As filed with the Securities and Exchange Commission on April 12, 2000
Registration No. ___________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
----------------------
PMC-SIERRA, INC.
(Exact name of registrant as specified in its charter)
----------------------
Delaware 94-2925073
- ------------------------ -------------------
(State of Incorporation) (I.R.S. Employer
Identification No.)
105-8555 Baxter Place
Burnaby, British Columbia V5A 4V7
Canada
(Address of principal executive offices)
----------------------
Extreme Packet Devices Inc. 1999 Stock Option Plan
(Full title of the plan)
----------------------
The Corporation Trust Company
1209 Orange Street
Wilmington, Delaware 19801
(800) 677-3394
(Name, address and telephone number of agent for service)
----------------------
Copy to:
Neil Wolff
Wilson Sonsini Goodrich & Rosati, P.C.
650 Page Mill Road
Palo Alto, California 94304-1050
----------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ---------------------------------- --------------------- ------------------- ----------------------- -----------------------
Proposed Proposed
Title of Maximum Maximum Amount
Securities Amount Offering Aggregate of
to be to be Price Per Offering Registration
Registered (1) Registered Share Price Fee
- ---------------------------------- --------------------- ------------------- ----------------------- -----------------------
Common Stock,
<S> <C> <C> <C> <C>
$0.001 par value 204,943 (2) $ 3.08 (2) $631,224.44 (2) $166.64
- ---------------------------------- --------------------- ------------------- ----------------------- -----------------------
Common Stock,
$0.001 par value 66,410 (2) $ 6.15 (2) $408,421.50 (2) $107.82
- ---------------------------------- --------------------- ------------------- ----------------------- -----------------------
Common Stock,
$0.001 par value 50,247 (2) $13.84 (2) $695,418.48 (2) $183.60
- ---------------------------------- --------------------- ------------------- ----------------------- -----------------------
Common Stock,
$0.001 par value 2,240 (2) 203.81 (2) $456,534.40 (2) $120.52
================================== ===================== =================== ======================= =======================
<FN>
(1) Pursuant to the Amended and Restated Acquisition Agreement dated as of
April 6, 2000 among PMC-Sierra, Inc. ("PMC"), 600444 B.C. Ltd., Extreme
Packet Devices, Inc ("EPD") and State Street Bank and Trust Company of
California, N.A., PMC assumed, effective as of April 6, 2000, all of the
outstanding options to purchase common stock of EPD under the EPD 1999
Stock Option Plan, and such options became exercisable to purchase
shares of PMC's common stock, with appropriate adjustments to the number
of shares and exercise price of each assumed option.
(2) Options granted pursuant to an employee stock option plan. Estimated
pursuant to Rule 457(h)(1) under the Securities Act of 1933, as amended,
solely for the purpose of calculating the registration fee. Based on the
price per share at which the options may be exercised.
</FN>
</TABLE>
================================================================================
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
--------------------------------------
The following documents and information are incorporated by reference
as filed with the Securities and Exchange Commission:
(a) PMC-Sierra, Inc.'s ("PMC's") Form 10-K Annual Report for the
fiscal year ended December 26, 1999 (File No. 000-19084).
(b) PMC's Form 8-K dated March 20, 2000 (File No. 000-19084).
(c) The description of PMC's Common Stock to be offered hereby is
contained in the Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended on June 27, 1999 filed with the Commission
pursuant to Section 13(a) of the Exchange Act, including any
amendment or report filed for the purpose of updating such
description.
All documents subsequently filed by PMC pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended, prior to
the filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in this registration
statement and to be part hereof from the date of filing such documents.
Item 4. Description of Securities.
-------------------------
Not applicable.
Item 5. Interests of Named Experts and Counsel.
--------------------------------------
Certain legal matters with respect to the shares will be passed upon
by Wilson, Sonsini, Goodrich & Rosati, a Professional Corporation, Palo Alto,
California.
Item 6. Indemnification of Directors and Officers.
-----------------------------------------
Section 145 of the Delaware General Corporation Law generally
provides that a corporation is empowered to indemnify any person who is made a
party to any threatened, pending or completed action, suit or proceeding by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation or is or was serving, at the request of the corporation, in any
of such capacities of another corporation or other enterprise, if such director,
officer, employee or agent acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. This statute describes in detail the right of
PMC to indemnify any such person.
PMC's Certificate of Incorporation eliminates in certain
circumstances the liability of directors of PMC for monetary damages for breach
of their fiduciary duty as directors. This provision does not eliminate the
liability of a director (i) for breach of the director's duty of loyalty to PMC
or its stockholders, (ii) for acts or omissions by the director not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) for willful or negligent declaration of an unlawful dividend, stock
purchase or redemption or (iv) for transactions from which the director derived
an improper personal benefit.
<PAGE>
PMC's Certificate of Incorporation also provides generally for
indemnification of all directors and officers of PMC to the fullest extent
permitted by the General Corporation Law of the State of Delaware. Such right to
indemnification shall be deemed to be a contract right and includes generally
the right to be paid by PMC the expenses incurred in defending any proceeding
covered by this provision in advance of its final disposition. Individuals who
are entitled to indemnification may bring suit to seek recovery of amounts due
under the foregoing provisions and to recover the expenses of such suit if
successful.
PMC has entered into indemnification agreements to such effect with
its officers and directors containing provisions which are in some respects
broader than the specific indemnification provisions contained in the General
Corporation Law of Delaware. The indemnification agreements may require PMC,
among other things, to indemnify such officers and directors against certain
liabilities that may arise by reason of their status or service as directors or
officers (other than liabilities arising from willful misconduct of a culpable
nature) and to advance their expenses incurred as a result of any proceeding
against them as to which they could be indemnified.
PMC believes that it is the position of the Commission that insofar
as the foregoing provisions may be invoked to disclaim liability for damages
arising under the Securities Act, such provisions are against public policy as
expressed in the Security Act and are therefore unenforceable.
PMC currently maintains an officers' and directors' liability
insurance policy which covers, subject to the exclusions and limitations of the
policy, officers and directors of PMC against certain liabilities which may be
incurred by them solely in such capacities.
Item 7. Exemption from Registration Claimed.
-----------------------------------
Not applicable.
Item 8. Exhibits.
---------
The Exhibits to this registration statement are listed in the Index
to Exhibits on page 5.
Item 9. Undertakings.
-------------
(a) PMC hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this
registration statement to include any material
information with respect to the plan of distribution
not previously disclosed in the registration
statement or any material change to such information
in the 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 therein,
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
post-effective amendment any of the securities being
registered which remain unsold at the termination of
the offering.
<PAGE>
(b) PMC hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of PMC's
annual report pursuant to Section 13(a) or Section 15(d) of
the Exchange Act (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section
15(d) of the Exchange Act) that is incorporated by reference
in the registration statement shall be deemed to be a new
registration statement relating to the securities offered
therein, 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 PMC pursuant to the Delaware General
Corporation Law, the Certificate of Incorporation or the
Bylaws of PMC, Indemnification Agreements entered into between
PMC and its officers and directors, or otherwise, PMC 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 PMC 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 hereunder, PMC 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, PMC certifies that
it has reasonable grounds to believe that it meets all of the requirements for
filing on Form S-8 and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Burnaby, British Columbia, Canada, on this 12th day of April 2000.
PMC-SIERRA, INC.
By: /s/ROBERT L. BAILEY
-------------------------------
Robert L. Bailey, President and
Chief Executive Officer and
Chairman of the Board of Directors
(Principal Executive Officer)
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each such person whose
signature appears below constitutes and appoints, jointly and severally, Robert
L. Bailey and John W. Sullivan his attorneys-in-fact, each with the power of
substitution, for him in any and all capacities, to sign any amendments to this
Registration Statement on Form S-8 (including post-effective amendments), and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Commission, hereby ratifying and confirming all that each of
said attorneys-in-fact, or his substitute or substitutes, may do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Title Date
- --------------------- ------------------------------ ---------------
/s/Robert L. Bailey President, Chief Executive Officer
- -------------------- and Chairman of the Board of Directors
Robert L. Bailey (Principal Executive Officer) April 12, 2000
/s/JOHN SULLIVAN Vice President of Finance and
- ----------------- Chief Financial Officer (Principal
John Sullivan Financial and Accounting Officer) April 11, 2000
- ----------------------
Alexandre Balkanski Director April 12, 2000
/s/COLIN BEAUMONT
- ------------------
Colin Beaumont Director April 11, 2000
/s/JAMES V. DILLER
- -------------------
James V. Diller Director April 11, 2000
/s/FRANK J. MARSHALL
- ---------------------
Frank J. Marshall Director April 11, 2000
<PAGE>
INDEX TO EXHIBITS
-----------------
Exhibit
Number Description
- ------ -------------
4.1 Extreme Packet Devices Inc. 1999 Stock Option Plan Description
4.2 Extreme Packed Devices Inc. Stock Option Grant Confirmation Letter
4.3 Letter from Extreme Packet Devices and PMC-Sierra to EPD Option Holders
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation
23.1 Consent of Deloitte & Touche LLP, Independent Auditors
23.2 Consent of Counsel (Contained in Exhibit 5.1 above)
24.1 Power of Attorney (see page II-4)
EXTREME PACKET DEVICES INC.
1999 STOCK OPTION PLAN
PLAN DESCRIPTION
----------------
1. Purpose of the Plan
The purpose of the 1999 Stock Option Plan is to develop the interest
and incentive of eligible employees, directors and consultants of Extreme Packet
Devices Inc. and its subsidiaries (the "Company") in the Company's growth and
development by giving eligible employees, directors and consultants an
opportunity to purchase common shares in the capital stock of the Company on a
favourable basis, thereby advancing the interests of the Company, enhancing the
value of the Common Shares for the benefit of all the shareholders and
increasing the ability of the Company to attract and retain skilled and
motivated individuals in the service of the Company.
The Board of Directors has approved the terms of this Plan.
2. Definitions
In this Plan:
(a) "Associate" has the meaning assigned by the Securities Act
(Ontario), as amended from time to time;
(b) "Board of Directors" means the board of directors of the Company;
(c) "Committee" means the appropriate compensation committee
appointed by the Board of Directors to administer the Plan. All
references in the Plan to the Committee means the Board of
Directors if no Committee has been appointed;
(d) "Common Shares" means all of the issued and outstanding common
shares of the Company or, in the event of an adjustment
contemplated in Section 9 hereof, such other Common Shares to
which a Participant may be entitled upon the exercise of an
Option as a result of such adjustment;
(e) "Consultant" means a service provider engaged to provide ongoing
bona fide consulting services for the Company, spend a
significant amount of their time and attention on the affairs and
business of the Company and have a relationship with the Company
that will permit them to be knowledgeable in respect of the
business affairs of the Company;
(f) "Date of Grant" means the date a Participant is granted an Option
to purchase Option Shares;
(g) "Director" means a person occupying the position of director on
the Board of Directors;
(h) "Employee" means an employee of the Company or its subsidiaries;
(i) "Exchange" means The Toronto Stock Exchange or, if the Common
Shares are not then listed and posted for trading on The Toronto
Stock Exchange, on such stock exchange on which such shares are
listed and posted for trading as may be selected by the
Committee;
<PAGE>
(j) "Exercise Date" means the date the Company receives from the
Participant a completed Stock Option Purchase Form with payment
for the Option Shares being purchased;
(k) "Insider" means:
(i) an insider of the Company as defined by the Securities Act
(Ontario) as amended from time to time, other than a
person who falls within such definition solely by virtue
of being a director or senior officer of a subsidiary of
the Company; and
(ii) an Associate of any person who is an insider by virtue of
clause (i) of this definition;
(l) "Fair Market Value" at any date in respect of the Common Shares
shall be as determined by the Board of Directors from time to
time based on the last price per share established in an arm's
length equity transaction or the Option Price of the last
Options granted pursuant to the Plan, whichever is the more
recent, unless the Common Shares become listed and posted for
trading on the Exchange, in which case the Fair Market Value
shall be equal to the closing price of the Common Shares on the
Exchange on the trading day immediately preceding the Date of
Grant.
(m) "Option" means an option to purchase Common Shares from the
treasury of the Company granted to a Participant.
(n) "Option Price" means the price per share at which a Participant
may purchase Option Shares;
(o) "Option Shares" means the Common Shares of the Company which a
Participant is entitled to purchase under the Plan;
(p) "Outstanding Issue" means the number of Common Shares that are
outstanding immediately prior to any issuance of Option Shares,
excluding Option Shares issued pursuant to the Plan during the
preceding one year period;
(q) "Participants" means Directors, Employees and Consultants to
whom Option Shares are granted pursuant to the Plan and which
remain outstanding and unexercised;
(r) "Plan" means the Extreme Packet Devices Inc. 1999 Stock Option
Plan;
(s) "Stock Option Agreement" means the stock option agreement to be
entered into between the Company and a Participant of the Plan
upon the grant of an Option to a Participant, and any other
agreements entered into between the Company and a Participant
relating to the terms and conditions of the Participant's
Options;
(t) "Stock Option Purchase Form" means the stock option purchase
form to be executed by a Participant upon the exercise of an
Option; and
(u) "Vesting Period" means the period(s) referred to in Section 6
hereof that the Participant may purchase the Option Shares.
3. Eligibility
Participation in the Plan shall be limited to Participants who are
designated from time to time by the Committee. Participation shall be voluntary
and the extent to which any Participant shall be entitled to participate in the
Plan shall be determined by the Committee.
<PAGE>
4. Number of Option Shares and Limitations on Issuance
The aggregate number of Option Shares which may be reserved for
issuance hereunder shall not exceed 25% of the Outstanding Issue, unless
otherwise determined by the Board of Directors.
No fractional shares may be purchased or issued hereunder. Subject to
the foregoing, the number of Option Shares that a Participant is entitled to
purchase under the Plan will be determined by the Committee.
Notwithstanding the foregoing, in the event that the Common Shares
become listed and posted for trading on the Exchange, the aggregate number of
Option Shares which may be reserved for issuance hereunder shall not exceed the
static number representing 25% of the Outstanding Issue at that time and the
following restrictions shall also apply to this Plan as well as all other plans
or stock option agreements to which the Company may be a party:
(i) the aggregate number of Option Shares reserved for
issuance pursuant to Options granted to Insiders shall not
exceed 10% of the Outstanding Issue;
(ii) Insiders shall not be issued, within any one year period,
a number of Option Shares which exceeds 10% of the
Outstanding Issue;
(iii) no Participant together with such Participant's Associates
shall be issued, within any one year period, a number of
Option Shares which exceeds 5% of the Outstanding Issue;
and
(iv) the number of Option Shares reserved for issuance pursuant
to Options to any one Participant shall not exceed 5% of
the Outstanding Issue.
5. Price for Option Shares
The Committee shall advise each Participant designated to participate
in the Plan of the number of Option Shares such Participant is entitled to
purchase and the Option Price at which the Option Shares may be purchased and
the Vesting Period. The Option Price at which the Option Shares may be purchased
under the Plan shall be fixed by the Committee based upon the Fair Market Value
of the Common Shares of the Company.
6. Vesting
Unless otherwise specifically approved by the Board of Directors and
agreed to in writing by the Company in the Stock Option Agreement to be executed
by the Participant, the Options granted under the Plan must be exercised within
a period of 5 years from the Date of Grant, failing which the Participant's
right to purchase such Option Shares lapses. The vesting periods within this 5
year period during which Option Shares or a portion thereof vest and may be
exercised by the Participant shall be as follows:
(i) one-fourth of the Options granted shall vest on the first
anniversary of the Date of Grant;
(ii) one forty-eighth (1/48) of the Options granted shall vest
on the first day of each month commencing on the first day
of the month immediately following the first anniversary
of the Date of Grant and ending on the first day of the
thirty-sixth month following the first anniversary of the
Date of Grant.
Notwithstanding the vesting period set forth in the Stock Option
Agreement, in the event that the Company or its shareholders receive and accept
an offer to acquire all of the shares or substantially all of the assets of the
Company, whether effected through an acqusition for cash or securities, and
whether structured as a purchase, amalgamation, merger, arrangement or otherwise
(in each case, a "Sale Transaction"), the board of directors may, in its sole
discretion, deal with the Options issued under the Plan in the manner it deems
fair and reasonable in light of the circumstances of the Sale Transaction.
Without limiting the generality of the foregoing, in connection with a Sale
Transaction, the board of directors may, without any action or consent required
on the part of any Particpant, (i) deem any or all Options (vested or unvested)
under the Plan to have been exercised and the Option Shares to have been
tendered to the Sale Transaction, (ii) apply a portion of the Participant's
proceeds from the closing of the Sale Transaction to the exercise price payable
by that Participant for the exercise of his or her Options, (iii) cancel the
Options and pay to a Participant the amount that the Participant would have
received, after deducting the exercise price of the Options, had the Options
been exercised, (iv) exchange unvested Options, or any portion of them, for
options to purchase shares in the capital of the acquiror or any corporation
which results from an amalgamation, merger or similar transaction involving the
Company made in connection with the Sale Transaction or (v) take such other
actions, and combinations of the foregoing actions, as it deems fair and
reasonable under the circumstances.
7. Payment
The Participant from time to time and at any time after the vesting of
any Options and prior to the lapse of such Options, may elect to purchase all or
a portion of the Option Shares available for purchase by lump sum payment by
delivering to the Company at its registered office, a completed Stock Option
Purchase Form. Such Form shall specify the number of Option Shares the
Participant desires to purchase and shall be accompanied by payment in full of
the purchase price for such Option Shares. Payment may be made by cash,
certified cheque, bank draft, money order or the equivalent payable to the order
of Extreme Packet Devices Inc.
8. Share Certificates
Upon exercise of the Option and payment in full of the purchase price
the Company shall cause to be delivered to the Participant within a reasonable
period of time a duplicate certificate or certificates in the name of the
Participant representing the number of Option Shares the Participant has
purchased. The original share certificate(s) may be held in trust by the
Company, to ensure compliance with the terms and conditions of the Plan and
Stock Option Agreement, for delivery to the Participant in accordance with the
Plan and Stock Option Agreement.
9. Adjustment in Shares
Appropriate adjustments in the number of Common Shares subject to the
Plan and, as regards Options granted or to be granted, in the number of Common
Shares optioned and in the Option Price, shall be made by the Committee to give
effect to the adjustments in the number of Common Shares resulting from
sub-divisions, consolidations or re-classification of the Common Shares or other
relevant changes in the authorized or issued capital of the Company.
Furthermore, in the event of any amalgamation, merger, arrangement or
any similar change affecting the Company or its securities, the board of
directors may, in its sole discretion, deal with the Options issued under the
Plan in the manner it deems fair and reasonable in light of the circumstances of
the change, including without limitation, taking any of the actions outlined in
Section 6 hereof and/or making such other adjustments to the number and kind of
shares which thereafter may be offered and sold to Participants under the Plan
as it may deem equitable.
10. Termination Of Participant
(a) Unless otherwise specifically approved by the Board of Directors
and agreed to in writing by the Company in the Stock Option Agreement to be
executed by the Participant, in the event that an Employee's employment or
Consultant's services with the Company or any of its subsidiaries is terminated
for any reason other than death or disability or a Director shall cease to be a
Director on the Board for any reason other than death or disability, the
Participant, may elect to purchase at the Option Price all or a portion of the
remaining Option Shares that have vested at the time such employment, services
or Board position is terminated at any time during the 60 day period, or such
later date as determined by the Board, following the date of such termination of
employment, services or of Board position (but in no event after the lapse of
any Options held), and upon the expiry of such 60 day period, all unexercised
Options held by the Participant shall lapse. For the purposes of this Plan, the
transfer of the Employee's employment to the Company or to any subsidiary of the
Company shall not be considered a termination of employment and the Employee's
rights under the Option shall be the same as if such transfer had not occurred.
(b) Unless otherwise specifically approved by the Board of Directors
and agreed to in writing by the Company in the Stock Option Agreement to be
executed by the Participant, in the event that an Employee's employment or
Consultant's services with the Company or any of its subsidiaries is terminated
by reason of death or disability or a Director shall cease to be a Director on
the Board by reason of death or disability, the Participant, or the
Participant's personal representatives may elect to purchase at the Option Price
all or a portion of the remaining Option Shares that have vested at the time
such employment, services or Board position is terminated at any time during the
90 day period, or such later date as determined by the Board, following the date
of such termination of employment, services or of Board position (but in no
event after the lapse of any Options held), and upon the expiry of such 90 day
period, all unexercised Options held by the Participant shall lapse.
(c) Unless otherwise specifically approved by the Board of Directors
and agreed to in writing by the Company in the Stock Option Agreement to be
executed by the Participant, in the event that a Participant's employment or
services, as may be applicable, with the Company or any of its subsidiaries is
terminated by the Company for Cause, where "Cause" shall mean any act or
omission by the Participant which would in law permit an employer to, without
notice or payment in lieu of notice, terminate the Participant's employment or
services, and shall include without limitation the meaning attributed thereto in
the employment agreement or consulting agreement, as may be applicable, of such
Participant, the Company may, at its sole discretion, at any time within ninety
(90) days from the date of such termination, repurchase any Common Shares
purchased by the Participant pursuant to the exercise of Options granted
hereunder, at a price per Common Share equal to the Option Price per Common
Share.
(d) Unless otherwise specifically approved by the Board of Directors
and agreed to in writing by the Company in the Stock Option Agreement to be
executed by the Participant, in the event that a Participant's employment or
services, as may be applicable, with the Company or any of its subsidiaries is
terminated by the Company without Cause or by reason of death or disability, or
such Participant resigns from the Company, the Company may, at its sole
discretion, at any time within ninety (90) days from the date of such
termination, repurchase any Common Shares purchased by the Participant pursuant
to the exercise of Options granted hereunder at a price per Common Share equal
to the greater of (i) fifty percent (50%) of the Fair Market Value of such
Common Shares, and (ii) the Option Price per Common Share.
11. Transfer and Assignment
The Participant's rights under Options granted under the Plan are not
assignable or transferable by the Participant or subject to any other
alienation, sale, pledge or encumbrance by such Participant during the
Participant's lifetime and therefore the Options are exercisable during the
Participant's lifetime only by the Participant. The obligations of each
Participant shall be binding on his or her heirs, executors and administrators.
12. Employment, Consulting and Board Position Non-Contractual
The granting of an Option to a Participant under the Plan does not
confer upon the Participant any right to continue in the employment of the
Company or any subsidiary of the Company or as a member of the Board of
Directors, as the case may be, nor does it interfere in any way with the rights
of the Employee or Consultant or of the Company's rights to terminate the
Employee's employment or Consultants's services at any time or of the
shareholders' right to elect directors.
<PAGE>
13. Rights and Obligations as Shareholders
Participants shall not have any rights as a shareholder with respect to
Option Shares until:
(a) full payment has been made to the Company;
(b) a share certificate or share certificates have been duly
issued; and
(c) the Participant becomes a party to any existing unanimous
shareholders' agreement and/or any other agreement or
voting trust generally applicable to Employees and/or
Consultants of the Company.
Upon becoming a shareholder of the Company, a Participant may only be
entitled to sell Common Shares in accordance with and subject to the terms of
any existing unanimous shareholders' agreement and/or any other agreement or
voting trust generally applicable to generally applicable to Employees and/or
Consultants of the Company.
14. Administration Of The Plan
The Plan shall be administered by the Committee. The Committee shall
have the power to interpret and construe the terms and conditions of the Plan
and the Options. Any determination by the Committee shall be final and
conclusive on all persons affected thereby unless otherwise determined by the
Board of Directors. The day-to-day administration of the Plan may be delegated
to such officers and employees of the Company or any subsidiary of the Company
as the Committee shall determine.
15. Financial Assistance
The Committee may authorize the Company to lend or cause to be lent to
Employees, Consultants or Directors such portion of the purchase price of the
Option Shares under the Plan as an Employee, Consultant or Director may request
and the Committee administering the Plan may approve. The terms and conditions
of such loan which may be interest free, are to be determined by the Committee.
16. Notices
All written notices to be given by the Participant to the Company may
be delivered personally or by registered mail, postage prepaid, addressed as
follows:
Extreme Packet Devices Inc.
309 Legget Drive, Suite 204
Kanata, Ontario
K2K 3A3
Attention: Secretary.
Any notice given by the Participant pursuant to the terms of the Option
shall not be effective until actually received by the Company at the above
address. Any notice to be given to the Participant shall be sufficiently given
if delivered personally (effective at the time of delivery), by facsimile
transmission (effective one day after transmission) or by postage prepaid mail
to the last address of the Participant on the records of the Company and shall
be effective five days after mailing.
17. Corporate Action
Nothing contained in the Plan or in the Option shall be construed so as
to prevent the Company or any subsidiary of the Company from taking corporate
action which is deemed by the Company or the subsidiary to be appropriate or in
its best interest, whether or not such action would have an adverse effect on
the Plan.
<PAGE>
18. Amendments
The Board of Directors of the Company shall have the right, in its sole
discretion, to alter, amend or discontinue the Plan from time to time and at any
time. No such amendment or discontinuation, however, may, without the consent of
the Participant, alter or impair his rights or increase his obligations under
the Plan. Any amendment to the Plan may require the prior approval of the
Exchange and may require the approval of the Company's shareholders.
19. Termination Of Plan
Except as otherwise provided herein, Options may be granted only within
the five year period from the date the Plan has been adopted by the Board of
Directors of the Company.
20. Governing Law
The Plan is established under the laws of the Province of Ontario and
the rights of all parties and the construction and effect of each provision of
the Plan shall be according to the laws of the Province of Ontario and the laws
of Canada applicable therein.
21. Government Regulation
The Company's obligation to issue and deliver Common Shares under any
Option is subject to:
(a) the satisfaction of all requirements under applicable
securities law in respect thereof and obtaining all
regulatory approvals as the Company shall determine to be
necessary or advisable in connection with the
authorization, issuance or sale thereof, including
shareholder approval, if required;
(b) the admission of such Common Shares to listing on any
stock exchange on which Common Shares may then be listed;
and
(c) the receipt from the Participant of such representations,
agreements and undertakings as to future dealings in such
Common Shares as the Company determines to be necessary or
advisable in order to safeguard against the violation of
the securities law of any jurisdiction.
In this connection, the Company shall take all reasonable steps to
obtain such approvals and registrations as may be necessary for the issuance of
such Common Shares in compliance with applicable securities law and for the
listing of such Common Shares on any stock exchange on which such Common Shares
are then listed.
DATED this 27th day of May, 1999, as amended November ___, 1999.
EXTREME PACKET DEVICES INC.
Per:________________________________
Authorized Officer
Extreme Packet Devices Inc. Stock Option Grant Confirmation Letter
_______, 200_
[Optionee]
[Address]
Dear ______:
Re: Extreme Packet Devices Inc. 1999 Stock Option Plan (the "Plan")
This will confirm that an option (the "Option") to purchase common shares (the
"Shares") of Extreme Packet Devices Inc. (the "Company") has been granted to you
pursuant to the Plan as follows:
Date of Grant: _____________
Number of Shares: ______ ("Option Shares")
Price per Share: CDN$__.__ ("Option Price")
Vesting: As set forth in the Plan
Expiry Date of Option: As set forth in the Plan
Unless otherwise expressly stated herein, the Option is subject to the terms and
conditions set forth in the Plan, as same may be amended or replaced from time
to time, and in addition shall be subject to the terms and conditions
hereinafter set forth.
By signing and returning to the Company the enclosed duplicate copy of this
letter, you become eligible to participate in the Plan and you acknowledge and
agree to be bound by the terms and conditions as set out both in the Plan and in
this letter (collectively, the "Stock Option Agreement").
<PAGE>
You agree that all of your obligations hereunder shall be binding upon your
administrators, successors and assigns. This Stock Option Agreement shall be
governed by, construed and enforced in accordance with the laws of the Province
of Ontario and the laws of Canada applicable therein.
Should you have any questions or concerns regarding tax or legal issues of this
plan, we suggest you consult your legal or tax advisor.
Kindly acknowledge receipt of this letter, as well as a copy of the attached
Plan, by signing a counterpart of this letter and returning the same to me.
Yours very truly,
Bruce Gregory
President & CEO
Extreme Packet Devices Inc.
309 Legget Drive, Suite 204
Kanata, Ontario
K2K 3A3
March __, 2000
EPD Option Holder
Dear ________:
Re: Acquisition of Extreme Packet Devices Inc. ("EPD") by PMC Sierra, Inc.
As you are no doubt aware, EPD's Board of Directors has accepted an offer from
PMC Sierra, Inc. ("PMC") to acquire all of the issued and outstanding common
shares of EPD in exchange for special shares of EPD that will be exchangeable
for PMC common shares valued at closing at US $415 million (the "Acquisition").
PMC common shares are publicly traded on the NASDAQ National Market.
This letter is written to explain what rights you, as an EPD option holder as
opposed to an EPD shareholder, have with respect to the Acquisition. Generally,
the options that you currently hold to purchase EPD common shares will, on
closing, be assumed by PMC and accordingly become exchanged for options to
purchase PMC common shares. A more detailed discussion of the process of this
transaction follows.
There are four major elements to any stock options granted under EPD's 1999
Stock Option Plan: (1) the number of common shares under option; (2) the
exercise price per common share; (3) the vesting period of the option grant; and
(4) the expiry of the option grant.
We will review how the Acquisition impacts on each of these elements.
(1) Number of Common Shares Under Option
Under the agreement arrived at between EPD and PMC, EPD option holders are to be
treated identically to EPD shareholders as to the number of PMC common shares to
which they will be entitled to acquire for each EPD common share.
The exact number of PMC common shares will not be calculated until just prior to
closing, however, based on the closing price of PMC common shares on March 10,
2000 (US$245.4375), the exchange ratio would be approximately 0.1913 of a PMC
common share for each EPD common share. For example, an EPD shareholder who owns
10,000 EPD common shares will be entitled to receive, through the mechanics of
the Acquisition, 1,913 PMC common shares. Consequently, an option to purchase up
to 10,000 EPD common shares will, following the Acquisition, become an option to
purchase up to 1,900 PMCS common shares.
(2) Exercise Price per Common Share
While the option exercise price per share changes after closing, the total
exercise price paid for the exercise of your stock options will remain the same.
For example, if you hold an option to purchase up to 10,000 EPD common shares at
CDN $3.00 per share, using the exchange rate example provided above, after the
Acquisition, your current option will be converted into an option to purchase up
to 1,913 PMC common shares at approximately CDN $15.68 per share. Both before
and after closing, the total amount paid for the exercise of such stock options
will be CDN $30,000.
<PAGE>
(3) Vesting Period of the Option Grant
The options that you currently hold were granted pursuant to the Extreme Packet
Devices Inc. 1999 Stock Option Plan (the "Plan"), a copy of which has been
previously provided to you. Pursuant to the Plan, your options are to vest over
a four-year period from their date of grant, with 25% of the grant vesting on
the first anniversary of the date of grant, and 2.08% of the remaining grant
vesting on the first day of each month thereafter, starting in the first month
after the first anniversary of the date of grant.
Under the terms of the Acquisition, your options will continue to be governed by
the provisions of the Plan, so that the vesting schedule of your options will
remain unchanged from that noted above.
(4) Expiry of the Grant
Under the Plan, all options granted thereunder expire on the fifth anniversary
of their date of grant.
It is anticipated that the Acquisition will have no effect on the expiry
provisions of your options.
We thank you for your contributions to Extreme Packet Devices Inc. to date and
we look forward to break new ground with PMC-Sierra, Inc. in the future.
EXTREME PACKET DEVICES
on behalf of the Board of Directors.
On behalf of PMC-Sierra, Inc. the undersigned hereby confirms and acknowledges
that the foregoing accurately represents the agreement between PMC-Sierra, Inc.
and Extreme Packet Devices Inc. with respect to options granted to employees,
directors and consultants of Extreme Packet Devices Inc. under the Extreme
Packet Devices Inc. 1999 Stock Option Plan.
PMC-SIERRA, INC.
Per: _______________________________
Name: _______________________________
Title: _______________________________
I hereby agree to the foregoing amendments to the stock options granted to me by
Extreme Packet Devices Inc.
Per: _______________________________
Name: _______________________________
Title: _______________________________
WILSON SONSINI GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CALIFORNIA 94304-1050
TELEPHONE 650-493-9300 FACSIMILE 650-493-6811
April 12, 2000
PMC-Sierra, Inc.
105-8555 Baxter Place
Burnaby, British Columbia V5A 4V7
Canada
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8 to be filed by
PMC-Sierra, Inc. ("PMC") with the Securities and Exchange Commission on or about
April 12, 2000 (the "Registration Statement") in connection with the
registration under the Securities Act of 1933, as amended, of 314,891 shares
(the "Shares") of PMC common stock to be issued under Extreme Packet Devices
Inc. ("EPD") 1999 Stock Option Plan ("EPD Plan") assumed by PMC pursuant to the
Amended and Restated Acquisition Agreement dated April 6, 2000 between PMC,
600444 B.C. Ltd., EPD, and State Street Bank and Trust Company of California,
N.A. (the "Acquisition Agreement"). As PMC's counsel in connection with this
transaction, we have examined the proceedings taken and are familiar with the
proceedings proposed to be taken by PMC in connection with the issuance and sale
of the Shares pursuant to the EPD Plan.
It is our opinion that, when shares of PMC are issued and sold pursuant
to options granted in the manner described in the EPD Plan and the agreements
which accompany each option grant and pursuant to the Acquisition Agreement, the
Shares will be legally and validly issued, fully paid and non-assessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement, and further consent to the use of our name wherever appearing in the
Registration Statement and any amendments thereto.
Very truly yours,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
/s/Wilson Sonsini Goodrich & Rosati
CONSENT OF DELOITTE & TOUCHE LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated January 17, 2000, with respect to the
consolidated financial statements and schedule of PMC-Sierra, Inc., included in
the Annual Report (Form 10-K), as ammended, for the year ended December 26,
1999, filed with the Securities and Exchange Commission.
/s/DELOITTE & TOUCHE LLP
Vancouver, British Columbia, Canada
April 11, 2000
