George Lucas Deposition Techtopus 426-27

7/23/2019 George Lucas Deposition Techtopus 426-27

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Deposition of George Lucas

In Re: HIGH-TECH EMPLOYEE ANTITRUST LITIGATION

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

IN RE: HIGH-TECH EMPLOYEE

ANTITRUST LITIGATION

THIS DOCUMENT RELATES TO:

ALL ACTIONS.

No. 11-CV-2509-LHK

CONFIDENTIAL - ATTORNEYS' EYES ONLY

VIDEO DEPOSITION OF GEORGE LUCAS

MARCH 28, 2013

Reported by: Rosalie A. Kramm, CSR No. 5469, CRR

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THE VIDEOGRAPHER: Okay. If there are no

2

tipulations, will the court reporter please swear in the

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itness.

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5

GEORGE LUCAS,

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aving been first duly sworn, testified as follows:

7

8

EXAMINATION

9

Y MR. SAVERI:

10

Q

ood morning, Mr. Lucas.

1

1

A. ood morning.

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o you understand you're under oath here today?

13

.

es.

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And do you understand that when you took the

15 oath you promised to tell the truth?

16

.

es.

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And do you understand that the oath you gave is

18 just as binding as it would have been if given in front

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f a jury in this case?

20

.

es.

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.

kay. Where do you work? What's your business

22

ddress?

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.

-- to be quite honest, I'm not quite sure. I

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hink it's 5858 Lucas Valley Road.

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. kay. And where do you reside?

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A. lie -- reside at .11111111111..

Q.

n --

Ili

A.

eah.

Q.

nd, Mr. Lucas, I am fighting a cold which has

affected my hearing a little bit, so I may ask you to

speak up a little bit.

A.

kay.

Q.

kay? Thank you.

Now, do you know what this litigation is about?

A. es.

Q.

an you tell me what you understand that the

litigation is about.

A.

here was a federal case brought against

Lucasfilm along with a lot of other companies, and

ultimately our connection to it has to do with -- I had

split off Pixar from Lucasfilm, and we, at that point --

I had talked to Ed Catmull about how we were splitting up

the employees, and that even though I knew they weren't

in the film business, I knew that was their desire, and

that we would, instead of destroy each other, we would

talk to each other about anybody who wanted to move from

one company to the other, and we wouldn't actively try to

raid each other's companies.

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Q.

ow did you learn that information that you

just gave me?

MR. KEKER: Object to the extent it calls for

attorney-client information. Talk about what you

learned, not from your lawyers.

BY MR. SAVERI:

Q.

id you -- did you learn any of that

information you just gave me, other than from your

lawyers?

A.

have a very vague remembrance of that

conversation with Ed Catmull.

Q.

kay. And I'm going to ask you some more

questions about that, but just can you generally tell me

when you recall that conversation -- when your

conversation with Ed Catmull happened.

A.

t was in the very early '90s.

Q

kay. Now, let me ask you a couple other

questions. Did you, in preparation for the deposition

today -- did you look at any documents?

A.

es.

Q.

And were those documents that your lawyers

provided to you to review?

A.

es.

Q.

kay. So in preparation for the deposition

today, did you yourself go to look at your records or

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entire period of time?

A.

es.

Q

kay. As you sit here today, do you maintain

any ownership interest in Lucasfilm?

A. o.

Q.

o when -- when Lucasfilm was sold to Disney,

did you dispose of your entire ownership interest in

Lucasfilm?

A.

es.

Q.

ow, was -- there was a point in time, and

we'll talk about it in a few minutes, where Lucasfilm

owned Pixar, correct?

A. ell, at that point it was called the Lucasfilm

Computer Division.

Q

kay. As you sit here today, do you

o you

own any interest in Pixar?

A.

o.

Q.

nd does Lucasfilm own any interest in Pixar?

A. o.

Q.

ere there written agreements that memorialized

the terms of the sale of Lucasfilm to Disney?

A. es.

Q

o any of those written agreements, to the best

of your recollection, say anything about the subject of

recruiting or hiring?

KRAMM CO URT REPORTING


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A. o.

Q.

kay.

A.

ot that I know of.

Q

missed this, but a few minutes ago you

identified the -- the name of the company that actually

owned Pixar. I think it was -- would you tell me the

name of that company.

A.

hat owned Pixar?

Q

hat owned Pixar. I think you said it was --

MR. KEKER: No. He said Lucasfilm Computer.

THE WITNESS: No, there was no -- Pixar was a

computer. It was no not a company.

BY MR. SAVERI:

Q. kay.

A.

t simply a division of Lucasfilm. It was the

computer division. It was our tech, research and

development company.

Q.

kay.

A.

r division.

Q.

got it.

Now, when did you sell your -- your interest in

the technology or the -- or the division associated with

Pixar?

A.

'm not absolutely sure. It was in the mid

'80s.



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Q.

kay. And subsequent to that are you aware

that the purchasers of that interest set up a company

called Pixar?

A.

es.

Q. kay. And subsequent to that time, did

Lucasfilm or some portion of that company do business

with Pixar?

A.

ell, that, I'm not sure of. I know that we

were very close.

Q. kay.

A.

nd that, you know, obviously we were the same

company for a long time.

Q.

ight.

A. And so everybody knew each other. And we

definitely worked on many of Pixar's movies as a sound

company.

Q.

kay. So let's -- let's go through that a

little bit.

Subsequent to the time that you sold your

interest and the company became Pixar, could you describe

for me the nature of -- of any collaborations between

Lucasfilm and Pixar, generally?

A. enerally, apart from -- specifically apart

from us -- them being a client at Skywalker Sound, and

the fact that ILM, Industrial Light & Magic, which the


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A. es.

Q.

nd could you tell me when it contracted?

A. ell, it was mostly ILM, and when ILM was

between movies, even though we tried to retrain -- I mean

retain as many people as we could, we, you know -- they

would have to let certain people go in order to get

through the -- the spot where there was no business.

Q. And then when business kind of started back up

again, were people hired to -- to do the job on those

projects?

A.

es. But most of the people were put on

vacation.

Q

kay.

A. nd in training, things like that. But then

there were -- every time we would start a project, we'd

have to hire more people, depending on how much business

we had.

Q.

nd this kind of in and out that you've been

talking about, was that essentially a -- a feature of --

of -- of ILM's workforce?

A.

es.

Q. kay. And when -- can you give me a general

sense of kind of the magnitude of the kind of in and out

at ILM when you -- when ILM was going through a period

when they were busy with projects to a period where they


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weren't?

A.

hat's hard to say. Because as the company

grew and became more successful, the numbers shifted,

and, you know, the -- you know, it's hard for me to know

exactly how many they were letting go.

Q. nd then in terms generally of the Lucasfilm

workforce, how many -- or how much of that was ILM?

A.

'm not sure, but it was quite a bit. It was

probably 30 percent.

Q.

kay.

A.

0 percent.

Q

s it your view that the recruiting and

retention of top talent was important to the success of

Lucasfilm?

A.

es.

Q

kay. And how

nd can you explain that to

me. How or why was it important?

A. ell, I always -- the rule we had, or the rule

that I put down for everybody, was that since we started

the industry in terms of -- basically that main concern

was ILM, because the top talent in the other areas are

available, we can always go out and get somebody else.

Or, you know -- but I had said that we cannot get into a

bidding war with other companies because we don't have

the margins for that sort of thing.


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And I said if somebody comes and says that they

want -- you know, another company offered them a lot of

money, we say, great, go work for them. Good luck. If

you want, come back, but, you know, we can't afford that.

So -- and I said the key to our success is our

human resources department and our scouts. What we do is

we find young people, we train them, we get them up to

speed, and I had to constantly tell the -- the presidents

of the various entities that if -- there is nobody

invaluable. If somebody can get a better job, let them

do it. I know it's hard to go back and start over again,

but ultimately it's better than getting into a bidding

war with other companies.

And with that, that was the basic premise for

the way we ran the companies. We tried to run a very,

very good company for people. We paid people good wages.

We have lots of benefits, more than most companies. And

if they want the lifestyle, they'll stay. If they don't,

they just want the money, they'll go somewhere else.

Q.

ow generally did Lucasfilm go about recruiting

or finding the -- the good people during the time that

the company was growing?

A.

'm not sure. You know, the -- you know, it's

a big company. I know mostly -- the areas I know is in

visual effects, but even then I don't -- you know, I



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wasn't involved in any of that.

Q

kay. Did -- you mentioned a minute ago the

human resources or HR.

A.

h-huh.

Q think you -- I don't know if you called it a

department or --

A. ell, it -- it varies. I mean that's a

generality --

Q. kay.

A.

- to describe the people that recruit.

Q

kay. And --

A. here were recruiters, and sometimes each

company, or each or division or company or whatever,

would had their own, because they were specialized.

Q

s a general matter, though, was it the HR

department or HR people who were responsible for

recruiting at the company?

A.

'd say those -- sometimes it was consolidated,

sometimes it was left -- it was in the divisions, because

the consolidated group didn't have the expertise to, you

know, make judgments on people who are, you know, very

esoteric in terms of their qualifications.

Q

id -- did you or did Lucasfilm hire outside

recruiters to help in recruiting efforts?

A.

-- I don't know.



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Q.

kay. In particular -- when there were times

when particular projects were wrapping up, did Lucasfilm

hire contract people to help with recruiting efforts?

A.

hat, I don't recall.

Q.

kay. Who would you identify as the person who

is most knowledgeable at the company about Lucasfilm's

recruiting efforts?

A.

hat, I don't know.

Q.

ow, you -- you spoke a minute ago about some

of your ideas or principles or rules regarding

compensation. Let me ask you a couple more questions

about that.

Did you think as part of what you needed to

strike that.

In order to recruit or retain the talent you

needed at the company, did you think having a

fair

compensation structure was important?

A.

es.

Q.

kay. Did you believe it was fair to pay a

wage that was competitive with other companies where your

employees might have the qualities to find a job?

A. ay that again.

Q.

et me -- let me ask a better question.

You're aware that your employees had skills

that were marketable, correct?


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A. es.

Q

nd they could go get other jobs at other

places.

A.

es.

Q.

n order to retain -- to recruit or retain them

to your company, did you believe that you needed to

provide them compensation that was competitive with their

other employment alternatives?

A. o.

Q.

as compensation -- was -- did you believe that

what you were paying your employees had anything to do

with whether you could recruit or retain people to the

company?

A. es.

Q

nd did -- what role did it play?

A.

hat? In compensation?

Q.

es.

A.

eah. We wanted to pay people a fair salary.

Q

ow, in -- in determining salaries, did you

look at what other companies paid?

A. es.

Q.

And how did you use what other companies paid

in determining what you would pay to people that were

employed at your company or -- or people that you might

recruit to your company?



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A. e were about on even keel with everybody.

Q.

And when you say even keel what do you mean?

A.

mean we were paying about the same within a

range of salaries. We were paying what mostly everybody

else was paying.

Q.

hen you set compensation levels, did you look

at other -- at the information you had about what other

companies paid as a benchmark in determining what to pay

your folks?

A.

es.

Q.

nd did you use an arithmetic benchmark?

A.

don't know. They -- it was an outside

consultant that came in and did it.

Q

o you know who was the outside consultant?

A.

have no idea.

Q.

t least aspirationally, did you try to set

your compensation levels at some percentage of what you

understood market rates to be?

A.

-- we tried to set them at market rates.

Q.

kay. I mean, for example, did you try to set

your compensation basic levels at --

=ME?

A.

o. No. It was --

Q.

kay. And where did you get the information

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about the range? From the outside companies?

A.

es.

Q.

ow, a few minutes ago I think you said at

least at the end of -- of your tenure, Lucasfilm employed

approximately 1800 to 2000 people, somewhere in there; is

that right?

A. ight.

Q.

n what physical locations did Lucasfilm

operate?

A.

ere at the Presidio, in -- in Lucas Valley -

Q.

ight.

A.

- and in Singapore. And then we had little

offshoot operations, small ones, which I don't even know

how many there are, in places like the -- in Canada, down

in L.A., you know, other places.

Q.

id you have an operation in the U.K.?

A.

ell, you mean when I -- when we -- when I

left?

Q.

kay. I -- that's what the question was.

A.

hat?

Q.

o was there a point in time when you operated

a physical location in the U.K.?

A.

es.

Q. nd I take it, then, by the time -- at the end

of your tenure, that was closed.


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In Re: HIGH-TECH EMPLOYEE ANTITRUST LITIGATIO

A. es.

Q.

s a cost, how important were your costs of

labor?

A.

ery important.

Q.

an you tell me approximately what percentage

of your costs were labor costs.

A. don't know.

Q.

kay. In -- in your recruiting efforts, did --

did you or people who worked in the HR department or

other places that were responsible for recruiting, did

you target particular companies as places where you

thought you could -- you could recruit talent that suited

your needs?

A. o.

Q.

oes -- or did Lucasfilm have any policy of not

recruiting or hiring from any companies?

A.

had a general -- again, it's not a rule.

It s not a dictate. But I had -- we had a general

policy, because we were out to promote other digital

companies and help them, that the -- we weren't going to

try to recruit people from them. If people wanted to

leave that company, because they were tired of working in

New Zealand and they wanted to move back home, we

would -- we could recruit them, but not to go and say,

will you work for us? We'll pay you more. Or, will you



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work for us?

Because mostly all those companies were started

by people who worked here. So they all went off and

started other companies and we weren't about to try to --

to damage them in any way. It's not a normal industrial

competitive situation.

Q.

ou said other digital companies?

A.

es, digital -- visual effects, anything. You

know, mostly the -- mostly I'm focusing on the digital

people.

Q.

kay. So can you give me some examples of the

companies that your -- you had this policy with -- or

excuse me.

Could you give me examples of the -- these

digital companies that you had a policy with respect to?

A. enerally, all companies. It's not a company.

Q.

kay. But I mean can you give me the names of

companies that you can think of that were -- that were

primary examples of companies that would -- would fall

within that category.

A.

ell, there were other visual effects

companies. The -- the companies in England, Weta, which

is, you know, England is Frame Storm, New Zealand, Weta.

In L.A. it was Rhythm and Hues, and, you know, generally,

that was those companies.


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Deposit on of George Lucas


Q.

ow, and -- let me ask you about what the --

what the policy was. Was the policy that you would not

recruit or hire people from those companies under any

circumstances, or was it --

A.

o. It was that we would not try to raid them

and we would not recruit there. We would not consciously

make a phone call and say, Will you leave your company

and come work for us?

Q.

o, for example, if a person who worked for

those -- one of those companies came to you and said,

I'm interested in a job with you, would you --

A.

es.

Q.

- would you talk to them?

A.

e would talk to them and we would, you know --

yeah. Anybody that came in and -- and offered -- was

looking for a job, we would talk to them.

Q.

ow, in situations where someone was working

for one of these other digital companies and expressed to

you an interest in coming to work for you --

A. h-huh.

Q.

-

did the policy that you have involve any

kind of notification to their current employer?

A. enerally, no, if they were companies we didn't

know about, you know. Eventually, we told them to tell

their boss, and -- but we didn't -- you know, to be real


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honest with you, I don't actually know exactly the way

they did it, because I wasn't involved in it.

Q.

kay.

A.

he ruling basically was, you know, if somebody

comes over the transom, we hire -- we will, you know, let

them apply, and then generally I don't know what they --

you know, what happened after that.

Q.

kay. And -- and so a couple of questions

about that. You said generally that was the policy.

Is that a policy that you made?

A. t was a -- it wasn't a policy. It was my

wish.

Q.

kay. Did you express this wish to people who

worked for you?

A.

t was generally expressed not to raid other

companies.

Q.

kay. And did you tell, for example, Ms. Chau

that that was your wish?

A.

es.

Q.

kay. Did you -- when you told her that, did

you expect her to communicate that to the people that

worked for her that were responsible for -- for running

the recruiting function at the company?

A.

es.

Q. kay. Now, I haven't seen any transoms here,

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so I was -- but the --

Just following along, if -- if someone kind of,

you know, came in over the transom and sought a job, from

your perspective, your -- your policy did not require you

to inform their employer -- their current employer that

this person was looking for a job.

A. don't know.

Q.

kay. And did your policy also include any

kind of rule about matching offers or counteroffers?

A. don't know.

Q.

kay. Now, were there any written agreements

in place between you and any of these other digital

companies with respect to -- with respect to the subject

of recruiting or hiring?

A.

o.

Q.

kay. And did -- or were any of these digital

companies owned by larger entities, like studios or other

businesses?

A. ome of them were.

Q.

nd did your policy that you described apply to

applications from people who worked, you know, in other

parts of those studios that owned the digital companies?

A. don't think so.

Q.

kay. Now, did you have a policy with respect

to recruiting or not recruiting from any companies other



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than the digital companies you identified?

A. ot that I know of.

Q.

kay. So, for example, did you have any policy

of recruiting or not recruiting with any studio,

generally?

A.

ell, there was a company up here that was

started by some people that used to work here and some

good friends of mine, who was backed by IDsney, which was

a digital animation company.

Q. as that ImageMovers?

A.

es.

Q.

kay. We'll talk about that in a minute.

When did you become aware that the Department

of Justice was investigating Lucasfilm's understandings

or agreements with Pixar regarding cold calling?

A. can't really remember. I'm not good with

dates.

Q.

kay. Do you recall how you became aware?

A.

think it was brought up at a legal -- on a

board meeting with a legal review of what was going on.

Q.

o you have any role in providing information

in connection with the Department of Justice

investigation?

MR. KEKER: Object. Don't talk about any

conversations you had with your lawyers. That's covered


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by the attorney-client privilege. But if it's -- there

is some -- if you want -- would you reframe the question?

MR. SAVERI: Actually, let me -- I can probably

do a better job.

BY MR. SAVERI:

Q.

id you -- did you provide any documents -- I'm

not asking you what the documents said, but did you

provide any documents to any of the lawyers who were

responding to the Department of Justice investigation?

MR. KEKER: Same objection.

BY MR. SAVERI:

Q.

id you -- did you ever speak to the Department

of Justice in connection with the investigation?

A.

o.

Q.

id you provide a deposition or some kind of

sworn testimony to the Department of Justice in

connection with the investigation?

A.

o.

Q.

kay. Did you provide any written answers to

any questions from the Department of Justice?

A. can't remember.

Q.

id you review any of the submissions made on

behalf of your company to the Department of Justice in

connection with their investigation?

A. think only at the end.


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Q.

hen you say at the end, what do you mean?

A.

hen they did their agreement to -- you know,

the -- I don't know what you call it.

Q.

et me help you. Do you recall that there was

a final judgment entered?

A.

eah, in the final judgment. I saw the final

judgment.

Q.

kay. Have -- have you been involved in

implementing the final judgment?

A. o.

Q.

n connection with this case, were you involved

at all in any of the efforts to look for documents?

A.

o.

Q.

ow, when -- when did you -- strike that.

Did you agree with Pixar with respect to

recruiting or hiring from each other's employ -- from

each other's companies?

A.

id I agree?

Q.

id you enter into an agreement with -- with

Pixar with respect to recruiting or hiring from the two

companies?

A.

wouldn't call it an agreement.

Q.

kay. What would you --

A.

t was basically a conversation that -- my only

involvement was a conversation between Ed and myself


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about, since we were both fragile companies, that we

wouldn't destroy each other.

Q.

kay. And let me try to get your best

recollection of -- of that communication.

When was it?

A. t was during the time of the split, of the

sale of the company to Steve Jobs.

Q.

o that was in approximately 1985?

A.

es, mid '80s, I guess. I'm not good with

dates.

Q.

nd can you tell me to the best of your

recollection who said what to whom during that

conversation?

A.

e were talking about that he was getting his

group together, and he was -- you know, there were some

people who were -- could be put every -- either way. He

thought that they'd worked all that out and everything

with the head of ILM, and -- and the other parts of the

computer division, which weren't being sold, there was

only a small part, and he said he thought it was going

well. I said, great. But we should agree not to try to

run each other out of business. I knew he wanted to go

into the film business, and when it came to that, you

know, we'll be helpful, but, you know, we -- I really

didn't want him raiding the company and trying to take



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all the good people away.

Q. kay. At the time that you had this

conversation with Mr. -- now, let me back up.

Did you discuss this on one occasion with

Mr. Catmull, or did it occur over the --

A. t was just

--

Q.

- course of several communications?

A. ust one, that one.

Q.

nd at the time had you already reached a basic

understanding with Steve Jobs about what he was going to

pay for the assets that got spun off into Pixar?

A.

-- probably.

Q kay.

A.

'm not really sure.

Q.

ust so I'm clear, you never talked about this

subject with Steve Jobs himself, correct?

A. o. This was purely between Ed and I.

Q kay. And when you discussed it with

Mr. Catmull, was the agreement about recruiting or hiring

company-wide?

MR. KEKER: Objection. He said it wasn't an

agreement.

THE WITNESS: Yeah, it wasn't an agreement.

Company-wide in terms of everybody at the company?


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BY MR

SAVERI:

Q

et me back up.

Your conversation about -- with Mr. Catmull,

when you had a discussion about what you would do with

respect to recruiting going forward, and that you didn't

want to attack or raid each other's companies, was the

discussion about the entirety of both companies?

A.

ell, I don't think we got that specific.

Q. kay.

A.

t was simply -- it was simply, we are

splitting the company up. You have a lot of the

technology, and we have a lot of the people that are

working with that technology. And if the people in our

company want to go work for your company, that's fine.

If people in your company want to come to work for our

company, that's fine. Let's not actively go out and try

to kill each other. That was the thing.

Because we have always been a very -- we're not

a competitive company. So we don't go out and, you

know -- and, you know, a lot of the people that work for

me are union people, and a lot of people that work for

him aren't.

Q

hen you said you won't kill each other, do you

mean not kill each other with respect to recruiting or

hiring?


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A.

eah.

Q. kay. Now, at the time that -- of the spinoff,

the organization that Catmull was talking about was

basically the people who had formerly worked for you that

were being spun off, correct?

A.

o. That was just a general statement --

Q. kay.

A. - of, as we go down the road, we should try to

let people work between the companies, but we shouldn't

get into a competitive situation where we're trying to

put each other out of business.

Q.

kay. So at that time Mr. -- Ed Catmull knew

lots of people who worked for your company?

A.

eah, everybody.

Q.

nd so when -- when -- you understood that when

he committed to this, he was -- he was committing to that

with respect to everybody who worked for your company, or

might work for your company in the future?

A.

eah.

Q.

nd then at the time -- well, from your end,

you anticipated that -- that Pixar, Ed Catmull's

organization, would -- would continue and might hire

additional people, correct?

A.

ight.

Q .

nd what you were saying, at least from your


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part, is that you were not going to recruit actively

those people. When I say those people, I mean the

people that had left your company to work for

Mr. Catmull, or other people --

A.

eah.

Q.

-

that Mr. Catmull might hire.

A.

ight.

Q.

ow, did you -- do you recall who suggested

this?

A.

obody. I did.

Q.

kay.

A.

mean it was simply, you know, common sense.

Q.

kay. Did -- was the terms of this

understanding or your conversation with Mr. Catmull ever

written down, to the best of your recollection?

A.

-- I believe a memo was sent from ILM to

somebody at a point where they were getting worried about

something. I don't -- I'm not sure.

Q.

kay. And can you give me a sense about when

that memo was written in relation to when you spoke about

it with -- when you spoke about the subject the first

time with Ed Catmull?

A. have no idea.

Q.

as it 10 years? Two days?

A. don't know.



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Q. kay. Now, other than discussions with Ed

Catmull, did you ever discuss this topic with anybody

else at Pixar?

A.

o.

Q.

kay. After you had this conversation with Ed

Catmull about recruiting, did you tell anybody at

Lucasfilm that you had had this discussion?

A.

t may have come up at ILM when they were

getting worried that they were going to lose all their

people. And I said, no, we agreed not to raid each

other.

Q.

nd was the point at which you were -- you

remember ILM getting worried, was that the time of the

spinoff?

A.

o. I don't know when that was.

Q.

nd who did you discuss that subject with at

ILM?

A. t would have been with the president of the

company -- I mean the president of ILM.

Q.

ho was whom?

A.

t that time -- I'm not exactly sure which

president. We've had a couple. You know, Jim Morris or

Chrissie England, either one of them.

Q.

o you recall discussing the subject, and when

I say the subject, I mean the conversation or


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understanding that you had with Ed Catmull, with

Mr. Morris? Do you recall discussing that subject with

him at any time?

A.

e was the president of ILM. So I'd say it was

either him or the other -- it was one of the main

presidents. I mean Chrissie was the president for a long

time and Jim was the president for a long time.

Q.

id Jim Morris ever tell you that he had had

his own discussions with folks at Pixar regarding the

subject of recruiting?

A. o.

Q.

id you discuss this subject of your

understanding with Ed Catmull at any time with Micheline

Chau?

A.

don't think so. I can't remember.

Q.

o you know if she knew about this

understanding that you had with Pixar?

A. don't know.

Q.

o the best of your recollection, did Micheline

Chau ever come to you and say, we've got an issue about

Pixar recruiting someone in a way which is contrary to

the understanding that you have with Ed Catmull?

A. don't remember that.

Q. Who is IIIIIMMIE?

A. don't know him.

KRAMIVI COURT REPORTING

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Q.

r as there a lawyer that worked

for Lucasfilm that went to work for Pixar?

A. 'm not good with names.

Q

kay.

A. nd I don't -- you know, I'm not, again, that

involved in the actual running of the company.

Q.

as there ever a situation you recall where you

got upset that Pixar was recruiting or hiring someone

from Lucasfilm?

A.

o.

Q.

kay. Do you recall a situation where you ever

told Ed Catmull or someone that worked for his

organizations to stop recruiting people from Lucasfilm?

A. o.

Q.

n your conversation with Ed Catmull, did you

discuss with him how you would handle the situation when

an employee did, in fact, want to leave one company for

the other?

A.

e had discussed the -- the fact of, you know,

if somebody want -- comes to them looking for a job and

wants to leave here, at least give us a heads-up that

that's what they're going to do.

Q.

'm sorry. Who would give whom the heads-up?

A. d or somebody at Pixar would call us, whoever

the head of, like, ILM, and say, hey, this person is


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looking for a job. He's come here. We just want to let

you know.

Q.

n that conversation with Ed Catmull, did you

discuss any limits or rules or procedures that you would

adopt with respect to offers?

A.

o, not at all.

Q.

id you discuss with him the subject of

counteroffers?

A.

o.

Q.

o you know what a counteroffer is?

A. es.

Q

id you discuss with Ed Catmull the subject of

your interest in avoiding bidding wars between the two

companies?

A.

ell, no, but that was implied.

Q.

kay.

A. ut it's not -- it's not a bidding war.

said our policy is to let people go. We do not -- if

somebody says they got a better job at a higher pay, go

to it. We shake their hand, we give them a great, you

know, exit bonus and all that sort of thing, and we send

them off, and we say, good luck. Because those people

come back. You know, it's a -- it's a gypsy pool.

Q

t's a gypsy pool?

A. eah.

KRAMM CO URT REPORTING ONFIDENTIAL - ATTORNEYS EYES ONLY

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Deposifon of George Lu cas


Q.

hat do you mean by gypsy pool ?

A.

he people in the business that we're in go

from company to company. You know, they're not -- they

come back and forth, back and forth, and then they go

work for other companies, and then they come back. It's

not like, you know, if we lose somebody we lose them

forever. And if we do, our policy is to create a new

one.

Q.

id -- other than the -- the occasion that you

identified that there was some memorialization of it with

respect to ILM, to the best of your knowledge, was there

ever any other writing between the two companies that

formalized or specified the terms of the understanding

between the two companies with respect to recruiting?

A.

ot that I know of.

Q.

or example, are you aware of any kind of email

correspondence between the two companies, either between

you and Mr. Catmull or -- or anybody within your

respective organizations, where the subject of the terms

of this understanding was -- was set forth?

A.

o.

Q.

kay. Were -- or was the agreement between you

and -- strike that.

Was -- to the best of your recollection, was

your policy or procedure arising from your conversation


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that was produced by Pixar, would you agree with me that

they are generally consistent?


THE WITNESS: Well, not technically consistent.

BY MR. SAVERI:

Q. kay.

A. f we're doing it word by word.

Q.

ut are they generally consistent?


THE WITNESS: Yeah, I mean we don't -- you

know, they won't counteroffer, and there is something

here that says, we'll try to save the relationship if we

can, if we want to -- if we want to retain them. Those

are two opposite things.

You know, I don't know -- again, the save

conversation may or may not have anything to do with

salary. It may have to do just simply with what -- you

know, what they're unhappy about.

BY MR. SAVERI:

Q.

ther than the provision about the save

conversation, would you agree with me that these two

descriptions of the understanding between the two

companies are largely consistent?

MR. KEKER: Same objection. Object as to form.

THE WITNESS: Again, one -- the -- the -- ours


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is much more specific about what our things are. But,

again, this is the opinion of the person in HR. I

don't -- I don't know whether it came from any direction

from anybody.

BY MR. SAVERI:

Q.

id you ever tell Ms. Chau that you had a,

quote/unquote, gentleman's agreement with Ed Catmull?

A. o.

Q.

id you ever use that terminology, to the best

of your recollection, in describing your conversation or

understanding with Ed Catmull?

A. o. I think the part of the agreement is not

to solicit each other's employees, is the crux of it.

Q.

o let me just go through it, then.

A.

here is a similarity between the two.

Q.

kay. So in Sharon Coker's email, which is the

Lucas document, she begins by saying, We have a standing

agreement with Pixar, which I believe to be an informal

'gentleman's agreement' forged a few years ago (Mich

knows the history of it) -

Again, Mich is Mich Chau, right?

A.

es.

Q.

- to call each other, HR to HR, whenever we

extend an offer to someone who works for the other

company. Do you see that?


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A. es.

Q.

ould you agree with me that that's -- that

paragraph is consistent with the first bullet point in

Exhibit 137?

MR. KEKER: Object as to form.

THE WITNESS: They're similar.

BY MR. SAVERI:

Q.

nd then a little bit farther down it says,

Pixar will not give us details on the comp or job role

they've offered, but if the employee shares it and we

want to -- and we want to counter, we can do so and Pixar

will not give the employee a different or additional

offer. Do you see that?

A. h-huh. Yes.

Q.

ow, if you look at the last bullet on

Exhibit 137, it says, Once we have had the conversation

with LFL, we never counter if the candidate comes back to

us with a better offer from Lucasfilm. Do you see that?

A.

es.

Q.

ould you agree with me that those two

provisions are consistent?


THE WITNESS: I guess they're similar.

BY MR. SAVERI:

Q .

ow, Sharon Coker writes, We have agreed that



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we want to avoid bidding wars. Do you see that?

A. es.

Q.

id you want to avoid bidding wars with Pixar?

A.

o. That wasn't the original intention of my

wish.

Q kay. But did you want to avoid bidding wars

with Pixar --

A. o.

Q.

- with respect to employees?

A.

o.

Q.

id you have any feeling one way or another

about bidding wars with respect to Pixar?

A. o. I didn't -- no.

Q.

o

it's your testimony that you didn't care if

you entered into a bidding war with Pixar with respect to

employees?


BY MR. SAVERI:

Q.

id you care one way or the other about whether

you ended up in bidding wars with Pixar for particular

employees?

A.

don't think we would have done it. That

wasn't part of the wish. The wish is if they came back

and counteroffered for more, we'd just say, go.

Q.

ut in general, I think -- I mean we talked


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A.

his is an interpretation by the HR person, I

think, about the same people, really, who used to work

for each other.

Q

ut would you agree with me -- I think we

talked about this earlier today, that at least your --

part of your -- your philosophy with respect to

compensation was that if people wanted to get better jobs

somewhere else, they were free to go.

A.

hey were. They were absolutely free to go.

Q.

nd in connection with that, you -- it was your

view that you didn't want to increase compensation to

prevent people from leaving the company.

A.

ell, that's not what I said.

Q.

kay. Well, that's what I'm asking you.

In connection with that, did you have a view

about whether, as a compensation philosophy, you wanted

to pay people, increase compensation, in order for them

to not leave the company?

A. an you say that again?

Q.

kay. In connection with your view, your

compensation philosophy, did you want to avoid or

discourage your people who were in charge of compensation

from increasing compensation to Lucasfilm employees who

were thinking about going to work somewhere else in order

to encourage them to stay at the company?


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Did you -- did you want to -- was it your --

was it part of your philosophy to instruct the HR people

not to increase compensation to prevent people from

leaving the company?


THE WITNESS: That was my philosophy.

BY MR. SAVERI:

Q.

ow, in Sharon Coker's email, she says about

halfway down, We do not have this arrangement with any

other studio. Do you see that?

A. es, I do.

Q.

o the best of your recollection, is that a

true statement?

A.

es.

Q.

kay. Now, she also says towards the bottom of

the document, These guidelines are intended for the

situation where a Pixar employee has responded on their

own to one of our job postings directly (or vice versa).

Our employees are hands off to each other in terms of

soliciting talent.

Do you see that?

A.

es.

Q.

o the best of your recollection, is that a

true statement of fact?

A.

es.


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Deposition of George Lucas In Re: HIGH-TECH EMPLOYEE ANTITRUST LITIGATION

Q.

ow -- and again, did you ever discuss this

subject, that is the subject -- the topics that are set

forth in Sharon Coker's email with Sharon Coker?

A.

o.

Q.

id you ever discuss them with Jan Van der

Voort?

A.

o.

Q.

id you ever discuss them with Steve Condiotti?

A.

o.

Q.

ondiotti, excuse me.

A.

o.

Q.

id you ever discuss them with Alan Keith?

A.

o.

MR. SAVERI: You can put that aside.

(Exhibit 2435 was marked for identification.)

BY MR. SAVERI:

Q.

've handed you what has been marked as

Exhibit 2435. Do you have that in front of you?

A. h-huh.

Q. gain, this is a document produced to us by

Pixar. In particular, I want to ask you about the

portion of the email at the bottom of the first page from

this gentleman named

to someone named

Subject: Spoke with George.

A.

es.

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Q.

kay.

A. think this is just a worksheet.

Q.

kay. And again, your role in the process was

to approve or -- or disapprove a recommendation that was

made to you by the compensation committee?

A.

es.

Q. an you ever recall a situation where you

didn't approve the recommendation?

A. ot that I can remember.

Q.

ow, 2438, I believe you said, refers to

executive compensation set by the compensation committee

of the Lucas board, correct?

A. ight.

Q.

ow, what about with respect to everybody else

at the company? What was your role with respect -- with

respect to setting compensation for them?

A. hey -- every few years we would also check

with a survey company to also verify where we stood in

the pecking order.

Q.

kay. And would you undertake a similar kind

of process with respect to those nonexecutives with

respect to compensation?

A.

hose were used to help the administrative

staff work with the heads of the companies to alert them

to, you know, people or things where there -- you know,


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again, the same thing, where they weren't getting paid.

They weren't -- we weren't competing with everybody else.

Q.

ere -- at Lucasfilm, was there a regular

process for setting compensation for -- for

nonexecutives?

A.

es.

Q. nd what was that?

A.

he -- the compensation was pretty much decided

by the president of that company, and there -- there is a

review process, an HR process, a -- you know, a whole

thing. And raises and bonuses and that whole thing was

sort of set up by the head of the company, and then it

would go to Mich, and she would approve it.

Q.

id you have any role in that process?

A.

o.

Q.

id -- was there a point in time in that

process where Mich Chau came to you and said, This is

what we're going to do. Do you approve it or not?

A.

es.

Q.

kay. And did you, as part of that process,

ever disagree with any of the recommendations that

Ms. Chau gave you?

A.

might have. Yes, I can't remember. Again,

you're talking 35 years, not just with her, but obviously

with the process.



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Q.

as the process annual?

A. es.

Q.

kay. Did you have any role with -- with

respect to that process -- with respect to your direct

reports?

A.

es.

Q.

kay. Who were the direct reports that you

gave reviews to or had input into with respect to

compensation?

A. ich, my -- I have two assistants, my two

assistants.

Q. kay.

A.

nd I had producers -- or a producer that

worked for me, and he was my direct report, too.

Q.

s part of the -- this kind of annual process,

was there a -- was there some kind of budgeting decision

that was made at the beginning of the process in terms

of, you know, a percentage increase of compensation or --

or anything like that?

A. ell, I think there was. I think there was

a -- a -- an overall what -- the business plan for that

year.

Q

ight.

A. And what they thought they were going to make.

Q.

ight.


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A.

nd then a part of this in terms of the

salaries was determined by how much money was left over.

Q.

ight.

A.

mean not left over, but how much money we had

to work with. And then at the end, if they met those

goals and we did that business and that kind of thing,

then they would get bonuses.

Q.

kay. Can you describe for me generally for

the nonexecutives what the kind of elements of

compensation were at Lucasfilm.

A. ell, there was the salary.

Q.

base salary.

A. here was a company bonus

Q

ight.

A.

ased on how that division did. And then

there was a personal bonus depending on how that person

did. And it was discretionary.

Q.

ow, were there job titles or job

classifications that were used as part of the

compensation structure at Lucasfilm?

A. hat, I don't know.

Q.

kay. For example, do you know if there were

salary ranges that were established within the structure

for people who had similar job titles or job

classifications?


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A.

think there were, yes.

Q.

kay. And who established those?

A. think it was done in the administrative

department and HR in relationship t , you know, trying to

keep things even. I mean, you know, in terms of -- make

sure it was fair.

Q.

ight. Did you have any role in setting salary

ranges for any particular job title or job

classification?

A. o, not except -- except for Mich.

Q.

nd that is why I started with --

A.

eah.

Q.

- asking you about your direct reports. But

I'm talking about more generally across the structure.

A.

o. Occasionally they would come -- Mich would

come and say, We want to give this guy a raise. He's

been moving -- he -- we are moving him up from this to

that. And I'd say, Fine.

Q.

kay. So a couple of questions about that.

Do you have any role in determining -- okay.

First, do you have any role in determining changes to

salary ranges for any particular job title or job

classification?

A.

o.

Q.

kay. Did you have any role in determining



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whether someone would be promoted from one job

classification to another?

A. o.

Q.

kay. Did you have any kind of general

oversight rule about exceptions to base compensation?

A.

ell, no.

Q.

et me try --

A.

t is hard to understand exactly what you are

saying, though.

Q.

et me try to give you an example. For

example, if there was a person whose job title placed

them at a position -- strike that.

If there was a person who, because of their job

title, would ordinarily receive a specific salary within

a job range, did it -- were there ever situations where

someone recommended that someone would receive

compensation outside the established range for that job

title?

A. o.

Q. kay. And what I was getting at is, did you

have any role in approving exceptions from the salary

range established for particular jobs or job titles?

A. ell, again, some of the salaries were -- you

know, they're not even. Some people worked for me 35, 40

years.


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1

THE WITNESS: No.

2

Y MR. SAVERI:

3

.

ow, the -- the next paragraph is

4

Benchmarking. Do you see that?

5

.

h-huh.

6

.

t says, Lucasfilm will benchmark...

8 using compensation surveys that are relevant to the

9

pecific job or job family. Do you see that?

1

0

A. es.

11

Q.

s that true?

12

. es.

13

.

hen it says,

14

xcuse me.

15

20

o you see that?

21

.

es.

22

.

s that true?

23

. es.

24

.

kay. How did Lucasfilm identify which

25 positions were to be benchmarked at -- benchmarked

ate



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6.1.1111

11

A.

don't know.

Q.

id you have any role in identifying or making

that determination?

A.

o.

Q.

ow, this refers to studio and technical

positions as being examples of the highly competitive

and/or critical to achieving business objectives jobs.

Do you see that?

A. es.

Q.

o you agree that those were highly competitive

or -- and/or critical to achieving Lucas' business

objectives?

A. es.

Q.

ere there others that you could identify which

would similarly fall in that category?

A. ell, studio, I'm interpreting here, as meaning

the creatives at the production and ILM and those things

where you have, you know, highly specialized creative

people.

Q.

kay. And so --

A. nd technical positions are technical

positions.

Q.

ow, the next paragraph talks about base salary

adjustments and merit increases. Do you see that?

KRAMM COURT REPORTING ONFIDENTIAL - NITORNEYS EYES ONLY

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A. es.

Q

nd it says, Base Salary Adjustments (Merit

Increases) will be done annually, linked to employee

performance reviews. Is that true?

A.

es.

Q.

hen it says, The level of increases will be

determined by analyzing both external market practices

and company performance and then will be awarded based on

individual performance. Do you see that?

A.

es.

Q

s that true?

A.

es.

Q.

his document, if you turn to the first page of

it, the cover, is dated November 28th, 2007.

A.

es.

Q

nd it is for 2008. Do you see that?

A.

or -- it says November -- yeah.

Q

t is dated November 28th, 2007, but it looks

like it's meant to apply to 2008. Do you see where --

A.

kay. I don't -- where is the --

Q.

aybe I'm misunderstanding.

A. don't really know. I mean --

Q

et me -- let me withdraw the question and just

ask you about -- have you turn back to the third page

again, which is what I was asking you about.



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A. ot that I directly know of.

Q.

kay. Was there a rule that prevented that?

A. o.

Q

id you leave that -- was that -- was the

authority about that subject delegated to someone at the

company?

A. es, whoever was in charge of the employees.

Q.

kay.

A. nd what the situation was.

Q.

kay. Did -- was HR or someone in that

department given any of the authority with respect to

determine whether to counter or raise salary in order to

retain talent?

A.

don't know.

Q.

kay. When you were thinking about what to do

about compensation on a going-forward basis, i.e.,

setting levels for a particular year, bonuses, or things

like that, did you look at this kind of information?

When I say this kind of information, I mean information

regarding your employees getting higher offers at other

places. Did you look at that kind of information when

you were thinking about what you were going to do with

respect to compensation for the following year?

A.

o.

Q.

kay. Did it enter into your calculus at all?


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Deposit on of George Lucas


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A.

o.

Q.

o when you were thinking about what -- whether

to raise salaries for the coming year, you didn't care

whether or not competitive companies were raising

salaries to hire away --

MR. KEKER: Objection to form.

BY MR. SAVERI:

Q.

- talent?


You can answer.

THE WITNESS: Well, again, this is a

specific -- I mean I don't -- I didn't know anything

about the -- this Sony group. But when a company is

formed, they immediately go out and raid all the other

companies. It's a big problem. And they will pay

whatever it takes, even though it is irresponsible. And,

of course, these companies are all out of business now,

because they paid everybody more than they could afford.

So we have to protect ourselves against that,

because that can completely wipe out a department. In

this case it is the animation group which was working on

our TV show that we had to deliver, and we had to deliver

on time, no matter what. So if they take away 30 of our

people, or key -- 10 of our key people, we're wiped out.

We'll go bankrupt. So it's that close to the edge.

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Deposition of George Lucas In Re: HIGH-TECH EMPLOYEE ANTITRUST LITIGATION

So in that situation -- and in this case, Gail

Currey was looking at, we're not going to get done if we

lose these people. So in that particular case, it was

maybe we should offer some more money so he'll stay until

we can bolster up the rest of the people that have been

scavaged away to, you know, keep the pipeline going.

BY MR. SAVERI:

Q.

o from time to time new companies would come

into your -- into the space --

A.

ight.

Q.

- and --

A.

t's -- it's a joint problem for the company.

It's the same thing with Digital Domain, it was the same

thing with Sony, it was the same thing with DEI, it was

the same -- you know, we have this a lot. It is not just

a little thing. And, you know, the result is, there's

only a couple of companies left.

Q.

o sometimes you would lose people.

A.

es.

Q.

nd -- and sometimes they would go to companies

that ended up failing.

A.

ell, they would go to companies that would pay

them a lot more, and at the same time it would damage our

production line so that we couldn't get our job done on

time. And in that case you have the supervisor there



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4

panicking and saying, we're not going to get done. e

have to hire a whole bunch more people and train them,

which takes, you know, a year, and then -- you know, and

still be on time.

nd she was saying, that ain't going

5

to happen.

6

Q. o from time to time did you kind of respond to

7

that competitive threat by -- well, not letting the

8

people go, but trying to do things to keep -- encourage

9 people to stay?

10

A. o. e would -- well, we'd encourage people to

11

stay, and in those situations we have a key person who

12

you have to have to keep going who is being wooed away by

13

another company who is going to pay triple what they are

14

getting, or in this case even 30 percent is a lot, and,

15

you know, you want to try to keep that in check.

16 Q.

kay. ell,

rom time to time, though --

17

A.

ut it is on an individual basis.

18

Q.

nd so from time to time on an individual basis

19

some compensation was raised.

20

A.

es.

21

Q

kay. nd was that something you decided?

22

A. o.

23

Q. nd that was something that you delegated to

24

other people in the company.

25

A. t was whoever was affected by it.


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Q.

kay.

A.

nd then they would in the end say, we're way

overbudget because we had to do this, this, and this.

Q.

kay. Well, you never had that problem with

Pixar, right?

A.

o.

Q.

nd that's in large part because you had an

understanding going back to Ed Catmull.

A. ut they didn't -- since they began from our

company, they didn't have to recruit a lot of people, and

in the beginning they weren't doing movies. So it wasn't

until they started doing movies that it started to become

some kind of an issue.

And it was the same thing for them when we did

Star Wars and that sort of thing. People wanted to move

back and forth between the companies. They did move back

and forth between the companies a lot.

Q.

et me hand you this document. Let me just ask

you a question. Exhibit 118 is a Croner Survey.

A.

h-huh.

Q.

nd maybe I can just short-circuit. Did you

ever see Croner Surveys like this?

A. et me look at the whole thing. I don't think

SO.

Q.

ou should satisfy yourself that that's your



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answer, but that's my question.

A.

o, I didn't. I haven't seen this.

MR. KEKER: There is no question pending,

George.

MR. SAVERI: Well, if you are satisfied you --

THE WITNESS: Yeah.

MR. SAVERI: Put it aside, then.

BY MR. SAVERI:

Q.

et he hand you Exhibit 167. This is the

Competitive Impact Statement that was filed in the

action by the Department of Justice against Lucasfilm.

A. kay.

Q.

really only have questions about section II

which is on page 2 and 3, but the same thing, please take

whatever time you need to look at the document.

A.

kay.

Q.

irst, have you ever seen this document before?

A. o.

Q.

n II, there is some text under the heading,

Description of the Events Giving Rise to the Alleged

Violations of the Antitrust Laws. Do you see where I

am?

A.

ight. Uh-huh.

Q.

nd it says, Lucasfilm and Pixar are rival

digital animation studios. Do you see that?


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A.

es.

Q.

s that true?

A. es.

Q

hen it says, Third, they agreed that when

offering a position to the other company's employee,

neither would counter offer above the initial offer. Is

that true?

A.

don't know.

Q

ou don't know one way or the other.

A. o, I don't.

Q

kay. So you don't deny that's true.

MR. KEKER: Object to the form.

THE WITNESS: It obviously was repeated in the

memo, so --

MR. KEKER: This is a DOJ memo.

MR. SAVERI: Let me -- let me ask the questions

and have the witness answer them.

Q

ow, it says, The protocol covered all digital

animators and other employees of both firms and was not

limited by geography, job function, product group, or

time period. Do you see that?

A. ep.

Q

s that true?

A.

don't know.

Q

ell, when you had your discussions with Ed

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Catmull, were there any limitations with respect to

geography, job function, product group or time period?

A.

o.

Q.

o you have any reason to believe that that was

changed in any way subsequent to that?

A. riginally we were talking about digital. The

people that worked at Pixar that used to work at

Lucasfilm.

Q.

kay. But subsequently you understood that

neither company would -- would actively recruit not only

digital animators, but other employees as well.

A. eah.

Q. nd it says, Senior executives at the two

firms agreed on the protocol through direct and explicit

communications. Do you see that?

A.

es.

Q. ow, you're a senior executive at the company,

right?

A. es.

Q. o -- well, is that statement true?

A. o.

Q.

hy isn't it true?

A.

ell, if you're saying that I'm

f they were

communicating with me, no. If they were communicating

between Ed Catmull and Ms. Chau, yes.


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Q.

nd it says, In furtherance of this agreement,

Pixar drafted the terms of the agreement with Lucasfilm

and communicated those written terms to Lucasfilm. Do

you see that?

A.

eah.

Q.

s that true?

A.

wouldn't call it terms of an agreement.

Q. ell --

A. mean --

Q.

-

what would you call it?

A.

ust the understanding between the two

companies.

Q.

kay. And it says', Both firms communicated

the agreement to management and select employees with

hiring or recruiting responsibilities. Do you see that?

A.

es.

Q.

s that true?

A. es.

Q. ow, it says, Twice in 2007 Pixar complained

to Lucasfilm about recruiting efforts Lucasfilm had

made. Do you see that?

A.

ep.

Q.

nd is that true?

A.

don't know.

Q.

kay. Do you recall any incident in 2007 where


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Pixar complained to Lucasfilm about Lucasfilm's

recruiting efforts?

A.

o.

Q.

nd then it says, Complaints about breaches of

the agreement led the two firms to alter their conduct

going forward to conform to the agreement.

Do you see that?

A.

es.

Q.

o you know if that's true?

A.

o.

Q.

ow, the -- the next paragraph says -- well,

let me ask you a question before I get there.

Did you -- at Lucasfilm, who knew about your

understanding with Ed Catmull?

A.

don't know.

Q.

as it -- was it a matter of kind of public

knowledge within the company?

A.

hat, I don't know either.

Q.

kay. Did you ever tell anybody that worked

for you that information regarding your conversations

with Ed Catmull were not to be widely disseminated or

described?

A. o.

Q.

kay. Now, this says in the next paragraph,

It eliminated a significant form of competition to

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attract digital animation employees and other employees

covered by the agreement. Do you see that?

A.

h-huh.

Q.

ould you agree that your agreement or your --

your -- excuse me.

Would you agree that your conversations with Ed

Catmull served to head off any competition between the

two companies to attract digital animation employees?

A.

o.

Q.

ell, would you agree that the discussions you

had with Ed Catmull generally prevented, as you said,

efforts by the two companies that might have killed each

other?

A.

ight. I was trying to -- we were trying to

protect the San Francisco film industry. It is very,

very small. It is very hard for us. We're not like

Hollywood. And the only way we can survive is if we do

it together. United we stand, divided we fall. This is

not like a regular capitalist kind of operation where

you're out to kill the other guy. I'm promoting digital

technology for cinema, and I'm devoting a lot of my time

working with animators and with visual effects people to

try to expand the entire medium and discipline for

everybody. When I came here, there were nobody -- there

was nobody.


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Q.

id you believe that if you were kind of

competing with Pixar for employees, and -- and recruiting

or raiding each other's talent, that you would -- that

would have limited your ability to do that?

A.

es.

Q

nd it would have made -- it's your testimony

that that kind of raiding or recruiting would have

limited the growth of the industry here.

A.

efinitely. It's -- it's, you know -- it's a

very common thing in our business. It is something that

comes -- Lucasfilm has been close to bankruptcy several

times because of it. It's not something we take lightly.

And, as I say, most of the visual effects companies and a

lot of the animation companies now are broke. They are

bankrupt, they're gone, or they've gone to Europe.

Q.

o it's your -- is it your testimony that were

you to -- were you to have competed with -- with Pixar

with respect to compensation or recruiting or retaining

talent, that you would have not been able to succeed as a

business?

A.

e would have been able to succeed, but my way

of looking at that is not in an adversary way. My whole

life is dedicated to cooperation and helping people and

being together to help people to expand and create

something that wasn't there before. It is only the



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1

I, Rosalie A. Kramm, Certified Shorthand

2

eporter licensed in the State of California, License No.

3

469, hereby certify that the deponent was by me first

4 duly sworn and the foregoing testimony was reported by me

5 and was thereafter transcribed with computer-aided

6 ranscription; that the foregoing is a full, complete,

7 and true record of said proceedings.

8 further certify that I am not of counsel or

9 attorney for either of any of the parties in the

10 foregoing proceeding and caption named or in any way

11 nterested in the outcome of the cause in said caption.

12

he dismantling, unsealing, or unbinding of the

13 riginal transcript will render the reporter's

14 ertificates null and void.

15

n witness whereof, I have hereunto set my hand

16

his day:

pril 9, 2013.

17

eading and Signing was requested.

18 Reading and Signing was waived.

19 Reading and signing was not requested.

20

21

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George Lucas Deposition Techtopus 426-27

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