Disney-Pixar merger pact lays out conditions
LOS ANGELES (Reuters) - The merger agreement between the Walt Disney Co. and Pixar Animation Studios Inc. rests, in part, on whether Pixar's award-winning creative team agrees to work for the combined company, according to a securities filing made on Thursday.
The agreement also has a provision that would require Pixar to pay $210 million in the event it bails out of the deal, and expands by one member Disney's board of directors to 14, to include Pixar Chief Executive Steve Jobs.
The agreement gives Pixar Vice President John Lasseter, who will become chief creative officer of the Pixar and Disney animation studios, the authority to "green light" films for both studios, although Disney CEO Robert Iger has final approval.
The loss of Lasseter or Pixar President Ed Catmull, who will serve as president of both animation studios, could be a deal-breaking event, the agreement says.
Pixar's "brain trust" of seven directors and creative executives were also listed as company assets, and the agreement requires that a majority of them agree to join the combined company.
Those employees include "Finding Nemo" director Andrew Stanton; "Monsters, Inc." director Pete Docter; "The Incredibles" director Brad Bird; director/writer Bob Peterson; story artist Brenda Chapman; editor Lee Unkrich; and sound designer Gary Rydstrom.
The merger also sets up a "steering committee" whose job is to oversee feature animation at both studios, and to help maintain the Pixar "culture," among other duties.
The committee would consist of Catmull, Lasseter, Jobs, Iger, Walt Disney Studios Chairman Dick Cook, and Disney Chief Financial Officer Tom Staggs, and must meet at Pixar headquarters at least one full day every other month.
The agreement protects Pixar's right to eschew employment contracts, and mandates that the studio continue to be called Pixar.
The branding of films made after the merger is finalized will be changed to "Disney Pixar."
The groundbreaking animation company will, however, stay in Emeryville, California, with a sign at its gate that "shall not be altered" from "Pixar," the agreement said.