Exhibit 10.38





Exhibit 10.38




TRIDENT MICROSYSTEMS, INC.




EXECUTIVE RETENTION AND SEVERANCE PLAN





1. Establishment and Purpose



1.1 Establishment. The Trident Microsystems, Inc. Executive Retention and Severance Plan (the
“Plan”) is hereby established by the Compensation Committee of the Board of Directors of Trident
Microsystems, Inc., effective January 23, 2008 (the “Effective Date”).



1.2 Purpose. The Company draws upon the knowledge, experience and advice of the officers and
key employees of the Company and its subsidiaries in order to manage its business for the benefit
of the Company’s stockholders. Due to the widespread awareness of the possibility of mergers,
acquisitions and other strategic alliances in the Company’s industry, the topic of compensation and
other employee benefits in the event of a Change in Control is an issue in competitive recruitment
and retention efforts. The Committee recognizes that the possibility or pending occurrence of a
Change in Control could lead to uncertainty regarding the consequences of such an event and could
adversely affect the Company’s ability to attract, retain and motivate officers and key employees.
The Committee has therefore determined that it is in the best interests of the Company and its
stockholders to provide for the continued dedication of officers and key employees notwithstanding
the possibility or occurrence of a Change in Control by establishing this Plan to provide
designated officers and key employees with enhanced financial security in the event of a Change in
Control. The purpose of this Plan is to provide its Participants with specified compensation and
benefits in the event of termination of employment under circumstances specified herein upon or
following a Change in Control. The Company intends that all payments pursuant to the Plan be
exempt from or comply with all applicable requirements of Section 409A (as defined below), and the
Plan shall be so construed.




2. Definitions and Construction



2.1 Definitions. Whenever used in this Plan, the following terms shall have the meanings set
forth below:



(a) “Annual Bonus Rate” means an amount equal to the aggregate of all annual incentive bonuses
that would be earned by the Participant at the targeted annual rate (assuming attainment of 100% of
all applicable performance goals) under the terms of the programs, plans or agreements providing
for such bonuses in which the Participant was participating for the fiscal year of the Company in
which the Termination Upon a Change in Control occurs. For this purpose, annual incentive bonuses
shall not include signing bonuses or other nonrecurring cash incentive awards.



(b) “Base Salary Rate” means the greater of the Participant’s (i) monthly base salary rate in
effect immediately prior to the Participant’s Termination Upon a Change in Control, or (ii) monthly
base salary rate in effect immediately prior to the Change in Control, in either case without
giving effect to any reduction in the Participant’s base salary rate which constitutes Good Reason.
For this purpose, base salary does not include any bonuses,
commissions, fringe benefits, car allowances, other irregular payments or any other
compensation except base salary.


 


 









 






(c)
“Board” means the Board of Directors of the Company.



(d) “Cause” means the occurrence of any of the following: (1) the Participant’s theft,
dishonesty, misconduct, breach of fiduciary duty for personal profit, or falsification of any
documents or records of the Company Group; (2) the Participant’s material failure to abide by the
code of conduct or other policies (including, without limitation, policies relating to
confidentiality and reasonable workplace conduct) of any member of the Company Group;
(3) misconduct by the Participant within the scope of Section 304 of the Sarbanes-Oxley Act of 2002
as a result of which of the Company is required to prepare an accounting restatement; (4) the
Participant’s unauthorized use, misappropriation, destruction or diversion of any tangible or
intangible asset or corporate opportunity of a member of the Company Group (including, without
limitation, the Participant’s improper use or disclosure of the confidential or proprietary
information of a member of the Company Group); (5) any intentional act by the Participant which has
a material detrimental effect on the reputation or business of a member of the Company Group;
(6) the Participant’s repeated failure or inability to perform any reasonable assigned duties after
written notice from a member of the Company Group of, and a reasonable opportunity to cure, such
failure or inability; (7) any material breach by the Participant of any employment, non-disclosure,
non-competition, non-solicitation or other similar agreement between the Participant and a member
of the Company Group, which breach is not cured pursuant to the terms of such agreement; or (8) the
Participant’s conviction (including any plea of guilty or nolo contendere) of any criminal act
involving fraud, dishonesty, misappropriation or moral turpitude, or which impairs the
Participant’s ability to perform his or her duties with a member of the Company Group.



(e) “Change in Control” means, except as otherwise provided in the Participation Agreement
applicable to a given Participant, the occurrence of any of the following:



(1) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”)), other than a trustee or other fiduciary holding
securities of the Company under an employee benefit plan of the Company, acquires (or has acquired
during the 12-month period ending on the date of the most recent acquisition by such person)
“beneficial ownership” (as defined in Rule 13d-3 promulgated under the Exchange Act), directly or
indirectly, of stock of the Company representing more than percent (50%) of the total combined
voting power of the Company’s then-outstanding stock entitled to vote generally in the election of
directors;



(2) the Company is party to a merger or consolidation which results in the holders of the
voting stock of the Company outstanding immediately prior thereto failing to retain immediately
after such merger or consolidation direct or indirect beneficial ownership of more than fifty
percent (50%) of the total combined voting power of the stock entitled to vote generally in the
election of directors of the Company or the surviving entity outstanding immediately after such
merger or consolidation;


 


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(3) the sale or disposition of all or substantially all of the Company’s assets or
consummation of any transaction having similar effect (other than a sale or disposition to one or
more subsidiaries of the Company); or



(4) a change in the composition of the Board within any consecutive 12-month period as a
result of which fewer than a majority of the directors are Incumbent Directors;



provided, however, that a Change in Control shall be deemed not to include a transaction
described in subsections (1) or (2) of this Section in which a majority of the members of the board
of directors of the continuing, surviving or successor entity, or parent thereof, immediately after
such transaction is comprised of directors who were members of the Board immediately prior to
consummation of such transaction. Notwithstanding the foregoing, to the extent that any amount
constituting Section 409A Deferred Compensation would become payable under this Plan by reason of a
Change in Control, such amount shall become payable only if the event constituting a Change in
Control would also constitute a change in ownership or effective control of the Company or a change
in the ownership of a substantial portion of the assets of the Company within the meaning of
Section 409A.



(f) “Change in Control Period” means a period commencing upon the consummation of a Change in
Control and ending on the date occurring eighteen (18) months thereafter.



(g) “Chief Executive Officer” means the individual who, immediately prior to the consummation
of a Change in Control, serves as the Company’s Chief Executive Officer appointed by the Board.



(h) “Code” means the Internal Revenue Code of 1986, as amended, or any successor thereto and
any applicable regulations promulgated thereunder.




(i) “Committee” means the Compensation Committee of the Board.



(j) “Company” means Trident Microsystems, Inc., a Delaware corporation, and, following a
Change in Control, a Successor that agrees to assume all of the terms and provisions of this Plan
or a Successor which otherwise becomes bound by operation of law to this Plan.



(k) “Company Group” means the group consisting of the Company and each present or future
parent and subsidiary corporation or other business entity thereof.



(l) “Disability” means a Participant’s permanent and total disability within the meaning of
Section 22(e)(3) of the Code.



(m) “Equity Award” means any Option, Restricted Stock, Restricted Stock Units, performance
shares, performance units or other stock-based compensation award granted by the Company or any
other Company Group member to a Participant, including any such award which is assumed by, or for
which a replacement award is substituted by, the Successor or any other member of the Company Group
in connection with a Change in Control.


 


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(n) “Executive Officer” means an individual, other than the Chief Executive Officer, who
immediately prior to the consummation of a Change in Control serves as an executive officer of the
Company appointed by the Committee or the Board.



(o) “Good Reason” means the occurrence during a Change in Control Period of any of the
following conditions without the Participant’s informed written consent, which condition(s)
remain(s) in effect thirty (30) days after written notice to the Company from the Participant of
such condition(s) and which notice must have been given within ninety (90) days following the
initial occurrence of such condition(s):



(1) a material diminution in the Participant’s authority, duties or responsibilities, causing
the Participant’s position to be of materially lesser rank or responsibility within the Company or
an equivalent business unit of its parent, as measured against the Participant’s authority, duties
or responsibilities immediately prior to the Change in Control;



(2) a material diminution in the authority, duties or responsibilities of the officer to whom
the Participant is required to report, causing such officer’s position to be of materially lesser
rank or responsibility within the Company or an equivalent business unit of its parent, as measured
against the authority, duties and responsibilities of the officer to whom the Participant was
required to report immediately prior to the Change in Control, including a requirement that the
Participant report to a corporate officer or employee instead of reporting directly to the board of
directors of the Company Group or the Successor;



(3) a material decrease in the Participant’s Base Salary Rate or Annual Bonus Rate (subject to
applicable performance requirements with respect to the actual amount of the Annual Bonus Rate
earned and paid);



(4) a material decrease in the size of the budget within the Company Group over which the
Participant has responsibility, measured against the budget within the Company group over which the
Participant had responsibility immediately prior to the Change in Control;



(5) the relocation of the Participant’s work place for the Company Group to a location that
increases the regular commute distance between the Participant’s residence and work place by more
than thirty (30) miles (one-way); or



(6) any material breach of this Plan by the Company or its Successor with respect to the
Participant.



The existence of Good Reason shall not be affected by the Participant’s temporary incapacity due to
physical or mental illness not constituting a Disability. The Participant’s continued employment
for a period not exceeding one hundred eighty (180) days following the occurrence of any condition
constituting Good Reason shall not constitute consent to, or a waiver of rights with respect to,
such condition. For the purposes of any determination regarding the existence of Good Reason
hereunder, any claim by the Participant that Good Reason exists shall be presumed to be correct
unless the Company establishes to the Board that Good Reason does not exist, and the Board, acting
in good faith, affirms such determination by a vote of not less than two-thirds
of its entire membership (excluding the Participant if the Participant is a member of the Board).


 


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(p) “Incumbent Director” means a director who either (1) is a member of the Board as of the
Effective Date, or (2) is elected, or nominated for election, to the Board with the affirmative
votes of at least a majority of the Incumbent Directors at the time of such election or nomination,
but (3) was not elected or nominated in connection with an actual or threatened proxy contest
relating to the election of directors of the Company.



(q) “Key Employee” means an individual, other than the Chief Executive Officer or an Executive
Officer, who immediately prior to the consummation of a Change in Control is employed by the
Company Group and has been designated by the Board or Committee as eligible to participate in the
Plan.



(r) “Option” means any option to purchase shares of the capital stock of the Company or of any
other member of the Company Group granted to a Participant by the Company or any other Company
Group member, whether granted before or after a Change in Control, including any such option which
is assumed by, or for which a replacement option is substituted by, the Successor or any other
member of the Company Group in connection with a Change in Control.



(s) “Participant” means each Executive Officer and each Key Employee designated by the
Committee to participate in the Plan, provided such individual has executed a Participation
Agreement.



(t) “Participation Agreement” means an Agreement to Participate in the Plan in the form
attached hereto as Exhibit A or in such other form as the Committee may approve from time
to time; provided, however, that, after a Participation Agreement has been entered into between a
Participant and the Company, it may be modified only by a supplemental written agreement executed
by both the Participant and the Company. The terms of such forms of Participation Agreement need
not be identical with respect to each Participant. For example, a Participation Agreement may
limit the duration of a Participant’s participation in the Plan or may modify the definitions of
“Change in Control,” “Cause,” or “Good Reason” with respect to a Participant.



(u) “Performance-Based Equity Award” means an Equity Award granted to a Participant prior to a
Change in Control, the vesting or earning of which is conditioned in whole or in part upon the
achievement of one or more performance goals (e.g., the attainment of a target stock price or
achievement of a corporate financial goal), notwithstanding that the vesting or earning of such
Equity Award may also be conditioned upon the continued performance of services by the Participant
for the Company Group.



(v) “Release” means a general release of all known and unknown claims against the Company and
its affiliates and their stockholders, directors, officers, employees, agents, successors and
assigns substantially in the form attached hereto as Exhibit B (“General Release of Claims
[Age 40 and over]”) or Exhibit C (“General Release of Claims [Under age 40]”), whichever is
applicable, with any modifications thereto determined by legal
counsel to the Company to be necessary or advisable to comply with applicable law or to
accomplish the intent of Section 8 (Exclusive Remedy) hereof.


 


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(w) “Restricted Stock” means any compensatory award of shares of the capital stock of the
Company or of any other member of the Company Group granted to a Participant by the Company or any
other Company Group member, whether such shares are granted or acquired before or after a Change in
Control, including any shares issued in exchange for any such shares by the Successor or any other
member of the Company Group in connection with a Change in Control.



(x) “Restricted Stock Units” mean any compensatory award of rights to receive shares of the
capital stock or cash in an amount measured by the value of shares of the capital stock of the
Company or of any other member of the Company Group granted to a Participant by the Company or any
other Company Group member, whether such rights are granted before or after a Change in Control,
including any such rights assumed by, or issued in exchange for any such rights by, the Successor
or any other member of the Company Group in connection with a Change in Control.



(y) “Section 409A” means Section 409A of the Code and any applicable regulations and other
administrative guidance promulgated thereunder.



(z) “Section 409A Deferred Compensation” means compensation and benefits provided by the Plan
that constitute deferred compensation subject to and not exempted from the requirements of Section
409A.



(aa) “Separation from Service” means a separation from service within the meaning of Section
409A.



(bb) “Service-Based Equity Award” means an Equity Award granted to a Participant prior to a
Change in Control, the vesting or earning of which is conditioned solely upon the continued
performance of services by the Participant for the Company Group.



(cc) “Severance Benefit Period” means (1) with respect to a Participant who is the Chief
Executive Officer, a period of twenty-four (24) months, (2) with respect to a Participant who is an
Executive Officer, a period of twelve (12) months, and (3) with respect to a Participant who is a
Key Employee, a period as determined by the Committee and set forth in such Participant’s
Participation Agreement.




(dd) “Specified Employee” means a specified employee within the meaning of Section 409A.



(ee) “Successor” means any successor in interest to substantially all of the business and/or
assets of the Company.


 


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(ff) “Termination Upon a Change in Control” means the occurrence of any of the following
events during the Change in Control Period:



(1) termination by the Company Group of the Participant’s employment for any reason other than
Cause; or



(2) the Participant’s resignation for Good Reason from all capacities in which the Participant
is then rendering service to the Company Group, provided that such resignation occurs no later than
one hundred eighty (180) days following the initial occurrence of the condition constituting Good
Reason;



provided, further, however, that Termination Upon a Change in Control shall not include any
termination of the Participant’s employment which is (i) for Cause, (ii) a result of the
Participant’s death or Disability, or (iii) a result of the Participant’s voluntary termination of
employment other than for Good Reason.



2.2 Construction. Captions and titles contained herein are for convenience only and shall not
affect the meaning or interpretation of any provision of the Plan. Except when otherwise indicated
by the context, the singular shall include the plural and the plural shall include the singular.
Use of the term “or” is not intended to be exclusive, unless the context clearly requires
otherwise.




3. Eligibility



The Committee shall designate those officers and key employees of the Company or any other
member of the Company Group who shall be eligible to become Participants in the Plan. To become a
Participant, the designated officer or key employee must execute a Participation Agreement.




4. Treatment of Equity Awards Upon a Change in Control



4.1 Acceleration of Vesting Upon Non-Assumption of Service-Based Equity Awards.
Notwithstanding any provision to the contrary contained in any plan or agreement evidencing a
Service-Based Equity Award, in the event of a Change in Control in which the surviving, continuing,
successor, or purchasing corporation or other business entity or parent thereof, as the case may be
(the “Acquiring Corporation”), does not assume or continue the Company’s rights and obligations
under the then-outstanding Service-Based Equity Award or substitute for such Service-Based Equity
Award a substantially equivalent equity award for the Acquiring Corporation’s stock, then the
vesting and exercisability of such Service-Based Equity Award which is not assumed, continued or
substituted for shall be accelerated in full effective immediately prior to but conditioned upon
the consummation of the Change in Control, provided that the Participant remains an employee or
other service provider with the Company Group immediately prior to the Change in Control.



4.2 Acceleration of Vesting of Performance-Based Equity Awards. Notwithstanding any provision
to the contrary contained in any plan or agreement evidencing a Performance-Based Equity Award, in
the event of a Change in Control the vesting and exercisability of such Performance-Based Equity
Awards shall be accelerated in full immediately prior to but conditioned upon the consummation of
the Change in Control (assuming for the purpose of determining the extent of such acceleration, if
applicable, that one hundred percent (100%) of the target level of performance has been achieved),
provided that the Participant
remains an employee or other service provider with the Company Group immediately prior to the
Change in Control.


 


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The provisions of this Section 4 with respect to all amounts that constitute Section 409A Deferred
Compensation shall be subject to, limited by and construed in accordance with the requirements of
Section 409A and Section 6.2 below.




5. Termination Upon a Change in Control



In the event of a Participant’s Termination Upon a Change in Control:



5.1 Accrued Obligations. The Participant shall be entitled to receive:



(a) all salary, commissions, bonuses and accrued but unused vacation earned through the date
of the Participant’s termination of employment;



(b) reimbursement within ten (10) business days of submission, within thirty (30) days
following the Participant’s termination of employment, of proper expense reports of all expenses
reasonably and necessarily incurred by the Participant in connection with the business of the
Company Group prior to his or her termination of employment; and



(c) the benefits, if any, under any Company Group retirement plan, nonqualified deferred
compensation plan or stock-based compensation plan or agreement (other than any such plan or
agreement pertaining to an Equity Award whose treatment is prescribed by Section 4 or
Section 5.2(c)), health benefits plan or other Company Group benefit plan to which the Participant
may be entitled pursuant to the terms of such plans or agreements.



5.2 Severance Benefits. Provided that the Participant executes the Release applicable to such
Participant and such Release becomes effective in accordance with its terms prior to the applicable
date on which payment is to be made, the Participant shall be entitled to receive the following
severance payments and benefits:



(a) Salary and Bonus. Subject to Section 6.2, the Company shall pay to the Participant in a
lump sum cash payment on the sixtieth (60th) day following the Participant’s Termination Upon a
Change in Control an amount equal to the sum of:



(1) the product of the Participant’s Severance Benefit Period and the Participant’s Base
Salary Rate;



(2) (i) for a Participant who is the Chief Executive Officer, two hundred percent (200%) of
the Participant’s Annual Bonus Rate, (ii) for a Participant who is an Executive Officer, one
hundred percent (100%) of the Participant’s Annual Bonus Rate and (iii) for a Participant who is a
Key Employee, such portion of the Participant’s Annual Bonus Rate as is determined by the Committee
and set forth in such Participant’s Participation Agreement; and


 


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(3) all annual incentive bonuses earned by the Participant for the fiscal year of the Company
prior to the year of the Participant’s Termination Upon a Change in Control which remain unpaid as
of the date of such termination of employment.



(b) Health and Life Insurance Benefits. Subject to Section 6.2, for the period commencing
immediately following the Participant’s Termination Upon a Change in Control and continuing for the
duration of the Severance Benefit Period applicable to the Participant, the Company shall arrange
to provide the Participant and his or her dependents with health benefits (including medical and
dental) and life insurance substantially similar to that provided to the Participant and his or her
dependents immediately prior to the date of such termination of employment, including the
continuation of Exec-U-Care or any similar policy in force for the benefit of the Participant
immediately prior to the Termination Upon a Change in Control or shall reimburse the Participant
for the cost of obtaining such benefits to the extent described below. Such benefits shall be
provided to the Participant at the same premium cost to the Participant and at the same coverage
level as in effect as of the Participant’s Termination Upon a Change in Control; provided, however,
that the Participant shall be subject to any change in the premium cost and/or level of coverage
applicable generally to all employees holding the position or comparable position with the Company
Group which the Participant held immediately prior to the Termination Upon a Change in Control.
The Company may satisfy its obligation to provide a continuation of health benefits, other than
continuation of the Exec-U-Care or similar policy, by paying that portion of the Participant’s
premiums required under the Consolidated Omnibus Reconciliation Act
of 1985 (“COBRA”) that exceeds
the amount of premiums that the Participant would have been required to pay for continuing coverage
had he or she continued in employment. If the Company is not reasonably able to continue such
coverage under the Company’s health benefit plans, the Company shall provide substantially
equivalent coverage under other sources or will reimburse (without a tax gross-up) the Participant
for premiums (in excess of the Participant’s premium cost described above) incurred by the
Participant to obtain his or her own such coverage. If the Participant and/or the Participant’s
dependents become eligible to receive such coverage under another employer’s health benefit plans
during the applicable Severance Benefit Period, the Participant shall report such eligibility to
the Company, and the Company’s obligations under this subsection shall be secondary to the coverage
provided by such other employer’s plans. For the balance of any period in excess of the applicable
Severance Benefit Period during which the Participant is entitled to continuation coverage under
COBRA, the Participant shall be entitled to maintain coverage for himself or herself and the
Participant’s eligible dependents at the Participant’s own expense.



(c) Acceleration of Vesting of Equity Awards. Notwithstanding any provision to the contrary
contained in any plan or agreement evidencing an Equity Award granted to a Participant but, subject
to Section 6.2, the vesting, exercisability and settlement of each of the Participant’s outstanding
Equity Awards which were not otherwise accelerated pursuant to Section 4 shall be accelerated in
full effective as of the date of the Participant’s Termination Upon a Change in Control so that
each Equity Award held by the Participant shall be immediately exercisable and fully vested (and,
in the case of Restricted Stock Units, performance shares, performance units and similar
stock-based compensation, shall be settled in full), as of the date of the Participant’s
Termination Upon a Change in Control.


 


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5.3 Indemnification; Insurance.



(a) In addition to any rights a Participant may have under any indemnification agreement
previously entered into between the Company and such Participant (a “Prior Indemnity Agreement”),
from and after the date of the Participant’s Termination Upon a Change in Control, the Company
shall indemnify and hold harmless the Participant against any costs or expenses (including
attorneys’ fees), judgments, fines, losses, claims, damages or liabilities incurred in connection
with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative
or investigative, by reason of the fact that the Participant is or was a director, officer,
employee or agent of the Company Group, or is or was serving at the request of the Company Group as
a director, officer, employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, whether asserted or claimed prior to, at or after the date of the Participant’s
termination of employment, to the fullest extent permitted under applicable law, and the Company
shall also advance fees and expenses (including attorneys’ fees) as incurred by the Participant to
the fullest extent permitted under applicable law. In the event of a conflict between the
provisions of a Prior Indemnity Agreement and the provisions of this Plan, the Participant may
elect which provisions shall govern.



(b) For a period of six (6) years from and after the date of the Termination Upon a Change in
Control of a Participant who was an officer and/or director of the Company at any time prior to
such termination of employment, the Company shall maintain a policy of directors’ and officers’
liability insurance for the benefit of such Participant which provides him or her with coverage no
less favorable than that provided for the Company’s continuing officers and directors.




6. Certain Federal Tax Considerations




6.1 Federal Excise Tax Under Section 4999 of the Code.



(a) Treatment of Excess Parachute Payments. In the event that any payment or benefit received
or to be received by a Participant pursuant to this Plan or otherwise payable to the Participant
(collectively, the “Payments”) would subject the Participant to any excise tax pursuant to Section
4999 of the Code, or any similar or successor provision (the “Excise Tax”), due to the
characterization of the Payments as “excess parachute payments” under Section 280G of the Code or
any similar or successor provision (“Section 280G”), then, notwithstanding the other provisions of
this Plan, the amount of such Payments will not exceed the amount which produces the greatest
after-tax benefit to the Participant.



(b) Determination of Amounts. All computations and determinations called for by this
Section 6.1 shall be promptly determined and reported in writing to the Company and the Participant
by independent public accountants or other independent advisors selected by the Company and
reasonably acceptable to the Participant (the “Accountants”), and all such computations and
determinations shall be conclusive and binding upon the Participant and the Company. For the
purposes of such determinations, the Accountants may rely on reasonable, good faith interpretations
concerning the application of Sections 280G and 4999 of the Code. The Company and the Participant
shall furnish to the Accountants such information and documents as the Accountants may reasonably
request in order to make their required determinations. The Company shall bear all fees and
expenses charged by the Accountants in connection with such services.


 


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6.2 Compliance with Section 409A. Notwithstanding any other provision of the Plan to the
contrary, the provision, time and manner of payment or distribution of all compensation and
benefits provided by the Plan that constitute Section 409A Deferred Compensation shall be subject
to, limited by and construed in accordance with the requirements of Section 409A, including the
following:



(a) Separation from Service. Payments and benefits constituting Section 409A Deferred
Compensation otherwise payable or provided pursuant to Sections 5 or 6.1 upon a Participant’s
Termination Upon a Change in Control shall be paid or provided only at the time of a termination of
Participant’s employment which constitutes a Separation from Service.



(b) Six-Month Delay Applicable to Specified Employees. Payments and benefits constituting
Section 409A Deferred Compensation to be paid or provided pursuant to Sections 5 or 6.1 pursuant to
the Separation from Service of a Participant who is a Specified Employee shall be paid or provided
commencing on the later of (1) the date that is six (6) months and one (1) day after the date of
such Separation from Service or, if earlier, the date of death of the Participant (in either case,
the “Delayed Payment Date”), or (2) the date or dates on which such Section 409A Deferred
Compensation would otherwise be paid or provided in accordance with Section 5 or 6.1, as
applicable. All such amounts that would, but for this Section 6.2(b), become payable prior to the
Delayed Payment Date shall be accumulated and paid on the Delayed Payment Date.



(c) Limitation on Health and Life Insurance Benefits. To the extent that all or any portion
of the Company’s payment or reimbursement to the Participant for the cost of the Company’s
obligation to provide health benefits and/or life insurance benefits pursuant to Section 5.2(b)
(the “Company-Provided Benefits”) would exceed an amount for which, or continue for a period of
time in excess of which, such Company Provided Benefits would qualify for an exemption from
treatment as Section 409A Deferred Compensation, the Company shall, for the duration of the
applicable Severance Benefit Period, pay or reimburse the Participant for the applicable
Company-Provided Benefits in an amount not to exceed $50,000 per calendar year or any portion
thereof included in the Severance Benefit Period. The amount of Company-Provided Benefits
furnished in any taxable year of the Participant shall not affect the amount of Company-Provided
Benefits furnished in any other taxable year of the Participant. Any right of a Participant to
Company-Provided Benefits shall not be subject to liquidation or exchange for another benefit. Any
reimbursement for Company-Provided Benefits to which a Participant is entitled shall be paid no
later than the last day of the Participant’s taxable year following the taxable year in which the
Participant’s expense for such Company-Provided Benefits was incurred.



(d) Equity Awards. The vesting of any Equity Award which constitutes Section 409A Deferred
Compensation and is held by a Participant who is a Specified Employee shall be accelerated in
accordance with Section 5.2(c) to the extent applicable; provided, however, that the payment in
settlement of any such Equity Award shall occur on the Delayed Payment Date. Equity Awards which
vest and become payable upon a Change in Control in accordance with Section 4 shall not be subject
to this Section.


 


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7. Conflict in Benefits; Noncumulation of Benefits



7.1 Effect of Plan. The terms of this Plan, when accepted by a Participant pursuant to an
executed Participation Agreement, shall supersede all prior arrangements, whether written or oral,
and understandings regarding the subject matter of this Plan and, subject to Section 7.2, shall be
the exclusive agreement for the determination of any payments and benefits due to the Participant
upon the events described in Sections 4, 5 and 6.



7.2 Noncumulation of Benefits. Except as expressly provided in a written agreement between a
Participant and the Company entered into after the date of such Participant’s Participation
Agreement and which expressly disclaims this Section 7.2 and is approved by the Committee, the
total amount of payments and benefits that may be received by the Participant as a result of the
events described in Sections 4, 5 and 6 pursuant to (a) the Plan, (b) any agreement between the
Participant and the Company or (c) any other plan, practice or statutory obligation of the Company,
shall not exceed the amount of payments and benefits provided by this Plan upon such events (plus
any payments and benefits provided pursuant to an agreement evidencing a Prior Indemnity
Agreement), and the aggregate amounts payable under this Plan shall be reduced to the extent of any
excess (but not below zero).




8. Exclusive Remedy



The payments and benefits provided by Section 5 and Section 6 (plus any payments and benefits
provided pursuant to an agreement evidencing a Prior Indemnity Agreement), if applicable, shall
constitute the Participant’s sole and exclusive remedy for any alleged injury or other damages
arising out of the cessation of the employment relationship between the Participant and the Company
in the event of the Participant’s Termination Upon a Change in Control. The Participant shall be
entitled to no other compensation, benefits, or other payments from the Company as a result of any
Termination Upon a Change in Control with respect to which the payments and benefits described in
Section 5 and Section 6 (plus any payments and benefits provided pursuant to an agreement
evidencing a Prior Indemnity Agreement), if applicable, have been provided to the Participant,
except as expressly set forth in this Plan or, subject to the provisions of Section 7.2, in a duly
executed employment agreement between Company and the Participant.




9. Proprietary and Confidential Information



The Participant agrees to continue to abide by the terms and conditions of the confidentiality
and/or proprietary rights agreement between the Participant and the Company.




10. Nonsolicitation



If the Company performs its obligations to deliver the payments and benefits set forth in
Section 5 and Section 6 (plus any payments and benefits provided pursuant to an agreement
evidencing an Equity Award or a Prior Indemnity Agreement), then for a period equal to the
Severance Benefit Period applicable to a Participant following the Participant’s Termination Upon a
Change in Control, the Participant shall not, directly or indirectly, recruit, solicit or invite
the solicitation of any employees of the Company or any other member of the Company Group to
terminate their employment relationship with the Company Group.


 


-12-









 






11. No Contract of Employment



Neither the establishment of the Plan, nor any amendment thereto, nor the payment of any
benefits shall be construed as giving any person the right to be retained by the Company, a
Successor or any other member of the Company Group. Except as otherwise established in an
employment agreement between the Company and a Participant, the employment relationship between the
Participant and the Company is an “at-will” relationship. Accordingly, either the Participant or
the Company may terminate the relationship at any time, with or without cause, and with or without
notice except as otherwise provided by Section 15. In addition, nothing in this Plan shall in any
manner obligate any Successor or other member of the Company Group to offer employment to any
Participant or to continue the employment of any Participant which it does hire for any specific
duration of time.




12. Claims for Benefits



12.1 ERISA Plan. This Plan is intended to be (a) an employee welfare plan as defined in
Section 3(1) of Employee Retirement Income Security Act of 1974 (“ERISA”) and (b) a “top-hat” plan
maintained for the benefit of a select group of management or highly compensated employees of the
Company Group.



12.2 Application for Benefits. All applications for payments and/or benefits under the Plan
(“Benefits”) shall be submitted to the Company’s [Vice President, Human Resources] (the “Claims
Administrator”), with a copy to the Company’s General Counsel. Applications for Benefits must be
in writing on forms acceptable to the Claims Administrator and must be signed by the Participant or
beneficiary. The Claims Administrator reserves the right to require the Participant or beneficiary
to furnish such other proof of the Participant’s expenses, including without limitation, receipts,
canceled checks, bills, and invoices as may be required by the Claims Administrator.




12.3 Appeal of Denial of Claim.



(a) If a claimant’s claim for Benefits is denied, the Claims Administrator shall provide
notice to the claimant in writing of the denial within ninety (90) days after its submission. The
notice shall be written in a manner calculated to be understood by the claimant and shall include:




(1) The specific reason or reasons for the denial;




(2) Specific references to the Plan provisions on which the denial is based;



(3) A description of any additional material or information necessary for the applicant to
perfect the claim and an explanation of why such material or information is necessary; and



(4) An explanation of the Plan’s claims review procedures and a statement of claimant’s right
to bring a civil action under ERISA Section 502(a) following an adverse benefit determination.


 


-13-









 





(b) If special circumstances require an extension of time for processing the initial claim, a
written notice of the extension and the reason therefor shall be furnished to the claimant before
the end of the initial ninety (90) day period. In no event shall such extension exceed ninety (90)
days.



(c) If a claim for Benefits is denied, the claimant, at the claimant’s sole expense, may
appeal the denial to the Committee (the “Appeals Administrator”) within sixty (60) days of the
receipt of written notice of the denial. In pursuing such appeal the applicant or his duly
authorized representative:




(1) may request in writing that the Appeals Administrator review the denial;




(2) may review pertinent documents; and




(3) may submit issues and comments in writing.



(d) The decision on review shall be made within sixty (60) days of receipt of the request for
review, unless special circumstances require an extension of time for processing, in which case a
decision shall be rendered as soon as possible, but not later than one hundred twenty (120) days
after receipt of the request for review. If such an extension of time is required, written notice
of the extension shall be furnished to the claimant before the end of the original sixty (60) day
period. The decision on review shall be made in writing, shall be written in a manner calculated
to be understood by the claimant, and, if the decision on review is a denial of the claim for
Benefits, shall include:




(1) The specific reason or reasons for the denial;




(2) Specific references to the Plan provisions on which the denial is based;



(3) A description of any additional material or information necessary for the applicant to
perfect the claim and an explanation of why such material or information is necessary; and



(4) An explanation of the Plan’s claims review procedures and a statement of claimant’s right
to bring a civil action under ERISA Section 502(a) following an adverse benefit determination.




13. Arbitration



13.1 Disputes Subject to Arbitration. Any claim, dispute or controversy arising out of this
Plan, the interpretation, validity or enforceability of this Plan or the alleged breach thereof
shall be submitted by the parties to binding arbitration by the American Arbitration Association or
as otherwise required by ERISA; provided, however, that (a) the arbitrator shall have no authority
to make any ruling or judgment that would confer any rights with respect to trade secrets,
confidential and proprietary information or other intellectual property; and (b) this arbitration
provision shall not preclude the parties from seeking legal and
equitable relief from any court having jurisdiction with respect to any disputes or claims
relating to or arising out of the misuse or misappropriation of intellectual property. Judgment
may be entered on the award of the arbitrator in any court having jurisdiction.


 


-14-









 





13.2 Site of Arbitration. The site of the arbitration proceeding shall be in Santa Clara,
California or any other site mutually agreed to by the Company and the Participant.



13.3 Costs and Expenses Borne by Company. All costs and expenses of arbitration, including
but not limited to reasonable attorneys’ fees and other costs reasonably incurred by the
Participant in connection with arbitration in accordance with this Section 13, shall be paid by the
Company. Notwithstanding the foregoing, if the Participant initiates the arbitration, and the
arbitrator finds that the Participant’s claims were totally without merit or frivolous, then the
Participant shall be responsible for the Participant’s own attorneys’ fees and costs




14. Successors and Assigns



14.1 Successors of the Company. The Company shall require any successor or assign (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company, expressly, absolutely and unconditionally to assume and
agree to perform this Plan in the same manner and to the same extent that the Company would be
required to perform it if no such succession or assignment had taken place.



14.2 Acknowledgment by Company. If, after a Change in Control, the Company fails to
reasonably confirm that it has performed the obligation described in Section 14.1 within twenty
(20) business days after written notice from the Participant, such failure shall be a material
breach of this Plan and shall entitle the Participant to resign for Good Reason and to receive the
benefits provided under this Plan in the event of Termination Upon a Change in Control.



14.3 Heirs and Representatives of Participant. This Plan shall inure to the benefit of and be
enforceable by the Participant’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devises, legatees or other beneficiaries. If the Participant
should die while any amount would still be payable to the Participant hereunder (other than amounts
which, by their terms, terminate upon the death of the Participant) if the Participant had
continued to live, then all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Plan to the executors, personal representatives or administrators
of the Participant’s estate.


 


-15-









 






15. Notices



15.1 General. For purposes of this Plan, notices and all other communications provided for
herein shall be in writing and shall be deemed to have been duly given when personally delivered or
when mailed by United States certified mail, return receipt requested, or by overnight courier,
postage prepaid, as follows:




(a) if to the Company:




Trident Microsystems, Inc.

3408 Garrett Drive

Santa Clara, CA 95054-28803

Attention: General Counsel



(b) if to the Participant, at the home address which the Participant most recently
communicated to the Company in writing.



Either party may provide the other with notices of change of address, which shall be effective upon
receipt.



15.2 Notice of Termination. Any termination by the Company of the Participant’s employment
during the Change in Control Period or any resignation by the Participant during the Change in
Control Period shall be communicated by a notice of termination or resignation to the other party
hereto given in accordance with Section 15.1. Such notice shall indicate the specific termination
provision in this Plan relied upon, shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination under the provision so indicated, and
shall specify the termination date.




16. Termination and Amendment of Plan



This Plan and/or any Participation Agreement executed by a Participant may not be terminated
with respect to such Participant without the written consent of the Participant and the approval of
the Committee. This Plan and/or any Participation Agreement executed by a Participant may be
modified, amended or superseded with respect to such Participant only by a supplemental written
agreement between the Participant and the Company approved by the Committee. Notwithstanding any
other provision of the Plan to the contrary, the Committee may, in its sole and absolute discretion
and without the consent of any Participant, amend the Plan or any Participation Agreement, to take
effect retroactively or otherwise, as it deems necessary or advisable for the purpose of conforming
the Plan or such Participation Agreement to any present or future law relating to plans of this or
similar nature (including, but not limited to, Section 409A of the Code), and to the administrative
regulations and rulings promulgated thereunder.




17. Miscellaneous Provisions



17.1 Administration. The Plan shall be administered by the Committee. The Committee shall
have the exclusive discretion and authority to establish rules, forms and procedures for the
administration of the Plan, to construe and interpret the Plan, and to decide all questions of
fact, interpretation, definition, computation or administration arising in connection with the
Plan, including, but not limited to, eligibility to participate in the Plan and the amount of
benefits paid under the Plan. The rules, interpretations and other actions of the Committee shall
be binding and conclusive on all persons.


 


-16-









 





17.2 Unfunded Obligation. Any amounts payable to Participants pursuant to the Plan are
unfunded obligations. The Company shall not be required to segregate any monies
from its general funds, or to create any trusts, or establish any special accounts with
respect to such obligations. The Company shall retain at all times beneficial ownership of any
investments, including trust investments, which the Company may make to fulfill its payment
obligations hereunder. Any investments or the creation or maintenance of any trust or any
Participant account shall not create or constitute a trust or fiduciary relationship between the
Board or the Company and a Participant, or otherwise create any vested or beneficial interest in
any Participant or the Participant’s creditors in any assets of the Company.



17.3 No Duty to Mitigate; Obligations of Company. A Participant shall not be required to
mitigate the amount of any payment or benefit contemplated by this Plan by seeking employment with
a new employer or otherwise, nor shall any such payment or benefit (except for benefits to the
extent described in Section 5.2(b)) be reduced by any compensation or benefits that the Participant
may receive from employment by another employer. Except as otherwise provided by this Plan, the
obligations of the Company to make payments to the Participant and to make the arrangements
provided for herein are absolute and unconditional and may not be reduced by any circumstances,
including without limitation any set-off, counterclaim, recoupment, defense or other right which
the Company may have against the Participant or any third party at any time.



17.4 No Representations. By executing a Participation Agreement, the Participant acknowledges
that in becoming a Participant in the Plan, the Participant is not relying and has not relied on
any promise, representation or statement made by or on behalf of the Company which is not set forth
in this Plan.



17.5 Waiver. No waiver by the Participant or the Company of any breach of, or of any lack of
compliance with, any condition or provision of this Plan by the other party shall be considered a
waiver of any other condition or provision or of the same condition or provision at another time.



17.6 Choice of Law. The validity, interpretation, construction and performance of this Plan
shall be governed by the substantive laws of the State of California, without regard to its
conflict of law provisions.



17.7 Validity. The invalidity or unenforceability of any provision of this Plan shall not
affect the validity or enforceability of any other provision of this Plan, which shall remain in
full force and effect.



17.8 Benefits Not Assignable. Except as otherwise provided herein or by law, no right or
interest of any Participant under the Plan shall be assignable or transferable, in whole or in
part, either directly or by operation of law or otherwise, including, without limitation, by
execution, levy, garnishment, attachment, pledge or in any other manner, and no attempted transfer
or assignment thereof shall be effective. No right or interest of any Participant under the Plan
shall be liable for, or subject to, any obligation or liability of such Participant.



17.9 Tax Withholding. All payments made pursuant to this Plan will be subject to withholding
of applicable income and employment taxes.


 


-17-









 





17.10 Consultation with Legal and Financial Advisors. By executing a Participation Agreement,
the Participant acknowledges that this Plan confers significant legal rights, and may also involve
the waiver of rights under other agreements; that the Company has encouraged the Participant to
consult with the Participant’s personal legal and financial advisors; and that the Participant has
had adequate time to consult with the Participant’s advisors before executing the Participation
Agreement.



17.11 Further Assurances. From time to time, at the Company’s request and without further
consideration, the Participant shall execute and deliver such additional documents and take all
such further action as reasonably requested by the Company to be necessary or desirable to make
effective, in the most expeditious manner possible, the terms of the Plan, the Participant’s
Participation Agreement and the Release, and to provide adequate assurance of the Participant’s due
performance thereunder.




18. Agreement



By executing a Participation Agreement, the Participant acknowledges that the Participant has
received a copy of this Plan and has read, understands and is familiar with the terms and
provisions of this Plan. This Plan shall constitute an agreement between the Company and the
Participant executing a Participation Agreement.



IN WITNESS WHEREOF, the undersigned Secretary of the Company certifies that the foregoing Plan
was duly adopted by the Compensation Committee of the Board effective on January 23, 2008.



 



 


-18-









 





EXHIBIT A




FORM OF




AGREEMENT TO PARTICIPATE IN THE




TRIDENT MICROSYSTEMS, INC.




EXECUTIVE RETENTION AND SEVERANCE PLAN





 


 









 







AGREEMENT TO PARTICIPATE IN THE

TRIDENT MICROSYSTEMS, INC.

EXECUTIVE RETENTION AND SEVERANCE PLAN

As Adopted January 23, 2008




In consideration of the benefits provided by the Trident Microsystems, Inc. Executive
Retention and Severance Plan, as adopted January 23, 2008 (the
“Plan”), the undersigned employee of
Trident Microsystems, Inc. (the “Company”) or any of its subsidiaries and the Company agree that,
as of the date written below, the undersigned shall become a Participant in the Plan and shall be
fully bound by and subject to all of its provisions. All references to a “Participant” in the Plan
shall be deemed to refer to the undersigned.



[The undersigned is a “Key Employee” (as defined by the Plan) as of the date of this
Agreement. If the undersigned remains a Key Employee, but not an “Executive Officer,” for the
purpose of determining any severance payments or benefits to which the undersigned may become
entitled under the Plan, the “Severance Benefit Period” applicable to the undersigned shall be
periods of
 _____ 

months and the applicable portion of the undersigned’s Annual Bonus Rate for
purposes of Section 5.2(a)(2) of the Plan shall be
 _____%.]



The undersigned employee acknowledges that the Plan confers significant legal rights and may
also constitute a waiver of rights under other agreements with the Company; that the Company has
encouraged the undersigned to consult with the undersigned’s personal legal and financial advisors;
and that the undersigned has had adequate time to consult with the undersigned’s advisors before
executing this agreement.



The undersigned employee acknowledges that he or she has received a copy of the Plan and has
read, understands and is familiar with the terms and provisions of the Plan. The undersigned
employee further acknowledges that (1) by accepting the arbitration provision set forth in Section
13 of the Plan, the undersigned is waiving any right to a jury trial in the event of any dispute
covered by such provision and (2) except as otherwise established in an employment agreement
between a member of the Company Group and the undersigned, the employment relationship between the
undersigned and his or her employer is an “at-will” relationship.




Executed on
 _____.



	 	 	 	 	 	 	 	 	 
	PARTICIPANT	 	 	 	TRIDENT MICROSYSTEMS, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

Signature

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

Name Printed

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 

Address

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 


	 	 	 	 	 	 	 	 







 


 









 







EXHIBIT B




FORM OF




GENERAL RELEASE OF CLAIMS

[Age 40 and over]





 


 









 







GENERAL RELEASE OF CLAIMS

[Age 40 and over]




This Agreement is by and between [Employee Name] (“Employee”) and [Trident Microsystems, Inc.
or successor that agrees to assume the Executive Retention and Severance Plan following a Change in
Control] (the “Company”). This Agreement will become effective on the eighth (8th) day after it is
signed by Employee (the “Effective Date”), provided that the Company has signed this Agreement and
Employee has not revoked this Agreement (by written notice to [Company Contact Name] at the
Company) prior to that date.



RECITALS




A. Employee was employed by the Company or its
 _____ 

subsidiary as of

 _____,
 _____.



B. Employee and the Company entered into an Agreement to Participate in the Trident
Microsystems, Inc. Executive Retention and Severance Plan (such agreement and plan being referred
to herein as the “Plan”) effective as of
 _____,
 _____ 

wherein Employee is entitled to receive
certain benefits in the event of a Termination Upon a Change in Control (as defined by the Plan),
provided Employee signs and does not revoke a Release (as defined by the Plan).



C. A Change in Control (as defined by the Plan) has occurred as a result of [briefly describe
change in control]



D. Employee’s employment is being terminated as a result of a Termination Upon a Change in
Control. Employee’s last day of work and termination are effective as of
 _____,
 _____.
Employee desires to receive the payments and benefits provided by the Plan by executing this
Release.




NOW, THEREFORE, the parties agree as follows:



1. The Company shall provide Employee with the applicable payments and benefits set forth in
the Plan in accordance with the terms of the Plan. Employee acknowledges that the payments and
benefits made pursuant to this paragraph are made in full satisfaction of the Company’s obligations
under the Plan. Employee further acknowledges that Employee has been paid all wages and accrued,
unused vacation that Employee earned during his or her employment with the Company or its
subsidiary.



2. Employee and Employee’s successors release the Company, its respective subsidiaries,
stockholders, investors, directors, officers, employees, agents, attorneys, insurers, legal
successors and assigns of and from any and all claims, actions and causes of action, whether now
known or unknown, which Employee now has, or at any other time had, or shall or may have against
those released parties based upon or arising out of any matter, cause, fact, thing, act or omission
whatsoever related to Employee’s employment by the Company or a subsidiary or the termination of
such employment and occurring or existing at any time up to and including the date on which
Employee signs this Agreement, including, but not limited to, any
claims of breach of written, oral or implied contract, wrongful termination, retaliation, fraud,
defamation, infliction of emotional distress, or national origin, race, age, sex, sexual
orientation, disability or other discrimination or harassment under the Civil Rights Act of 1964,
the Age Discrimination In Employment Act of 1967, the Americans with Disabilities Act, the Fair
Employment and Housing Act or any other applicable law. Notwithstanding the foregoing, this
release shall not apply to (a) any right of the Employee pursuant to Section 5.3 of the Plan or
pursuant to a Prior Indemnity Agreement (as such term is defined by the Plan) or (b) any rights or
claims that cannot be released by Employee as a matter of law, including, but not limited to, any
claims for indemnity under California Labor Code Section 2802.


 


 









 





3. Employee acknowledges that he or she has read Section 1542 of the Civil Code of the State
of California, which states in full:




A general release does not extend to claims which the creditor does not know
or suspect to exist in his favor at the time of executing the release, which
if known by him must have materially affected his settlement with the
debtor.



Employee waives any rights that Employee has or may have under Section 1542 and any comparable or
similar provisions of the laws of other states in the United States to the full extent that he or
she may lawfully waive such rights pertaining to this general release of claims, and affirms that
Employee is releasing all known and unknown claims that he or she has or may have against the
parties listed above.



4. Employee and the Company acknowledge and agree that they shall continue to be bound by and
comply with the terms and their obligations under the following agreements: (i) any proprietary
rights or confidentiality agreements between the Company or its subsidiary and Employee, (ii) the
Plan, (iii) any Prior Indemnity Agreement (as such term is defined by the Plan) to which Employee
is a party, and (iv) any agreement between the Company or its subsidiary and Employee evidencing an
Equity Award (as such term is defined by the Plan), as modified by the Plan.



5. This Agreement shall be binding upon, and shall inure to the benefit of, the parties and
their respective successors, assigns, heirs and personal representatives.



6. The parties agree that any and all disputes that both (i) arise out of the Plan, the
interpretation, validity or enforceability of the Plan or the alleged breach thereof and (ii)
relate to the enforceability of this Agreement or the interpretation of the terms of this Agreement
shall be subject to binding arbitration pursuant to Section 13 of the Plan.



7. The parties agree that any and all disputes that (i) do not arise out of the Plan, the
interpretation, validity or enforceability of the Plan or the alleged breach thereof and (ii)
relate to the enforceability of this Agreement, the interpretation of the terms of this Agreement
or any of the matters herein released or herein described shall be subject to binding arbitration,
to the extent permitted by law, in Santa Clara, California or any other site mutually agreed to by
the Company and Employee, before the American Arbitration Association, as provided in this
paragraph. The parties agree to and hereby waive their rights to jury trial as to such matters to
the extent permitted by law; provided however, that (a) the arbitrator shall have no authority to
make any ruling or judgment that would confer any rights with respect to trade secrets,
confidential and proprietary information or other intellectual property; and (b) this arbitration
provision shall not preclude the parties from seeking legal and equitable relief from any court
having jurisdiction with respect to any disputes or claims relating to or arising out of the misuse
or misappropriation of intellectual property. The Company shall bear the costs of the arbitrator,
forum and filing fees and each party shall bear its own respective attorney fees and all other
costs, unless otherwise provided by law and awarded by the arbitrator.


 


-2-









 





8. This Agreement constitutes the entire agreement between the parties with respect to the
subject matter hereof and supersedes all prior negotiations and agreements, whether written or
oral, with the exception of any agreements described in paragraph 4 of this Agreement. This
Agreement may not be modified or amended except by a document signed by an authorized officer of
the Company and Employee. If any provision of this Agreement is deemed invalid, illegal or
unenforceable, such provision shall be modified so as to make it valid, legal and enforceable, and
the validity, legality and enforceability of the remaining provisions of this Agreement shall not
in any way be affected.



EMPLOYEE UNDERSTANDS THAT EMPLOYEE SHOULD CONSULT WITH AN ATTORNEY PRIOR TO SIGNING THIS
AGREEMENT AND THAT EMPLOYEE IS GIVING UP ANY LEGAL CLAIMS EMPLOYEE HAS AGAINST THE PARTIES RELEASED
ABOVE BY SIGNING THIS AGREEMENT. EMPLOYEE FURTHER UNDERSTANDS THAT EMPLOYEE MAY HAVE UP TO 45 DAYS
TO CONSIDER THIS AGREEMENT, THAT EMPLOYEE MAY REVOKE IT AT ANY TIME DURING THE 7 DAYS AFTER
EMPLOYEE SIGNS IT, AND THAT IT SHALL NOT BECOME EFFECTIVE UNTIL THAT 7-DAY PERIOD HAS PASSED.
EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE IS SIGNING THIS AGREEMENT KNOWINGLY, WILLINGLY AND VOLUNTARILY
IN EXCHANGE FOR THE COMPENSATION AND BENEFITS DESCRIBED IN PARAGRAPH 1.



	 	 	 	 	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	[Employee Name]	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	[Company]	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Dated:

	 	 	 	 	 	By:	 	 	 	 







 


-3-









 







EXHIBIT C




FORM OF




GENERAL RELEASE OF CLAIMS

[Under age 40]





 


 









 







GENERAL RELEASE OF CLAIMS

[Under age 40]




This Agreement is by and between [Employee Name] (“Employee”) and [Trident Microsystems, Inc.
or successor that agrees to assume the Executive Retention and Severance Plan following a Change in
Control] (the “Company”). This Agreement is effective on the day it is signed by Employee (the
“Effective Date”).



RECITALS




A. Employee was employed by the Company or its
 _____ 

subsidiary as of

 _____,
 _____.



B. Employee and the Company entered into an Agreement to Participate in the Trident
Microsystems, Inc. Executive Retention and Severance Plan (such agreement and plan being referred
to herein as the “Plan”) effective as of
 _____,
 _____ 

wherein Employee is entitled to receive
certain benefits in the event of a Termination Upon a Change in Control (as defined by the Plan),
provided Employee signs a Release (as defined by the Plan).



C. A Change in Control (as defined by the Plan) has occurred as a result of [briefly describe
change in control]



D. Employee’s employment is being terminated as a result of a Termination Upon a Change in
Control. Employee’s last day of work and termination are effective as of
 _____,
 _____ 

(the
“Termination Date”). Employee desires to receive the payments and benefits provided by the Plan by
executing this Release.




NOW, THEREFORE, the parties agree as follows:



1. The Company shall provide Employee with the applicable payments and benefits set forth in
the Plan in accordance with the terms of the Plan. Employee acknowledges that the payments and
benefits made pursuant to this paragraph are made in full satisfaction of the Company’s obligations
under the Plan. Employee further acknowledges that Employee has been paid all wages and accrued,
unused vacation that Employee earned during his or her employment with the Company or its
subsidiary.



2. Employee and Employee’s successors release the Company, its respective subsidiaries,
stockholders, investors, directors, officers, employees, agents, attorneys, insurers, legal
successors and assigns of and from any and all claims, actions and causes of action, whether now
known or unknown, which Employee now has, or at any other time had, or shall or may have against
those released parties based upon or arising out of any matter, cause, fact, thing, act or omission
whatsoever related to Employee’s employment by the Company or a subsidiary or the termination of
such employment and occurring or existing at any time up to and including the date on which
Employee signs this Agreement, including, but not limited to, any claims of breach of written, oral
or implied contract, wrongful termination, retaliation, fraud, defamation, infliction of emotional
distress, or national origin, race, sex, sexual orientation, disability or other discrimination or
harassment under the Civil Rights Act of 1964, the
Americans with Disabilities Act, the Fair Employment and Housing Act or any other applicable law.
Notwithstanding the foregoing, this release shall not apply to (a) any right of the Employee
pursuant to Sections 5.3 of the Plan or pursuant to a Prior Indemnity Agreement (as such term is
defined by the Plan), or (b) any rights or claims that cannot be released by Employee as a matter
of law, including, but not limited to, any claims for indemnity under California Labor Code Section
2808.


 


 









 





3. Employee acknowledges that he or she has read Section 1542 of the Civil Code of the State
of California, which states in full:




A general release does not extend to claims which the creditor does not know
or suspect to exist in his favor at the time of executing the release, which
if known by him must have materially affected his settlement with the
debtor.



Employee waives any rights that Employee has or may have under Section 1542 and any comparable or
similar provisions of the laws of other states in the United States to the full extent that he or
she may lawfully waive such rights pertaining to this general release of claims, and affirms that
Employee is releasing all known and unknown claims that he or she has or may have against the
parties listed above.



4. Employee and the Company acknowledge and agree that they shall continue to be bound by and
comply with the terms and their obligations under the following agreements: (i) any proprietary
rights or confidentiality agreements between the Company or its subsidiary and Employee, (ii) the
Plan, (iii) any Prior Indemnity Agreement (as such term is defined by the Plan) to which Employee
is a party, and (iv) any agreement between the Company or its subsidiary and Employee evidencing an
Equity Award (as such term is defined by the Plan), as modified by the Plan.



5. This Agreement shall be binding upon, and shall inure to the benefit of, the parties and
their respective successors, assigns, heirs and personal representatives.



6. The parties agree that any and all disputes that both (i) arise out of the Plan, the
interpretation, validity or enforceability of the Plan or the alleged breach thereof and (ii)
relate to the enforceability of this Agreement or the interpretation of the terms of this Agreement
shall be subject to binding arbitration pursuant to Section 13 of the Plan.



7. The parties agree that any and all disputes that (i) do not arise out of the Plan, the
interpretation, validity or enforceability of the Plan or the alleged breach thereof and (ii)
relate to the enforceability of this Agreement, the interpretation of the terms of this Agreement
or any of the matters herein released or herein described shall be subject to binding arbitration,
to the extent permitted by law, in Santa Clara, California or any other site mutually agreed to by
the Company and Employee, before the American Arbitration Association, as provided in this
paragraph. The parties agree to and hereby waive their rights to jury trial as to such matters to
the extent permitted by law; provided however, that (a) the arbitrator shall have no authority to
make any ruling or judgment that would confer any rights with respect to trade secrets,
confidential and proprietary information or other intellectual property; and (b) this arbitration
provision shall not preclude the parties from seeking legal and equitable relief from any court
having jurisdiction with respect to any disputes or claims relating to or arising out of the misuse
or misappropriation of intellectual property. The Company shall bear the costs of the arbitrator,
forum and filing fees and each party shall bear its own respective attorney fees and all other
costs, unless otherwise provided by law and awarded by the arbitrator.


 


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8. This Agreement constitutes the entire agreement between the parties with respect to the
subject matter hereof and supersedes all prior negotiations and agreements, whether written or
oral, with the exception of any agreements described in paragraph 4 of this Agreement. This
Agreement may not be modified or amended except by a document signed by an authorized officer of
the Company and Employee. If any provision of this Agreement is deemed invalid, illegal or
unenforceable, such provision shall be modified so as to make it valid, legal and enforceable, and
the validity, legality and enforceability of the remaining provisions of this Agreement shall not
in any way be affected.



EMPLOYEE UNDERSTANDS THAT EMPLOYEE SHOULD CONSULT WITH AN ATTORNEY PRIOR TO SIGNING THIS
AGREEMENT AND THAT EMPLOYEE IS GIVING UP ANY LEGAL CLAIMS EMPLOYEE HAS AGAINST THE PARTIES RELEASED
ABOVE BY SIGNING THIS AGREEMENT. EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE IS SIGNING THIS AGREEMENT
KNOWINGLY, WILLINGLY AND VOLUNTARILY IN EXCHANGE FOR THE COMPENSATION AND BENEFITS DESCRIBED IN
PARAGRAPH 1.



	 	 	 	 	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	[Employee Name]	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	[Company]	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Dated:

	 	 	 	 	 	By:	 	 	 	 







 


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