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UNITED STATES
SECURITIES AND EXCHA NGE COM MISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHA N GE ACT OF 1934
For the fiscal year ended: December 30, 2001
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHA N GE ACT OF 1934
For the transition period from: to
Commissi on File Number 0-19084
PM C-Sierra, Inc.
(Exact name of registrant as specifi ed in its charter)
Del aw are
(State or other jurisdiction of incorporation)
94-2925073
(I.R.S. Employer Identification N o.)
3975 Freedom Circle
Santa Clara, CA 95054
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (408) 369-1176
Securities registered pursuant to Section 12(b) of the Act: N one
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $0.001
Preferred Stock Purchase Rights
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 15th, 2002, as reported by the Nasdaq National Market,
was approximately $1,898,781,000. Shares of Common Stock held by each executive officer and director and
by each person known to the Registrant 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 15th, 2002, the Registrant had 166,203,216 shares of Common Stock outstanding.
DOCUM ENTS I NCORPORATED BY REFERENCE
Portions of the Proxy Statement for Registrant's 2002 Annual Meeting of Stockholders to be held on May 30, 2002 are
incorporated by reference into Part III, Items 10, 11, 12 and 13 of this Form 10-K Report.

Table of contents

  • Page 1
    ... of the voting stock held by nonaffiliates of the Registrant, based upon the closing sale price of the Common Stock on February 15th, 2002, as reported by the Nasdaq National M arket, was approximately $1,898,781,000. Shares of Common Stock held by each executive officer and director and by each...

  • Page 2
    ... our intellectual property and expertise in communications technologies. PM C-Sierra w as incorporated in the State of California in 1983 and reincorporated in the State of Delaw are in 1997. Our Common Stock trades on the N asdaq N ational M arket under the symbol "PM CS" and is included in the...

  • Page 3
    ... identified under " Factors That You Should Consider Before Investing In PM C-Sierra" and elsew here in this A nnual Report. IN DUSTRY OVERVIEW During the 1990's, the Internet experienced enormous grow th as more households, enterprises and corporations connected to and increased their utilization...

  • Page 4
    ...equipment programs. Due to this market dow nturn, w e experienced a significant drop in sales of our products. The impact of the dow nturn w as magnified by the high levels of inventory that existed at our distributors, the contract manufacturers, and the OEM s at the beginning of 2001. A s a result...

  • Page 5
    ... cost of custom semiconductors, has resulted in the OEM s outsourcing more of their communications integrated circuit requirements to companies such as PM C-Sierra. A t the same time, some of the OEM s have undergone corporate restructurings and have few er resources and technical staff to dedicate...

  • Page 6
    ... factors. In many cases, it can take several years before a new silicon chip or chip set can be designed, manufactured, tested, and released to full production for a customer. It is essential, therefore, that the companies like PM C-Sierra that develop the chips to be incorporated into the OEM...

  • Page 7
    ... multiple chip sets, integrate different functions and could be classified in one or more categories. For example, some of our products both convert high-speed analog signals to digital signals, and also split or combine various transmission signals. • Line interface units: these devices, also...

  • Page 8
    ... develop custom chips. By outsourcing more of the silicon content in their netw orking and telecom equipment, OEM s can improve their time-to-market and reduce development risk w hile differentiating their products in other w ays. Provide first-class products, customer service and technical support...

  • Page 9
    ... Statements. SA LES, M A RKETIN G A N D D ISTRIBUTION Our sales and marketing strategy is to have our products designed into our customers' equipment by developing superior products for w hich w e provide premium service and technical support. We maintain close w orking relationships w ith many of...

  • Page 10
    ... percentage of their orders directly to the contract manufacturers and a low er percentage w ill be shipped through our distributors over time. Cisco Systems and Lucent Technologies each represented more than 10% of our 2001 revenues based on total sales to end customers (i.e. based on shipments...

  • Page 11
    ... under one of the agreements to purchase a minimum percentage of our total annual w afer requirements provided that the foundry is able to continue to offer competitive technology, pricing, quality and delivery. The agreements may be terminated if either party does not comply w ith the terms. Wafers...

  • Page 12
    ... assets, have established sales channels, and depend on the market in w hich w e participate for the bulk of their revenues. Other competitors include major domestic and international semiconductor companies, such as Cypress Semiconductor, Intel, IBM , Infineon, Integrated Device Technology, M axim...

  • Page 13
    ... companies to incorporate other features in our products. Our only material license is the M IPS microprocessor architecture license from M IPS Technologies Inc., on w hich our microprocessor-based products are based. While the desktop microprocessor market is dominated by the Intel Corporation...

  • Page 14
    ..., engineering, product test, sales and marketing operations. Our Canadian headquarters is located in Burnaby, British Columbia w here w e lease 254,000 square feet of office space in five separate buildings. These locations support a significant portion of our product development, manufacturing...

  • Page 15
    ...245.00 Fourth Quarter ...227.19 2001 Hi gh Low $24.74 19.12 10.05 9.87 First Quarter ...$105.94 Second Quarter ...44.81 Third Quarter ...36.87 Fourth Quarter ...29.24 The prices presented above reflect a tw o-for-one stock split in the form of a 100% stock dividend that w e issued on February 14...

  • Page 16
    ...charges Impairment of goodwill and purchased intangible assets Costs of merger Acquisition of in process research and development Income (loss) from operations Gain (loss) on investments Net income (loss) Net income (loss) per share - basic: (4) (4) (2) 2000 1999 1998 1997 (3) 322,738 137,262...

  • Page 17
    ...of deferred stock compensation: Research and development Marketing, general and administrative Amortization of goodwill Restructuring costs and other special charges Impairment of goodwill and purchased intangible assets Costs of merger Acquisition of in process research and development Income (loss...

  • Page 18
    ... capital resources sufficiency; capital expenditures; restructuring activities, expenses and associated annualized savings; and our business outlook. PM C releases earnings at regularly scheduled times after the end of each reporting period. Typically w ithin one hour of the release, w e w ill hold...

  • Page 19
    ... and sale of netw orking products that addressed additional netw ork functions, and a significant increase in our customers' inventory of our products. Non-networking N on-netw orking revenues declined 22% in 2001 compared to an increase of 68% in 2000. These changes reflect the volume of...

  • Page 20
    ...certain of our customers' programs plus a charge of $18.6 million for inventory levels in excess of estimated 12-month demand (see " Critical A ccounting Policies and Significant Estimates" ). Our netw orking gross profit increased by $301.3 million in 2000 due to increased sales volumes but did not...

  • Page 21
    ...by $11.8 million due to our continued investment in new tools and equipment in support of our continuing research and development efforts. Our 2001 R& D expenses also increased by $4.2 million as a result of acquisitions that w e completed during 2000 and accounted for under the purchase method. 21

  • Page 22
    ... in sales commissions as a result of the decline in our revenues. M G& A expenses increased by approximately $1.2 million in 2001 as a result of the full year impact of acquisitions made during 2000 that w ere accounted for under the purchase method. Through our tw o restructuring programs in 2001...

  • Page 23
    ... million in 2000 and $5.1 million in 1999. In 2001, our amortization of deferred stock compensation increased compared to 2000 due to accelerated vesting related to certain employees terminated as a result of our tw o restructurings. Our acquisitions of A A N etcom, A brizio, QED, Sw itchOn, Toucan...

  • Page 24
    ... the date of acquisition w e estimated that M alleable's technology w as 58% complete and the costs to complete the project to be $4.4 million. The technology acquired from Datum is a digitally controlled amplifier architecture, w hich w as designed to increase base station system capacities, w hile...

  • Page 25
    ...the chip incorporating the technology acquired from...stations, w e failed to achieve the revenues, net income, and return on investment expected at the time that the acquisition...management approved the restructuring plan committing PM C to the termination of 223 employees, the consolidation of a number...

  • Page 26
    ... a second restructuring plan in the fourth quarter of 2001 to reduce our operating cost structure. Prior to the end of the fourth quarter, management approved the second restructuring plan committing PM C to the termination of 341 employees, the consolidation of additional excess facilities...

  • Page 27
    ...CA building lease committed to in 2000. The charge for this excess facility is recorded net of expected future sublease revenue. See " Critical A ccounting Policies and Significant Estimates" . Certain leasehold improvements located at the closed facilities and computer equipment, softw are licenses...

  • Page 28
    ... $ 1999 26.8 9% We reported a net loss on investments of $14.6 million in 2001, and gains on investments of $58.5 million in 2000 and $26.8 million in 1999. In 2001, w e recorded $2.9 million of gains on the sale of a portion of our investment in Sierra Wireless, Inc., a public company, as w ell as...

  • Page 29
    ... Intangible A ssets". SFA S 141 requires that business combinations be accounted for under the purchase method of accounting and addresses the initial recognition and measurement of assets acquired, including goodw ill and intangibles, and liabilities assumed in a business combination. SFA S 142...

  • Page 30
    ... amount, if any, of sublease revenues. This required us to estimate the timing and costs of each lease to be terminated, the amount of operating costs, and the timing and rate at w hich w e might be able to sublease the site. To form our estimates for these costs w e performed an assessment of the...

  • Page 31
    ... of the technology and assets acquired in the purchase of Datum Telegraphic, Inc. We estimated the future cash flow s of those assets in light of continued w eak industry conditions, low er market grow th expectations, and delays in our customers' clients moving to next generation w ireless services...

  • Page 32
    ... sales of our non-netw orking device to decline significantly by the second quarter of 2002 as the next generation product that our principal customer has designed no longer incorporates our non-netw orking device. We expect our total R& D and M G& A expenses to decline in 2002 as compared to 2001...

  • Page 33
    ... 15, 2006. The notes are convertible into shares of our common stock at a conversion price of approximately $42.43 per share, and are subject to restrictive covenants including those concerning payments on the notes and other indebtedness. In the event of a change in control of PM C, the noteholders...

  • Page 34
    ... for exiting and terminating operating lease facilities included in the above table. We participate in four professionally managed venture funds that invest in early-stage private technology companies in markets of strategic interest to us. From time to time these funds request additional capital...

  • Page 35
    ... have been cancelled as our customers cancel or restructure product development initiatives or as venture-financed startup companies fail. Our revenues may be materially and adversely impacted beyond 2001 if these conditions continue or w orsen. Our customers' actions have materially and adversely...

  • Page 36
    ... verify or crosscheck the information w e receive from the companies w e survey. We obtain this information over extended periods and do not adjust the information for the time at w hich a response w as received. • • • While w e intend to monitor contract manufacturer and large OEM customer...

  • Page 37
    ... t ern. We depend on a limited number of customers for a major portion of our revenues. Through direct, distributor and subcontractor purchases, Cisco Systems and Lucent Technologies each accounted for more than 10% of our fiscal 2001 revenues. Both of these companies have recently announced order...

  • Page 38
    ...sales of new system level products by our customers do not increase over time. We may experience this more w ith design w ins from early stage companies, w ho tend to focus on leading-edge technologies... losses. Restructuring plans require significant management resources to execute and w e may fail ...

  • Page 39
    ..., have established sales channels, and are dependent on the market in w hich w e participate for the bulk of their revenues. Other competitors include major domestic and international semiconductor companies, such as Cypress Semiconductor, Intel, IBM , Infineon, Integrated Device Technology, M axim...

  • Page 40
    ..., and new manufacturing and design technologies. M any of the standards and protocols for our products are based on high-speed netw orking technologies that have not been w idely adopted or ratified by one or more of the standard-setting bodies in our customers' industry. Our customers often delay...

  • Page 41
    A cquiring products, technologies or businesses from third parties is part of our business strategy. M anagement may be diverted from our operations w hile they identify and negotiate these acquisitions and integrate an acquired entity into our operations. A lso, w e may be forced to develop ...

  • Page 42
    ..., our stock price has declined substantially. The stock options w e grant to employees are effective as retention incentives only if they have economic value. Our recent restructurings have significantly reduced the number of our technical employees. We may experience customer dissatisfaction as...

  • Page 43
    ... semiconductor device requirements. Our foundry suppliers also produce products for themselves and other companies. In addition, w e may not have access to adequate capacity or certain process technologies. We have less control over delivery schedules, manufacturing yields and costs than competitors...

  • Page 44
    ... delivery delays that, in turn, may result in the loss of revenues. 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 l i mi t ed number of desi gn soft w are suppl i ers, t he l oss...

  • Page 45
    In addition, w hile all of our sales are denominated in US dollars, our customers' products are sold w orldw ide. A ny further decline in the w orld netw orking markets could seriously depress our customers' order levels for our products. This effect could be exacerbated if fluctuations in currency ...

  • Page 46
    ... to third party claims than some of our larger 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. Customers may also make claims against us w ith respect...

  • Page 47
    ...ue of our common stock . Our certificate of incorporation and bylaw s and Delaw are law contain provisions that could make it harder for a third party to acquire us w ithout the consent of our board of directors. Delaw are law also imposes some restrictions on mergers and other business combinations...

  • Page 48
    ... Other Investments: Other investments at December 31, 2001 include a minority investment of approximately 2.3 million shares of Sierra Wireless Inc., a publicly traded company. This investment is subject to certain resale restrictions. 1.2 million shares w ill be released from these restrictions in...

  • Page 49
    ... released at a later date. A t December 31, 2001, w e held approximately 85,000 shares of Intel Corporation. It is our intention to sell these securities in the first quarter of 2002. Our public company investments are subject to considerable market price volatility and are additionally risky due to...

  • Page 50
    ...in A ugust 2001. Because w e pay fixed interest coupons on our notes, market interest rate fluctuations do not impact our debt interest payments. H ow ever, the fair value of our convertible subordinated notes w ill fluctuate as a result of changes in the price of our common stock, changes in market...

  • Page 51
    ... Part II hereof is hereby incorporated by reference into the Item 8 of Part II of this Form 10-K. Consolidated Financial Statements Included in Item 8: Page 52 53 54 55 56 57 Independent A uditors Report Consolidated Balance Sheets at December 31, 2001 and 2000 Consolidated Statements of Operations...

  • Page 52
    Independent A uditors Report The Board of Directors of PM C-Sierra, Inc. We have audited the accompanying consolidated balance sheets of PM C-Sierra, Inc. as of December 31, 2001 and 2000 and the related consolidated statements of operations, stockholders' equity and cash flow s for each of the ...

  • Page 53
    ...SOLI D A TED BA LA N CE SH EETS (in thousands, except par value) December 31, 2001 2000 A SSETS: Current ...shares convertible into 3,373 (2000 - 3,746) shares of common stock Stockholders' equity Common stock and additional paid in capital, par value $.001: 900,000 shares authorized; 165,702 shares...

  • Page 54
    ... Costs of merger A cquisition of in process research and development Income (loss) from operations Interest and other income, net Gain (loss) on investments Income (loss) before provision for income taxes Provision for (recovery of) income taxes N et income (loss) N et income (loss) per common share...

  • Page 55
    ... DA TED STA TEM EN TS OF CA SH FLOWS (in thousands) 2001 Cash f l ow s from operati ng acti vi ti es: N et income (loss) A djustments to reconcile net income (loss)...PM C-Sierra special shares into common stock Issuance of common stock and stock options for acquisitions under the purchase method of ...

  • Page 56
    ... Change in net unrealized gains on investments Comprehensive loss Conversion of special shares into common stock Issuance of common stock under stock benefit plans Deferred stock compensation A mortization of deferred stock compensation Bal ances at D ecember 31, 2001 133,931 792 12,432 9 757 88 148...

  • Page 57
    ...utilized as the fiscal year end for all financial statement captions. Fiscal years 2001 and 1999 each consisted of 52 w eeks. Fiscal year 2000 consisted of 53 w eeks. The Company's reporting... specific identification method. The proceeds from sales and realized gains or losses on sales of short-term...

  • Page 58
    ... w afers are purchased based on current market pricing and the Company's volume requirements change in relation to sales of its products. In each year, the Company is entitled to receive a refund of a portion of the deposits based on the annual purchases from these suppliers compared to the target...

  • Page 59
    ... the outstanding deposits w ill be refunded to the Company at the termination of the agreements. Property and equipment, net . Property and equipment are stated at cost, net of w rite-dow ns for impairment, and depreciated using the straight-line method over the estimated useful lives of the assets...

  • Page 60
    ... due from one of the Company's distributors. The Company believes that this concentration and the concentration of credit risk resulting from trade receivables ow ing from high-technology industry customers is substantially mitigated by the Company's credit evaluation process, relatively short...

  • Page 61
    ... on a limited number of suppliers for w afer fabrication capacity. Revenue recognition. Revenues from product sales direct to customers and minor distributors are recognized at the time of shipment. The Company accrues for w arranty costs, sales returns and other allow ances at the time of shipment...

  • Page 62
    ... value to identify possible impairment and then, if necessary, the impairment is measured through a deemed purchase price allocation. Under this standard, the Company w ill also be required to review the useful lives of acquired goodw ill and intangible assets at least annually. The Company is...

  • Page 63
    ...processor company, w ith offices in the United States and India. Under the terms of the agreement, approximately 2,112,000 shares of common stock w ere exchanged and options assumed to acquire Sw itchOn. PM C-Sierra recorded merger related transaction costs of $1.1 million related to the acquisition...

  • Page 64
    ... design. A t December 31, 1999, the Company ow ned seven per cent of Toucan and purchased the remainder for approximately 300,000 shares of common stock and stock options. PM C-Sierra recorded merger-related transaction costs of $534,000 related to the acquisition of Toucan. These charges, w hich...

  • Page 65
    ... company that specialized in broadband sw itch chip fabrics used in core A TM sw itches, digital cross connects, and terabit routers. Under the terms of the agreement, approximately 8,704,000 shares of common stock w ere exchanged and options assumed to acquire A brizio. PM C-Sierra recorded merger...

  • Page 66
    ... the purchase of Octera Corporation, a privately held company located in San Diego, CA , that provided digital design services for A pplication Specific Integrated Circuits ("A SICs"), boards and systems w ith its primary focus on A SIC design. The Company paid cash and issued common stock w ith an...

  • Page 67
    ... statements include the operating results of each acquisition from the respective acquisition dates. The fair value of the common shares of the Company issued to acquire M alleable, Datum, and Octera w as based on the closing market price of the Company's stock a short period before and after the...

  • Page 68
    ... ork equipment. The technology acquired from Datum w as a digitally controlled amplifier architecture, w hich w as designed to increase base station system capacities, w hile reducing cost, size and pow er consumption of radio netw orks. A t the date of acquisition, the Company estimated that Datum...

  • Page 69
    this chip and has extended development of the Datum technology to a follow -on product. The general economic slow dow n has delayed the introduction of the third generation base stations into w hich the Company expects to incorporate this technology, but the Company expects these products to begin ...

  • Page 70
    ...(0.21) Net revenues Net income (loss) Pro forma basic earnings (loss) per share Pro forma diluted earnings (loss) per share The pro forma results of operations give... management approved the restructuring plan committing the Company to the termination of 223 employees, the consolidation of a number ...

  • Page 71
    ... of the charge for excess facilities relates to a Santa Clara, CA building lease committed to in 2000. To form the plan for the termination of excess lease facilities, the Company considered local market conditions for each site and estimated the timing and amount of sublease revenues. The 71

  • Page 72
    ... $20.7 million during the year ended December 31, 2001. The continued industry w ide reduction in capital spending and resulting decrease in demand for the Company's products prompted the Company to assess its current inventory levels compared to sales forecasts for the next tw elve months. This...

  • Page 73
    ... 31, 2001, the Company held 2.3 million shares (2000 - 2.4 million shares) of Sierra Wireless, Inc., of w hich 1.2 million shares w ere subject to resale restrictions and could not be sold until M ay 2002. The Company has classified the shares as available-for-sale and has reported the entire...

  • Page 74
    ... term notes bear interest at a rate of 3.75% per annum and are convertible into an aggregate of approximately 6,480,650 shares of PM C's common stock at any time prior to maturity, at a conversion price of approximately $42.43 per share. The Company may redeem the notes, in w hole or in part, at any...

  • Page 75
    ... a minimum percentage of its total annual w afer requirements, provided that the foundry is able to continue to offer competitive technology, pricing, quality and delivery. Investment agreements. The Company participates in four professionally managed venture funds that invest in early-stage private...

  • Page 76
    ... the number of shares of PM C common stock issuable on conversion plus a nominal amount per share plus unpaid dividends, or at the holder's option convert into LTD ordinary shares, w hich are the functional equivalent of voting common stock. If the Company files for bankruptcy, is liquidated...

  • Page 77
    ... outstanding at a w eighted average exercise price of $3.87 per share, respectively. Convertible Preferred Stock of QED . QED, w hich w as acquired by PM C in A ugust 2000 in a transaction accounted for under the pooling method (see N ote 2), had preferred stock comprised of $0.001 par value per...

  • Page 78
    ... 1 of each year, (ii) 45,000,000 shares, or (iii) an amount to be determined by the Board of Directors. In addition, the Company assumed the stock option plans of each of the companies it acquired prior to 2001 (see N ote 2). In 2001, the company simplified its plan structure by merging these plans...

  • Page 79
    ...98 - $15.98 $16.55 - $18.26 $18.50 - $48.31 $52.38 - $245.00 $0.02 - $245.00 Weighted A verage Exercise Price per Share $ 2.65 $10.51 $18.26 $21.71 $91.18 $26.82 Stock-based compensation. In accordance w ith the provisions of Statement of Financial A ccounting Standards N o. 123, " A ccounting for...

  • Page 80
    ... grant. Pro forma information regarding net income (loss) and net income (loss) per share is required by SFA S 123 for aw ards granted or modified after December 31, 1994 as if the Company had accounted for its stock-based aw ards to employees under the fair value method of SFA S 123. The fair value...

  • Page 81
    ... follow ing: 2001 $ Year Ended December 31, 2000 1999 4 (7,034) (7,030) (10,733) (10,733) $ (17,763) $ $ 40 224 100,880 101,144...een the Company's effective tax rate and the U.S. Federal statutory rate is as follow s: 2001 Year Ended...intangible assets Acquisition costs Deferred stock compensation ...

  • Page 82
    ... $1.1 million of state manufacturer's investment credits w hich expire through 2010. Included in the above net operating loss carryforw ards are $23.8 million and $8.6 million of federal and state net operating losses related to acquisitions accounted for under the purchase method of accounting. The...

  • Page 83
    ... consists of internetw orking semiconductor devices and related technical service and support to equipment manufacturers for use in their communications and netw orking equipment. The non-netw orking segment includes custom user interface products. The Company is supporting a non-netw orking product...

  • Page 84
    ... assets United States Canada Other Total $ 267,298 89,684 4,133 $ 361,115 $ 341,361 210,006 3,720 $ 555,087 The Company's largest customers based on billings are contract manufacturing companies and distributors of the Company's products. Revenues from external customers (2001 - 2, 2000 - 1, 1999...

  • Page 85
    ...$ 75,298 $ 1999 71,829 Net income (loss) Other comprehensive income: Change in net unrealized gains on investments, net of tax of $4,914 in 2001 (2000 - $22,629 and 1999 - nil... 76,000 common shares of the Company, and matures on December 31, 2002. A s at December 31, 2001, the full amount...

  • Page 86
    ... concerning the Company's directors and executive officers required by this Item is incorporated by reference from the information set forth in the sections entitled " Election of Directors", "Executive Officers", and "Section 16(a) Beneficial Ow nership Reporting Compliance" in our Proxy Statement...

  • Page 87
    ... 1995 (6) ...Terms of PMC-Sierra, Ltd. Special Shares (7) ...Preferred Stock Rights Agreement, as amended and restated as of July 27, 2001, by and between the Registrant and American Stock Transfer and Trust Company (8)...Form of Convertible Note and Indenture dated August 6, 2001 by and between the...

  • Page 88
    ... No. 1 to the Technology License Agreement, by and between MIPS Technology, Inc. and PMC-Sierra US, Inc. (formerly Quantum Effect Devices, Inc.) dated March 31, 1997. (26)...11.1 21.1 23.1 24.1 Calculation of earnings per share. (27)...Subsidiaries of the Registrant...Consent of Deloitte & Touche...

  • Page 89
    ... the Commission on N ovember 14, 2001. Incorporated by reference from Exhibit 10.44 filed w ith the Registrant's A nnual Report on Form 10-K filed w ith the Commission on A pril 2, 2001. Incorporated by reference from Exhibit 10.45 filed w ith the Registrant's A nnual Report on Form 10-K filed w ith...

  • Page 90
    ... of Section 13 or 15(d) of the Securities Exchange A ct of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. PM C-SIERRA, INC. (Registrant) Date: M arch 27, 2002 / s/ John Sullivan_____ John W. Sullivan Vice President, Finance...

  • Page 91
    / s/ Frank M arshall Frank M arshall / s/ Lewis O. Wilks Lewis O. Wilks Director M arch 27, 2002 Director M arch 27, 2002 91

  • Page 92
    ...al uati on and Qual i f yi ng A ccounts Years ended December 31, 2001, 2000, and 1999 (in thousands) Allowance for Doubtful Accounts Balance at beginning of year... 810 420 439 Additions charged to other accounts - Year 2001 2000 1999 Write-offs 119 39 14 Balance at end of year $ $ $ 2,625 1,934 ...

  • Page 93
    I N D EX TO EXH I BI TS Exhibit Number Description Page Number 10.3 21.1 23.1 2001 (Nonstatutory) Incentive Stock Plan Subsidiaries Consent of Deloitte & Touche LLP 93