's business.
Administration. The 1995 Stock Plan may be administered by the Board or a
committee of the Board (the "Administrator"), which committee is required to be
constituted to comply with Section 16(b) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and applicable laws. Subject to the other
provisions of the 1995 Stock Plan, the Administrator has the power to determine
the employees and consultants to whom options and stock purchase rights may be
granted, the number of shares subject to the option or stock purchase right and
the exercisability thereof. The Administrator also has the power to reprice
options if the exercise price of outstanding options exceeds the fair market
value of Pixar's Common Stock.
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Eligibility; Limitations. The 1995 Stock Plan provides that nonstatutory
stock options may be granted to employees and consultants. Incentive stock
options may be granted only to employees. An optionee who has been granted an
option or stock purchase right may, if he or she is otherwise eligible, be
granted additional options or stock purchase rights.
Section 162(m) of the Code limits the deductibility of compensation paid to
certain executive officers of Pixar. To maximize Pixar's deduction attributable
to options granted to such persons, the 1995 Stock Plan provides that no
employee may be granted, in any fiscal year, options and stock purchase rights
to purchase more than 3,000,000 shares of Common Stock.
Terms and Conditions of Options. Each option granted under the 1995 Stock
Plan is evidenced by a written stock option agreement between the optionee and
Pixar and is subject to the following terms and conditions:
(a) Exercise Price. The Administrator determines the exercise price of
options to purchase shares of Common Stock at the time the options are
granted. However, the exercise price of an incentive stock option must not
be less than 100% (110% if issued to any person possessing more than 10% of
the voting power of all classes of stock of Pixar (a "10% Shareholder")) of
the fair market value of the Common Stock on the date the option is
granted. For so long as Pixar's Common Stock is traded on the Nasdaq
National Market, the fair market value of a share of Common Stock will be
the closing sales price for such stock (or the closing bid if no sales were
reported) on the last trading day prior to the date of grant as quoted on
such system.
(b) Exercise of the Option. Each stock option agreement will specify
the term of the option and the date when the option is to become
exercisable. The terms of such vesting are to be determined by the
Administrator. Options granted under the 1995 Stock Plan to date generally
become exercisable over four years and have a 10-year term. The maximum
term of an option granted to a 10% Shareholder is five years. Options
granted prior to January 1, 1998 generally vest at a rate of one-fourth of
the shares subject to the options at the end of one year from the date of
grant and 1/48 at the end of each month thereafter. Options granted after
January 1, 1998 generally vest at a rate of one-fourth of the shares
subject to the options at the end of each year from the date of grant. An
option is exercised by giving written notice of exercise to Pixar,
specifying the number of full shares of Common Stock to be purchased and by
tendering full payment of the purchase price to Pixar.
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(c) Form of Consideration. The consideration to be paid for the shares
of Common Stock issued upon exercise of an option shall be determined by
the Administrator and is set forth in the stock option agreement. Such form
of consideration may vary for each option, and may consist entirely of
cash, check, promissory note, other shares of Pixar's Common Stock, any
combination thereof, or any other legally permissible form of consideration
as may be provided in the stock option agreement.
(d) Termination of Employment. In the event an optionee's continuous
status as an employee or consultant terminates for any reason (other than
upon the optionee's death or disability), the optionee may exercise his or
her option within such period of time as is specified in such optionee's
stock option agreement but only to the extent that the optionee was
entitled to exercise the option at the date of such termination (but in no
event later than the expiration of the term of such option as set forth in
the stock option agreement). Options granted under the 1995 Stock Plan to
date have generally provided that optionees may exercise their options
within 30 days from the date of termination of employment (other than for
death or disability).
(e) Disability. In the event an optionee's continuous status as an
employee or consultant terminates as a result of permanent and total
disability (as defined in Section 22(e)(3) of the Code), the optionee may
exercise his or her option, but only within 12 months from the date of such
termination, and only to the extent that the optionee was entitled to
exercise it at the date of such termination (but in no event later than the
expiration of the term of such option as set forth in the stock option
agreement).
(f) Death. In the event of an optionee's death, the optionee's estate
or a person who acquired the right to exercise the deceased optionee's
option by bequest or inheritance may exercise the option, but
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only within 12 months following the date of death, and only to the extent
that the optionee was entitled to exercise it at the date of death (but in
no event later than the expiration of the term of such option as set forth
in the stock option agreement).
(g) Term of Options. The term of each option is the term stated in the
stock option agreement; provided, however, that the term may not exceed 10
years from the date of grant. In the case of an incentive stock option
granted to a 10% Shareholder, the term may not exceed five years from the
date of grant. No option may be exercised by any person after the
expiration of its term.
(h) Nontransferability of Options. An option is nontransferable by the
optionee, other than by will or the laws of descent and distribution, and
is exercisable during the optionee's lifetime only by the optionee. In the
event of the optionee's death, options may be exercised by a person who
acquires the right to exercise the option by bequest or inheritance.
(i) Value Limitation. If the aggregate fair market value (as
determined on date of grant) of all shares of Common Stock subject to an
optionee's incentive stock option, which are exercisable for the first time
during any calendar year, exceeds $100,000, the excess options shall be
treated as nonstatutory options.
(j) Other Provisions. The stock option agreement may contain such
other terms, provisions and conditions not inconsistent with the 1995 Stock
Plan as may be determined by the Administrator.
Stock Purchase Rights. A stock purchase right gives the purchaser a period
of no longer than 30 days from the date of grant to purchase Common Stock. A
stock purchase right is accepted by the execution of a restricted stock purchase
agreement between Pixar and the purchaser, accompanied by the payment of the
purchase price for the shares. Unless the Administrator determines otherwise,
the restricted stock purchase agreement shall give Pixar a repurchase option
exercisable upon the voluntary or involuntary termination of the purchaser's
employment or consulting relationship with Pixar for any reason (including death
and disability). The purchase price for any shares repurchased by Pixar shall be
the original price paid by the purchaser. The repurchase option lapses at a rate
determined by the Administrator. A stock purchase right is nontransferable other
than by will or the laws of descent and distribution, and may be exercisable
during the optionee's lifetime only by the optionee.
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Adjustment Upon Changes in Capitalization; Corporate Transactions. In the
event of changes in the outstanding Common Stock of Pixar by reason of any stock
splits, reverse stock splits, stock dividends, combinations, reclassifications
or other similar change in the capital structure of Pixar, an appropriate
adjustment shall be made by the Administrator in the following: (i) the number
of shares of Common Stock subject to the 1995 Stock Plan, (ii) the number and
class of shares of stock subject to any option or stock purchase right
outstanding under the 1995 Stock Plan, and (iii) the exercise price of any such
outstanding option or stock purchase right. The determination of the
Administrator as to which adjustments shall be made shall be conclusive. In the
event of a proposed dissolution or liquidation of Pixar, the Board will notify
the holders of options or stock purchase rights at least 15 days prior to such
action and all outstanding options and stock purchase rights will terminate
immediately prior to the consummation of such proposed action.
Notwithstanding the above, in the event of a merger of Pixar with or into
another corporation or the sale of substantially all of the assets of Pixar, the
1995 Stock Plan requires that each outstanding option and stock purchase right
be assumed or an equivalent option or stock purchase right be substituted by the
successor corporation; provided, however, if such successor or purchaser refuses
to assume or substitute the then outstanding options or stock purchase rights,
the 1995 Stock Plan provides for the full acceleration of the exercisability of
all outstanding options and stock purchase rights for a period of 15 days from
the date of notice of acceleration to the holder and all options or stock
purchase rights will terminate upon the expiration of such period.
Amendment and Termination of the 1995 Stock Plan. The Board may at any time
amend, alter, suspend or terminate the 1995 Stock Plan. Pixar shall obtain
shareholder approval of any amendment to the 1995 Stock Plan in such a manner
and to such a degree as is necessary and desirable to comply with Rule 16b-3
under the Exchange Act and Sections 162(m) and 422 of the Code (or any other
applicable law or regulation,
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including the requirements of any exchange or quotation system on which the
Common Stock is traded). Any amendment or termination of the 1995 Stock Plan
shall not affect options already granted and such options shall remain in full
force and effect as if the 1995 Stock Plan had not been amended or terminated,
unless mutually agreed otherwise between the optionee and Pixar, which agreement
must be in writing and signed by the optionee and Pixar. In any event, the 1995
Stock Plan shall terminate in May 2005. Any options outstanding under the 1995
Stock Plan at the time of its termination shall remain outstanding until they
expire by their terms.
FEDERAL INCOME TAX CONSEQUENCES
Incentive Stock Options. An optionee who is granted an incentive stock
option does not recognize taxable income at the time the option is granted or
upon its exercise, although the exercise may subject the optionee to the
alternative minimum tax. Upon a disposition of the shares more than two years
after grant of the option and one year after exercise of the option, any gain or
loss is treated as long-term capital gain or loss. If these holding periods are
not satisfied, the optionee recognizes ordinary income at the time of
disposition equal to the difference between the exercise price and the lower of
(i) the fair market value of the shares at the date of the option exercise or
(ii) the sale price of the shares. Any gain or loss recognized on such a
premature disposition of the shares in excess of the amount treated as ordinary
income is treated as long-term or short-term capital gain or loss, depending on
the holding period. Long-term capital gains are grouped and netted by holding
periods. Net capital gains on assets held for more than 12 months are currently
taxed at a maximum federal rate of 20%. Capital losses are allowed in full
against capital gains and up to $3,000 against other income. A different rule
for measuring ordinary income upon a premature disposition may apply if the
optionee is also an officer, director, or 10% Shareholder of Pixar. Pixar is
entitled to a deduction in the same amount as the ordinary income recognized by
the optionee.
Nonstatutory Stock Options. An optionee does not recognize any taxable
income at the time he or she is granted a nonstatutory stock option. Upon
exercise, the optionee recognizes taxable income generally measured by the
excess of the then fair market value of the shares over the exercise price. Any
taxable income recognized in connection with an option exercise by an employee
of Pixar is subject to tax withholding by Pixar. Pixar is entitled to a
deduction in the same amount as the ordinary income recognized by the optionee.
Upon a disposition of such shares by the optionee, any difference between the
sale price and the optionee's 9
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exercise price, to the extent not recognized as
taxable income as provided above, is treated as long-term or short-term capital
gain or loss, depending on the holding period. Net capital gains on assets held
for more than 12 months are currently taxed at a maximum federal rate of 20%.
Capital losses are allowed in full against capital gains and up to $3,000
against other income.
Stock Purchase Rights. Stock purchase rights will generally be taxed in the
same manner as nonstatutory stock options. However, restricted stock is
generally purchased upon the exercise of a stock purchase right. At the time of
purchase, restricted stock is subject to a "substantial risk of forfeiture"
within the meaning of Section 83 of the Code. As a result, the purchaser will
not recognize ordinary income at the time of purchase. Instead, the purchaser
will recognize ordinary income on the dates when the stock ceases to be subject
to a substantial risk of forfeiture. The stock will generally cease to be
subject to a substantial risk of forfeiture when it is no longer subject to
Pixar's right to repurchase the stock upon the purchaser's termination of
employment with Pixar. At such times, the purchaser will recognize ordinary
income measured as the difference between the purchase price and the fair market
value of the stock on the date the stock is no longer subject to a substantial
risk of forfeiture.
The purchaser may accelerate to the date of purchase his or her recognition
of ordinary income, if any, and the beginning of any capital gain holding period
by timely filing an election pursuant to Section 83(b) of the Code. In such
event, the ordinary income recognized, if any, is measured as the difference
between the purchase price and the fair market value of the stock on the date of
purchase, and the capital gain holding period commences on such date. The
ordinary income recognized by a purchaser who is an employee will be subject to
tax withholding by Pixar. Different rules may apply if the purchaser is also an
officer, director, or 10% Shareholder of Pixar.
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The foregoing is only a summary of the effect of federal income taxation
upon optionees, holders of stock purchase rights, and Pixar with respect to the
grant and exercise of options and stock purchase rights under the 1995 Stock
Plan. It does not purport to be complete, and does not discuss the tax
consequences of the employee's or consultant's death or the provisions of the
income tax laws of any municipality, state or foreign country in which the
employee or consultant may reside.
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PARTICIPATION IN THE 1995 STOCK PLAN IN FISCAL 19992000
The grant of options under the 1995 Stock Plan to employees, including the
Named Officers (as defined under "Executive Officer Compensation"), is subject
to the discretion of the Administrator. As of the date of this proxy statement,
there has been no determination by the Administrator with respect to future
awards under the 1995 Stock Plan. Accordingly, future awards are not
determinable. Non-employee directors are not eligible to participate in the 1995
Stock Plan. The following table sets forth information with respect to the grant
of options pursuant to the 1995 Stock Plan to the Named Officers, to all current
executive officers as a group and to all other employees as a group during the
last fiscal year.
NUMBER OF
SECURITIES UNDERLYING OPTIONS EXERCISE PRICE
NAME OF INDIVIDUAL AND POSITION OPTIONS GRANTED ($ PER SHARE)
------------------------------- ----------------------------------------- --------------
Steve Jobs.................................................. -- --
Chairman, Chief Executive Officer
Edwin E. Catmull............................................ -- --
Executive Vice500,000 $26.50
President and Chief Technical Officer
Ann Mather.................................................. 500,000 $33.94-- --
Executive Vice President, Chief Financial Officer and
Secretary
John Lasseter............................................... -- --1,000,000 26.50
Executive Vice President, Creative Development
Sarah McArthur.............................................. -- --
Executive Vice President, Production
All current executive officers as a group (5 persons)....... 500,000 $33.941,500,000 26.50
All other employees as a group.............................. 1,600,077 $35.29(1)3,854,584 28.72(1)
- ---------------
(1) Represents a weighted average per share exercise price.
PROPOSAL NO. 43
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected KPMG LLP, independent certified public
accountants, to audit the financial statements of Pixar for the fiscal year
ending December 30, 2000.29, 2001. KPMG LLP has audited Pixar's financial statements
since Pixar's inception. A representative of KPMG LLP is expected to be present
at the meeting, will have the opportunity to make a statement, and is expected
to be available to respond to appropriate questions.
REQUIRED VOTE
The Board of Directors has conditioned its appointment of Pixar's
independent auditors upon the receipt of the affirmative vote of a majority of
the shares represented, in person or by proxy, and voting at the Annual Meeting.
In the event that the shareholders do not approve the selection of KPMG LLP, the
appointment of the independent auditors will be reconsidered by the Board of
Directors.
RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS PIXAR'S INDEPENDENT AUDITORS.
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FEE DISCLOSURE
Audit Fees. The aggregate fees billed by KPMG LLP for professional services
rendered for the audit of the Company's annual financial statements for the year
ended December 30, 2000 and for the reviews of the financial statements included
in the Company's Quarterly Reports on Form 10-Q for that year were $215,500.
Financial Information Systems Design and Implementation Fees. No fees were
billed by KPMG LLP for professional services rendered for information technology
services design and implementation for the year ended December 30, 2000.
All Other Fees. The aggregate fees billed by KPMG LLP for services rendered
to the Company, other than for services described above, for the year ended
December 30, 2000 were approximately $255,000. These other services consisted of
tax related services, tax compliance, tax research, review of the Securities and
Exchange Commission registration statements, and consultations on accounting and
tax matters.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of Common Stock of
Pixar as of September 22, 2000July 31, 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 OF
NAME OF BENEFICIAL OWNER SHARES(1) TOTAL(1)
------------------------ ---------- ----------
Steve Jobs.................................................. 30,000,001 63.2%62.1%
c/o Pixar
1001 West Cutting Boulevard
Richmond,1200 Park Avenue
Emeryville, CA 9480494608
The TCW Group, Inc.(2)...................................... 3,025,869 6.45,168,883 10.7
865 South Figueroa Street
Los Angeles, CA 90017
Disney Enterprises, Inc.(3)................................. 2,500,100 5.35.0
500 South Buena Vista Street
Burbank, CA 91521
John Lasseter(4)............................................ 785,883811,303 1.7
Edwin E. Catmull(5)......................................... 442,800 1.0Catmull............................................ 377,800 *
Sarah McArthur(6)McArthur(5)........................................... 100,000 *
Ann Mather(7)Mather(6)............................................... 125,000250,000 *
Lawrence B. Levy............................................ 186,40075,900 *
Larry W. Sonsini(8)Sonsini(7)......................................... 24,52834,528 *
Skip M. Brittenham(9)Brittenham(8)....................................... 50,00060,000 *
Joseph A. Graziano(10)...................................... 50,000Graziano(9)....................................... 60,000 *
Jill E. Barad(11)Barad(10)........................................... 31,00041,000 *
Joe Roth.................................................... 0 *
All directors and executive officers as a group (11
persons)(12)(11).............................................. 31,795,612 65.931,810,532 64.5
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* Represents less than 1% of the total.
(1) Based on 47,446,81448,308,317 shares outstanding on September 22, 2000.July 31, 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 60 days of September 22, 2000July
31, 2001 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) As indicated in the Schedule 13G filed by The TCW Group, Inc. pursuant to
the Exchange Act on February 14, 2000.2001.
(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 379,583465,003 shares subject to options that are exercisable within 60
days of September 22, 2000.July 31, 2001.
(5) Includes 66,667 shares subject to options that are exercisable within 60
days of September 22, 2000.
(6) Includes 100,000 shares subject to options that are exercisable within 60
days of September 22, 2000.
(7)July 31, 2001.
(6) Includes 125,000250,000 shares subject to options that are exercisable within 60
days of September 22, 2000.
(8) Includes 20,000 shares subject to options that are exercisable within 60
days of September 22, 2000.
(9) Includes 50,000 shares subject to options that are exercisable within 60
days of September 22, 2000.
(10) Includes 50,000 shares subject to options that are exercisable within 60
days of September 22, 2000.
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(11)July 31, 2001.
(7) Includes 30,000 shares subject to options that are exercisable within 60
days of September 22, 2000.
(12)July 31, 2001.
(8) Includes 821,25060,000 shares subject to options that are exercisable within 60
days of September 22, 2000.July 31, 2001.
(9) Includes 60,000 shares subject to options that are exercisable within 60
days of July 31, 2001.
(10) Includes 40,000 shares subject to options that are exercisable within 60
days of July 31, 2001.
(11) Includes 1,005,003 shares subject to options that are exercisable within 60
days of July 31, 2001.
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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 10% 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 10% 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 19992000 all Section
16(a) filing requirements applicable to its executive officers, directors and
10% shareholders were complied with.with, except that a Form 5 for John Lasseter
reporting an option granted in fiscal 2000 was filed late.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Pixar's Compensation Committee was formed in October 1995 and is currently
composed of Ms. Barad and Mr. 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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EXECUTIVE OFFICER COMPENSATION
SUMMARY COMPENSATION TABLE
The following table shows, as to the Chief Executive Officer and each of
the five most highly compensated executive officers whose salary plus bonus
exceeded $100,000 during the last fiscal year (the "Named Officers"),
information concerning compensation paid for services to Pixar in all capacities
during the last three fiscal years.
LONG TERM
COMPENSATION
AWARDS
------------
ANNUAL COMPENSATION SECURITIES
----------------------- UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY($SALARY ($) BONUS($BONUS ($) OPTIONS(#)OPTIONS (#)
--------------------------- ---- ---------- --------- ---------- ------------
Steve Jobs..................................... 1999Jobs....................................... 2000 $ 52 $ -- --
Chairman, Chief Executive Officer 1999 52 -- --
1998 50 -- --
1997 -- -- --
Edwin E. Catmull...............................Catmull................................. 2000 392,793 -- 500,000
President 1999 322,596 54,167 --
Executive Vice President, Chief Technical 1998 295,846 -- --
Officer 1997 208,539Ann Mather....................................... 2000 400,005 -- --
Ann Mather(1).................................. 1999 124,617 203,600 500,000
Executive Vice President, Chief Financial
Officer 1999 124,617(1) 203,600 500,000
and Secretary 1998 N/A N/A N/A
John Lasseter..................................Lasseter.................................... 2000 879,567 600,000 1,000,000
Executive Vice President, Creative Development 1999 806,726 900,000 --
Executive Vice President, Creative 1998 769,315 250,000 --
Development 1997 625,903 1,250,000 125,000
Sarah McArthur(2).............................. 1999 322,596 54,167McArthur................................... 2000 392,793 -- --
Executive Vice President, Production 1999 322,596 54,167 --
1998 300,000 -- 200,000
1997 196,148 -- 200,000
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(1) Ms. Mather joined Pixar in September 1999.
(2) Ms. McArthur joined Pixar in February 1997.
OPTION GRANTS IN LAST FISCAL YEAR
The following table shows, as to each of the Named Officers, information
concerning stock options granted during fiscal 1999.2000.
OPTION GRANTS IN FISCAL 19992000
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
--------------------------------------------------- VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF
SECURITIES OPTIONS STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM(4)
OPTIONS EMPLOYEES IN PRICE EXPIRATION -------------------------
NAME GRANTED(1) FISCAL YEAR(2) ($/SH) DATE(3) 5% 10%
---- ---------- -------------- -------- ---------- ----------- -----------
Steve Jobs..................... -- --% $ -- -- $ -- $ --
Edwin E. Catmull............... 500,000(5) 9.34 26.50 12/6/10 8,332,854 21,117,088
Ann Mather..................... -- -- -- -- -- --
Ann Mather..................... 500,000(5) 23.8 33.94 9/7/09 10,671,556 27,043,817
John Lasseter.................. -- -- -- -- -- --1,000,000(6) 18.68 26.50 12/6/10 16,665,708 42,234,175
Sarah McArthur................. -- -- -- -- -- --
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(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) Pixar granted options for 2,100,0775,354,584 shares of Common Stock to employees in
fiscal 1999.2000.
(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.
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(4) The 5% and 10% assumed rates of appreciation are provided in accordance with
rules of the SEC and do not represent Pixar's 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) These options areThis option is a nonstatutory stock options,option, which vestvests 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 1999,2000, and the
number of shares subject to both exercisable and unexercisable stock options as
of January 1,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 Pixar's Common Stock as
of January 1,December 30, 2000.
AGGREGATED OPTION EXERCISES IN FISCAL 19992000 AND
FISCAL 19992000 YEAR-END OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED VALUE OPTIONS AT FISCAL YEAR END AT FISCAL YEAR END($)(1)
ON REALIZED --------------------------- ---------------------------
NAME EXERCISE(#) ($) EXERCISABLE UNXERCISABLEUNEXERCISABLE EXERCISABLE UNXERCISABLEUNEXERCISABLE
---- ----------- --------------------- ----------- ------------- ----------- -------------
Steve Jobs..............Jobs................ -- $ -- -- -- $ -- $ --
Edwin E. Catmull........ 83,333 2,988,530Catmull.......... 66,667 -- 2,345,012 --
Ann Mather.............. -- --1,753,342 -- 500,000 -- 718,7501,750,000
Ann Mather................ -- -- 125,000 375,000 -- --
John Lasseter........... 260,000 10,663,000 353,542 36,458 11,202,893 774,733Lasseter............. -- -- 384,792 1,005,208 9,798,698 3,582,677
Sarah McArthur.......... 60,000 2,097,188 54,167 270,833 1,225,528 4,402,597McArthur............ -- -- 104,167 220,833 1,796,881 2,084,369
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(1) Market value of underlying securities based on the closing price of Pixar's
Common Stock on December 31, 199929, 2000 (the last trading day of fiscal 1999)2000) on
the Nasdaq National Market of $35.375$30.00 minus the exercise price.
EMPLOYMENT AGREEMENTS
In February 1997, PixarMarch 2001, we entered into an employment agreement with John Lasseter
that extends until(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 23, 2004.1997. Pursuant to the agreement,Employment 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.$4,940,000. The agreementEmployment Agreement also
provides for a current annual salary of $881,837,$2,500,000 with 8%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, also providesexcept for options that vest on the paymentlast month
will vest on the penultimate month of a bonus (the
"Motion Picture Bonus") based upon domestic theatrical box office gross receipts
from each feature-length animated motion picture ("Feature Films") directed by
Mr. Lasseter.this ten-year period. Under the agreement,Employment
Agreement, Mr. Lasseter agreed towill 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 Pixar electswe elect to produce
such sequels within 12 years afterof the initial release of the applicable picture.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 agreement,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. PixarWe can terminate the agreementEmployment Agreement at any time for
any reason. However, if Pixar terminateswe terminate Mr. Lasseter's employment without cause, Pixarwe
must (1) pay Mr. Lasseter (i) an amount equal to 75% of the balance of the salary Mr. Lasseter
would have earned through the remainder of
15
18
the term of the agreementEmployment Agreement and (ii) any(2) accelerate the unvested portion of the Motion Picture Bonus as and if due. In
addition, the vesting of
Mr. Lasseter's stock options would accelerateoption so that theythe option would be exercisable in full andfull. In
addition, Mr. Lasseter couldwould be able to accept employment with any third party.
In September 1999, Pixar 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, Pixar will pay an amount equal to her then-current monthly salary
times the number of months remaining in her first 24 months of employment.
15
18
CERTAIN TRANSACTIONS
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 memberChairman and Chief Executive Officer 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.
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The primary role of the Audit Committee is to provide oversight and
monitoring of Company management and the independent auditors and their
activities with respect to the Company's financial reporting process. The Board
of Directors has determined that each member of the Audit Committee is
"independent" as required by the listing standards of the Nasdaq National
Market. The Board of Directors has adopted a written charter of the Audit
Committee, a copy of which is included in this Proxy Statement as Appendix A. In
the performance of its oversight function, the Audit Committee has:
- reviewed and discussed the audited financial statements with management;
- discussed with KPMG LLP, its independent auditors, the matters required
to be discussed by the Statement on Auditing Standards No. 61,
Communication with Audit Committees, as currently in effect;
- received the written disclosures and the letter from the independent
auditors required by Independence Standards Board Standard No. 1,
Independence Discussions with Audit Committees, as currently in effect;
- considered whether the provision of information technology consulting
services relating to financial information systems design and
implementation and other non-audit services by KPMG LLP is compatible
with maintaining KPMG LLP's independence and has discussed with KPMG LLP
the auditor's independence.
Based upon the reports and discussions described in this Report, the Audit
Committee recommended to the Board of Directors that the audited financial
statements be included in the Company's Annual Report on Form 10-K for the year
ended December 30, 2000.
AUDIT COMMITTEE OF THE
BOARD OF DIRECTORS
Joseph A. Graziano
Larry W. Sonsini
16
19
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The Compensation Committee of the Board of Directors (the "Committee") was
formed in October 1995 and is responsible for reviewing the compensation and
benefits for Pixar's executive officers, as well as supervising and making
recommendations to the Board on compensation matters generally. The Committee
also administers Pixar's stock option plans and makes grants to executive
officers under the 1995 Stock Plan.
COMPENSATION PHILOSOPHY
The Committee's compensation philosophy is to provide cash and equity
incentives to Pixar's executive officers and other employees to attract
personnel of the highest caliber in order to maintain Pixar's competitive
position. The goals of the Committee are to:
- attract, retain and motivate highly qualified executive officers and
employees who contribute to the long-term success of Pixar
- align the compensation of executive officers with business objectives and
performance
- align incentives for executive officers with the interests of
shareholders in maximizing value
Pixar currently intends to take the necessary steps to conform its
compensation practices to comply with the $1 million compensation deduction cap
under Section 162(m) of the Internal Revenue Code.
ELEMENTS OF COMPENSATION
The compensation for executive officers is based on two elements: Base
Compensation and Long-Term Incentive Compensation.
Base Compensation is determined on the basis of the level of
responsibility, expertise and experience of the executive officer, taking into
account competitive conditions in the industry. Mr. Lasseter is compensated
pursuant to an employment agreement. See "Executive Officer
Compensation -- Employment Agreements." The compensation of the other executive
officers, except for the Chief Executive Officer who received $52.00 in fiscal
1999,2000, is reviewed annually by the Committee and increased on the basis of
performance, Pixar's financial results for the previous year and competitive
conditions.
Long-Term Incentive Compensation is provided through grants of stock
options pursuant to Pixar's 1995 Stock Plan. Ownership of Pixar's Common Stock
is a key element of executive compensation and is intended to provide additional
incentives to the executive officers to maximize shareholder value. Executive
officers and other employees of Pixar are eligible to participate in the 1995
Stock Plan. The 1995 Stock Plan permits the Board of Directors or the Committee
to grant stock options to employees on such terms as the Board or the Committee
may determine. In determining the size of a stock option grant to a new
executive officer or other employee, the Committee takes into account equity
participation by comparable employees within the Company, external competitive
circumstances and other relevant factors. Additional options may be granted to
current executive officers and employees to reward exceptional performance or to
provide additional 16
19
unvested equity incentives. These options typically vest over
a four-year period and thus require the employee's continuing service to the
Company. The Committee believes that such stock plans align the interests of the
employees with the long-term interests of the stockholders.
17
20
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Pixar's Chief Executive Officer received $52.00 in compensation for his
services in fiscal 1999.2000.
THE BOARD OF DIRECTORS
Steve Jobs
Larry W. SonsiniEdwin E. Catmull
Jill E. Barad
Skip M. Brittenham
Joseph A. Graziano
Jill E. Barad
Edwin E. Catmull
Lawrence B. Levy
17Joe Roth
Larry W. Sonsini
18
2021
PIXAR STOCK PRICE PERFORMANCE GRAPH
The following graph compares Pixar's cumulative total shareholder return
with those of the JP Morgan H&Q Technology Index, the Nasdaq Stock Market
Index-U.S. and the Standard & Poor's Entertainment Index. The graph assumes that
$100 was invested on November 29, 1995 (the date of Pixar's initial public
offering) in (i) Pixar's Common Stock and (ii) the JP Morgan H&Q Technology
Index, the Nasdaq Stock Market Index-U.S. and the Standard & Poor's
Entertainment Index, including reinvestment of dividends. No dividends have been
paid or declared on Pixar's Common Stock. Note that historic stock price
performance is not necessarily indicative of future stock price performance.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG PIXAR, ANIMATION STUDIOS, THE NASDAQ STOCK MARKET (U.S.) INDEX,
THE CHASEJP MORGAN H&Q TECHNOLOGY INDEX AND THE S&P ENTERTAINMENT INDEX
PERFORMANCE GRAPH[PERFORMANCE GRAPH]
PIXAR ANIMATION NASDAQ STOCK CHASEJP MORGAN H & Q&Q S & P&P
STUDIOS MARKET (U.S.) TECHNOLOGY ENTERTAINMENT
--------------- ------------- ------------------------ -------------
Nov. 29, 1995 100.00 100.00 100.00 100.00
Dec. 11/29/95 100 100 100 100
12/95 131.25 101.81 93.40101.8 93.4 100.83
Dec. 12/96 59.09 125.26125.24 116.08 102.37
Dec. 12/97 98.30 153.47 136.1098.3 153.39 136.1 149.38
Dec. 12/98 159.09 247.79 240.65 215.05
Dec. 216.26 211.69 202.38
12/99 160.80 387.41 452.32 265.84
June 2000 160.23 392.55 479.03 285.77160.8 401.89 472.77 236.8
12/00 136.36 241.7 305.63 202.13
6/01 185.45 212.63 238.25 139.93
* $100 INVESTED ON 11/29/95 IN STOCK OR ON 10/31/95
IN INDEX -- INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING DECEMBER 31.
1819
2122
OTHER MATTERS
Pixar knows of no other matters to be submitted to the meeting. If any
other matters properly come before the meeting, it is the intention of the
persons named in the enclosed proxy to vote the shares they represent as Pixar
may recommend.
It is important that your shares be represented at the meeting, regardless
of the number of shares, which you hold. You are, therefore, urged to execute
and return, at your earliest convenience, the accompanying proxy in the
envelope, which has been enclosed.
THE BOARD OF DIRECTORS
Richmond,Emeryville, California
October 5, 2000
19August 22, 2001
20
23
APPENDIX A
CHARTER FOR THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
OF
PIXAR
PURPOSE:
The purpose of the Audit Committee of the Board of Directors of Pixar (the
"Company") shall be:
- to provide oversight and monitoring of Company management and the
independent auditors and their activities with respect to the Company's
financial reporting process;
- to provide the Company's Board of Directors with the results of its
monitoring and recommendations derived therefrom;
- to outline to the Board improvements made, or to be made, in internal
accounting controls;
- to nominate to the Board of Directors independent auditors to audit the
Company's financial statements and oversee the activities and
independence of the auditors; and
- to provide to the Board of Directors such additional information and
materials as it may deem necessary to make the Board of Directors aware
of significant financial matters that require the attention of the Board
of Directors.
The Audit Committee will undertake those specific duties and
responsibilities listed below and such other duties as the Board of Directors
may from time to time prescribe.
MEMBERSHIP:
The Audit Committee members will be appointed by, and will serve at the
discretion of, the Board of Directors and will consist of at least three members
of the Board of Directors. On or before June 14, 2001, the members will meet the
following criteria:
1. Each member will be an independent director, in accordance with the
Nasdaq National Market Audit Committee requirements;
2. Each member will be able to read and understand fundamental financial
statements, in accordance with the Nasdaq National Market Audit
Committee requirements; and
3. At least one member will have past employment experience in finance or
accounting, requisite professional certification in accounting, or other
comparable experience or background, including a current or past
position as a chief executive or financial officer or other senior
officer with financial oversight responsibilities.
RESPONSIBILITIES:
The responsibilities of the Audit Committee shall include:
- providing oversight and monitoring of Company management and the
independent auditors and their activities with respect to the Company's
financial reporting process;
- recommending the selection and, where appropriate, replacement of the
independent auditors to the Board of Directors;
- reviewing fee arrangements with the independent auditors;
- reviewing the independent auditors' proposed audit scope, approach and
independence;
A-1
24
- reviewing the performance of the independent auditors, who shall be
accountable to the Board of Directors and the Audit Committee;
- requesting from the independent auditors a formal written statement
delineating all relationships between the auditor and the Company,
consistent with Independent Standards Board Standard No. 1, and engaging
in a dialogue with the auditors with respect to any disclosed
relationships or services that may impact the objectivity and
independence of the auditors;
- directing the Company's independent auditors to review before filing with
the SEC the Company's interim financial statements included in Quarterly
Reports on Form 10-Q, using professional standards and procedures for
conducting such reviews;
- discussing with the Company's independent auditors the matters required
to be discussed by Statement on Accounting Standard No. 61, as it may be
modified or supplemented;
- reviewing with management, before release, the audited financial
statements and Management's Discussion and Analysis in the Company's
Annual Report on Form 10-K;
- providing a report in the Company's proxy statement in accordance with
the requirements of Item 306 of Regulation S-K and Item 7(e) (3) of
Schedule 14A;
- reviewing the Audit Committee's own structure, processes and membership
requirements;
- reviewing on a continuing basis the adequacy of the Company's system of
internal controls;
- conducting a post-audit review of the financial statements and audit
findings, including any significant suggestions for improvements provided
to management by the independent auditors;
- reviewing management's monitoring of compliance with the Company's
Standards of Business Conduct and with the Foreign Corrupt Practices Act;
- reviewing, in conjunction with counsel, when necessary, any legal matters
that could have a significant impact on the Company's financial
statements;
- providing oversight and review of the Company's investment policies;
- if necessary, instituting special investigations and, if appropriate,
hiring special counsel or experts to assist;
- reviewing related party transactions for potential conflicts of interest;
and
- performing such other duties as may be requested by the Board of
Directors.
MEETINGS:
The Audit Committee will meet at least quarterly. The Audit Committee may
establish its own schedule, which it will provide to the Board of Directors in
advance.
The Audit Committee will meet separately with the independent auditors as
well as members of the Company's management as it deems appropriate in order to
review the financial controls of the Company.
The Audit committee is authorized, by majority vote or unanimous written
consent of its members, to adopt its own rules of procedure, including the
formalities of calling, noticing and holding meetings and for the taking of
action of the Audit Committee by vote at any such meeting or by unanimous
written consent of the members thereof, and that unless and until any such
procedures are formally adopted by the Audit Committee, the procedures with
respect to calling, noticing and holding meetings of the Audit Committee and
conducting business of the Audit Committee shall be the same as those provided
in the Bylaws of the Company with respect to calling, noticing and holding
meetings of and taking action by the Board of Directors.
A-2
25
MINUTES:
The Audit Committee will maintain written minutes of its meetings, which
minutes will be filed with the minutes of the meetings of the Board of
Directors.
REPORTS:
Apart from the report prepared pursuant to Item 306 of Regulation S-K and
Item 7(e) (3) of Schedule 14A, the Audit Committee will summarize its
examinations and recommendations to the Board in written form from time to time
as may be appropriate, consistent with the Committee's charter.
A-3
26
APPENDIX B
PIXAR
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of PIXAR, a California corporation, hereby
acknowledges receipt of the Notice of Annual Meeting of Shareholders and Proxy
Statement, each dated August 22, 2001, and hereby appoints Steve Jobs and Ann
Mather, and each of them, proxies, with full power of substitution, to represent
the undersigned and to vote as designated on the reverse side, all shares of
Common Stock of PIXAR that the undersigned is entitled to vote at the Annual
Meeting of Shareholders of PIXAR to be held on September 14, 2001 at 10:00 a.m.,
local time, in the Wattis Theater at the San Francisco Museum of Modern Art
located at 151 Third Street, San Francisco, California 94103, and at any
adjournment thereof.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO
SPECIFICATION IS MADE, THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR
EACH OF THE PROPOSALS ON THE REVERSE SIDE HEREOF AND FOR SUCH OTHER MATTERS AS
MAY PROPERLY COME BEFORE THE MEETING AS THE PROXIES DEEM ADVISABLE.
SEE REVERSE SIDE SEE REVERSE SIDE
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
- --------------------------------------------------------------------------------
/X/ Please mark votes as in this example
A VOTE FOR THE FOLLOWING PROPOSALS IS RECOMMENDED BY THE BOARD OF DIRECTORS.
1. Election of eight Directors.
Nominees: (1) Steve Jobs, (2) Edwin E. Catmull, (3) Jill E. Barad,
(4) Skip M. Brittenham, (5) Joseph A. Graziano,
(6) Lawrence B. Levy, (7) Joe Roth and (8) Larry W. Sonsini.
/ / FOR ALL NOMINEES / / WITHHELD FROM ALL NOMINEES
/ /
--------------------------------------
For all nominees except as noted above
FOR AGAINST ABSTAIN
2. Proposal to approve an amendment to Pixar's 1995 Stock Plan increasing the
number of shares reserved for issuance thereunder from by 750,000 shares. / / / / / /
3. Proposal to ratify the appointment of KPMG LLP as Pixar's independent / / / / / /
auditors for the fiscal year ending December 29, 2001.
4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment
thereof.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT / /
We hope you will be able to attend the meeting in person, and you are
cordially invited to attend. If you expect to attend the meeting, please mark
the box at right when you return your proxy. / /
Please sign exactly as your name appears on your stock certificate. If the
stock is held by joint tenants or as community property, both should sign.
Executors, administrators, trustees, guardians, attorneys and corporate officers
should give their titles.
Signature: _________________ Date: ________ Signature: _________________ Date: ________
27
APPENDIX C
PIXAR 1995 STOCK PLAN
(as amended September 8, 2000)
1. Purposes of the Plan. The purposes of this Stock Plan are to attract
and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees and Consultants of
the Company and its Subsidiaries and to promote the success of the Company's
business. Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant of an Option and subject to the applicable provisions of Section 422 of
the Code and the regulations promulgated thereunder. Stock Purchase Rights may
also be granted under the Plan.
2. Definitions. As used herein, the following definitions shall apply:
a. "Administrator" means the Board or any of its Committees
appointed pursuant to Section 4 of the Plan.
b. "Board" means the Board of Directors of the Company.
c. "Code" means the Internal Revenue Code of 1986, as amended.
d. "Committee" means a Committee appointed by the Board of Directors
in accordance with Section 4 of the Plan.
e. "Common Stock" means the Common Stock of the Company.
f. "Company" means PIXAR, a California corporation.
g. "Consultant" means any person who is engaged by the Company or
any Parent or Subsidiary to render consulting or advisory services and is
compensated for such services. The term Consultant shall not include Directors
who are not compensated for their services or are paid only a Director's fee by
the Company.
h. "Continuous Status as an Employee or Consultant" means that the
employment or consulting relationship with the Company, any Parent or Subsidiary
is not interrupted or terminated. Continuous Status as an Employee or Consultant
shall not be considered interrupted in the case of (i) any leave of absence
approved by the Company or (ii) transfers between locations of the Company or
between the Company, its Parent, any Subsidiary, or any successor. A leave of
absence approved by the Company shall include sick leave, military leave, or any
other personal leave approved by an authorized representative of the Company.
For purposes of Incentive Stock Options, no such leave may exceed 90 days,
unless reemployment upon expiration of such leave is guaranteed by statute or
contract, including Company policies. If reemployment upon expiration of a leave
of absence approved by the Company is not so guaranteed, on the 91st day of such
leave any 23
Incentive Stock Option held by the Optionee shall cease to be treated
as an Incentive Stock Option and shall be treated for tax purposes as a
Nonstatutory Stock Option.
i. "Director" means a member of the Board of Directors of the
Company.
j. "Employee" means any person, including Officers and Directors,
employed by the Company or any Parent or Subsidiary of the Company. The payment
of a Director's fee by the Company shall not be sufficient to constitute
"employment" by the Company. 28
k. "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
l. "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:
i. If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market of the National Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") System, its Fair Market Value shall be the
closing sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such exchange or system for the last market trading day
prior to the time of determination and reported in The Wall Street Journal or
such other source as the Administrator deems reliable;
ii. If the Common Stock is quoted on the NASDAQ System (but not
on the Nasdaq National Market thereof) or regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the high bid and low asked prices for the Common Stock
on the last market trading day prior to the day of determination; or
iii. In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by the
Administrator.
m. "Incentive Stock Option" means an Option intended to qualify as
an incentive stock option within the meaning of Section 422 of the Code.
n. "Nonstatutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.
o. "Officer" means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
p. "Option" means a stock option granted pursuant to the Plan.
q. "Optioned Stock" means the Common Stock subject to an Option or a
Stock Purchase Right.
r. "Optionee" means an Employee or Consultant who receives an Option
or -2-
24
Stock Purchase Right.
s. "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.
t. "Plan" means this 1995 Stock Plan.
u. "Restricted Stock" means shares of Common Stock acquired pursuant
to a grant of a Stock Purchase Right under Section 11 below.
v. "Share" means a share of the Common Stock, as adjusted in
accordance with Section 12 below.
w. "Stock Purchase Right" means a right to purchase Common Stock
pursuant to Section 11 below.
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29
x. "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to Section 12, the maximum
aggregate number of Shares which may be subject to option and sold under the
Plan is 21,891,166(1)21,891,1661 Shares provided, however, that beginning January 1, 1998,
the number of Shares shall be increased each January 1 by three percent (3%) of
the total issued and outstanding Shares on such date. In no event, except as
subject to Section 12, shall more than 16,350,000 Shares be issued upon the
exercise of Incentive Stock Options under the Plan.
If an Option or Stock Purchase Right expires or becomes unexercisable
without having been exercised in full, or is surrendered pursuant to an Option
Exchange Program, the unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated). However, Shares that have actually been issued under the Plan, upon
exercise of either an Option or Stock Purchase Right, shall not be returned to
the Plan and shall not become available for future distribution under the Plan,
except that if Shares of Restricted Stock are repurchased by the Company at
their original purchase price, and the original purchaser of such Shares did not
receive any benefits of ownership of such Shares, such Shares shall become
available for future grant under the Plan. For purposes of the preceding
sentence, voting rights shall not be considered a benefit of Share ownership.
- ----------
(1) Such number reflects the automatic increases of (1) 1,272,321 shares
on January 1, 1998, (2) 1,360,073 Shares on January 1, 1999 and (3) 1,408,772
shares on January 1, 2000.
-3-
25
4. Administration of the Plan.
a. Procedure.
i. Multiple Administrative Bodies. If permitted by Rule 16b-3,
the Plan may be administered by different bodies with respect to Directors and
Officers, and Employees and Consultants who are neither Directors nor Officers.
ii. Administration With Respect to Directors and Officers. With
respect to grants of Options and Stock Purchase Rights to Employees who are also
Officers or Directors of the Company, the Plan shall be administered by (A) the
Board if the Board may administer the Plan in compliance with Rule 16b-3
promulgated under the Exchange Act or any successor thereto ("Rule 16b-3") with
respect to a plan intended to qualify thereunder as a discretionary plan, or (B)
a Committee designated by the Board to administer the Plan, which Committee
shall be constituted in such a manner as to permit the Plan to comply with Rule
16b-3 with respect to a plan intended to qualify thereunder as a discretionary
plan. Once appointed, such Committee shall continue to serve in its designated
capacity until otherwise directed by the Board. From time to time the Board may
increase the size of the Committee and appoint additional members thereof,
remove members (with or without cause) and appoint new members in substitution
therefor, fill vacancies, however caused, and remove all members of the
Committee and thereafter directly administer the Plan, all to the extent
permitted by Rule 16b-3 with respect to a plan intended to qualify thereunder as
a discretionary plan.
iii. Administration With Respect to Other Employees and
Consultants . With respect to grants of Options and Stock Purchase Rights to
Employees or Consultants who are neither Directors nor Officers of the Company,
the Plan shall be administered by (A) the Board or (B) a Committee designated by
the Board, which committee shall be constituted in such a manner as to satisfy
the legal requirements relating to the administration of incentive stock option
plans, if any, of California corporate and securities laws, of the Code, and
- -------
1 Such number reflects the automatic increases of (1) 1,272,321 shares on
January 1, 1998, (2) 1,360,073 Shares on January 1, 1999 and (3) 1,408,772
shares on January 1, 2000.
-3-
30
of any applicable stock exchange (the "Applicable Laws"). Once appointed, such
Committee shall continue to serve in its designated capacity until otherwise
directed by the Board. From time to time the Board may increase the size of the
Committee and appoint additional members thereof, remove members (with or
without cause) and appoint new members in substitution therefor, fill vacancies,
however caused, and remove all members of the Committee and thereafter directly
administer the Plan, all to the extent permitted by the Applicable Laws.
b. Powers of the Administrator. Subject to the provisions of the
Plan and, in the case of a Committee, the specific duties delegated by the Board
to such Committee, and subject to the approval of any relevant authorities,
including the approval, if required, of any stock exchange upon which the Common
Stock is listed, the Administrator shall have the authority in its discretion:
-4-
26
i. to determine the Fair Market Value of the Common Stock, in
accordance with Section 2(l) of the Plan;
ii. to select the Consultants and Employees to whom Options and
Stock Purchase Rights may be granted hereunder;
iii. to determine whether and to what extent Options and Stock
Purchase Rights or any combination thereof, are granted hereunder;
iv. to determine the number of shares of Common Stock to be
covered by each Option and Stock Purchase Right granted hereunder;
v. to approve forms of agreement for use under the Plan;
vi. to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any award granted hereunder. Such terms and conditions
include, but are not limited to, the exercise price, the time or times when
Options or Stock Purchase Rights may be exercised (which may be based on
performance criteria), any vesting acceleration or waiver of forfeiture
restrictions, and any restriction or limitation regarding any Option or Stock
Purchase Right or the shares of Common Stock relating thereto, based in each
case on such factors as the Administrator, in its sole discretion, shall
determine;
vii. to reduce the exercise price of any Option or Stock Purchase
Right to the then current Fair Market Value if the Fair Market Value of the
Common Stock covered by such Option or Stock Purchase Right shall have declined
since the date the Option or Stock Purchase Right was granted;
viii. to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan;
ix. to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under
foreign tax laws;
x. to modify or amend each Option or Stock Purchase Right
(subject to Section 14 of the Plan), including the discretionary authority to
extend the post-termination exercisability period of Options longer than is
otherwise provided for in the Plan;
xi. to authorize any person to execute on behalf of the Company
any instrument required to effect the grant of an Option or Stock Purchase Right
previously granted by the Administrator;
-4-
31
xii. to determine the terms and restrictions applicable to
Options and Stock Purchase Rights and any Restricted Stock; and
-5-
27
xiii. to make all other determinations deemed necessary or
advisable for administering the Plan.
c. Effect of Administrator's Decision. All decisions, determinations
and interpretations of the Administrator shall be final and binding on all
Optionees and any other holders of any Options or Stock Purchase Rights.
5. Eligibility.
a. Nonstatutory Stock Options and Stock Purchase Rights may be
granted to Employees and Consultants. Incentive Stock Options may be granted
only to Employees. An Employee or Consultant who has been granted an Option or
Stock Purchase Right may, if otherwise eligible, be granted additional Options
or Stock Purchase Rights.
b. Each Option shall be designated in the written option agreement
as either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designations, to the extent that the aggregate Fair Market
Value of Shares subject to an Optionee's Incentive Stock Options granted by the
Company, any Parent or Subsidiary, which become exercisable for the first time
during any calendar year (under all plans of the Company or any Parent or
Subsidiary) exceeds the limit imposed by Section 422(d) of the Code or any
successor thereto, such excess Options shall be treated as Nonstatutory Stock
Options. For purposes of this Section 5(b), Incentive Stock Options shall be
taken into account in the order in which they were granted. The Fair Market
Value of the Shares shall be determined as of the time the Option with respect
to such Shares is granted.
c. Neither the Plan nor any Option or Stock Purchase Right shall
confer upon any Optionee any right with respect to continuation of his or her
employment or consulting relationship with the Company, nor shall it interfere
in any way with his or her right or the Company's right to terminate his or her
employment or consulting relationship at any time, with or without cause.
d. Upon the Company or a successor corporation issuing any class of
common equity securities required to be registered under Section 12 of the
Exchange Act or upon the Plan being assumed by a corporation having a class of
common equity securities required to be registered under Section 12 of the
Exchange Act, the following limitations shall apply to grants of Options and
Stock Purchase Rights to Employees:
(i)i. No Employee shall be granted, in any fiscal year of the
Company, Options and Stock Purchase Rights to purchase more than 3,000,000
Shares.
(ii)ii. The foregoing limitation shall be adjusted proportionately
in connection with any change in the Company's capitalization as described in
Section 12.
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(iii)iii. If an Option or Stock Purchase Right is cancelled in the
same fiscal year of the Company in which it was granted (other than in
connection with a transaction described in Section 12), the cancelled Option
shall be counted against the limit set forth in Section 5(d)(i). For this
purpose, if the exercise price of an Option is reduced, such reduction will be
treated as a cancellation of the Option and the grant of a new Option.
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32
6. Term of Plan. The Plan shall become effective upon the earlier to
occur of its adoption by the Board of Directors or its approval by the
shareholders of the Company, as described in Section 18 of the Plan. It shall
continue in effect for a term of ten (10) years unless sooner terminated under
Section 14 of the Plan.
7. Term of Option. The term of each Option shall be the term stated in
the Option Agreement; provided, however, that the term shall be no more than ten
(10) years from the date of grant thereof. In the case of an Incentive Stock
Option granted to an Optionee who, at the time the Option is granted, owns stock
representing more than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the term of the Option shall
be five (5) years from the date of grant thereof or such shorter term as may be
provided in the Option Agreement.
8. Option Exercise Price and Consideration.
a. The per Share exercise price for the Shares to be issued upon
exercise of an Option shall be such price as is determined by the Administrator,
but shall be subject to the following:
i. In the case of an Incentive Stock Option
(1) granted to an Employee who, at the time of grant of
such Option, owns stock representing more than ten percent (10%) of the voting
power of all classes of stock of the Company or any Parent or Subsidiary, the
per Share exercise price shall be no less than 110% of the Fair Market Value per
Share on the date of grant.
(2) granted to any other Employee, the per Share exercise
price shall be no less than 100% of the Fair Market Value per Share on the date
of grant.
ii. In the case of a Nonstatutory Stock Option, the per Share
exercise price shall be determined by the Administrator.
b. The consideration to be paid for the Shares to be issued upon exercise of
an Option, including the method of payment, shall be determined by the
Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant). Such consideration may consist of (1) cash,
(2) check, (3) promissory note, (4) other Shares which (x) in the case of Shares
acquired upon exercise of an Option, have been owned by the Optionee for more
than six months on the date of surrender, and (y) have a Fair Market Value on
the date of surrender equal to the
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29 aggregate exercise price of the Shares as to
which such Option shall be exercised, (5) delivery of a properly executed
exercise notice together with such other documentation as the Administrator and
a broker, if applicable, shall require to effect an exercise of the Option and
delivery to the Company of the sale or loan proceeds required to pay the
exercise price, (6) a reduction in the amount of any Company liability to the
Optionee, including any liability attributable to the Optionee's participation
in any Company-sponsored deferred compensation program or arrangement, or (7)
any combination of the foregoing methods of payment. In making its determination
as to the type of consideration to accept, the Administrator shall consider if
acceptance of such consideration may be reasonably expected to benefit the
Company.
9. Exercise of Option.
a. Procedure for Exercise; Rights as a Shareholder. Any Option
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Administrator, including performance criteria with respect
to the Company and/or the Optionee, and as shall be permissible under the terms
of the Plan.
An Option may not be exercised for a fraction of a Share.
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33
An Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may, as authorized by the Administrator, consist of any
consideration and method of payment allowable under Section 8(b) hereof. Until
the issuance (as evidenced by the appropriate entry on the books of the Company
or of a duly authorized transfer agent of the Company) of the stock certificate
evidencing such Shares, no right to vote, receive dividends or any other rights
as a shareholder shall exist with respect to the Optioned Stock, notwithstanding
the exercise of the Option. The Company shall issue (or cause to be issued) such
stock certificate promptly upon exercise of the Option. No adjustment shall be
made for a dividend or other right for which the record date is prior to the
date the stock certificate is issued, except as provided in Section 12 hereof.
Exercise of an Option in any manner shall result in a decrease in the
number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
b. Termination of Employment or Consulting Relationship. In the
event of termination of an Optionee's Continuous Status as an Employee or
Consultant (but not in the event of an Optionee's change of status from Employee
to Consultant (in which case an Employee's Incentive Stock Option shall
automatically convert to a Nonstatutory Stock Option on the ninety-first (91st)
day following such change of status) or from Consultant to Employee), such
Optionee may, but only within such period of time as is determined by the
Administrator, with such determination in the case of an Incentive Stock Option
not exceeding three (3) months after the date of such termination (but in no
event later than the expiration date of the term of such Option as set forth in
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30
the Option Agreement), exercise his or her Option to the extent that the
Optionee was entitled to exercise it at the date of such termination. To the
extent that the Optionee was not entitled to exercise the Option at the date of
such termination, or if the Optionee does not exercise such Option to the extent
so entitled within the time specified herein, the Option shall terminate.
c. Disability of Optionee. In the event of termination of an
Optionee's Continuous Status as an Employee or Consultant as a result of his or
her "Disability," as such term is defined in Section 22(c)(3) of the Code, the
Optionee may, but only within twelve (12) months from the date of such
termination (and in no event later than the expiration date of the term of such
Option as set forth in the Option Agreement), exercise the Option to the extent
otherwise entitled to exercise it at the date of such termination. To the extent
that the Optionee was not entitled to exercise the Option at the date of
termination, or if the Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.
d. Death of Optionee. In the event of the death of an Optionee, the
Option may be exercised at any time within twelve (12) months following the date
of death (but in no event later than the expiration of the term of such Option
as set forth in the Notice of Grant) by the Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or inheritance, but only to
the extent that the Optionee was entitled to exercise the Option on the date of
death. If, at the time of death, the Optionee was not entitled to exercise his
or her entire Option, the Shares covered by the unexercisable portion of the
Option shall immediately revert to the Plan. If, after the Optionee's death, the
Optionee's estate or a person who acquires the right to exercise the Option by
bequest or inheritance does not exercise the Option within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.
e. Rule 16b-3. Options granted to persons subject to Section 16(b)
of the Exchange Act must comply with Rule 16b-3 and shall contain such
additional conditions or restrictions as may be required thereunder to qualify
for the maximum exemption from Section 16 of the Exchange Act with respect to
Plan transactions.
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34
f. Buyout Provisions. The Administrator may at any time offer to buy
out for a payment in cash or Shares, an Option previously granted, based on such
terms and conditions as the Administrator shall establish and communicate to the
Optionee at the time that such offer is made.
10. Non-Transferability of Options and Stock Purchase Rights. Options and
Stock Purchase Rights may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee.
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31
11. Stock Purchase Rights.
a. Rights to Purchase. Stock Purchase Rights may be issued either
alone, in addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside of the Plan. After the Administrator determines
that it will offer Stock Purchase Rights under the Plan, it shall advise the
offeree in writing of the terms, conditions and restrictions related to the
offer, including the number of Shares that such person shall be entitled to
purchase, the price to be paid, and the time within which such person must
accept such offer, which shall in no event exceed thirty (30) days from the date
upon which the Administrator makes the determination to grant the Stock Purchase
Right. The offer shall be accepted by execution of a Restricted Stock purchase
agreement in the form determined by the Administrator. Shares purchased pursuant
to the grant of a Stock Purchase Right shall be referred to herein as
"Restricted Stock."
b. Repurchase Option. Unless the Administrator determines otherwise,
the Restricted Stock purchase agreement shall grant the Company a repurchase
option exercisable upon the voluntary or involuntary termination of the
purchaser's employment with the Company for any reason (including death or
Disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock purchase agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company. The repurchase option shall lapse at such rate as the
Administrator may determine.
c. Rule 16b-3. Stock Purchase Rights granted to Insiders, and Shares
purchased by Insiders in connection with Stock Purchase Rights, shall be subject
to any restrictions applicable thereto in compliance with Rule 16b-3. An Insider
may only purchase Shares pursuant to the grant of a Stock Purchase Right, and
may only sell Shares purchased pursuant to the grant of a Stock Purchase Right,
during such time or times as are permitted by Rule 16b-3.
d. Other Provisions. The Restricted Stock purchase agreement shall
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Administrator in its sole discretion. In
addition, the provisions of Restricted Stock purchase agreements need not be the
same with respect to each purchaser.
e. Rights as a Shareholder. Once the Stock Purchase Right is
exercised, the purchaser shall have rights equivalent to those of a shareholder
and shall be a shareholder when his or her purchase is entered upon the records
of the duly authorized transfer agent of the Company. No adjustment shall be
made for a dividend or other right for which the record date is prior to the
date the Stock Purchase Right is exercised, except as provided in Section 12 of
the Plan.
12. Adjustments Upon Changes in Capitalization or Merger.
a. Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option or Stock Purchase Right, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
-8-
35
which no Options or Stock Purchase Rights have yet been granted
-10-
32 or which have
been returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per share of Common Stock covered by each
such outstanding Option or Stock Purchase Right, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company. The conversion of any convertible securities of
the Company shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the Board, whose determination
in that respect shall be final, binding and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an Option or Stock Purchase Right.
b. Dissolution or Liquidation. In the event of the proposed dissolution
or liquidation of the Company, the Administrator shall notify the Optionee at
least fifteen (15) days prior to such proposed action. To the extent it has not
been previously exercised, the Option or Stock Purchase Right shall terminate
immediately prior to the consummation of such proposed action.
c. Merger or Asset Sale. In the event of a merger of the Company with or
into another corporation, or the sale of substantially all of the assets of the
Company, each outstanding Option and Stock Purchase Right shall be assumed or an
equivalent option or right substituted by the successor corporation or a Parent
or Subsidiary of the successor corporation. In the event that the successor
corporation refuses to assume or substitute for the Option or Stock Purchase
Right, the Optionee shall have the right to exercise the Option or Stock
Purchase Right as to all of the Optioned Stock, including Shares as to which it
would not otherwise be exercisable. If an Option or Stock Purchase Right is
exercisable in lieu of assumption or substitution in the event of a merger or
sale of assets, the Administrator shall notify the Optionee that the Option or
Stock Purchase Right shall be fully exercisable for a period of fifteen (15)
days from the date of such notice, and the Option or Stock Purchase Right shall
terminate upon the expiration of such period. For the purposes of this
paragraph, the Option or Stock Purchase Right shall be considered assumed if,
following the merger or sale of assets, the option or right confers the right to
purchase or receive, for each Share of Optioned Stock subject to the Option or
Stock Purchase Right immediately prior to the merger or sale of assets, the
consideration (whether stock, cash, or other securities or property) received in
the merger or sale of assets by holders of Common Stock for each Share held on
the effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding Shares); provided, however, that if such consideration received
in the merger or sale of assets was not solely common stock of the successor
corporation or its Parent, the Administrator may, with the consent of the
successor corporation, provide for the consideration to be received upon the
exercise of the Option or Stock Purchase Right, for each Share of Optioned Stock
subject to the Option or Stock Purchase Right, to be solely common stock of the
successor corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the merger or sale of
assets.
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33
13. Time of Granting Options and Stock Purchase Rights. The date of grant
of an Option or Stock Purchase Right shall, for all purposes, be the date on
which the Administrator makes the determination granting such Option or Stock
Purchase Right, or such other date as is determined by the Administrator. Notice
of the determination shall be given to each Employee or Consultant to whom an
Option or Stock Purchase Right is so granted within a reasonable time after the
date of such grant.
14. Amendment and Termination of the Plan.
a. Amendment and Termination. The Board may at any time amend,
alter, suspend or discontinue the Plan, but no amendment, alteration, suspension
or discontinuation shall be made which would
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36
impair the rights of any Optionee under any grant theretofore made, without his
or her consent. In addition, to the extent necessary and desirable to comply
with Rule 16b-3 under the Exchange Act or with Section 422 of the Code (or any
other applicable law or regulation, including the requirements of the NASD or an
established stock exchange), the Company shall obtain shareholder approval of
any Plan amendment in such a manner and to such a degree as required.
b. Effect of Amendment or Termination. Any such amendment or
termination of the Plan shall not affect Options or Stock Purchase Rights
already granted, and such Options and Stock Purchase Rights shall remain in full
force and effect as if this Plan had not been amended or terminated, unless
mutually agreed otherwise between the Optionee and the Administrator, which
agreement must be in writing and signed by the Optionee and the Company.
15. Conditions Upon Issuance of Shares. Shares shall not be issued
pursuant to the exercise of an Option or Stock Purchase Right unless the
exercise of such Option or Stock Purchase Right and the issuance and delivery of
such Shares pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange upon which the Shares may then be listed, and
shall be further subject to the approval of counsel for the Company with respect
to such compliance.
As a condition to the exercise of an Option or Stock Purchase Right, the
Company may require the person exercising such Option or Stock Purchase Right to
represent and warrant at the time of any such exercise that the Shares are being
purchased only for investment and without any present intention to sell or
distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required by any of the aforementioned relevant provisions of
law.
16. Reservation of Shares. The Company, during the term of this Plan,
shall at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan. The inability of the Company
to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary to the lawful
-12-
34
issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.
17. Agreements. Options and Stock Purchase Rights shall be evidenced by
written agreements in such form as the Administrator shall approve from time to
time.
18. Shareholder Approval. Continuance of the Plan shall be subject to
approval by the shareholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such shareholder approval shall be obtained
in the degree and manner required under applicable state and federal law and the
rules of any stock exchange upon which the Common Stock is listed.
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35
PIXAR
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of PIXAR, a California corporation, hereby
acknowledges receipt of the Notice of Annual Meeting of Shareholders and Proxy
Statement, each dated October 5, 2000, and hereby appoints Steve Jobs and Ann
Mather, and each of them, proxies, with full power of substitution, to represent
the undersigned and to vote as designated on the reverse side, all shares of
Common Stock of PIXAR that the undersigned is entitled to vote at the Annual
Meeting of Shareholders of PIXAR to be held on October 26, 2000 at 10:00 a.m.,
local time, in the Wattis Theater at the San Francisco Museum of Modern Art
located at 151 Third Street, San Francisco, California 94103, and at any
adjournment thereof.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO
SPECIFICATION IS MADE, THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR
EACH OF THE PROPOSALS ON THE REVERSE SIDE HEREOF AND FOR SUCH OTHER MATTERS AS
MAY PROPERLY COME BEFORE THE MEETING AS THE PROXIES DEEM ADVISABLE.
- ----------- -----------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
- ----------- -----------
DETACH HERE
Please mark
[X] votes as in
this example
A VOTE FOR THE FOLLOWING PROPOSALS IS RECOMMENDED BY THE BOARD OF DIRECTORS.
1. Proposal to approve an amendment to Pixar's Bylaws to increase the
authorized number of directors to a range of six to eleven
directors, with the exact number to be fixed at eight.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. Election of eight Directors.
Nominees: Steve Jobs, Larry W. Sonsini, Skip M. Brittenham, Joseph A.
Graziano, Jill E. Barad, Edwin E. Catmull, Lawrence B. Levy and Joe Roth
[ ] FOR ALL NOMINEES [ ] WITHHELD FROM ALL NOMINEES
[ ] ___________________________________
For all nominees except as noted above
FOR AGAINST ABSTAIN
3. Proposal to approve an amendment [ ] [ ] [ ]
to Pixar's 1995 Stock Plan
to increase the number of shares
reserved for issuance thereunder
by 3,350,000 shares.
4. Proposal to ratify the appointment [ ] [ ] [ ]
of KPMG LLP as Pixar's independent
auditors for the fiscal year
ending December 30, 2000.
36
5. In their discretion, the proxies [ ] [ ] [ ]
are authorized to vote upon such
other business as may properly
come before the meeting or any
adjournment thereof.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
Please sign exactly as your name appears on your stock certificate. If the stock
is held by joint tenants or as community property, both should sign. Executors,
administrators, trustees, guardians, attorneys and corporate officers should
give their titles.
Signature: ________________________ Date: ______________
Signature: ________________________ Date: ______________
We hope you will be able to attend the meeting in person, and you are cordially
invited to attend. If you expect to attend the meeting, please mark the box
below when you return your proxy.
[ ]-10-