Corporate Governance

Corporate Governance Guidelines

Members of the Board

Charters

Below are the charters for the Company's three committees of the Board, namely:

• Audit Committee


• Compensation Committee


• Nominating and Corporate Governance Committee

This Audit Committee Charter (Charter) has been adopted by the Board of Directors (the Board) of PMC-Sierra, Inc (Company). The Audit Committee of the Board (the Committee) shall review and reassess this charter at least annually and recommend any proposed changes to the Board for approval.

MEMBERSHIP AND ORGANIZATION

The membership of the Committee shall consist of at least three directors, who are each free of any relationship that, in the opinion of the Board, may interfere with such member's individual exercise of independent judgment, who meet the independence requirements of the Nasdaq Stock Market (Nasdaq) and the Securities and Exchange Commission (SEC) and meet the financial literacy requirements for serving on audit committees. At least one member shall be designated by the Board as the "audit committee financial expert" as defined by Nasdaq and SEC.

One member of the Committee shall be appointed as chair. The chair shall be responsible for leadership of the Committee, including scheduling and presiding over meetings, preparing agendas, and making regular reports to the Board. The chair will also maintain regular liaison with the CEO, CFO, and the lead independent audit partner.

The Committee shall meet at least six times a year, or more frequently as the Committee considers necessary. At least once each year the Committee shall have separate private meetings with the independent auditors and management.

RESPONSIBILITIES AND AUTHORITY

The Committee assists the Board in fulfilling its responsibility for oversight of the quality and integrity of the accounting, auditing, internal control and financial reporting practices of PMC. It may also have such other duties as may from time to time be assigned to it by the Board. The Committee shall maintain free and open communication with the independent auditors and Company management.

The Committee is empowered to investigate any matter relating to PMC's accounting, internal control or financial reporting practices brought to its attention, with full access to all Company books, records, facilities and personnel. The Committee has the authority to engage and determine funding for independent counsel and other advisors, as it deems necessary to carry out its duties.

Although the Committee may wish to consider other duties from time to time, the general recurring activities of the Committee in carrying out its oversight role are described below. The Committee shall be responsible for:

• Appointing, compensating, retaining and overseeing the work of the independent auditors (including resolving disagreements between management and the independent auditors regarding financial reporting) for the purpose of preparing or issuing an audit report or related work. The independent auditors shall report directly to the Committee.
• Pre-approving any audit and permitted non-audit services provided to the Company by the independent auditors (or subsequently approving non-audit services in those circumstances where a subsequent approval is necessary and permissible); in this regard, the Committee shall have the sole authority to approve the hiring and firing of the independent auditors, all audit engagement fees and terms and all non-audit engagements, as may be permissible, with the independent auditors.
• Obtaining annually from the independent auditors a formal written statement describing all relationships between the auditors and PMC, consistent with Independence Standards Board Standard Number 1. The Committee shall actively engage in a dialogue with the independent auditors with respect to any relationships that may impact the objectivity and independence of the auditors and shall take, or recommend that the Board take, appropriate actions to oversee and satisfy itself as to the auditors' independence.
• Reviewing the audited financial statements and any report rendered by the independent auditors and discussing them with management and the independent auditors. These discussions shall include the matters required to be discussed under Statement of Auditing Standards No. 61 and consideration of the quality of PMC's accounting principles as applied in its financial reporting, including a review of particularly sensitive accounting estimates, reserves and accruals, judgmental areas, audit adjustments (whether or not recorded), and other such inquiries as the Committee or the independent auditors shall deem appropriate. Based on such review, the Committee shall make its recommendation to the Board as to the inclusion of PMC's audited financial statements in PMC's Annual Report on Form 10 K.
• Reviewing and discussing reports from the independent auditors on all critical accounting policies and practices used by PMC, alternative accounting treatments within GAAP related to material items that have been discussed with management, including the ramifications of the use of the alternative treatments and the treatment preferred by the independent auditor, and other material written communications between the independent auditor and management.
• Issuing annually a report to be included in PMC's proxy statement as required by the rules of the SEC.
• Discussing with a representative of management and the independent auditors any issues arising from the independent auditors review of the quarterly financial statements prior to the filing of PMC's Quarterly Report on Form 10 Q.
• Reviewing with management and the independent auditors the quality and adequacy of and compliance with PMC's internal controls, management's report on internal controls, and the independent auditor's attestation and report on management's assertions, as required by Section 404 of the Sarbanes-Oxley Act.
• Discussing with management and/or PMC's general counsel any legal matters (including the status of pending litigation) that may have a material impact on PMC's financial statements, and any material reports or inquiries from regulatory or governmental agencies.
• Receiving, retaining and treating complaints received by PMC regarding accounting, internal accounting controls or auditing matters and investigating any confidential, anonymous submissions by employees of concerns regarding questionable accounting or auditing matters.
• In connection with each periodic report of PMC, reviewing and discussing with management, as appropriate:
• management's disclosure to the Committee and the independent auditor under Section 302 of the Sarbanes-Oxley Act.
• the contents of the Chief Executive Officer and Chief Financial Officer certificates to be filed under Section 302 and 906 of the Sarbanes-Oxley Act.
• Reviewing any report, by an attorney representing PMC, of a material violation of securities law, material breach of fiduciary duty, or similar violation of U.S. federal or state law as PMC's Qualified Legal Compliance Committee.
• Reviewing policies and procedures with respect to transactions between PMC and officers and directors or their affiliates (Related Party Transactions) and approving any proposed Related Party Transactions.
• Monitor the appropriate standards related to accounting and/or financial controls and reporting within PMC's Code of Conduct and Business Ethics and review compliance with such standards.

The Committee's job is one of oversight. Management is responsible for the preparation of PMC's financial statements and the independent auditors are responsible for auditing those financial statements. The Committee and the Board recognize that management and the independent auditors have more resources and time, and more detailed knowledge and information regarding PMC's accounting, auditing, internal control and financial reporting practices than the Committee does; accordingly the Committee's oversight role does not provide any expert or special assurance as to the financial statements and other financial information provided by PMC to its stockholders and others.

MEMBERSHIP AND ORGANIZATION

The Committee shall consist of no fewer than two members. The members of the Committee shall be independent of the Company and its affiliates, and shall otherwise be deemed "Independent Directors" under the following requirements or definitions:

• Independence requirements of the listing standards of The Nasdaq National Market
• "Non-employee director" definition of Rule 16b-3 under Section 16 of the Securities Exchange Act of 1934
• "Outside director" definition of Section 162(m) of the Internal Revenue Code of 1986

RESPONSIBILITIES AND AUTHORITY

The Board has delegated to the Committee the following authority:

• Review and approve the compensation of the CEO, other executive officers and key employees as directed by the Committee
• Review and approve the Company's compensation programs and policies generally.
• Set specific corporate objectives relevant to executive compensation, and review executive officer performance in light of these objectives
• Annually review and recommend to the Board for its approval, the compensation for members of the Board, including for their service as a member of the Board, a member of a committee of the Board, a Chair of any committee of the Board, Chairman of the Board or Lead Independent Director
• Review and approve employment agreements, severance arrangements, and applicable change in control agreements/provisions for the executive officers
• Act as Administrator of the Company's equity incentive plans, programs and arrangements, with authority to adopt, modify and review such plans, programs and arrangements
• Oversee the administration of the Company's retirement benefit plans, programs and arrangements
• Review and discuss with management the Company's Compensation Discussion and Analysis (CD&A), and recommend to the Board of Directors that the CDA be included in the Company's annual report on Form 10-K and, as applicable, the Company's proxy statement
• Produce the Compensation Committee Report for inclusion in the Company's annual proxy statement
• Assess the adequacy of this Charter periodically and recommend changes to the Board

SUBCOMMITTEES AND ADVISORS

The Committee may delegate or assign the above responsibilities to subcommittees, as appropriate. The Committee has the authority to retain consultants on behalf of the Company to assist in its evaluation of compensation. The Committee shall also have authority to obtain advice and assistance from legal counsel, accountants or other advisors, as appropriate.

MEETINGS

The Committee shall elect its own Chair and establish its own procedures. The Committee will meet regularly. Special meetings may be convened as required. The Committee will maintain written minutes of its meetings, which will be filed with the minutes of the Board meetings. The Committee, or its Chair, shall report to the Board on the results of these meetings.

MEMBERSHIP AND ORGANIZATION

The Committee will consist of no fewer than two members. Each member of the Committee shall meet the independence requirements of the listing standings of the NASDAQ National Market.

RESPONSIBILITIES AND AUTHORITY

The Board has delegated to the Committee the following authority:

• Identify, consider and recommend nominees for election to the Board at the annual meeting of stockholders or to fill new positions or vacancies on the Board.
• Oversee compliance by the Board and its committees with applicable laws and regulations, including the NASDAQ listing standards and SEC regulations.
• Determine the criteria for membership on the Board.
• Monitor the Company's Code of Business Conduct and Ethics.
• Consider questions of possible conflicts of interest of Board members or corporate officers.
• Review and approve, if appropriate, actual and potential conflicts of interest of Board members and corporate officers.

The Board has given the Committee the following responsibilities, with action items to be recommended to the entire Board:

• Develop and annually review corporate governance guidelines.
• Review the composition and size of the Board.
• Review and consider any nominees for election to the Board submitted by the stockholders.
• Review the composition of the Board committees and recommend persons to serve as committee members.
• Oversee the creation of new committees and the change in mandate or dissolution of existing committees.
• Assess the adequacy of this Charter annually and revise as required.

SUBCOMMITTEES AND ADVISORS

The Committee may form and delegate the above responsibilities to subcommittees when appropriate. The Committee has the authority to retain search firms on behalf of the Company to assist in the identification of candidates for the Board. The Committee also has the authority to obtain advice and assistance from legal counsel, accountants or other advisors, as required.

MEETINGS

The Committee shall elect its own Chair and establish its own procedures. The Committee will meet regularly. Special meetings may be convened as required. The Committee will maintain written minutes of its meetings, which will be filed with the minutes of the Board meetings. The Committee, or its Chair, shall report to the Board on the results of these meetings.

Policy on Director Independence

CODE OF BUSINESS CONDUCT AND ETHICS

Introduction

This Code of Business Conduct and Ethics (the or this "Code") covers a wide range of business practices and procedures. It does not cover every issue that may arise, but it sets out basic principles to guide all employees of the Company. All of our employees must conduct themselves accordingly and seek to avoid even the appearance of improper behavior. The Code should also be provided to, and followed by, the Company's agents and representatives, including consultants.

If a law conflicts with a policy in this Code, you must comply with the law. If you have any questions about these conflicts, you should ask your supervisor, Human Resources or the General Counsel how to handle the situation

Those who violate the standards in this Code will be subject to disciplinary action, up to and including termination of employment. If you are in a situation that you believe may violate or lead to a violation of this Code, follow the guidelines described in Section 15 of this Code.

We are committed to continuously reviewing and updating our policies and procedures. The Company therefore reserves the right to amend, alter or terminate this Code at any time and for any reason, subject to applicable law.

1. Compliance with Laws, Rules and Regulations

Obeying the law, both in letter and in spirit, is the foundation on which this Company's ethical standards are built. All employees must respect and obey the laws of the cities, states, provinces and countries in which we operate. Although not all employees are expected to know the details of these laws, it is important to know enough to determine when to seek advice from supervisors, managers or other appropriate personnel. Violations of laws, rules and regulations may subject you to individual criminal or civil liability, in addition to discipline by the Company. Violations may also subject the Company to civil or criminal liability or the loss of business.

The Company will hold information and training sessions to promote compliance with laws, rules and regulations, including insider trading laws.

2. Conflicts of Interest

A "conflict of interest" exists when a person's private interest interferes in any way with the interests of the Company. A conflict situation can arise when an employee, officer or director takes actions or has interests that may make it difficult to perform his or her Company work objectively and effectively. Conflicts of interest may also arise when an employee, officer or director, or members of his or her family, receives improper personal benefits as a result of his or her position in the Company. It is a conflict to give, take or solicit bribes or kickbacks in the form of money or services. Loans to, or guarantees of obligations of, employees and their family members may create conflicts of interest.

It is almost always a conflict of interest for a Company employee to work simultaneously for a competitor, customer or supplier. You are not allowed to work for a competitor as a consultant or board member. The best policy is to avoid any direct or indirect business connection with our customers, suppliers or competitors, except on our behalf. Conflicts of interest are prohibited as a matter of Company policy, except under guidelines approved by the Board of Directors. Conflicts of interest may not always be clear-cut, so if you have a question, you should consult with higher levels of management or the Company's General Counsel. As with any possible breach of this Code, any employee who becomes aware of a conflict or potential conflict should bring it to the attention of a supervisor, manager or other appropriate personnel or consult the procedures described in Section 15 of this Code.

3. Insider Trading

All non-public information about the Company should be considered confidential information. Employees who have access to confidential information are not permitted to use or share that information for stock trading purposes or for any other purpose except the conduct of our business. These obligations are in addition to your obligations with respect to confidential nonpublic information generally, discussed below. To use non-public information for personal financial benefit or to "tip" others who might make an investment decision on the basis of this information is not only unethical but also illegal. You should be aware that stock market surveillance techniques are becoming increasingly sophisticated, and the probability that U.S. federal or other regulatory authorities will detect and prosecute even small level trading is significant. Insider trading rules are strictly enforced, even in instances when the financial transactions seem small.

In order to assist with compliance with laws against insider trading, the Company has adopted a specific Insider Trading Policy that governs trading by employees, officers and directors in securities of the Company. This policy has been made available to every employee, officer and director. Such persons have the individual responsibility to comply with the Company's Insider Trading Policy. If you have any questions, please consult the Company's General Counsel who also serves as the Company's Chief Compliance Officer

4. Corporate Opportunities

Employees, officers and directors are prohibited from taking for themselves personally opportunities that are discovered through the use of corporate property, information or position without the consent of the Board of Directors. No such person may use corporate property, information, or position for improper personal gain, or compete with the Company directly or indirectly. Employees, officers and directors owe a duty to the Company to advance its legitimate interests when the opportunity to do so arises.

5. Competition and Fair Dealing

We seek to outperform our competition fairly and honestly. Stealing proprietary information, possessing trade secret information that was obtained without the owner's consent, or inducing such disclosures by past or present employees of other companies is prohibited.

Each employee should endeavor to respect the rights of and deal fairly with the Company's customers, suppliers, competitors and each of their employees. No employee should take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other intentional unfair-dealing practice.

The purpose of business entertainment and gifts in a commercial setting is to create good will and sound working relationships, not to gain unfair advantage with customers, suppliers or others. No gift or entertainment should ever be offered, given, provided or accepted by any Company employee, family member of an employee or agent unless it: (1) is not a cash gift, (2) is consistent with customary business practices, (3) is not excessive in value, (4) cannot be construed as a bribe or payoff (5) does not violate any laws or regulations and (6) does not present a conflict of interest. Please discuss with your supervisor any gifts and entertainment or proposed gifts and entertainment of which you are not certain are appropriate.

6. Discrimination and Harassment

The Company endeavors to maintain its reputation as an employer of choice through enhancing and sustaining a supportive and positive work environment in which all individuals are treated with respect and dignity. To that end, employees must foster an environment of respect by:

• Promoting a positive work environment that is free of harassment;
• Demonstrating support of workplace policies by setting and following standards of professional conduct;
• Setting a positive example for all employees; and
• Knowing the Company's harassment prevention guidelines.

The Company is committed to providing a work environment that is free of discrimination and harassment. The Company is an equal opportunity employer and makes employment decisions on the basis of merit and business needs. In addition, the Company strictly prohibits harassment of any kind, including harassment on the basis of race, color, veteran status, religion, gender, sex, sexual orientation, age, mental or physical disability, medical condition, national origin, marital status or any other characteristics protected under federal, state, provincial law or local ordinances. For example, the Company will not tolerate derogatory comments based on racial or ethnic characteristics or unwelcome sexual advances.

7. Health and Safety

The Company strives to provide each employee with a safe and healthy work environment. Each employee has responsibility for maintaining a safe and healthy workplace for all employees by following safety and health rules and practices and reporting accidents, injuries and unsafe equipment, practices or conditions.

Violence and threatening behavior are not permitted. Employees should report to work in condition to perform their duties, free from the influence of illegal drugs or alcohol. The use of illegal drugs in the workplace will not be tolerated.

8. Record-Keeping

The Company requires honest and accurate recording and reporting of information in order to make responsible business decisions. For example, employees should accurately and promptly record any overtime (hourly employees only) and all vacation or other leaves of absences.

Many employees regularly use business expense accounts, which must be documented and recorded accurately. If you are not sure whether a certain expense is legitimate, ask your supervisor or Accounts Payable.

All of the Company's books, records, accounts and financial statements must be maintained in reasonable detail, must appropriately reflect the Company's transactions, and must conform both to applicable legal requirements and to the Company's system of internal controls. Unrecorded or "off the books" funds or assets should not be maintained unless permitted by applicable law or regulation.

Business records and communications often become public, and we should avoid exaggeration, derogatory remarks, guesswork, or inappropriate characterizations of people and companies that can be misunderstood. This applies equally to e-mail, internal memos, and formal reports. Employees must comply with any record retention policies in effect for their department and/or function. In the event of litigation or governmental investigation, threatened or pending, please consult with the Company's General Counsel. Directives regarding record retention in connection with litigation or investigations take precedence over then-current policies.

9. Confidentiality

Employees must maintain the confidentiality of confidential information entrusted to them by the Company or its customers, suppliers or other third party under a non-disclosure agreement, except when disclosure is authorized by the General Counsel. Confidential information includes all non-public information that might be of use to competitors, or harmful to its owner/disclosing party, if disclosed. The obligation to preserve confidential information continues even after employment ends pursuant to the conduct agreement containing confidentiality provisions executed by each employee when he or she began his or her employment with the Company.

10. Protection and Proper Use of Company Assets

All employees should endeavor to protect the Company's assets and ensure their efficient use. Theft, carelessness, and waste have a direct impact on the Company's profitability. Any suspected incident of fraud or theft should be immediately reported for investigation. Company equipment should not be used for non-Company business, although incidental personal use may be permitted provided that it does not interfere with your productivity or violate any laws or Company policies. While your privacy is important to us, you are advised that there is no absolute expectation of privacy on Company premises or when using Company resources, even in such cases where access to such systems is gained by a personal password. The Company is committed to maintaining a lawful, safe and productive environment for all employees and reserves the right to monitor your use of Company systems, equipment or surroundings in an effort to secure that environment.

The obligation of employees to protect the Company's assets includes its proprietary information. Proprietary information includes intellectual property such as trade secrets, patents, trademarks, and copyrights, as well as business, marketing and service plans, engineering and manufacturing ideas, designs, databases, records, salary information and any unpublished financial data and reports. Unauthorized use or distribution of this information would violate Company policy and the terms of your conduct agreement with the Company. It could also be illegal and result in civil or even criminal penalties.

11. Payments to Government Personnel

The U.S. Foreign Corrupt Practices Act prohibits giving anything of value, directly or indirectly, to officials of foreign governments or foreign political candidates in order to obtain or retain business. It is strictly prohibited to make illegal payments to government officials of any country.

In addition, the U.S. government has a number of laws and regulations regarding business gratuities that may be accepted by U.S. government personnel. The promise, offer or delivery to an official or employee of the U.S. government of a gift, donation, favor or other gratuity in violation of these rules would not only violate Company policy but could also be a criminal offense. State and local governments, as well as foreign governments, may have similar rules.

12. Special Ethics Obligations for Employees with Financial Reporting Responsibilities

As a public company, it is important that the Company's filings with the Securities and Exchange Commission be accurate and timely. Depending on their position within the Company, employees may be called upon to provide information to assure that the Company's public reports are complete, fair and understandable. The Company expects all of its personnel to take this responsibility seriously and to provide prompt and accurate answers to inquiries related to the Company's public disclosure requirements.

The Finance department bears a special responsibility for promoting integrity throughout the organization, with responsibilities to stakeholders both inside and outside the Company. The Chief Executive Officer, Chief Financial Officer, Chief Compliance Officer (the General Counsel), Controller and other Finance personnel each have a special role both to adhere to these principles themselves and also to ensure that a culture exists throughout the Company as a whole that ensures that fair and timely reporting of financial results and conditions.

Because of this special role, the Chief Executive Officer, Chief Financial Officer, Chief Compliance Officer, Controller and all other and all members of the Company's Finance department are bound by the following Financial Officer Code of Ethics, and by accepting the Code of Business Conduct and Ethics, each agrees that he or she will:

• Act with honesty and integrity;
• Avoid actual or apparent conflicts of interest in professional and personal relationships;
• Provide information that is accurate, complete, objective, relevant, timely and understandable to ensure full, fair, accurate timely and understandable disclosure in reports and documents that the Company files with, or submits to, government agencies and in other public communications;
• Accept responsibility for the full, fair, accurate, timely and understandable disclosure in the periodic reports required to be filed by the Company with the SEC;
• Bring promptly to the attention of the Chief Financial Officer, the Chief Compliance Officer or the Disclosure Committee any material information of which he or she may become aware that affects the disclosures made by the Company in its public filings;
• Bring to the attention of the Chief Financial Officer, Disclosure Committee and the Audit Committee of the Company any significant deficiencies in the design or operation of internal controls which could adversely affect the Company's ability to record, process, summarize and report financial data;
• Bring to the attention of the Chief Compliance Officer, Chief Financial Officer, Disclosure Committee and the Audit Committee of the Company any fraud that involves management or other employees who have a significant role in the Company's financial reporting, disclosures or internal controls;
• Bring to the attention of the Chief Compliance Officer, the CEO and the Audit Committee any information concerning any violation of the Company's Code of Business Conduct and Ethics, including any conflicts of interest involving any employees who have a significant role in the Company's financial reporting, disclosures or internal controls; and
• Bring to the attention of the Chief Compliance Officer, the CEO and the Audit Committee any information concerning a material violation of the securities or other laws, rules or regulations applicable to the Company and the operation of its business.

Violations of this Financial Officer Code of Ethics, including failures to report potential violations by others, will be viewed as a severe disciplinary matter that may result in personnel action, including termination of employment.

In addition to, or as an alternative to reporting any perceived violations of the Code of Business Conduct and Ethics or the Financial Officer Code of Conduct and Ethics to the individuals in the positions named above, an electronic report may be logged through an external service: www.mysafeworkplace.com. The individual filing the report can elect to make the report anonymous, if desired. Entering a complaint through www.mySafeWorkplace.com will be confidentially and automatically forwarded to the designated member of the Audit Committee for review and consideration.

It is against the Company's policy to retaliate against any employee for good faith reporting of violations of this Code.

13. Waivers of the Code of Business Conduct and Ethics

Any waiver of this Code for executive officers or any member of the Board of Directors may be made only by the Board of Directors, or a committee of the Board of Directors empowered to do so, and will be promptly disclosed as required by law or stock exchange regulation.

14. Reporting any Illegal or Unethical Behavior

Employees are encouraged to talk to supervisors, managers or other appropriate personnel about observed illegal or unethical behavior and when in doubt about the best course of action in a particular situation. It is the policy of the Company not to allow retaliation for reports of misconduct by others made in good faith by employees. Employees are expected to cooperate in internal investigations of misconduct.

Employees must read the Company's Employee Complaint Procedures for Accounting and Auditing Matters that describes the Company's procedures for the receipt, retention, and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters. Any employee may submit a good faith concern regarding questionable accounting or auditing matters without fear of dismissal or retaliation of any kind.

15. Compliance Procedures

We must all work to ensure prompt and consistent action against violations of this Code. However, in some situations it is difficult to know if a violation has occurred. Since we cannot anticipate every situation that will arise, it is important that we have a way to approach a new question or problem. These are the steps to keep in mind:

• Make sure you have all the facts. In order to reach the right solutions, we must be as fully informed as possible.
• Ask yourself: What specifically am I being asked to do? Does it seem unethical or improper? This will enable you to focus on the specific question you are faced with, and the alternatives you have. Use your judgment and common sense; if something seems unethical or improper, it probably is.
• Clarify your responsibility and role. In most situations, there is shared responsibility. Are your colleagues informed? It may help to get others involved and discuss the problem.
• Discuss the problem with your supervisor. This is the basic guidance for all situations. In many cases, your supervisor will be more knowledgeable about the question, and will appreciate being brought into the decision-making process. Remember that it is your supervisor's responsibility to help solve problems.
• Seek help from Company resources. In the rare case where it may not be appropriate to discuss an issue with your supervisor, or where you do not feel comfortable approaching your supervisor with your question, discuss it locally with your office manager or your Human Resources manager.

Employee Complaint Procedures for Accounting and Auditing Matters

As part of our ongoing efforts to improve our corporate governance practices and procedures, the Audit Committee of the Board of Directors of PMC-Sierra, Inc. has adopted the following procedure for the receipt, treatment and retention of complaints for accounting and auditing matters. We have adopted these procedures in accordance with the requirements of Section 301 of the Sarbanes-Oxley Act of 2002 and certain related SEC rules.

1. Policy on complaints of accounting and auditing matters

It is PMC-Sierra, Inc.’s policy to treat complaints about accounting and auditing matters or deceptive financial practices seriously and on a timely basis.

It is against the Company’s policy to retaliate against any employee for good faith reporting of violations of the Code of Business Conduct and Ethics (this or the “Code”). Any employee may submit a good faith concern regarding questionable accounting or auditing matters without fear of dismissal or retaliation of any kind.

2. Accounting and auditing matters that should be reported

Employees are encouraged to report and submit complaints of Accounting and auditing matters for which there is actual or suspected:

• intentional error or fraud in the preparation, review or audit of any of PMC-Sierra’s financial information statements;
• significant deficiencies in PMC-Sierra’s internal and reporting controls, or intentional noncompliance with those controls;
• violations of SEC rules and regulations that are related to accounting, internal accounting controls and auditing matters; or
• fraud against investors, securities fraud, mail or wire fraud, bank fraud, or fraudulent statements to management, the SEC or members of the investing public.

3. Procedure for submitting accounting and auditing complaints

You are encouraged to notify management of your complaint. You may direct your complaint to the General Counsel (who is also the Company’s Chief Compliance Officer), the Internal Audit department, the Chief Financial Officer, the CEO or the Disclosure Committee that reviews financial disclosure and regulatory filing obligations (at Disclosure_Committee@pmc-sierra.com). In accordance with SEC rules, employees may also submit complaints of accounting and/or auditing matters to the Audit Committee of the Board of Directors on a confidential and, if desired, anonymous basis. To facilitate communications with the Audit Committee, PMC-Sierra has engaged MySafeWorkplace to provide independent reporting through a toll free phone call or submitting the matter through the Internet as follows:

• Toll free or collect call – you may submit a complaint by calling:
  800-461-9330 from the US or Canada
  800-1777.9999 outside North America; or
  720-514-4400 collect
  

Ask to be connected to the MySafeWorkplace call center to make a report. Please inform the call center recipient the name of company you are making a report for (PMC-Sierra), and indicate that you wish to make a complaint about either an accounting or auditing matter. At your option, you may make the report anonymous or not.

• Internet submission – log in to www.mysafeworkplace.com, entering the company that you are making the complaint for (PMC-Sierra), and follow the on-line form for making a report. At your option, you may make the report anonymous or not.

If you submit your report through MySafeWorkplace, you will be provided with a unique access code, and asked to provide a password. This unique code identifies your report and allows you to engage in a dialogue, anonymous or not, with the Audit Committee or its designated representative, and to check the status of your complaint.

4. Audit Committee complaint review process

The Audit Committee will review all complaints concerning Accounting or Audit matters, and may investigate it itself, or may assign a PMC-Sierra employee, outside counsel, advisor, expert or other third-party to investigate or assist in investigating the complaint. The Audit Committee may direct that any individual assigned to investigate a complaint of an accounting or auditing matter work at the direction of, or in conjunction with the Audit Committee or any other person in the course of the investigation.

Unless otherwise directed by the Audit Committee, the person assigned will investigate the complaint of the accounting or auditing matter, and report his or her findings to the Audit Committee. If the investigator’s findings indicate that the allegations in the complaint are true, and the investigator is in a position to recommend appropriate disciplinary or corrective action, the investigator may recommend to the Audit Committee the disciplinary or corrective action.

If determined necessary by the Audit Committee, PMC-Sierra will provide for appropriate funding to obtain and pay for additional resources that may be necessary to conduct the investigations, including retaining outside counsel, auditors, and/or experts.

At each quarterly board meeting, the Audit Committee will provide to the Board of Directors, a report that summarizes each new complaint about accounting or auditing matters made during the quarter and any outstanding complaints about accounting or auditing matters that remain unresolved. This report will include the person who submitted the complaint (unless anonymous); a description of the complaint; status of the investigation; and findings and conclusions of the investigator; and any recommendations to the Audit Committee.

5. Complaint Confidentiality

All reports and records associated with complaints of accounting or auditing matters are considered confidential information, and access will be restricted to members of the Audit Committee, the Board of Directors of PMC-Sierra, Inc., PMC-Sierra’s officers, and any employees or outside counsel, advisors, experts or third parties involved in the investigation of the complaint of the accounting or auditing matter. Access to reports and records of complaints may be granted to regulatory agencies and other parties at the discretion of the Audit Committee. Documents that are covered by the attorney-client communication and/or work-product privileges should not be disclosed unless the General Counsel has consented in writing to a waiver of privilege.

Complaints of accounting and auditing matters, and the related investigation reports or actions will not generally be disclosed to the public except as required by any legal requirements or regulations or by any corporate policy in place at the time.

Executive Management

Greg Lang President and Chief Executive Officer

Michael W. Zellner Chief Financial Officer

Colin  C. Harris Chief Operating Officer

Mark  C.  Stibitz Vice President and General Manager, Enterprise and Storage Division

Travis  Karr Vice President and General Manager, Communication Products Division

Ra'ed O. Elmurib Vice President, General Manager, Microprocessor Products Division

Ofer  Bar-Or Vice President and Co-General Manager, Fiber to the Home

Raphael  Sankar Vice President and Co-General Manager, Fiber to the Home

Tom Sun Vice President and General Manager, Broadband Wireless Division

Robert  M. Liszt Vice President, Worldwide Sales

O. Daryn  Lau Vice President, Corporate Strategy and Technology Office

Alinka Flaminia Vice President, General Counsel and Corporate Secretary

Brian Gerson Fellow and Vice President, Research and Development

Lee Rhodes Vice President of Worldwide Human Resources