(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 anydocuments or records of the Company Group; (2) the Participant’s material failure to abide by thecode of conduct or other policies (including, without limitation, policies relating toconfidentiality 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 2002as a result of which of the Company is required to prepare an accounting restatement; (4) theParticipant’s unauthorized use, misappropriation, destruction or diversion of any tangible orintangible asset or corporate opportunity of a member of the Company Group (including, withoutlimitation, the Participant’s improper use or disclosure of the confidential or proprietaryinformation of a member of the Company Group); (5) any intentional act by the Participant which hasa 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 afterwritten notice from a member of the Company Group of, and a reasonable opportunity to cure, suchfailure 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 memberof the Company Group, which breach is not cured pursuant to the terms of such agreement; or (8) theParticipant’s conviction (including any plea of guilty or nolo contendere) of any criminal actinvolving fraud, dishonesty, misappropriation or moral turpitude, or which impairs theParticipant’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 Agreementapplicable 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 ExchangeAct of 1934, as amended (the *“****Exchange Act****”*)), other than a trustee or other fiduciary holdingsecurities of the Company under an employee benefit plan of the Company, acquires (or has acquiredduring 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 orindirectly, of stock of the Company representing more than percent (50%) of the total combinedvoting power of the Company’s then-outstanding stock entitled to vote generally in the election ofdirectors;(2) the Company is party to a merger or consolidation which results in the holders of thevoting stock of the Company outstanding immediately prior thereto failing to retain immediatelyafter such merger or consolidation direct or indirect beneficial ownership of more than fiftypercent (50%) of the total combined voting power of the stock entitled to vote generally in theelection of directors of the Company or the surviving entity outstanding immediately after suchmerger or consolidation;
 
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(3) the sale or disposition of all or substantially all of the Company’s assets orconsummation of any transaction having similar effect (other than a sale or disposition to one ormore subsidiaries of the Company); or(4) a change in the composition of the Board within any consecutive 12-month period as aresult 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 transactiondescribed in subsections (1) or (2) of this Section in which a majority of the members of the boardof directors of the continuing, surviving or successor entity, or parent thereof, immediately aftersuch transaction is comprised of directors who were members of the Board immediately prior toconsummation of such transaction. Notwithstanding the foregoing, to the extent that any amountconstituting Section 409A Deferred Compensation would become payable under this Plan by reason of aChange in Control, such amount shall become payable only if the event constituting a Change inControl would also constitute a change in ownership or effective control of the Company or a changein the ownership of a substantial portion of the assets of the Company within the meaning ofSection 409A.(f) *“***Change in Control Period****”*means a period commencing upon the consummation of a Change inControl and ending on the date occurring eighteen (18) months thereafter.(g) *“***Chief Executive Officer****”*means the individual who, immediately prior to the consummationof 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 andany applicable regulations promulgated thereunder.(i) *“***Committee****”*means the Compensation Committee of the Board.(j) *“***Company****”*means Trident Microsystems, Inc., a Delaware corporation, and, following aChange in Control, a Successor that agrees to assume all of the terms and provisions of this Planor 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 futureparent and subsidiary corporation or other business entity thereof.(l) *“***Disability****”*means a Participant’s permanent and total disability within the meaning ofSection 22(e)(3) of the Code.(m) *“***Equity Award****”*means any Option, Restricted Stock, Restricted Stock Units, performanceshares, performance units or other stock-based compensation award granted by the Company or anyother Company Group member to a Participant, including any such award which is assumed by, or forwhich a replacement award is substituted by, the Successor or any other member of the Company Groupin connection with a Change in Control.
 
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(n) *“***Executive Officer****”*means an individual, other than the Chief Executive Officer, whoimmediately prior to the consummation of a Change in Control serves as an executive officer of theCompany appointed by the Committee or the Board.(o) *“***Good Reason****”*means the occurrence during a Change in Control Period of any of thefollowing 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 ofsuch condition(s) and which notice must have been given within ninety (90) days following theinitial occurrence of such condition(s):(1) a material diminution in the Participant’s authority, duties or responsibilities, causingthe Participant’s position to be of materially lesser rank or responsibility within the Company oran equivalent business unit of its parent, as measured against the Participant’s authority, dutiesor responsibilities immediately prior to the Change in Control;(2) a material diminution in the authority, duties or responsibilities of the officer to whomthe Participant is required to report, causing such officer’s position to be of materially lesserrank or responsibility within the Company or an equivalent business unit of its parent, as measuredagainst the authority, duties and responsibilities of the officer to whom the Participant wasrequired to report immediately prior to the Change in Control, including a requirement that theParticipant report to a corporate officer or employee instead of reporting directly to the board ofdirectors of the Company Group or the Successor;(3) a material decrease in the Participant’s Base Salary Rate or Annual Bonus Rate (subject toapplicable performance requirements with respect to the actual amount of the Annual Bonus Rateearned and paid);(4) a material decrease in the size of the budget within the Company Group over which theParticipant has responsibility, measured against the budget within the Company group over which theParticipant 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 thatincreases the regular commute distance between the Participant’s residence and work place by morethan thirty (30) miles (one-way); or(6) any material breach of this Plan by the Company or its Successor with respect to theParticipant.The existence of Good Reason shall not be affected by the Participant’s temporary incapacity due tophysical or mental illness not constituting a Disability. The Participant’s continued employmentfor a period not exceeding one hundred eighty (180) days following the occurrence of any conditionconstituting 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 Reasonhereunder, any claim by the Participant that Good Reason exists shall be presumed to be correctunless the Company establishes to the Board that Good Reason does not exist, and the Board, actingin good faith, affirms such determination by a vote of not less than two-thirdsof 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 theEffective Date, or (2) is elected, or nominated for election, to the Board with the affirmativevotes 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 contestrelating to the election of directors of the Company.(q) *“***Key Employee****”*means an individual, other than the Chief Executive Officer or an ExecutiveOfficer, who immediately prior to the consummation of a Change in Control is employed by theCompany Group and has been designated by the Board or Committee as eligible to participate in thePlan.(r) *“***Option****”*means any option to purchase shares of the capital stock of the Company or of anyother member of the Company Group granted to a Participant by the Company or any other CompanyGroup member, whether granted before or after a Change in Control, including any such option whichis assumed by, or for which a replacement option is substituted by, the Successor or any othermember of the Company Group in connection with a Change in Control.(s) *“***Participant****”*means each Executive Officer and each Key Employee designated by theCommittee to participate in the Plan, provided such individual has executed a ParticipationAgreement.(t) *“***Participation Agreement****”*means an Agreement to Participate in the Plan in the formattached hereto as Exhibit A or in such other form as the Committee may approve from timeto time; provided, however, that, after a Participation Agreement has been entered into between aParticipant and the Company, it may be modified only by a supplemental written agreement executedby both the Participant and the Company. The terms of such forms of Participation Agreement neednot be identical with respect to each Participant. For example, a Participation Agreement maylimit 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 aChange in Control, the vesting or earning of which is conditioned in whole or in part upon theachievement of one or more performance goals (e.g., the attainment of a target stock price orachievement of a corporate financial goal), notwithstanding that the vesting or earning of suchEquity Award may also be conditioned upon the continued performance of services by the Participantfor the Company Group.(v) *“***Release****”*means a general release of all known and unknown claims against the Company andits affiliates and their stockholders, directors, officers, employees, agents, successors andassigns 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 isapplicable, with any modifications thereto determined by legalcounsel to the Company to be necessary or advisable to comply with applicable law or toaccomplish 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 theCompany or of any other member of the Company Group granted to a Participant by the Company or anyother Company Group member, whether such shares are granted or acquired before or after a Change inControl, including any shares issued in exchange for any such shares by the Successor or any othermember 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 thecapital stock or cash in an amount measured by the value of shares of the capital stock of theCompany or of any other member of the Company Group granted to a Participant by the Company or anyother 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 Successoror 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 otheradministrative guidance promulgated thereunder.(z) *“***Section 409A Deferred Compensation****”*means compensation and benefits provided by the Planthat constitute deferred compensation subject to and not exempted from the requirements of Section409A.(aa) *“***Separation from Service****”*means a separation from service within the meaning of Section409A.(bb) *“***Service-Based Equity Award****”*means an Equity Award granted to a Participant prior to aChange in Control, the vesting or earning of which is conditioned solely upon the continuedperformance of services by the Participant for the Company Group.(cc) *“***Severance Benefit Period****”*means (1) with respect to a Participant who is the ChiefExecutive Officer, a period of twenty-four (24) months, (2) with respect to a Participant who is anExecutive Officer, a period of twelve (12) months, and (3) with respect to a Participant who is aKey Employee, a period as determined by the Committee and set forth in such Participant’sParticipation 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/orassets of the Company.
 
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(ff) *“****Termination Upon a Change in Control****”*means the occurrence of any of the followingevents during the Change in Control Period:(1) termination by the Company Group of the Participant’s employment for any reason other thanCause; or(2) the Participant’s resignation for Good Reason from all capacities in which the Participantis then rendering service to the Company Group, provided that such resignation occurs no later thanone hundred eighty (180) days following the initial occurrence of the condition constituting GoodReason;provided, further, however, that Termination Upon a Change in Control shall not include anytermination of the Participant’s employment which is (i) for Cause, (ii) a result of theParticipant’s death or Disability, or (iii) a result of the Participant’s voluntary termination ofemployment other than for Good Reason.2.2 **Construction.**Captions and titles contained herein are for convenience only and shall notaffect the meaning or interpretation of any provision of the Plan. Except when otherwise indicatedby 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 requiresotherwise.3.**Eligibility**The Committee shall designate those officers and key employees of the Company or any othermember of the Company Group who shall be eligible to become Participants in the Plan. To become aParticipant, 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 aService-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 obligationsunder the then-outstanding Service-Based Equity Award or substitute for such Service-Based EquityAward a substantially equivalent equity award for the Acquiring Corporation’s stock, then thevesting and exercisability of such Service-Based Equity Award which is not assumed, continued orsubstituted for shall be accelerated in full effective immediately prior to but conditioned uponthe consummation of the Change in Control, provided that the Participant remains an employee orother 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 provisionto the contrary contained in any plan or agreement evidencing a Performance-Based Equity Award, inthe event of a Change in Control the vesting and exercisability of such Performance-Based EquityAwards shall be accelerated in full immediately prior to but conditioned upon the consummation ofthe Change in Control (assuming for the purpose of determining the extent of such acceleration, ifapplicable, that one hundred percent (100%) of the target level of performance has been achieved),provided that the Participantremains an employee or other service provider with the Company Group immediately prior to theChange in Control.
 
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The provisions of this Section 4 with respect to all amounts that constitute Section 409A DeferredCompensation shall be subject to, limited by and construed in accordance with the requirements ofSection 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 dateof the Participant’s termination of employment;(b) reimbursement within ten (10) business days of submission, within thirty (30) daysfollowing the Participant’s termination of employment, of proper expense reports of all expensesreasonably and necessarily incurred by the Participant in connection with the business of theCompany Group prior to his or her termination of employment; and(c) the benefits, if any, under any Company Group retirement plan, nonqualified deferredcompensation plan or stock-based compensation plan or agreement (other than any such plan oragreement pertaining to an Equity Award whose treatment is prescribed by Section 4 orSection 5.2(c)), health benefits plan or other Company Group benefit plan to which the Participantmay be entitled pursuant to the terms of such plans or agreements.5.2 **Severance Benefits.**Provided that the Participant executes the Release applicable to suchParticipant and such Release becomes effective in accordance with its terms prior to the applicabledate on which payment is to be made, the Participant shall be entitled to receive the followingseverance payments and benefits:(a) **Salary and Bonus.**Subject to Section 6.2, the Company shall pay to the Participant in alump sum cash payment on the sixtieth (60th) day following the Participant’s Termination Upon aChange in Control an amount equal to the sum of:(1) the product of the Participant’s Severance Benefit Period and the Participant’s BaseSalary Rate;(2) (i) for a Participant who is the Chief Executive Officer, two hundred percent (200%) ofthe Participant’s Annual Bonus Rate, (ii) for a Participant who is an Executive Officer, onehundred percent (100%) of the Participant’s Annual Bonus Rate and (iii) for a Participant who is aKey Employee, such portion of the Participant’s Annual Bonus Rate as is determined by the Committeeand 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 Companyprior to the year of the Participant’s Termination Upon a Change in Control which remain unpaid asof the date of such termination of employment.(b) **Health and Life Insurance Benefits.**Subject to Section 6.2, for the period commencingimmediately following the Participant’s Termination Upon a Change in Control and continuing for theduration of the Severance Benefit Period applicable to the Participant, the Company shall arrangeto provide the Participant and his or her dependents with health benefits (including medical anddental) and life insurance substantially similar to that provided to the Participant and his or herdependents immediately prior to the date of such termination of employment, including thecontinuation of Exec-U-Care or any similar policy in force for the benefit of the Participantimmediately prior to the Termination Upon a Change in Control or shall reimburse the Participantfor the cost of obtaining such benefits to the extent described below. Such benefits shall beprovided to the Participant at the same premium cost to the Participant and at the same coveragelevel 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 coverageapplicable generally to all employees holding the position or comparable position with the CompanyGroup 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 thancontinuation of the Exec-U-Care or similar policy, by paying that portion of the Participant’spremiums required under the Consolidated Omnibus Reconciliation Actof 1985 (*“****COBRA****”*) that exceedsthe amount of premiums that the Participant would have been required to pay for continuing coveragehad he or she continued in employment. If the Company is not reasonably able to continue suchcoverage under the Company’s health benefit plans, the Company shall provide substantiallyequivalent coverage under other sources or will reimburse (without a tax gross-up) the Participantfor premiums (in excess of the Participant’s premium cost described above) incurred by theParticipant to obtain his or her own such coverage. If the Participant and/or the Participant’sdependents become eligible to receive such coverage under another employer’s health benefit plansduring the applicable Severance Benefit Period, the Participant shall report such eligibility tothe Company, and the Company’s obligations under this subsection shall be secondary to the coverageprovided by such other employer’s plans. For the balance of any period in excess of the applicableSeverance Benefit Period during which the Participant is entitled to continuation coverage underCOBRA, the Participant shall be entitled to maintain coverage for himself or herself and theParticipant’s eligible dependents at the Participant’s own expense.(c) **Acceleration of Vesting of Equity Awards.**Notwithstanding any provision to the contrarycontained in any plan or agreement evidencing an Equity Award granted to a Participant but, subjectto Section 6.2, the vesting, exercisability and settlement of each of the Participant’s outstandingEquity Awards which were not otherwise accelerated pursuant to Section 4 shall be accelerated infull effective as of the date of the Participant’s Termination Upon a Change in Control so thateach 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 similarstock-based compensation, shall be settled in full), as of the date of the Participant’sTermination 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 agreementpreviously 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 Companyshall indemnify and hold harmless the Participant against any costs or expenses (includingattorneys’ fees), judgments, fines, losses, claims, damages or liabilities incurred in connectionwith any claim, action, suit, proceeding or investigation, whether civil, criminal, administrativeor 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 asa director, officer, employee or agent of another corporation, partnership, joint venture, trust orother enterprise, whether asserted or claimed prior to, at or after the date of the Participant’stermination of employment, to the fullest extent permitted under applicable law, and the Companyshall also advance fees and expenses (including attorneys’ fees) as incurred by the Participant tothe fullest extent permitted under applicable law. In the event of a conflict between theprovisions of a Prior Indemnity Agreement and the provisions of this Plan, the Participant mayelect which provisions shall govern.(b) For a period of six (6) years from and after the date of the Termination Upon a Change inControl of a Participant who was an officer and/or director of the Company at any time prior tosuch 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 noless 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 receivedor 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 Section4999 of the Code, or any similar or successor provision (the *“****Excise Tax****”*), due to thecharacterization of the Payments as “excess parachute payments” under Section 280G of the Code orany similar or successor provision (*“****Section 280G****”*), then, notwithstanding the other provisions ofthis Plan, the amount of such Payments will not exceed the amount which produces the greatestafter-tax benefit to the Participant.(b) **Determination of Amounts.**All computations and determinations called for by thisSection 6.1 shall be promptly determined and reported in writing to the Company and the Participantby independent public accountants or other independent advisors selected by the Company andreasonably acceptable to the Participant (the *“****Accountants****”*), and all such computations anddeterminations shall be conclusive and binding upon the Participant and the Company. For thepurposes of such determinations, the Accountants may rely on reasonable, good faith interpretationsconcerning the application of Sections 280G and 4999 of the Code. The Company and the Participantshall furnish to the Accountants such information and documents as the Accountants may reasonablyrequest in order to make their required determinations. The Company shall bear all fees andexpenses 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 thecontrary, the provision, time and manner of payment or distribution of all compensation andbenefits provided by the Plan that constitute Section 409A Deferred Compensation shall be subjectto, limited by and construed in accordance with the requirements of Section 409A, including thefollowing:(a) **Separation from Service.**Payments and benefits constituting Section 409A DeferredCompensation otherwise payable or provided pursuant to Sections 5 or 6.1 upon a Participant’sTermination Upon a Change in Control shall be paid or provided only at the time of a termination ofParticipant’s employment which constitutes a Separation from Service.(b) **Six-Month Delay Applicable to Specified Employees.**Payments and benefits constitutingSection 409A Deferred Compensation to be paid or provided pursuant to Sections 5 or 6.1 pursuant tothe Separation from Service of a Participant who is a Specified Employee shall be paid or providedcommencing on the later of (1) the date that is six (6) months and one (1) day after the date ofsuch 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 DeferredCompensation would otherwise be paid or provided in accordance with Section 5 or 6.1, asapplicable. All such amounts that would, but for this Section 6.2(b), become payable prior to theDelayed 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 portionof the Company’s payment or reimbursement to the Participant for the cost of the Company’sobligation 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 oftime in excess of which, such Company Provided Benefits would qualify for an exemption fromtreatment as Section 409A Deferred Compensation, the Company shall, for the duration of theapplicable Severance Benefit Period, pay or reimburse the Participant for the applicableCompany-Provided Benefits in an amount not to exceed $50,000 per calendar year or any portionthereof included in the Severance Benefit Period. The amount of Company-Provided Benefitsfurnished in any taxable year of the Participant shall not affect the amount of Company-ProvidedBenefits furnished in any other taxable year of the Participant. Any right of a Participant toCompany-Provided Benefits shall not be subject to liquidation or exchange for another benefit. Anyreimbursement for Company-Provided Benefits to which a Participant is entitled shall be paid nolater than the last day of the Participant’s taxable year following the taxable year in which theParticipant’s expense for such Company-Provided Benefits was incurred.(d) **Equity Awards.**The vesting of any Equity Award which constitutes Section 409A DeferredCompensation and is held by a Participant who is a Specified Employee shall be accelerated inaccordance with Section 5.2(c) to the extent applicable; provided, however, that the payment insettlement of any such Equity Award shall occur on the Delayed Payment Date. Equity Awards whichvest and become payable upon a Change in Control in accordance with Section 4 shall not be subjectto 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 anexecuted 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 bethe exclusive agreement for the determination of any payments and benefits due to the Participantupon the events described in Sections 4, 5 and 6.7.2 **Noncumulation of Benefits.**Except as expressly provided in a written agreement between aParticipant and the Company entered into after the date of such Participant’s ParticipationAgreement and which expressly disclaims this Section 7.2 and is approved by the Committee, thetotal amount of payments and benefits that may be received by the Participant as a result of theevents described in Sections 4, 5 and 6 pursuant to (a) the Plan, (b) any agreement between theParticipant 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 (plusany payments and benefits provided pursuant to an agreement evidencing a Prior IndemnityAgreement), and the aggregate amounts payable under this Plan shall be reduced to the extent of anyexcess (but not below zero).8.**Exclusive Remedy**The payments and benefits provided by Section 5 and Section 6 (plus any payments and benefitsprovided pursuant to an agreement evidencing a Prior Indemnity Agreement), if applicable, shallconstitute the Participant’s sole and exclusive remedy for any alleged injury or other damagesarising out of the cessation of the employment relationship between the Participant and the Companyin the event of the Participant’s Termination Upon a Change in Control. The Participant shall beentitled to no other compensation, benefits, or other payments from the Company as a result of anyTermination Upon a Change in Control with respect to which the payments and benefits described inSection 5 and Section 6 (plus any payments and benefits provided pursuant to an agreementevidencing 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 dulyexecuted 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 confidentialityand/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 inSection 5 and Section 6 (plus any payments and benefits provided pursuant to an agreementevidencing an Equity Award or a Prior Indemnity Agreement), then for a period equal to theSeverance Benefit Period applicable to a Participant following the Participant’s Termination Upon aChange in Control, the Participant shall not, directly or indirectly, recruit, solicit or invitethe solicitation of any employees of the Company or any other member of the Company Group toterminate their employment relationship with the Company Group.
 
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11.**No Contract of Employment**Neither the establishment of the Plan, nor any amendment thereto, nor the payment of anybenefits shall be construed as giving any person the right to be retained by the Company, aSuccessor or any other member of the Company Group. Except as otherwise established in anemployment agreement between the Company and a Participant, the employment relationship between theParticipant and the Company is an “at-will” relationship. Accordingly, either the Participant orthe Company may terminate the relationship at any time, with or without cause, and with or withoutnotice except as otherwise provided by Section 15. In addition, nothing in this Plan shall in anymanner obligate any Successor or other member of the Company Group to offer employment to anyParticipant or to continue the employment of any Participant which it does hire for any specificduration of time.12.**Claims for Benefits**12.1 **ERISA Plan.**This Plan is intended to be (a) an employee welfare plan as defined inSection 3(1) of Employee Retirement Income Security Act of 1974 (*“****ERISA****”*) and (b) a “top-hat” planmaintained for the benefit of a select group of management or highly compensated employees of theCompany 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 *“****ClaimsAdministrator****”*), with a copy to the Company’s General Counsel. Applications for Benefits must bein writing on forms acceptable to the Claims Administrator and must be signed by the Participant orbeneficiary. The Claims Administrator reserves the right to require the Participant or beneficiaryto 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 providenotice to the claimant in writing of the denial within ninety (90) days after its submission. Thenotice 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 toperfect 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 rightto bring a civil action under ERISA Section 502(a) following an adverse benefit determination.
 
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(b) If special circumstances require an extension of time for processing the initial claim, awritten notice of the extension and the reason therefor shall be furnished to the claimant beforethe 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, mayappeal the denial to the Committee (the *“****Appeals Administrator****”*) within sixty (60) days of thereceipt of written notice of the denial. In pursuing such appeal the applicant or his dulyauthorized 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 forreview, unless special circumstances require an extension of time for processing, in which case adecision shall be rendered as soon as possible, but not later than one hundred twenty (120) daysafter receipt of the request for review. If such an extension of time is required, written noticeof the extension shall be furnished to the claimant before the end of the original sixty (60) dayperiod. The decision on review shall be made in writing, shall be written in a manner calculatedto be understood by the claimant, and, if the decision on review is a denial of the claim forBenefits, 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 toperfect 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 rightto 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 thisPlan, the interpretation, validity or enforceability of this Plan or the alleged breach thereofshall be submitted by the parties to binding arbitration by the American Arbitration Association oras otherwise required by ERISA; provided, however, that (a) the arbitrator shall have no authorityto 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 arbitrationprovision shall not preclude the parties from seeking legal andequitable relief from any court having jurisdiction with respect to any disputes or claimsrelating to or arising out of the misuse or misappropriation of intellectual property. Judgmentmay be entered on the award of the arbitrator in any court having jurisdiction.
 
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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, includingbut not limited to reasonable attorneys’ fees and other costs reasonably incurred by theParticipant in connection with arbitration in accordance with this Section 13, shall be paid by theCompany. Notwithstanding the foregoing, if the Participant initiates the arbitration, and thearbitrator finds that the Participant’s claims were totally without merit or frivolous, then theParticipant shall be responsible for the Participant’s own attorneys’ fees and costs14.**Successors and Assigns**14.1 **Successors of the Company.**The Company shall require any successor or assign (whetherdirect or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all ofthe business and/or assets of the Company, expressly, absolutely and unconditionally to assume andagree to perform this Plan in the same manner and to the same extent that the Company would berequired 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 toreasonably 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 materialbreach of this Plan and shall entitle the Participant to resign for Good Reason and to receive thebenefits 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 beenforceable by the Participant’s personal or legal representatives, executors, administrators,successors, heirs, distributees, devises, legatees or other beneficiaries. If the Participantshould die while any amount would still be payable to the Participant hereunder (other than amountswhich, by their terms, terminate upon the death of the Participant) if the Participant hadcontinued to live, then all such amounts, unless otherwise provided herein, shall be paid inaccordance with the terms of this Plan to the executors, personal representatives or administratorsof the Participant’s estate.
 
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15.**Notices**15.1 **General.**For purposes of this Plan, notices and all other communications provided forherein shall be in writing and shall be deemed to have been duly given when personally delivered orwhen 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 DriveSanta Clara, CA 95054-28803Attention: General Counsel(b) if to the Participant, at the home address which the Participant most recentlycommunicated to the Company in writing.Either party may provide the other with notices of change of address, which shall be effective uponreceipt.15.2 **Notice of Termination.**Any termination by the Company of the Participant’s employmentduring the Change in Control Period or any resignation by the Participant during the Change inControl Period shall be communicated by a notice of termination or resignation to the other partyhereto given in accordance with Section 15.1. Such notice shall indicate the specific terminationprovision in this Plan relied upon, shall set forth in reasonable detail the facts andcircumstances claimed to provide a basis for termination under the provision so indicated, andshall specify the termination date.16.**Termination and Amendment of Plan**This Plan and/or any Participation Agreement executed by a Participant may not be terminatedwith respect to such Participant without the written consent of the Participant and the approval ofthe Committee. This Plan and/or any Participation Agreement executed by a Participant may bemodified, amended or superseded with respect to such Participant only by a supplemental writtenagreement between the Participant and the Company approved by the Committee. Notwithstanding anyother provision of the Plan to the contrary, the Committee may, in its sole and absolute discretionand without the consent of any Participant, amend the Plan or any Participation Agreement, to takeeffect retroactively or otherwise, as it deems necessary or advisable for the purpose of conformingthe Plan or such Participation Agreement to any present or future law relating to plans of this orsimilar nature (including, but not limited to, Section 409A of the Code), and to the administrativeregulations and rulings promulgated thereunder.17.**Miscellaneous Provisions**17.1 **Administration.**The Plan shall be administered by the Committee. The Committee shallhave the exclusive discretion and authority to establish rules, forms and procedures for theadministration of the Plan, to construe and interpret the Plan, and to decide all questions offact, interpretation, definition, computation or administration arising in connection with thePlan, including, but not limited to, eligibility to participate in the Plan and the amount ofbenefits paid under the Plan. The rules, interpretations and other actions of the Committee shallbe binding and conclusive on all persons.
 
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17.2 **Unfunded Obligation.**Any amounts payable to Participants pursuant to the Plan areunfunded obligations. The Company shall not be required to segregate any moniesfrom its general funds, or to create any trusts, or establish any special accounts withrespect to such obligations. The Company shall retain at all times beneficial ownership of anyinvestments, including trust investments, which the Company may make to fulfill its paymentobligations hereunder. Any investments or the creation or maintenance of any trust or anyParticipant account shall not create or constitute a trust or fiduciary relationship between theBoard or the Company and a Participant, or otherwise create any vested or beneficial interest inany 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 tomitigate the amount of any payment or benefit contemplated by this Plan by seeking employment witha new employer or otherwise, nor shall any such payment or benefit (except for benefits to theextent described in Section 5.2(b)) be reduced by any compensation or benefits that the Participantmay receive from employment by another employer. Except as otherwise provided by this Plan, theobligations of the Company to make payments to the Participant and to make the arrangementsprovided 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 whichthe Company may have against the Participant or any third party at any time.17.4 **No Representations.**By executing a Participation Agreement, the Participant acknowledgesthat in becoming a Participant in the Plan, the Participant is not relying and has not relied onany promise, representation or statement made by or on behalf of the Company which is not set forthin this Plan.17.5 **Waiver.**No waiver by the Participant or the Company of any breach of, or of any lack ofcompliance with, any condition or provision of this Plan by the other party shall be considered awaiver 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 Planshall be governed by the substantive laws of the State of California, without regard to itsconflict of law provisions.17.7 **Validity.**The invalidity or unenforceability of any provision of this Plan shall notaffect the validity or enforceability of any other provision of this Plan, which shall remain infull force and effect.17.8 **Benefits Not Assignable.**Except as otherwise provided herein or by law, no right orinterest of any Participant under the Plan shall be assignable or transferable, in whole or inpart, either directly or by operation of law or otherwise, including, without limitation, byexecution, levy, garnishment, attachment, pledge or in any other manner, and no attempted transferor assignment thereof shall be effective. No right or interest of any Participant under the Planshall 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 withholdingof applicable income and employment taxes.
 
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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 involvethe waiver of rights under other agreements; that the Company has encouraged the Participant toconsult with the Participant’s personal legal and financial advisors; and that the Participant hashad adequate time to consult with the Participant’s advisors before executing the ParticipationAgreement.17.11 **Further Assurances.**From time to time, at the Company’s request and without furtherconsideration, the Participant shall execute and deliver such additional documents and take allsuch further action as reasonably requested by the Company to be necessary or desirable to makeeffective, in the most expeditious manner possible, the terms of the Plan, the Participant’sParticipation Agreement and the Release, and to provide adequate assurance of the Participant’s dueperformance thereunder.18.**Agreement**By executing a Participation Agreement, the Participant acknowledges that the Participant hasreceived a copy of this Plan and has read, understands and is familiar with the terms andprovisions of this Plan. This Plan shall constitute an agreement between the Company and theParticipant executing a Participation Agreement.IN WITNESS WHEREOF, the undersigned Secretary of the Company certifies that the foregoing Planwas duly adopted by the Compensation Committee of the Board effective on January 23, 2008. 
 
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**EXHIBIT A**FORM OFAGREEMENT TO PARTICIPATE IN THETRIDENT MICROSYSTEMS, INC.EXECUTIVE RETENTION AND SEVERANCE PLAN
 
 

 
**AGREEMENT TO PARTICIPATE IN THE****************************