UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Amendment No. 2
(Mark One)
|X| Annual Report pursuant to Section 13 or 15(D) of the Securities
Exchange Act of 1934 For the fiscal year ended: December 26, 1999
| | Transition Report pursuant to Section 13 or 15(D) of the Securities
Exchange Act of 1934 For the transition period from: _______ to _______
Commission File Number 0-19084
PMC-Sierra, Inc.
(Exact name of registrant as specified in its charter)
Delaware 94-2925073
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
105-8555 BAXTER PLACE
BURNABY, BRITISH COLUMBIA, V5A 4V7
CANADA
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (604) 415-6000
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $0.001
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
The aggregate market value of the voting stock held by nonaffiliates of the
Registrant, based upon the closing sale price of the Common Stock on February
15, 2000, as reported by the Nasdaq National Market, was approximately
$15,831,000,000. Shares of Common Stock held by each executive officer and
director and by each person who owns 5% or more of the outstanding voting stock
have been excluded in that such persons may be deemed to be affiliates. This
determination of affiliate status is not necessarily a conclusive determination
for other purposes.
As of February 15, 2000, the Registrant had 139,210,849 shares of Common Stock
outstanding.
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the following document are incorporated by reference into the part
of this Form 10-K as indicated: None.
The undersigned registrant hereby amends the following items of its Annual
Report on Form 10-K for the fiscal year ended December 26, 1999 as set forth
below:
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Name Age (1) Principal Occupation
- ----------------- -------- --------------------------------------
Robert L. Bailey 42 President, Chief Executive Officer and
Chairman of the Board of Directors, PMC
James V. Diller 64 Vice Chairman, PMC; President, Chief Executive
Officer and Chairman of the Board of
Directors, Elantec Semiconductor, Inc.
Alexandre Balkanski 39 President and Chief Executive Officer, C-Cube
Microsystems, Inc.
Colin Beaumont 59 Management Consultant
Frank J. Marshall 53 Private Investor and Management Consultant
Greg Aasen 44 Chief Operating Officer, PMC
John W. Sullivan 53 Vice President, Finance and Chief Financial
Officer, PMC
- --------------------
(1) As of April 16, 2000
Mr. Bailey has been a director of the Company since October 1996. Mr.
Bailey has served as the Company's President and Chief Executive Officer since
July 1997 and was appointed as Chairman of the Board in February 2000. Prior to
his present position, Mr. Bailey has served as President, Chief Executive
Officer and director of PMC-Sierra, Ltd., a Canadian corporation, the Company's
principal subsidiary ("LTD"), since December 1993. Prior to joining LTD, Mr.
Bailey was employed by AT&T-Microelectronics from August 1989 to November 1993
where he served as Vice President of Integrated Microperipheral Products and at
Texas Instruments in various management assignments from June 1979 to August
1989. He also serves as a member of the Board of Directors of Copper Mountain
Networks.
Mr. Diller, a founder of the Company, served as the Company's Chief
Executive Officer from 1983 to July 1997 and as President from 1983 to July
1993. Mr. Diller has served as a director of the Company since the Company's
formation in 1983. Mr. Diller served as the Chairman of the Company's Board of
Directors from July 1993 until February 2000, at which time he became Vice
Chairman of the Board. Mr. Diller served as Chief Financial Officer of the
Company from its formation until July 1987. He has served on the Board of LTD
since its formation. He also serves as the President and Chief Executive Officer
and Chairman of the Board of Elantec Semiconductor, Inc. and is Chairman of the
Board of Directors of Summit Microelectronics, a privately held company.
<PAGE>
Dr. Balkanski has been a director of the Company since August 1993. In
July 1988, Dr. Balkanski co-founded C-Cube Microsystems, Inc., a developer of
integrated circuits and software. Dr. Balkanski has held a variety of senior
management positions with C-Cube, and is currently its President, Chief
Executive Officer and a director.
Mr. Beaumont has been a director of the Company since April 1997. Mr.
Beaumont served as Chief Executive Officer of Plaintree Systems, Inc. from June
1998 until February 1999 and as Chief Technology Officer from February 1999
until July 1999. Mr. Beaumont is currently a management consultant. Mr. Beaumont
served as a board member of Plaintree Systems, Incorporated until August 1999
and as a board member of Bell Emergis from August 1998 until March 1999. In 1995
Mr. Beaumont retired from Nortel where he was the Chief Engineer of BNR, the
largest commercial research and development facility in Canada. Mr. Beaumont has
served as a director of LTD since 1992.
Mr. Marshall has been a director of the Company since April 1996. Mr.
Marshall is currently a private investor and management consultant. Previously,
Mr. Marshall was Vice President, General Manager of Cisco Systems Inc.'s Core
Products Business Unit. Mr. Marshall has also served as Vice President of
Engineering for Cisco Systems Inc. from April 1992 to July 1995. He also serves
on the Board of Directors of Covad Communications Inc. and several private
companies. Mr. Marshall also serves on the technical advisory board of several
high technology companies, is a member of the technical advisory Board of
Interwest Partners and is a Venture Partner at Sequoia Capital.
Mr. Aasen has served as Chief Operating Officer of the Company since
February 1997. Mr. Aasen is a founder of LTD and served as its Chief Operating
Officer and Secretary since its formation in June 1992. He has served as a
director of LTD since August 1994. Prior to joining LTD, Mr. Aasen was a General
Manager of PMC, a division of MPR Teltech, Ltd.
Mr. Sullivan joined the Company in April 1997 as Vice President,
Finance and Chief Financial Officer. Prior to joining the Company, he was
employed by Semitool Inc., a semiconductor equipment manufacturer, as Vice
President Finance from 1993 to 1997. Prior to his employment with Semitool Inc.,
Mr. Sullivan was employed by United Dominion Industries and Arthur Young &
Company.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than 10% of the Company's Common Stock, to
file certain reports regarding ownership of, and transactions in, the Company's
securities with the Securities and Exchange Commission (the "SEC"). Such
officers, directors and 10% stockholders are also required by SEC rules to
furnish the Company with copies of all Section 16(a) forms that they file.
Based solely on its review of the copies of such forms received by the
Company, or written representations from certain reporting persons, the Company
believes that during fiscal 1999 all the reporting persons complied with Section
16(a) filing requirements except that in January 2000, Mr. Diller reported on an
amended Form 4 for November 1999 a gift of 40,000 shares of the Company's Common
Stock.
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
Compensation Tables
Summary Compensation Table. The following table sets forth the
compensation paid by any person for all services rendered in all capacities to
the Company, for each of the three fiscal years ending in fiscal 1999, to the
Chief Executive Officer and each of the other executive officers of the Company
in fiscal 1999:
<TABLE>
<CAPTION>
Long-Term
Compensation(1)
Securities All Other
Annual Compensation Underlying Compensation
Name and principal Position Year Salary ($) Bonus ($) Options (#) ($)(2)
- ---------------------------------------------- ---- ---------- --------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Robert L. Bailey ............................ 1999 254,279 469,735 1,260,000 7,248(3)
President, Chief Executive Officer and 1998 230,185 456,019 600,000 9,765(4)
Chairman of the Board of Directors 1997 211,415 459,837 600,000 7,751(5)
Gregory Aasen................................. 1999 198,634 231,314 820,000 362
Chief Operating Officer 1998 168,968 238,060 400,000 364
1997 147,810 186,102 400,000 198
John W. Sullivan(6)........................... 1999 164,919 140,420 240,000 1,150
Vice President Finance 1998 140,165 141,376 100,000 483
and Chief Financial Officer 1997 87,916 84,552 300,000 27,003(7)
<FN>
(1) The Company made no restricted stock awards during the periods presented.
(2) Life insurance premiums, except as indicated in Notes (3), (4) , (5) and
(7).
(3) Includes $486 for life insurance premium and $6,762 for tax preparation.
(4) Includes $798 for life insurance premium and $8,967 for tax preparation.
(5) Includes $107 for life insurance premium and $7,644 for tax preparation.
(6) Mr. Sullivan joined the Company in April 1997 and was elected as Vice
President Finance and Chief Financial Officer in July 1997.
(7) Includes $110 for life insurance premium and $26,893 for relocation
expenses.
</FN>
</TABLE>
Option Grants in Last Fiscal Year. The following table sets forth each
stock option grant made during fiscal 1999 to each of the executive officers
named in the Summary Compensation Table above:
<TABLE>
<CAPTION>
Individual Grants
-------------------------------------------------------
Number of Potential Realizable Value
Securities % of Total Exercise at Assumed Annual Rates of
Underlying Options Granted or Base Stock Price Appreciation
Options to Employees in Price Expiration for Option Term(5)
Granted(1)(2) Fiscal Year(3) ($/Sh)(4) Date
Name 5%($) 10%($)
- --------------------- ------------- --------------- ---------- ---------- ---------------------------
<S> <C> <C> <C> <C> <C> <C>
Robert L. Bailey......... 780,000 8.0 % 15.9844 01/04/2009 $ 7,840,953 $19,870,513
480,000 4.9 % 52.3750 12/15/2009 $15,810,411 $40,066,685
Gregory Aasen............ 520,000 5.4 % 15.9844 01/04/2009 $ 5,227,302 $13,247,009
300,000 3.1 % 52.3750 12/15/2009 $ 9,881,507 $25,041,678
John W. Sullivan......... 140,000 1.4 % 15.9844 01/04/2009 $ 1,407,350 $ 3,566,502
100,000 1.0 % 52.3750 12/15/2009 $ 3,293,836 $ 8,347,226
- --------------------------
<FN>
(1) The listed options become exercisable as to 1/4th of the shares subject to
the option one year after the date of grant and thereafter monthly as to
1/48th of the shares subject to the option with full vesting occurring on
the fourth anniversary of the date of grant.
<PAGE>
(2) Under the terms of the Company's 1994 Incentive Stock Plan, the Board of
Directors retains discretion, subject to plan limits, to modify the terms
of outstanding options and to reprice the options.
(3) The Company granted options to purchase 9,677,486 shares of Common Stock
to employees in fiscal 1999.
(4) The exercise price and tax withholding obligations related to exercise may
in some cases be paid by delivery to the Company of other shares or by
offset of the shares subject to the option.
(5) The 5% and 10% assumed annualized rates of compound stock price
appreciation are mandated by rules of the Securities and Exchange
Commission and do not represent the Company's estimate or a projection by
the Company of future Common Stock prices.
</FN>
</TABLE>
Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-End
Values. The following table sets forth, for each of the executive officers named
in the Summary Compensation Table above, stock options exercised during fiscal
1999 and the fiscal year-end value of unexercised options:
<TABLE>
<CAPTION>
Number of Securities Value(1) of Unexercised In the
Shares Value Underlying Unexercised Money Options at Fiscal
Acquired on Realized(1)(2) Options at Fiscal Year-End: Year-End:
Name Exercise(1) ($) Exercisable/Unexercisable(3) Exercisable/Unexercisable($)
- ------------------------- ------------ -------------- ---------------------------- ------------------------------
<S> <C> <C> <C> <C>
Robert L. Bailey......... 1,093 $ 28,279 957,497/1,739,167 (4) 65,143,972/85,915,219
Gregory Aasen............ 922 $ 24,856 683,332/1,136,668 46,452,355/56,681,957
John W. Sullivan......... 126,533 $ 2,768,423 122,514/392,086 8,246,701/20,212,636
<FN>
(1) Shares acquired includes shares purchased pursuant to the Company's
Employee Stock Purchase Plan. Value realized includes the difference
between the closing market price of the Common Stock on the purchase date
and the purchase price of the shares purchased.
(2) Market value of underlying securities at exercise date (for value realized)
or year-end (for value at year-end), minus the exercise price. At December
26, 1999 the closing market price for the Company's stock was $72.625.
(3) Does not include outstanding LTD Special Shares redeemable for shares of
Common Stock of the Company.
(4) Includes 36,664 shares issuable upon redemption of LTD Special Shares
subject to options.
</FN>
</TABLE>
Compensation of Directors
Non-employee directors receive an annual retainer of $12,000 per year
plus $1,000 per board meeting attended for their services as members of the
Board of Directors. Presently, under the Company's 1994 Stock Incentive Plan,
non-employee directors are automatically granted options to purchase 20,000
shares of the Company's Common Stock upon appointment and thereafter 5,000
shares per year, provided they are re-elected to the Board of Directors. In
1999, without taking into account the stock splits effected in May 1999 and
February 2000, Mr. Marshall, Mr. Beaumont and Dr. Balkanski each received an
automatic annual option grant to purchase 5,000 shares of the Company's Common
Stock. As adjusted for the stock splits effected in May 1999 and February 2000,
in April 1999, Mr. Marshall and Mr. Beaumont received automatic annual option
grants to purchase 20,000 shares of the Company's Common Stock at exercise
prices of $20.6407 per share and $23.8750 per share, respectively. As adjusted
for the February 2000 stock split, in June 1999, Dr. Balkanski received an
automatic annual option grant to purchase 10,000 shares of the Company's Common
Stock at an exercise price of $23.0625 per share. These options become
exercisable as to 1/4th of the shares subject to the option after one year;
thereafter, 1/48th of the shares subject to the option become exercisable at the
end of each calendar month.
<PAGE>
The Company has agreed to indemnify each director and officer against
certain claims and expenses for which the director might be held liable in
connection with past or future services to the Company and its subsidiaries. In
addition, the Company maintains an insurance policy insuring its officers and
directors against such liabilities.
Employment Contracts and Termination of Employment and Change-in-Control
Arrangements
Robert L. Bailey, Gregory Aasen and John W. Sullivan each have entered
into employment agreements with the Company. Under the terms of the employment
agreements, upon a termination without cause as defined in the employment
agreements and no change of control as defined in the employment agreements is
reasonably expected within the next 60 days or has occurred in the past two
years, the executive officers are entitled to receive their base salary and
accrued vacation through the date of termination. If the officers are terminated
without cause or constructively terminated as defined in the employment
agreements and a change of control is reasonably expected to occur within 60
days of the termination or has occurred within the past two years, the officers
are entitled to the following benefits: (1) their base salary through the date
of termination; (2) a lump-sum payment equal to four percent of their current
base salary for each full month they were employed with the Company, provided
that the total payment shall not exceed two times their current base salary; (3)
a lump-sum payment equal to two percent of their prior year's bonus for each
full month they were employed with the Company; and (4) all accrued vacation
through the date of termination. In addition, the executive officers are
entitled to execute consulting agreements with the Company that would require
them to provide service to the Company during each calendar quarter and maintain
the confidentiality of the Company's trade secrets. While they serve as
consultants to the Company, their stock options would continue to vest and be
exercisable until 30 days after the options have vested. Each of Mr. Bailey and
Mr. Sullivan also has the right to terminate employment and become a consultant
to the Company on these terms if on the first anniversary of a change of control
of the Company, he is an employee of the Company.
Under the terms of the employment agreements, "cause" means (i) gross
dereliction of duties which continues after at least two notices, each 30 days
apart, from the Chief Executive Officer (or in the case of the Chief Executive
Officer, from a director designated by a majority of the board of directors),
specifying in reasonable detail the tasks which must be accomplished and a
timeline for their accomplishment to avoid termination for Cause; (ii) willful
and gross misconduct which injures the Company; (iii) willful and material
violation of laws applicable to the Company; or (iv) embezzlement or theft of
Company property. "Change of control" under the employment agreements means the
occurrence of any of the following events:
(i) any "person" or "group" as such terms are defined under
Sections 13 and 14 of the Securities Exchange Act of 1934
("Exchange Act") (other than the Company, a subsidiary of the
Company, or a Company employee benefit plan) is or becomes the
"beneficial owner" (as defined in Exchange Act Rule 13d-3),
directly or indirectly, of Company securities representing 50%
or more of the combined voting power of the Company's then
outstanding securities;
(ii) the closing of (a) the sale of all or substantially all of the
assets of the Company if the holders of Company securities
representing all voting power for the election of directors
before the transaction hold less than a majority of the total
voting power for the election of directors of all entities
which acquire such assets, or (b) the merger of the Company
with or into another corporation if the holders of Company
securities representing all voting power for the election of
directors before the transaction hold less than a majority of
the total voting power for the election of directors of the
surviving entity;
<PAGE>
(iii) the issuance of securities which would give a person or group
beneficial ownership of Company securities representing 50% or
more of all voting power for the election of directors; or
(iv) a change in the board of directors such that the incumbent
directors and nominees of the incumbent directors are no longer
a majority of the total number of directors.
"Constructive termination" under the employment agreements means (i) a
material reduction in Executive's Base Salary, target bonus or benefits; (ii) a
material reduction in title, authority, status, obligations or responsibilities;
or (iii) the requirement that Executive relocate more than 100 miles from the
current Company headquarters.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee consists of Mr. Diller and Dr. Balkanski.
The Stock Option Committee consists of Mr. Bailey and any other director. The
Benefit Plans Committee consists of Mr. Bailey and any other director.
Compensation Committee Report on Executive Compensation
The following report is provided to stockholders by the members of the
Compensation Committee of the Board of Directors.
Compensation Philosophy. Under the supervision of the Compensation
Committee of the Board of Directors, the Company has developed and implemented
compensation policies, plans and programs which seek to enhance the
profitability of the Company, and thus stockholder value, by aligning closely
the financial interests of the Company's senior managers with those of its
stockholders. In furtherance of these goals, annual base salaries are generally
set below competitive levels to emphasize quarterly and longer-term incentive
compensation. This is meant to attract, motivate and retain corporate officers
and other key employees to perform to the full extent of their abilities. Both
types of incentive compensation are variable and closely tied to corporate
performance in a manner that encourages continuing focus on profitability and
stockholder value.
Compensation for the Company's executive officers consists of an annual
base salary and quarterly and longer-term incentive compensation. The Committee
considers the total compensation (earned or potentially available) of each
executive officer in establishing each element of compensation.
Cash Compensation. Each fiscal year the Committee reviews with the
Chief Executive Officer and approves, with appropriate modifications, an annual
salary plan for the Company's senior executives (other than the Chief Executive
Officer). This annual salary plan is composed of two elements: a base salary
plan and a quarterly bonus plan. The base salary plan is based on industry, peer
group, and national surveys and performance judgements as to the past and
expected future contributions of the individual senior executives. The base
salaries are fixed at a level below the competitive amounts paid to senior
managers with comparable qualifications, experience and responsibilities at
other similarly sized high-technology companies. In addition to the base
salaries, each executive officer, including the Chief Executive Officer, is
eligible to receive a quarterly cash bonus equal to a percentage of the
Company's operating group's pre-tax profits for the quarter. The percentages of
profits for each participant are determined annually by the Compensation
Committee based upon performance judgments as to the past and expected future
contributions of the individual senior executives.
<PAGE>
Increases to executive officer base salaries in fiscal 2000 were
determined by the Committee after general consideration of total fiscal year
1999 compensation, industry and peer group surveys, individual position and
responsibilities and the individual's total compensation package (including
annual incentive and long-term incentive compensation) in fiscal 1999 versus the
proposed plan for fiscal 2000. Together, the base salary plan and the quarterly
bonus plan provide a cash compensation package that is competitive with the
industry and peer groups.
In fiscal 1999, the Company generally attained its performance goals
for pre-tax operating profit (excluding non-recurring charges), and bonuses
ranged in amount from approximately 46% to approximately 54% of total cash-based
compensation for the executive officers named in the Summary Compensation Table
(other than the Chief Executive Officer).
The industry and peer group used by the Compensation Committee for
purposes of determining executive officer compensation is not the same peer
group used in connection with cumulative total stockholder return because the
Compensation Committee believes that the Company's most direct competitors for
executive talent are not necessarily all of the companies included in that peer
group. To construct the industry and peer group for executive officer
compensation, the Company chose companies in the semiconductor industry that (i)
have revenues comparable to the Company's revenues, or (ii) compete with the
Company for executive talent irrespective of revenue. Companies are included in
the latter group if their executives have skills and expertise similar to the
skills and expertise the Company requires of its executive officers.
Stock Options. During each fiscal year, the Stock Option Committee
considers the desirability of granting to executive officers awards under the
Company's 1994 Incentive Stock Plan, which allows for the grant of long-term
incentives in the form of stock options and stock purchase rights. The Stock
Option Committee believes stock option grants encourage the achievement of
superior results over time and align employee and stockholder interests. In
fixing the grants of stock options to executive officers (other than the Chief
Executive Officer) in the last fiscal year, the Stock Option Committee reviewed
with the Chief Executive Officer the recommended individual award, taking into
account scope of accountability, strategic and operational goals, and
anticipated performance requirements and contributions of the senior management
group. In addition, when hiring new executive officers, the Committee may
recommended a grant of options upon acceptance of employment. These grants are
made in order to retain qualified personnel and take into account the
compensation policies of the Company's competitors and the unique qualifications
of the new executives.
Chief Executive Officer Compensation. The Compensation Committee
reviews and fixes the total cash compensation of the Chief Executive Officer
based on similar competitive compensation data as for all executive officers and
the Compensation Committee's assessment of his past performance and its
expectation as to his future contributions in leading the Company and
positioning the Company for future growth. For fiscal 1999 the cash bonuses paid
to the Company's Chief Executive Officers was approximately 65% of the total
cash-based compensation, based on the pre-tax operating profit (excluding the
non-recurring expenses) of the Company. For fiscal 1999 the Company granted
stock options to the Chief Executive Officer to purchase 780,000 shares of
common stock exercisable at $15.9844 per share and 480,000 shares of common
stock exercisable at $52.375 per share. The award to the Chief Executive Officer
was based, among other
<PAGE>
things, on a review of competitive compensation data from several surveys, data
from selected peer companies (based on company size, revenue rate and relative
number of outstanding shares) and information regarding long-term compensation
awards, as well as the Committee's perception of past and expected future
contributions to the Company's achievement of its long-term performance goals.
Respectfully submitted by:
Alexandre Balkanski
James V. Diller
<PAGE>
Performance Graph
The following graph shows a comparison of cumulative total stockholder
returns for the Company, the Nasdaq National Market, and the line-of-business
index for semiconductors and related devices (SIC code 3674) published by Media
General Financial Services. The graph assumes the investment of $100 on January
1, 1995. The performance shown is not necessarily indicative of future
performance.
Comparison of 5-Year Cumulative Total Return*
Among PMC-Sierra, Inc.
Nasdaq National Market Index and SIC Code Index 3674
(Graphic Omitted)
ASSUMES $100 INVESTED ON JAN. 1, 1995
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING DEC. 26, 1999
* The total return on each of these investments assumes the
reinvestment of dividends, although cash dividends have never been paid on the
Company's Common Stock.
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information known to the Company
regarding beneficial ownership of Common Stock of the Company as of March 31,
2000 by (i) all persons known to the Company to be the beneficial owners of more
than 5% of the Company's Common Stock, (ii) each executive officer named in the
Summary Compensation Table below, (iii) each of the Company's directors, and
(iv) all current directors and executive officers as a group.
<TABLE>
<CAPTION>
Approximate
Percentage
Name(1) Number of Shares Ownership
- -------------------------------------------------------------------------------- --------------- -----------
<S> <C> <C>
AMVESCAP PLC(2)(5).............................................................. 9,743,060 7.0%
Capital Research and Management Company(2)(3)................................... 7,973,200 5.7%
Putnam Investments, Inc.(2)(4).................................................. 7,291,536 5.2%
FMR Corp.(2)(6)................................................................. 7,303,158 5.2%
James V. Diller(7).............................................................. 3,205,887 2.3%
Robert L. Bailey(8)............................................................. 2,848,420 2.0%
Gregory D. Aasen(9)............................................................. 1,474,974 1.1%
John W. Sullivan(10)............................................................ 272,449 *
Alexandre Balkanski(11)......................................................... 155,012 *
Colin Beaumont(12).............................................................. 61,498 *
Frank Marshall(13).............................................................. 258,278 *
All current directors and executive officers as a group(7 persons)(14).......... 8,276,518 5.8%
- ----------------------
<FN>
* Less than 1%.
(1) The beneficial owners named in the table have sole voting and investment
power with respect to the shares, except as indicated.
(2) Based on statements filed with the Securities and Exchange Commission
pursuant to Sections 13(d) or 13(g) of the Securities Exchange Act of 1934,
as amended. The Company has not independently verified these statements or
more current holdings of such stockholders.
(3) Capital Research and Management Group advises Smallcap World Fund, Inc.
Smallcap World Fund, Inc. is the beneficial owner of 3,990,000 shares of
the Company's Common Stock. The address of Capital Research and Management
Company and Smallcap World Fund, Inc. is 333 South Hope Street, Los
Angeles, California 90071.
(4) Putnam Investments, Inc. ("PI") beneficially own 7,291,536 shares. PI's
wholly-owned investment advisers Putnam Investment Management, Inc. ("PIM")
has shared dispositive power with respect to 6,489,880 of those shares, and
Putnam Advisory Company, Inc. ("PAC") has shared dispositive power with
respect to 801,656 of those shares. PAC also holds shared voting power with
PI with respect to 173,300 of those shares. PI's, PIM's and PAC's address
is One Post Office Square, Boston, Massachusetts 02109.
(5) AMVESCAP PLC has shared voting and dispositive power with respect to all
9,743,060 shares with AVZ, Inc., AIM Management Group, Inc. AMVESCAP Group
Services, Inc., INVESCO, Inc., INVESCO (NY) Asset Management, Inc., INVESCO
North American Holdings, Inc., INVESCO Capital Management, Inc., INVESCO
Funds Group, Inc. and INVESCO Realty Advisors, Inc., all of which are
holding companies, and with INVESCO Capital Management, Inc., INVESCO Funds
Group, Inc., INVESCO Management & Research, Inc., and INVESCO Realty
Advisers, Inc., its investment advisers. The addresses for AMVESCAP PLC and
its other holding companies and investment advisers is 11 Devonshire
Square, London EC2M 4YR, England or 1315 Peachtree Street, N.E., Atlanta,
Georgia 30309.
(6) Fidelity Management & Research Company ("Fidelity"), a wholly-owned
subsidiary of FMR Corp. ("FMR"), is an investment adviser to FMR and the
beneficial owner of 6,705,100 shares. Edward C. Johnson, III, Chairman of
FMR, and FMR through its control of Fidelity, has sole dispositive power
over 6,705,100 shares. FMR through its control of Fidelity, has sole voting
power over 6,705,100 shares. FMR Corp.'s address is 82 Devonshire Street,
Boston, Massachusetts 02109.
(7) Includes 1,215,401 shares subject to options exercisable within 60 days
after March 31, 2000. Mr. Diller's address is c/o PMC-Sierra, Inc.,
105-8555 Baxter Place, Burnaby, British Columbia, V5A 4V7, Canada.
(8) Includes 1,310,000 shares subject to options exercisable within 60 days
after March 31, 2000. Also includes 1,251,804 shares issuable upon
redemption of LTD Special Shares, and 73,328 shares issuable upon
redemption of LTD Special Shares subject to options exercisable within 60
days after March 31, 2000.
<PAGE>
(9) Includes 939,999 shares subject to options exercisable within 60 days after
March 31, 2000 and 23,600 shares held by Mr. Aasen's two sons. Also
includes 331,923 shares issuable upon redemption of LTD Special Shares,
101,534 shares issuable upon redemption of LTD Special Shares held by Mr.
Aasen's wife and 63,012 shares issuable upon redemption of LTD Special
Shares held by Mr. Aasen's two sons.
(10) Includes 210,847 shares subject to options exercisable within 60 days of
March 31, 2000, 4,802 shares held by Mr. Sullivan's wife and 10,000 shares
held in an investment retirement account.
(11) Includes 154,166 shares subject to options exercisable within 60 days after
March 31, 2000. Dr. Balkanski's address is c/o C-Cube Microsystems, 1778
McCarthy Boulevard, Milpitas, California 94062.
(12) Includes 57,498 shares subject to option exercisable within 60 days after
March 31, 2000. Mr. Beaumont's address is 200 Elgin Street, Suite 602,
Ottawa, Ontario, Canada K2P1L5.
(13) Includes 111,248 shares subject to options exercisable within 60 days of
March 31, 2000. Also includes 108,066 shares held by Timark, L.P. Mr.
Marshall is a General Partner of Timark, L.P. and disclaims beneficial
ownership except to the extent of his pecuniary interest therein. Mr.
Marshall's address is 14585 Big Basin Way, Saratoga, California 95070.
(14) Includes 3,999,159 shares subject to options exercisable within 60 days
after March 31, 2000 held by the current executive officers and directors
listed above. Also includes 73,328 shares issuable upon redemption of LTD
Special Shares subject to options exercisable within 60 days after March
31, 2000 held by one executive officer listed above and 1,748,273 shares
issuable upon redemption of LTD Special Shares held by two executive
officers listed above. See notes (7) through (13) above.
</FN>
</TABLE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Dr. Balkanski and Mr. Diller each received 846 shares of the Company's
Common Stock issued in connection with a distribution of shares from Sequoia
Technology Partners VIII (Q). Sequoia Technology Partners VIII (Q) received
shares of the Company's Common Stock through the acquisition by the Company of
Abrizio, Inc.
Mr. Marshall received an aggregate of 127,030 shares of the Company's
Common Stock as a result of the acquisition by the Company of Abrizio, Inc. Of
the shares of the Company's Common Stock received by Mr. Marshall, he received
2,110 shares in connection with a distribution of shares from Sequoia Technology
VIII (Q), which shares are held by Timark L.P. ("Timark") of which Mr. Marshall
is a general partner. Mr. Marshall received the remaining 124,920 shares of the
Company's Common Stock upon exchange of shares of Abrizio, Inc., which amount
includes 105,956 shares held by Timark and 18,964 shares beneficially held by
Mr. Marshall.
During the fiscal year ended December 26, 1999, members of the Board of
Directors of the Company and executive officers of the Company received grants
of options and shares of the Company's Common Stock as set forth under "Item 11
- -- Executive Compensation."
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Date: April 20, 2000
PMC-SIERRA, INC.
(Registrant)
By: /s/ John W. Sullivan
John W. Sullivan, Vice President, Finance
(Principal Financial and Accounting Officer)
Name Title Date
/s/ Robert L. Bailey* President, Chief Executive Officer April 20, 2000
Robert L. Bailey (Principal Executive Officer)
and Chairman of the Board of
Directors
/s/ John W. Sullivan Vice President Finance, Chief April 20, 2000
John W. Sullivan Financial Officer (and
Principal Accounting Officer)
/s/ Alexandre Balkanski* Director April 20, 2000
Alexandre Balkanski
/s/ Colin Beaumont* Director April 20, 2000
Colin Beaumont
/s/ James V. Diller* Director April 20, 2000
James V. Diller
/s/ Frank Marshall* Director April 20, 2000
Frank Marshall
*By: /s/ JOHN SULLIVAN
John Sullivan
Attorney-in-Fact
<PAGE>
INDEX TO EXHIBITS
Exhibit Description Page
Number Number
- ------ ------------------------------------------------------ --------
23.1 Consent of Deloitte & Touche LLP, Independent Auditors --
CONSENT OF DELOITTE & TOUCHE LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statements (Forms S-3 Nos. 333-31450, 333-86951, 33-86930, 33-90392, 33-96620,
33-97490, 333-15519 and 333-55989), and in the Registration Statements (Form S-8
Nos. 333-94999, 333-92885, 333-87039, 33-41027, 33-80988, 333-13387, 33-80992,
33-94790, 333-13359, 333-34671, 333-13357, 333-55983 and 333-55991) pertaining
to the 1991 Employee Stock Purchase Plan, the 1994 Incentive Stock Plan, the
PMC-Sierra, Inc. (Portland) 1996 Stock Option Plan of PMC-Sierra, Inc. (formerly
Sierra Semiconductor Corporation), 1998 PMC-Sierra (Maryland), Inc. Stock Option
Plan and Abrizio Inc. 1997 Stock Option Plan and in the related Prospectuses, of
our report dated January 17, 2000, with respect to the consolidated financial
statements and schedule of PMC-Sierra, Inc. (formerly Sierra Semiconductor
Corproation) included in this Annual Report (Form 10-K) for the year ended
December 31, 1999.
/s/ Deloitte & Touche LLP
Vancouver, B.C.
April 20, 2000
