Exhibit 10.1

 

PortalPlayer, Inc.

70 Plumeria Drive

San Jose, CA 95134

 

November 8, 2005

 

Mr Tomas Isaksson

 

Dear Tomas:

 

On behalf of PortalPlayer, Inc. (the “Company”), I am pleased to inform you that
you have been elected to the Board of Directors (the “Board”) of the Company.
Your initial term of election shall be until the 2006 Annual Meeting of
Stockholders.

 

1. Committees. Upon your acceptance of this offer, you will become a member of
the Audit Committee.

 

2. Compensation. The Company will reimburse you for reasonable expenses in
connection with attendance at Board and committee meetings. In connection with
your service as a director, you will receive annual compensation retainer of
$20,000 and as a member of the Audit Committee, you will receive annual
compensation retainer of $5,000, to be paid in quarterly installments. All
annual compensation will be pro rated for the portion of the year during which
you are a director and member of the Audit Committee. You will not receive any
additional compensation for committee meetings.

 

3. Stock Options. Upon your acceptance of this offer, you will be granted an
option to purchase 27,916 shares of the Company’s Common Stock and 4,583 shares
of restricted stock. The stock option exercise price per share will be equal to
the fair market value per share on the date the option is granted. The option
will be subject to the terms and conditions applicable to options granted under
the Company’s 2004 Stock Incentive Plan (the “Plan”), as described in the Plan
and the applicable Stock Option Agreement. You will vest in 25% of the option
shares after 12 months of continuous service, and the balance will vest in equal
monthly installments over the next 36 months of continuous service, as described
in the applicable Stock Option Agreement. In addition, immediately after each of
our regularly scheduled annual meetings of stockholders, you will be granted an
option to purchase 8,375 shares of the Company’s Common Stock and 1,375 shares
of restricted stock, provided you are still a director and that you have served
on the Board for at least six months. These option shares and restricted stock
will vest and become exercisable on the first anniversary of the date of grant
or immediately prior to our next annual meeting of stockholders, if earlier.

 

4. Indemnification. The Company carries Directors and Officers Insurance and has
Indemnification Agreements with directors on the Board. It is your
responsibility to familiarize yourself with the insurance and indemnification
agreement.

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5. Entire Agreement. This letter supersedes and replaces any prior
representations, understandings or agreements, whether oral, written or implied,
between you and the Company.

 

I hope that you will accept our offer to join the Board of Directors of the
Company and I look forward to working with you. You may indicate your agreement
with these terms and accept this offer by signing and dating both the enclosed
duplicate originals of this letter agreement and returning it to me.

 

If you have any questions, please call me at

 

Very truly yours,

PORTALPLAYER, INC.

/s/ Richard L. Sanquini

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Richard L. Sanquini

Chairman of the Board

 

I have read and accept this offer:

 

/s/ Tomas Isaksson

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Signature of Tomas Isaksson Dated: November 8, 2005