================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------- FORM 11-K [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] FOR THE TRANSITION PERIOD FROM ______ TO ______ COMMISSION FILE NUMBER A. Full title of the plan and the address of the plan, if different from that of the issuer named below: IMAX CORPORATION 401(k) RETIREMENT PLAN B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: IMAX CORPORATION 2525 Speakman Drive Mississauga, Ontario L5K 1B1 ================================================================================
IMAX CORPORATION 401(k) RETIREMENT PLAN TABLE OF CONTENTS OF INFORMATION REQUIRED IN REPORT ITEM 4. Financial Statements and Supplemental for the Plan The IMAX Corporation 401(k) Retirement Plan (the "Plan") is subject to the Employee Retirement Income Security Act of 1974 ("ERISA"). In lieu of the requirements of Items 1-3 of this Form, the Plan is filing the financial statements and supplemental schedules prepared in accordance with the financial reporting requirements of ERISA. The Plan financial statements and supplemental schedules for the years ended December 31, 2004 and 2003, are included as Exhibit 99.1 to this report on Form 11-K and are incorporated herein by reference. The Plan financial statements and supplemental schedules have been examined by PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm, and their report is included therein. Page Signatures 2 EXHIBITS 23.1 Consent of Independent Registered Public Accounting Firm 3 99.1 Financial Statements and Supplemental Schedule of the IMAX Corporation 401(k) Retirement Plan for the year ended December 31, 2004, prepared in accordance with the financial reporting requirements of ERISA 4 1
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees of the IMAX Corporation 401(k) Retirement Plan have duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized. IMAX CORPORATION 401(k) RETIREMENT PLAN Date: June 7, 2006 By: /s/ Mary C. Sullivan ------------------------------------- Name: Mary C. Sullivan Title: Senior Vice President, Human Resources & Administration By: /s/ G. Mary Ruby ------------------------------------- Name: G. Mary Ruby Title: Senior Vice President Legal Affairs, Corporate Secretary, Deputy General Counsel & Chief Compliance Officer 2
EXHIBIT 23.1 PRICEWATERHOUSECOOPERS LLP CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-134811) of IMAX Corporation of our report dated February 28, 2006 relating to the financial statements and financial statement schedules of the IMAX Corporation 401(k) Retirement Plan, which appears in this Form 11-K. /s/ PricewaterhouseCoopers LLP Buffalo, New York June 7, 2006 3
EXHIBIT 99.1 INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES OF THE IMAX CORPORATION 401(k) RETIREMENT PLAN Page Report of Independent Registered Public Accounting Firm 5 Financial Statements: Statement of net assets available for benefits as of December 31, 2004 and 2003 6 Statement of changes in net assets available for benefits for the years ended December 31, 2004 and 2003 7 Notes to financial statements 8-14 Additional Information: Schedule of Assets (Held At End Of Year) as of December 31, 2004 15 Schedule of Delinquent Participant Contributions for the year ended December 31, 2004 16 4
Report of Independent Registered Public Accounting Firm To the Participants and Administrator of IMAX Corporation 401(k) Retirement Plan We have audited the accompanying statements of net assets available for benefits of IMAX Corporation 401(k) Retirement Plan (the "Plan") at December 31, 2004 and 2003, and the related statement of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our report dated October 1, 2004, we were unable to, and did not, express an opinion on the statement of net assets available for benefits as of December 31, 2003 and the related statement of changes in net assets available for benefits for the year ended December 31, 2003 because, at the instruction of the plan administrator, we did not perform any auditing procedures with respect to the information summarized in Note 3 to those financial statements. The plan administrator has now instructed us to perform, and we did perform, an audit of the statement of net assets available for benefits at December 31, 2003 and statement of changes in net assets available for benefits for the year then ended in accordance with the standards of the Public Company Accounting Oversight Board (United States). Accordingly, we are now able to express an opinion on the statement of net assets available for benefits and statement of changes in net assets available for benefits at December 31, 2003. In our opinion, the financial statements referred in the first paragraph of this report present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2004 and December 31, 2003, and changes in the net assets available for benefits for the year ended December 31, 2004 and 2003 in conformity with accounting principles generally accepted in the United States of America. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental Schedule of Assets (Held at End of Year) and Schedule of Delinquent Participant Contributions are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental schedules are the responsibility of Management. The supplemental schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. Buffalo, New York February 28, 2006 5
IMAX CORPORATION 401(K) RETIREMENT PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS YEAR ENDED DECEMBER 31, 2004 AND 2003 - --------------------------------------------------------------------------------
IMAX CORPORATION 401(k) RETIREMENT PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2004 AND 2003 - -------------------------------------------------------------------------------- 1. DESCRIPTION OF THE PLAN The following brief description of the IMAX Corporation 401(k) Retirement Plan (the "Plan") is provided for general information purposes only. For a more complete description of the Plan's provisions, participants should refer to the Plan agreement. GENERAL The Plan was established by IMAX Corporation (the "Company") effective January 1, 1993. The Plan is a defined contribution retirement plan covering all eligible employees of the Company who are not covered by a collective bargaining agreement, and is subject to the provisions of the Employee Retirement Income Security Act ("ERISA") of 1974 and the Internal Revenue Code. Effective July 1, 2004, the Plan transferred all of the recordkeeping responsibilities from Fidelity Investments Institutional Operations Company, Inc. to ABN AMRO Trust Service Company and transferred all plan assets to ABN ARMO Trust Service Company, which replaced Fidelity Management Trust Company ("Fidelity") as the Plan's trustee and custodian (the "Trustee"). On July 1, 2004, participant investments balances were automatically transferred to investments with similar goals as shown below:
IMAX CORPORATION 401(K) RETIREMENT PLAN SCHEDULE OF ASSETS (HELD AT END OF YEAR) DECEMBER 31, 2004 - -------------------------------------------------------------------------------- CONTRIBUTIONS The Plan allows participants to contribute an amount up to 60% of their annual compensation, not to exceed the ceiling imposed by the Internal Revenue Service of $13,000 for 2004 and $12,000 for 2003, as prescribed by the Plan Agreement. A participant who has attained age 50 before the close of the respective Plan year, is eligible to make unmatched catch-up contributions up to a maximum of $3,000 for 2004 ($2,000 for 2003), increasing by $1,000 each year up to $5,000 in 2006. The Company will match 100% of the participants' contributions, not to exceed 2% of their total compensation. Additionally, profit sharing amounts may be contributed at the option of the Company's Board of Directors. No profit sharing contributions were made for the Plan year ended December 31, 2004 and 2003. VESTING Participants are vested immediately in their contributions plus actual earnings thereon. Vesting in the employer contribution portion of their accounts is based on years of continuous service as follows: Years of Service Percentage VESTING --------------------------- ------- Less than 1 0% 1 25% 2 50% 3 or more 100% Participants will be immediately vested upon the occurrence of certain events such as reaching normal retirement age, reaching early retirement age and completing 5 years of vesting service, becoming disabled and upon death. PARTICIPANT ACCOUNTS Separate accounts are maintained for each Plan participant. Participants may direct the investment of their contributions in 1% increments in any of several investments fund alternatives, which include mutual funds, a common trust fund and the IMAX stock fund. Participants may, in accordance with the rules of the Plan, transfer existing balances among the available investments funds, and/or redirect their current contributions into different funds, daily. A participant may increase or decrease, at any time, the percentage of salary reduction elected, effective the first day of each payroll period. Contributions may be suspended at any time. Each participant's account is credited with the participant's and the Company's contributions and investment earnings, and charged with investment losses. The benefit to which a participant is entitled is equal to the amount of the participant's vested account balance. 9
IMAX CORPORATION 401(K) RETIREMENT PLAN SCHEDULE OF ASSETS (HELD AT END OF YEAR) DECEMBER 31, 2004 - -------------------------------------------------------------------------------- PARTICIPANT LOANS Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum of $50,000 or 50% of their vested account balance, whichever is less. The loans are collateralized by the balance in the participant's account and bear interest at rates commensurate with local prevailing rates as determined annually by the plan administrator. The interest rates on loans outstanding at December 31, 2004 and 2003 ranged from 5.0% to 5.75%. BENEFIT PROVISIONS Normal retirement age is 65, at which time participants are entitled to 100% of their account balance. Vested amounts are distributable upon termination, death, undue financial hardship or the termination of the Plan. FORFEITURES Participants not fully vested in employer contributions upon termination of employment forfeit their non-vested balances when they incur a forfeiture break in service. A forfeiture break in service is a period of five consecutive vesting service periods in which a participant completes fewer than a minimum number of hours, as defined by the Plan, in each vesting service period comprising the five-year period. The forfeitures are retained in the Plan and are used to reduce future employer contributions payable under the Plan. At December 31, 2004 and 2003, unallocated forfeited non-vested accounts totaled $5,051 and $5,629, respectively. During 2004 and 2003, $11,247 and $5,183 of forfeited unallocated assets were used to reduce employer contributions, respectively. ADMINISTRATIVE EXPENSES Administrative expenses incurred in connection with the administration of the Plan are generally paid for by the Company. Other administrative expenses incurred related to specific transactions requested by participants and are paid for out of the respective participant accounts. The total amount of administrative expenses paid by plan participants as of December 31, 2004 and 2003 was $749 and $378, respectively. CHANGES IN THE PLAN On March 6, 2003, the Plan was amended to remove the joint and (at least) 50% survivor annuity distribution option. The Plan was also amended to change the procedure for loans and/or withdrawals from being pre-approved to being sponsor-approved. Additionally, the Plan was amended to be in compliance with the GUST legislation. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING The accounts of the Plan are maintained on the accrual basis of accounting. USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates. BENEFIT PAYMENTS Benefits are recorded when paid. 10
IMAX CORPORATION 401(K) RETIREMENT PLAN SCHEDULE OF ASSETS (HELD AT END OF YEAR) DECEMBER 31, 2004 - -------------------------------------------------------------------------------- INVESTMENT VALUATION AND INCOME RECOGNITION Investments are reported a fair value. Investments in mutual funds are valued at the net asset value of shares held at the end of the Plan year. Investments in common collective trust fund are valued at the net asset value based on the last reported sales price of the underlying investments held. Interest-bearing cash includes money market accounts valued at the net asset value of shares held by the Plan at year-end. Loans to participants are valued at cost, plus accrued interest which approximates fair value. Investment income of the mutual funds and the common collective trust fund are allocated to participants based on their proportionate share of the net assets of the respective investment fund. Purchases and sales of securities are reflected on a trade-date basis. Dividend income is recorded on the ex-dividend date. RISK AND UNCERTAINTY Investments are exposed to various risks, such as interest rate and market risk. Due to the level of risk associated with certain investments and the level of uncertainty related to changes in the value of investments, it is at least reasonably possible that changes in risk in the near term could materially affect participants' account balances and the amounts reported in the statement of net assets available for benefits and the statement of changes in net assets available for benefits. 11
IMAX CORPORATION 401(K) RETIREMENT PLAN SCHEDULE OF ASSETS (HELD AT END OF YEAR) DECEMBER 31, 2004 - -------------------------------------------------------------------------------- 3. INVESTMENTS On December 31, the following presents investments that represent 5% or more of the Plan's net assets:
IMAX CORPORATION 401(K) RETIREMENT PLAN SCHEDULE OF ASSETS (HELD AT END OF YEAR) DECEMBER 31, 2004 - -------------------------------------------------------------------------------- 4. RELATED PARTY TRANSACTIONS Effective July 1, 2004, the Plan allowed participants to invest in shares of the IMAX Stock Fund. The Fund normally keeps over 95% of the assets in IMAX stock with the remaining assets held in a money market fund. As of December 31, 2004 there were no shares outstanding in the IMAX Stock (Note 8). The balance in IMAX Stock Fund represents money held in a money market account at December 31, 2004. During the period from January 1, 2004 through June 30, 2004, certain Plan investments were shares of mutual funds managed by an affiliate of Fidelity, and therefore, these transactions qualify as party-in-interest transactions. During the period from July 1, 2004 to December 31, 2004, certain Plan investments were shares of mutual funds and units of commingled trusts managed by an affiliate of ABN ARMO Trust Service Company the trustee and, therefore, these transactions qualify as party-in-interest transactions. Loans to participants as of December 31, 2004 and 2003 were $48,002 and $60,652, respectively and are also considered party in interest transactions. 5. TAX STATUS The Internal Revenue Service ("IRS"), issued a favorable determination letter on October 9, 2003 regarding the qualified and tax-exempt status of the Plan under Section 401 and 501 of the Internal Revenue Code. Subsequent to receipt of the favorable determination letter, the Plan was amended. The plan administrator and the Plans tax counsel are of the opinion that the amendments did not affect the qualified and tax-exempt status of the Plan and, accordingly, no provision has been made for income taxes. Participants are not subject to federal or state income tax on employer matching contributions and pre-tax participant salary reduction contributions until such contributions are withdrawn or distributed. Participants are also not subject to federal or state income tax on the earnings and appreciation of the assets of the Plan until such amounts are withdrawn or distributed. 6. DISTRIBUTIONS OF EXCESS PARTICIPANTS CONTRIBUTIONS For purposes of complying with the participation and discrimination rules set forth in Section 401(k)(3) of the Internal Revenue Code, certain contributions from "highly compensated" participants were deemed to exceed allowable deferral limits for the year ended December 31, 2004 by $23,797. These excess contributions were refunded during 2005. 7. NON-EXEMPT TRANSACTIONS The Company was not in compliance with Regulation 2510.3-102 of the Department of Labor regarding the timely remittance of employee contributions withheld in February 2004, June 2004, and July 2004 to the Plan. Regulation 2510.3-102 requires that contributions by employees be remitted to the Trustee no later than the 15th business day following the end of the month. The Company remitted the employee contributions for February 2004 in January 2005, for June 2004 in July 2004, and for July 2004 in August 2004, and was therefore not in compliance. At December 31, 2004, $18,000 and $4,700 of employee and employer contributions, respectively, have been recorded as a receivable to the Plan. Included in other receivables as of December 31, 2004 is $2,805 of lost earnings and income due to participants. 13
IMAX CORPORATION 401(K) RETIREMENT PLAN SCHEDULE OF ASSETS (HELD AT END OF YEAR) DECEMBER 31, 2004 - -------------------------------------------------------------------------------- 8. UNREGISTERED SALE OF IMAX COMMON STOCK The Plan has offered IMAX common stock to participants as an investment option effective July 1, 2004. The stock was required to be registered with the Securities and Exchange Commission prior to offering to participants. The Company filed a Form S-8 to register the shares to be offered under the Plan. The Plan sponsor may be subject to claims for rescission of acquisitions of shares of the Plan sponsor's common stock under applicable securities laws during the one year following the date of acquisition of the shares, the statute of limitations period that the Plan sponsor believes may apply to claims for rescission under applicable federal laws. The prospectus mailed to participants included disclosure of this matter. As of January 23, 2006, there were $2,303 shares of IMAX stock fund held by the Plan. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 The following is a reconciliation of net assets available for benefits per the financial statements at December 31, 2004 and 2003 to Form 5500:
IMAX CORPORATION 401(K) RETIREMENT PLAN SCHEDULE OF ASSETS (HELD AT END OF YEAR) DECEMBER 31, 2004 - --------------------------------------------------------------------------------
IMAX CORPORATION 401(K) RETIREMENT PLAN SCHEDULE OF ASSETS (HELD AT END OF YEAR) DECEMBER 31, 2004 - --------------------------------------------------------------------------------