As filed with the Securities and Exchange Commission on October 21, 1999
Registration No. 333-86951
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
PMC-SIERRA, INC.
(Exact name of Registrant as specified in its charter)
8555 Baxter Place, Suite 105
Burnaby, British Columbia
Canada, V5A 4V7
(604) 415-6000
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
Delaware 94-2925073
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
The Corporation Trust Company
1209 Orange Street
Wilmington, Delaware 19801
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
Copy to:
Neil Wolff
Wilson Sonsini Goodrich & Rosati
Professional Corporation
650 Page Mill Road
Palo Alto, CA 94304
(415) 493-9300
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following box.[_]
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933 (the "Securities Act"), other than securities offered
only in connection with dividend or interest reinvestment plans, please check
the following box.[_]
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
================================================================================
<PAGE>
- --------------------------------------------------------------------------------
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
- --------------------------------------------------------------------------------
Subject to Completion
PMC-SIERRA, INC.
3,597,123 Shares of Common Stock
The selling stockholders listed on page 11 of this prospectus may sell
or distribute the shares through underwriters, dealers, brokers or other agents,
or directly to one or more purchasers. The price may be the market price
prevailing at the time of sale or a price privately negotiated.
We will not receive any of the proceeds from the sale of the shares.
However, we will pay substantially all expenses incident to their registration.
Our common stock is quoted on the Nasdaq National Market under the
symbol "PMCS." On October 20, 1999, the last reported sale price of our common
stock was $83.1875 per share.
Investing in our common stock involves a high degree of risk. See "Risk
Factors" located on page 1 of this prospectus.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved the PMC common stock to be issued in
connection with this prospectus or determined whether this prospectus is
accurate or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is October 21, 1999
<PAGE>
You should rely only on information or representations contained or
incorporated by reference in this prospectus. No one has been authorized to
provide you with any different information.
Our business and affairs may change following the date of this
prospectus. We do not have an obligation to update the information in this
prospectus after the date on the cover page.
RISK FACTORS
This offering involves a high degree of risk. You should carefully
consider all of these risks and the other information in this prospectus before
investing. As a result of these risks, our business, financial condition or
operating results could be materially adversely affected. This could cause the
trading price of our common stock to decline, and you may lose part or all of
your investment.
We may become subject to additional risks in the future. We will
include these risks in future Annual and Quarterly Reports we file with the
Securities and Exchange Commission. These reports are incorporated into this
prospectus by reference on page 8. If you are making an investment decision
after the date of this prospectus and any of these reports have been filed, you
should also consult and carefully consider the risk factors and other
information in these reports.
If one or more of our customers changes their ordering pattern of our products
or if we lose one or more of our customers, our revenues could decline
We depend on a limited number of customers for a major portion of our
revenues. Through direct, distributor and subcontractor purchases, Lucent
Technologies (including Ascend Communications) and Cisco Systems each accounted
for more than 10% of our fiscal 1998 revenues. We do not have long-term volume
purchase commitments from any of our major customers.
Our customers often shift buying patterns as they manage inventory
levels, decide to use competing products, are acquired or divested, market
different products, change production schedules or change their orders for other
reasons. If one or more customers were to delay, reduce or cancel orders, our
overall order levels may fluctuate greatly.
If our customers use our competitors' products instead of ours, suffer a decline
in demand for their products or are acquired or sold, our revenues may decline
Our expenses are relatively fixed so that fluctuation in our revenues
may cause our operating results to fluctuate as well. Demand for our products
and, as a result our revenues, may decline for the following reasons outside our
control.
As our customers design next generation systems and select the chips
for those new systems at an increasingly frequent rate, our
competitors have the opportunity to get our customers to switch to
their products more frequently, which may cause our revenues to
decline
The markets for our products are intensely competitive and subject to
rapid technological advancement in design tools, wafer manufacturing techniques
and process tools. The identification and capture of future market opportunities
are necessary to offset the rapid price erosion that characterizes our industry.
We may not be able to develop new products at competitive pricing and
performance levels. Even if we are able to do so, our completion of product
development and introduction of new products to market may not be in a timely
manner. Our customers may substitute use of our products with those of current
or future competitors.
<PAGE>
We typically face competition at the design stage, where customers
evaluate alternative design approaches that require integrated circuits. Our
competitors have increasingly frequent opportunities to supplant our products in
next generation systems because of shortened product life and design-in cycles
in many of our customers' products.
Our competitors are major domestic and international semiconductor
companies, many of which have substantially greater financial and other
resources than us. Emerging companies also provide significant competition in
our segment of the semiconductor market. Our competitors include Advanced Micro
Circuits Corporation, Broadcom, Conexant Systems, Cypress Semiconductor, Dallas
Semiconductor, Galileo Technology, Integrated Device Technology, IBM, Intel,
Lucent Technologies, Motorola, MMC Networks, Newport Communications, Infineon,
Texas Instruments, Transwitch and Vitesse Semiconductor. Over the next few
years, we expect additional competitors, some of which also may have greater
financial and other resources, to enter the market with new products. In
addition, we are aware of a number of venture-backed companies that each focus
on a specific portion of our broad range of products. These companies
collectively could represent future competition for many design wins, and
subsequent product sales.
We must often redesign our products to meet rapidly evolving industry
standards and customer specifications, which may delay an increase in
our revenues
We sell products to a market whose characteristics include rapidly
evolving industry standards, product obsolescence, and new manufacturing and
design technologies. Many of the standards and protocols for our products are
based on high speed networking technologies that have not been widely adopted or
ratified by one of the standard setting bodies in our customers' industry. Our
customers often delay or alter their design demands during this standard-setting
process. In response, we must redesign our products to suit these changing
demands. Redesign usually delays the production of our products. Our products
may become obsolete during these delays.
If demand for our customers' products changes, including due to a
downturn in the networking industry, our revenues could decline
Our customers routinely build inventories of our products in
anticipation of end demand for their products. Many of our customers have
numerous product lines, numerous component requirements for each product and
sizeable and very complex supplier structures. This makes forecasting their
production requirements difficult and can lead to inventory build of certain of
their suppliers' components.
In the past, our customers have built PMC component inventories that
exceeded their production requirements. Those customers materially reduced their
orders. This may happen in again.
In addition, while all of our sales are denominated in US dollars, our
customers' products are sold worldwide. Any major fluctuations in currency rates
could materially affect our customers' end demand, which could in turn cause
them to reduce orders, which could cause our revenues to decline.
Since we develop products many years before their volume production,
if we inaccurately anticipate our customers' needs, our revenues may
not increase
Our products generally take between 18 and 24 months from initial
conceptualization to development of a viable prototype, and another 6 to 18
months to be designed into our customers' equipment and into production. They
often need to be redesigned because manufacturing yields on prototypes are
unacceptable or customers redefine their products to meet changing industry
standards. As a result, we develop products many years before volume production
and may inaccurately anticipate our customers' needs. There have been times when
we either designed products that had more features than were demanded when they
were introduced to the market or conceptualized products that were not
sufficiently feature-rich to meet the needs of our customers or compete
effectively against our competitors. This may happen again.
<PAGE>
If the recent trend of consolidation in the networking industry
continues, our customers may be acquired or sold, which could cause
those customers to cancel product lines or development projects and our
revenues to decline
The networking equipment industry has experienced significant merger
activity and partnership programs. Through mergers or partnerships, our
customers could seek to remove redundancies in their product lines or
development initiatives. This could lead to the cancellation of a product line
into which PMC products are designed or a development project on which PMC is
participating. In the cases of a product line cancellation, PMC revenues could
be materially impacted. In the case of a development project cancellation, we
may be forced to cancel development of one or more products, which could mean
opportunities for future revenues from this development initiative could be
lost.
If there is not sufficient market acceptance of the recently developed
specifications and protocols on which our new products are based, we
may not be able to sustain or increase our revenues
We recently introduced a number of ethernet switch products which
function at gigabit and fast ethernet speeds. Gigabit ethernet involves the
transmission of data over ethernet -protocol networks at speeds of up to one
billion bits per second. Fast ethernet transmits data over these networks at
speeds of up to 100 megabits per second. While gigabit and fast ethernet are
well established, it is not clear whether products meeting these protocols will
be competitive with products meeting alternative protocols, or whether these
products will be sufficiently attractive within their own market spaces to
achieve commercial success.
Some of our other recently introduced products adhere to specifications
developed by industry groups for transmissions of data signals, or packets, over
high-speed fiber optics transmission standards. These transmission standards are
called synchronous optical network, or SONET, in North America, and synchronous
data hierarchy, or SDH in Europe. The specifications, commonly called
packet-over-SONET/SDH, have only been recently developed, and it is not clear
whether they will be widely adopted by the telecommunications industry. In
addition, we can not be sure whether our products will compete effectively with
packet-over-SONET/SDH offerings of other companies.
A substantial portion of our business also relies on industry
acceptance of asynchronous transfer mode, or ATM, products. ATM is a networking
protocol. While ATM has been an industry standard for a number of years, the
overall ATM market has not developed as rapidly as some observers had predicted
it would. As a result, competing communications technologies, including gigabit
and fast ethernet and packet-over-SONET/SDH, may inhibit the future growth of
ATM and our sales of ATM products.
We anticipate lower margins on mature and high volume products, which could
adversely affect our profitability
We expect the average selling prices of our products to decline as they
mature. Historically, competition in the semiconductor industry has driven down
the average selling prices of products. If we price our products too high, our
customers may use a competitor's product or an in-house solution. To maintain
profit margins, we must reduce our costs sufficiently to offset declines in
average selling prices, or successfully sell proportionately more new products
with higher average selling prices. Yield or other production problems, or
shortages of supply may preclude us from lowering or maintaining current
operating costs.
<PAGE>
We may not be able to meet customer demand for our products in a timely manner
or at all if we fail to secure adequate wafer fabrication or assembly capacity
or if we do not accurately predict demand
We rely on a limited source of wafer fabrication, the loss of which
could delay and limit our product shipments
We do not own or operate a wafer fabrication facility. Two outside
foundries supply all our semiconductor device requirements. Our foundry
suppliers also produce products for themselves and other companies. We may not
have access to adequate capacity or certain process technologies. We have less
control over delivery schedules, manufacturing yields and costs than competitors
with their own fabrication facilities. If the foundries we use are unable or
unwilling to manufacture our products in required volumes, we may have to
identify and qualify acceptable additional or alternative foundries. This
qualification process could take six months or longer. We may not find
sufficient capacity quickly enough, if ever, to satisfy our production
requirements.
We depend on third parties in Asia for assembly of our semiconductor
products which could delay and limit our product shipments
Sub-assemblers in Asia assemble all of our semiconductor products. Raw
material shortages, political and social instability, assembly house service
disruptions, currency fluctuations, or other circumstances in the region could
force us to seek additional or alternative sources of supply or assembly. This
could lead to supply constraints or product delivery delays which, in turn, may
result in the loss of customers. We have less control over delivery schedules,
assembly processes, quality assurances and costs than competitors that do not
outsource these tasks.
We depend on a limited number of software suppliers, the loss of which could
impede our product development
A limited number of suppliers provide the computer aided design, or
CAD, software we use to design our products. Factors affecting the price,
availability or technical capability of these products could affect our ability
to access appropriate CAD tools for the development of highly complex products.
In particular, the CAD software industry has been the subject of extensive
intellectual property rights litigation, the results of which could materially
change the pricing and nature of the software we use. We also have limited
control over whether our software suppliers will be able to breach technical
barriers in time to fulfill our needs.
We may be left with obsolete inventory if our forecasts of demand for our
products prove inaccurate
We attempt to forecast and maintain a level of inventory in
anticipation of demand for our products. Anticipating demand is difficult
because our customers face volatile pricing and demand for their end-user
networking equipment. If our customers were to delay, cancel or otherwise change
future ordering patterns, we could be left with unwanted inventory.
The recent series of earthquakes in Taiwan could disrupt the order patterns of
our customers, which in turn could lower our revenues
Recently, Taiwan suffered a series of major earthquakes. One of our two
silicon wafer suppliers, TSMC, and many of our customers' suppliers are located
in Taiwan. Many of these suppliers, including TSMC, were either damaged or left
without power for an extended period of time. As a result, we or one or more of
our customers' suppliers may become unable to provide our customers with the
components they require to manufacture their equipment. This may lead one or
more of our customers to reduce their production levels and component orders
until a sufficient supply of the components they need becomes available. This
could materially lower our revenues.
<PAGE>
We are subject to the risks of conducting business outside the United States to
a greater extent than companies which operate their businesses mostly in the
United States, which may impair our sales, development or manufacturing of our
products
We are subject to the risks of conducting business outside the United
States to a greater extent than most companies because, in addition to selling
our products in a number of countries, a significant portion of our research and
development and manufacturing are conducted outside of the United States. This
subjects us to the following risks.
We may lose our ability to design or produce products, could face
additional unforeseen costs or could lose access to key customers if
any of the nations in which we conduct business impose trade barriers
or new communications standards
We may have difficulty obtaining export licenses for certain technology
produced for us outside the United States. If a foreign country imposes new
taxes, tariffs, quotas, and other trade barriers and restrictions or the United
States and a foreign country develop hostilities or change diplomatic and trade
relationships, we may not be able to continue manufacturing or sub-assembly of
our products in that country and may have fewer sales in that country. We may
also have fewer sales in a country that imposes new communications standards or
technologies. This could inhibit our ability to meet our customers' demand for
our products and lower our revenues.
If foreign exchange rates fluctuate significantly, our profitability
may decline
We are exposed to foreign currency rate fluctuations because a
significant part of our development, test, marketing and administrative costs
are denominated in Canadian dollars, and our selling costs are denominated in a
variety of currencies around the world. In addition, a number of the countries
in which we have sales offices have a history of imposing exchange rate
controls. This could make it difficult to withdraw the foreign currency
denominated assets we hold in these countries.
We may have difficulty collecting receivables from customers based in
foreign countries, which could adversely affect our earnings
We sell our products to customers around the world. Payment cycle norms
in these countries may not be consistent with our standard payment terms. Thus,
we may have greater difficulty collecting receivables on time from customers in
these countries. This could impact our financial performance, particularly on
our balance sheet.
In addition, we may be faced with greater difficulty in collecting
outstanding balances due to the shear distances between our collection
facilities and our customers, and we may be unable to enforce receivable
collection in foreign nations due to their business legal systems. If one or
more of our foreign customers do not pay their outstanding receivable, we may be
forced to write-off the account. This could have a material impact on our
earnings.
Our business strategy contemplates acquisition of other companies or
technologies, and these transactions could adversely affect our operating
performance
<PAGE>
We recently acquired Abrizio, Inc. in exchange for approximately 4.35
million shares of PMC common stock. Abrizio, now a California subsidiary of PMC,
designs high speed switching chips for core network applications. At the time of
the acquisition, the design wins Abrizio products had achieved in customer
equipment had not yet generated revenue. These or any follow on products may not
achieve commercial success. This acquisition may not generate future earnings.
Our strategy is to acquire additional products, technologies or
businesses from third parties. Management may be diverted from our operations
while they identify and negotiate these acquisitions and integrate an acquired
entity into our operations. Also, we may be forced to develop expertise outside
our existing businesses, and replace key personnel who leave due to an
acquisition. An acquisition could absorb substantial cash resources, require us
to incur or assume debt obligations, or issue additional equity. If we issue
more equity, we may dilute our common stock with securities that have a senior
interest.
Acquired entities also may have unknown liabilities, and the combined
entity may not achieve the results that were anticipated at the time of the
acquisition.
The loss of personnel could preclude us from designing new products
To succeed, we must retain and hire technical personnel highly skilled
at the design and test functions used to develop high speed networking products
and related software. The competition for such employees is intense and we do
not have employment agreements in place with these key personnel. We issue
common stock options that are subject to vesting as employee incentives. These
options, however, are effective as retention incentives only if they have
economic value.
If we cannot protect our proprietary technology, we may not be able to prevent
competitors from copying our technology and selling similar products, which
would harm our revenues
To compete effectively, we must protect our proprietary information. We
rely on a combination of patents, trademarks, copyrights, trade secret laws,
confidentiality procedures and licensing arrangements to protect our
intellectual property rights. We hold several patents and have a number of
pending patent applications.
We might not succeed in attaining patents from any of our pending
applications. Even if we are awarded patents, they may not provide any
meaningful protection or commercial advantage to us, as they may not be of
sufficient scope or strength, or may not be issued in all countries where our
products can be sold. In addition, our competitors may be able to design around
our patents.
We develop, manufacture and sell our products in Asian and other
countries that may not protect our products or intellectual property rights to
the same extent as the laws of the United States. This makes piracy of our
technology and products more likely. Steps we take to protect our proprietary
information may not be adequate to prevent theft of our technology. We may not
be able to prevent our competitors from independently developing technologies
that are similar to or better than ours.
Our products employ technology that may infringe on the proprietary rights of
third parties, which may expose us to litigation and prevent us from selling our
products
Vigorous protection and pursuit of intellectual property rights or
positions characterize the semiconductor industry. This often results in
expensive and lengthy litigation. We, as well as our customers or suppliers, may
be accused of infringing on patents or other intellectual property rights owned
by third parties. This has happened in the past. An adverse result in any
litigation could force us to pay substantial damages, stop manufacturing, using
and selling the infringing products, spend significant resources to develop
non-infringing technology, discontinue using certain processes or obtain
licenses to the infringing technology. In addition, we may not be able to
develop non-infringing technology, nor might we be able to find appropriate
licenses on reasonable terms.
<PAGE>
Patent disputes in the semiconductor industry are often settled through
cross-licensing arrangements. Because we currently do not have a substantial
portfolio of patents, we may not be able to settle an alleged patent
infringement claim through a cross-licensing arrangement. We are therefore more
exposed to third party claims than some of our competitors and customers.
In the past, our customers have been required to obtain licenses from
and pay royalties to third parties for the sale of systems incorporating our
semiconductor devices. Until December of 1997, we indemnified our customers up
to the dollar amount of their purchases of our products found to be infringing
on technology owned by third parties. Customers may also make claims against us
with respect to infringement.
Furthermore, we may initiate claims or litigation against third parties
for infringing our proprietary rights or to establish the validity of our
proprietary rights. This could consume significant resources and divert the
efforts of our technical and management personnel, regardless of the
litigation's outcome.
Securities we issue to fund our operations could dilute your ownership
We may need to raise additional funds through public or private debt or
equity financing to fund our operations. If we raise funds by issuing equity
securities, the percentage ownership of current stockholders will be reduced and
the new equity securities may have priority rights to your investment. We may
not obtain sufficient financing on terms we or you will find favorable. We may
delay, limit or eliminate some or all of our proposed operations if adequate
funds are not available.
Our stock price has been and may continue to be volatile
In the past, our common stock price has fluctuated substantially. The
reasons this may continue include the following:
- our or our competitors' new product announcements;
- quarterly fluctuations in our financial results and other
companies in the semiconductor, networking or computer
industries;
- conditions in the networking or semiconductor industry; and
- investor sentiment toward technology stocks.
In addition, increases in our stock price and expansion of our
price-to-earnings multiple may have made our stock attractive to momentum
investors who often shift funds into and out of stocks rapidly, exacerbating
price fluctuations in either direction.
Our or third parties' computer systems may fail in the year 2000, which could
delay our product development and manufacturing
<PAGE>
Our greatest year 2000 exposure comes from our product manufacturing,
packaging and delivery suppliers. Our worst case scenario would be if one or
more critical suppliers fail to become year 2000 compliant and fail to develop
acceptable workaround solutions. The majority of our product manufacturing,
packaging and delivery is outsourced to two wafer fabrication companies, three
assembly companies and one shipping company, respectively. These suppliers are
generally much larger than us and we have little influence on their year 2000
preparedness schedules. While we have received written communication from our
critical suppliers that they have developed an action plan to address their year
2000 issues, we cannot be certain that these plans will be implemented or be
effective.
If our suppliers are unable to manufacture our products as a result of
year 2000 issues, we may be forced to find and qualify other year 2000 compliant
suppliers. This qualification process could take six months or longer. We may
not find sufficient capacity quickly enough to satisfy our production
requirements, as we would expect that the many other companies with
manufacturing models similar to ours would be vying for production capacity.
We are also exposed to customers who may not be year 2000 compliant. If
one or more of our customers' operations is interrupted due to year 2000 issue
non-compliance, our revenues from these customers could be materially impacted.
WHERE YOU CAN FIND MORE INFORMATION
PMC files annual, quarterly and current reports, proxy and information
statements and other information with the Securities and Exchange Commission.
You can inspect and copy these reports, proxy and information statements and
other information concerning PMC at the Commission's public reference facilities
at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549; and at the
Commission's regional offices at Suite 1400, 500 West Madison Street, Chicago,
Illinois 60661 and Seven World Trade Center, New York, New York 10048.
Information on the operation of the Public Reference Room is available by
calling the Commission at 1-800-SEC-0330. The SEC also maintains a site on the
World Wide Web at http://www.sec.gov that contains reports, proxy and
information statements and other information about PMC.
This prospectus is part of the Registration Statement on Form S-3 that
PMC filed with the commission to register shares of its common stock. This
prospectus does not contain all of the information contained in the Registration
Statement. Parts of documents are incorporated by reference into this
prospectus. You should read these documents in their entirety rather than
relying just on the parts incorporated by reference. Some of these documents are
exhibits to the Registration Statement. The Registration Statement together with
its exhibits can be inspected and copied at the public reference facilities and
regional offices of the Commission referred to above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by PMC with the
Commission pursuant to the Exchange Act, are incorporated by reference and made
a part of this prospectus to the extent statements in this prospectus do not
modify or supersede them:
1. PMC's Annual Report on Form 10-K for the fiscal year ended
December 27, 1998;
2. the Proxy Statement for PMC's 1999 Annual Meeting of
Stockholders;
3. PMC's Quarterly Reports on Form 10-Q for the quarters ended March
28, 1999 and June 27, 1999;
4. PMC's Current Reports on Form 8-K dated August 25, 1999 and
September 3, 1999.
5. the description of our common stock in our Quarterly Report on
Form 10-Q for the quarter ended June 27, 1999; and
6. all reports, definitive proxy statements and other documents
filed by PMC with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
this prospectus and prior to the termination of this offering.
<PAGE>
You may request a copy of any and all of the documents or information
referred to above that has been or may be incorporated by reference in this
prospectus (excluding exhibits to such documents unless such exhibits are
specifically incorporated by reference). Requests should be directed in writing
or by phone to:
PMC-Sierra, Inc.
Investor Relations
8555 Baxter Place, Suite 105
Burnaby, British Columbia
Canada V5A 4V7
Telephone Number: (604) 415-6000
PMC will provide these documents and information to you without charge.
PMC-SIERRA, INC.
PMC was incorporated in the State of California in 1983 and
reincorporated into the State of Delaware in 1997.
We design, develop, market and support high-performance semiconductor
networking solutions. Our products are used in the high speed transmission and
networking systems which are being used to restructure the global
telecommunications and data communications infrastructure.
We provide components for equipment based on ATM, SONET, SDH, T1/E1/J1
and T3/E3/J2 access transmission and ethernet protocols. Our networking products
adhere to international standards and are sold on the merchant market to over
100 customers either directly or through our worldwide distribution channels.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares covered by
this prospectus. We will, however, pay substantially all expenses related to the
registration of the shares.
SELLING STOCKHOLDERS
The name of each selling stockholder and the aggregate number of shares
of common stock registered by this Registration Statement that each selling
stockholder may offer and sell are set out in the table on page 11. All of the
shares offered are issued and outstanding as of the date of this prospectus
other than 87,290 shares of common stock issuable upon exercise of warrants by
selling stockholders identified in the table on page 11. Because the selling
stockholders may sell or distribute all or a portion of the shares at any time
and from time to time after the date of this prospectus, we cannot estimate the
number of shares of common stock that each selling stockholder may have upon
completion of this offering. As of the date of this prospectus, Frank Marshall
was a member of the PMC-Sierra board of directors and the following selling
stockholders serve as employees or consultants of Abrizio:
- Anders Swahn
- Nick McKeown
- Shang-Tse Chuang
- Gregory Charles Adam Watson
- Constantine Calamvokis
- Rolf Muralt
- Steven C. Lin
- Saroj Behera
- Leo Quilici
- Zubair Hussain
- Gireesh Shrimali
<PAGE>
Shares to be Offered for the
Selling Stockholder Selling Stockholder
------------------------------------------------------------------------------
Anders Swahn 632,145
Nick McKeown 632,145
Stanford University 58,699
Frank Marshall 9,482
Fenwick & West LLP 7,525
Shang-Tse Chuang 11,128
Gregory Charles Adam Watson 11,852
Constantine Calamvokis and Alison Lang, Community Property 7,901
Rolf Muralt 6,848
Steven C. Lin and Robin A. Lin, Community Property 6,848
Saroj Behera 22,125
Leo Quilici 9,218
Zubair Hussain 34,767
Gireesh Shrimali 4,741
Benchmark Capital 903,064
Sequoia Capital VIII 818,446
Sequoia International Technology Partners VIII 10,385
Sequoia International Technology Partners VIII (Q) 54,183
CMS Partners LLC 18,061
Sequoia 1997 1,987
F&W Investments 1998 7,675
Michael Dowling 601
Soleil Moscona 4,515
Dorothy Keggi 3,010
Jim Salvatore 3,010
Patrick A. McKeown 2,257
Jeremy P. McKeown 1,354
Alistair J. McKeown 903
Hanh V. Le and Thien-Hoa T. Truong 2,408
Dew T. Le and Michael F. Dawson 903
Nho T.T. LeHinds and Roger E. LeHinds 451
Sean Nhan 903
Trang T. Rowe and David Rowe 1,053
Nga T. Le and Mark S. Wolter 1,053
<PAGE>
Allied Telesis KK (1) 30,808
Timark LP 52,978
Leo P. Quilici Pension and Profit
Sharing Plan dated 12/28/90 (2) 13,829
Hennessy 1993 Revocable Trust (3) 18,353
Ron Schmidt (4) 45,883
Reed Hastings (5) 45,883
Morgan Littlewood (6) 22,941
Carmelo Santoro, Trustee, The Carmelo J.
and Nancy J. Santoro Family Trust, July 13, 1990 52,226
VLLI (7) 22,576
TOTAL 3,597,123
---------------------------------------
1 Includes 15,050 shares issuable upon exercise of warrants.
2 Includes 6,019 shares issuable upon exercise of warrants.
3 Includes 6,020 shares issuable upon exercise of warrants.
4 Includes 15,050 shares issuable upon exercise of warrants.
5 Includes 15,050 shares issuable upon exercise of warrants.
6 Includes 7,525 shares issuable upon exercise of warrants.
7 Includes 22,576 shares issuable upon exercise of warrants.
PLAN OF DISTRIBUTION
The shares may be sold or distributed from time to time by or for the
account of the selling stockholders. The selling stockholders will act
independently of PMC in making decisions with respect to these sales.
The selling stockholders may use underwriters, dealers, brokers or
other agents to sell or distribute some or all of the shares or may deal
directly with one or more purchasers. They may use block sales, Nasdaq, the
over-the-counter market, privately negotiated transactions or a combination of
these. These sales may be at the market price at the time of sale, at prices
related to the market price, at privately negotiated prices, or at fixed prices,
which may be changed. Brokers, dealers, agents or underwriters participating in
these sales as agent may receive compensation in the form of discounts,
concessions or commissions from the selling stockholders. If they act as agent
for the purchaser of such shares, they may also receive compensation from the
purchaser.
The selling stockholders and any underwriters, brokers, dealers or
agents that participate in distribution of the shares may be deemed
"underwriters" within the meaning of the Securities Act, and any discounts,
commissions or concessions they receive might be deemed to be underwriting
discounts and commissions under the Securities Act. Neither PMC nor the selling
stockholders can presently estimate the amount of such compensation. PMC does
not know of any existing arrangements relating to the sale or distribution of
the shares among any selling stockholders or between any selling stockholders
and any underwriter, broker, dealer or other agent.
PMC will pay substantially all of the expenses of this offering of the
shares by the selling stockholders other than commissions and discounts of
underwriters, brokers, dealers or agents.
LEGAL MATTERS
The validity of the shares offered hereby will be passed upon for PMC
by Wilson Sonsini Goodrich & Rosati, Professional Corporation.
EXPERTS
The consolidated financial statements of PMC-Sierra, Inc. at December
31, 1998, for the two years in the period then ended, and at December 31, 1997,
appearing in this prospectus and Registration Statement have been audited by
Deloitte & Touche LLP, independent auditors, and for the year ended December 31,
1996, by Ernst & Young LLP, independent auditors, as described in their
respective reports. The financial statements, as described in the reports, are
incorporated by reference in this prospectus in reliance on the authority of
these firms as experts in accounting and auditing.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses payable by the Registrant
in connection with the filing of this Registration Statement (1).
Securities and Exchange Commission Filing Fee $93,060
Nasdaq Additional Listing Fee $17,500
Printing and Engraving Expenses $10,000
Legal Fees and Expenses $15,000
Accounting Fees and Expenses -
Blue Sky Fees and Expenses -
Transfer Agent and Registration Fees $5,000
Miscellaneous expenses $1,440
Total $142,000
- --------------------------
(1) All of such expenses, other than the filing fee for the Commission and
additional listing fee for Nasdaq, are estimates and are subject to
future contingencies.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Certificate of Incorporation of PMC eliminates the liability of
directors to PMC for monetary damages for breach of fiduciary duty as a director
to the fullest extent permissible under Delaware law, as such law exists
currently or as it may be amended in the future. Under Delaware law, such
provision may not eliminate or limit director monetary liability for: (a)
breaches of the director's duty of loyalty to PMC or its stockholders; (b) acts
or omissions not in good faith or involving intentional misconduct or knowing
violations of law; (c) the payment of unlawful dividends or unlawful stock
repurchases or redemptions; or (d) transactions in which the director received
an improper personal benefit. Such limitation of liability provisions also may
not limit a director's liability for violation of, or otherwise relieve PMC or
its directors from the necessity of complying with, federal or state securities
laws, or affect the availability of non-monetary remedies such as injunctive
relief or rescission.
PMC's Bylaws provide that PMC shall indemnify its directors and
officers and may indemnify its employees and other agents to the fullest extent
permitted by law. PMC believes that indemnification under its Bylaws covers at
least negligence and gross negligence on the part of indemnified parties. PMC's
Bylaws also permit PMC to secure insurance on behalf of any officer, director,
employee or other agent for any liability arising out of his or her actions in
such capacity, regardless of whether PMC would have the power to indemnify him
or her against such liability under the General Corporation Law of Delaware. PMC
currently has secured such insurance on behalf of its officers and directors.
PMC has entered into agreements to indemnify its directors and
officers, in addition to indemnification provided for in PMC's Bylaws. Subject
to certain conditions, these agreements, among other things, indemnify PMC's
directors and officers for certain expenses (including attorney's fees),
judgments, fines and settlement amounts incurred by any such person in any
action or proceeding, including any action by or in the right of PMC, arising
out of such person's services as a director or officer of PMC, any subsidiary of
PMC or any other company or enterprise to which the person provides services at
the request of PMC.
<PAGE>
ITEM 16. EXHIBITS
The following exhibits are filed as part of this Registration
Statement:
NUMBER EXHIBIT DESCRIPTION
- ------ -------------------
5.1 Opinion of Counsel as to the validity of the Shares.
23.1 Consent of Counsel (included in Exhibit 5.1 above).
23.2 Consent of Ernst & Young LLP.
23.3 Consent of Deloitte & Touche LLP.
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this Registration
Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii)
above do not apply if the information required to be included in a
post-effective amendment by these paragraphs is contained in periodic reports
filed with or furnished by the Registrant pursuant to Section 13 or 15(d) of the
Exchange Act that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of this offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in this Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered herein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Amendment No. 2 to its Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized in
Burnaby, British Columbia, Canada on this 21th day of October 1999.
PMC-Sierra, Inc.
By: /s/ John Sullivan
--------------------------------------------
John Sullivan
Vice President, Finance
(Principal Financial and Accounting Officer)
Signature Title Date
/s/ ROBERT L. BAILEY* President, Chief Executive Officer October 21, 1999
- ------------------------ (Principal Executive Officer)
Robert L. Bailey and Director
/s/ JOHN SULLIVAN* Vice President, Finance (Principal October 21, 1999
- ------------------------ Financial and Accounting Officer)
John Sullivan
/s/ ALEXANDRE BALKANSKI* Director October 21, 1999
- ------------------------
Alexandre Balkanski
/s/ COLIN BEAUMONT* Director October 21, 1999
- ------------------------
Colin Beaumont
/s/ JAMES V. DILLER* Chairman of the Board of Directors October 21, 1999
- ------------------------
James V. Diller
/s/ FRANK J. MARSHALL* Director October 21, 1999
- ------------------------
Frank J. Marshall
*By: /s/ JOHN SULLIVAN
- ------------------------
John Sullivan
Attorney-in-Fact
<PAGE>
EXHIBIT INDEX
NUMBER EXHIBIT DESCRIPTION
- ------ -------------------
5.1 Opinion of Counsel as to the validity of the Shares.
23.2 Consent of Ernst & Young LLP
23.3 Consent of Deloitte & Touche LLP
650 PAGE MILL ROAD
PALO ALTO, CALIFORNIA 94304-1050
TELEPHONE 650-493-9300 FACSIMILE 650-493-6811
September 23, 1999
PMC-Sierra, Inc.
105-8555 Baxter Place
Burnaby, British Columbia
Canada V5A 4V7
Re: Registration Statement on Form S-3
Gentlemen & Ladies:
This opinion is given in connection with the Registration Statement on
Form S-3 under the Securities Act of 1933 relating to the sale by the persons
named therein to the public of up to 3,597,123 shares of your Common Stock,
$0.001 par value per share ("Shares").
We are of the opinion that the issuance of the shares has been duly
authorized by your Board of Directors, and the shares are validly issued, fully
paid and nonassessable.
We hereby consent to the filing of the opinion as an exhibit to the
Registration Statement and further consent to the use of our name wherever
appearing in the Registration Statement.
Sincerely,
/s/WILSON SONSINI GOODRICH & ROSATI
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related prospectus of PMC-Sierra, Inc. for
the registration of up to 3,597,123 shares of its common stock and to the
incorporation by reference therein of our report dated January 22, 1997, with
respect to the consolidated financial statements and schedule of PMC-Sierra,
Inc. (formerly Sierra Semiconductor Corporation) included in its Annual Report
(Form 10-K) for the year ended December 27, 1998, filed with the Securities and
Exchange Commission.
/s/ERNST & YOUNG LLP
San Jose, California
October 19, 1999
CONSENT OF DELOITTE & TOUCHE LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement (Form S-3),and related prospectus of PMC-Sierra, Inc.
for the registration of up to 3,597,123 shares of its common stock and to the
incorporation by reference therein of our report dated January 21, 1999, with
respect to the consolidated financial statements and schedule of PMC-Sierra,
Inc. included in its Annual Report (Form 10-K) for the year ended December 27,
1998, filed with the Securities and Exchange Commission.
DELOITTE & TOUCHE LLP
Vancouver, British Columbia, Canada
October 19, 1999
