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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
 FORM 10-K/A
Amendment No. 2 (Mark One) þ
    
    Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the fiscal year ended June 30, 2004 o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period from                         to Commission file number 0-20784 TRIDENT MICROSYSTEMS, INC.  Delaware
(State or other jurisdiction of
incorporation or organization)
    
    77-0156584
(I.R.S. Employer
Identification No.)
 1090 East Arques Avenue
Sunnyvale, California
(Address of principal executive offices)
    
    94085
(Zip code)
 Registrants telephone number, including area code: (408) 991-8800
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to section 12(g) of the Act:
Common Stock, $0.001 Par Value
(Title of class) Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes þ No o Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and
will not be contained, to the best of Registrants knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. þ Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes þ No o The aggregate market value of the Common Stock held by non-affiliates of
the Registrant, based upon the closing price of the Common Stock on December
31, 2003 ($17.42 per share), as reported on the NASDAQ National Market was
approximately $235,219,281. Shares of Common Stock held by executive officers
and directors and by each person who owns 5% or more of the outstanding Common
Stock have been excluded in that such persons may be deemed to be affiliates.
This determination of affiliate status is not necessarily a conclusive
determination for other purposes. The number of shares of the registrants $0.001 par value Common Stock
outstanding on August 31, 2004, was 22,941,958. DOCUMENTS INCORPORATED BY REFERENCE None.




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TRIDENT MICROSYSTEMS, INC.
FORM 10-K/A
AMENDMENT NO. 1
FOR THE FISCAL YEAR ENDED JUNE 30, 2004
INDEX PagePart IIIItem 11.
    
    Executive Compensation
    
    
    3Part IVItem 15.
    
    Exhibits and Financial Statement Schedules
    
    
    8EXHIBIT 31.1EXHIBIT 31.2
  EXPLANATORY NOTE Trident Microsystems, Inc. (TMI or the Company) hereby amends Item 11
of Part III of its Annual Report on Form 10-K for the fiscal year ended June
30, 2004, as filed with the Securities and Exchange Commission (the SEC) on
September 13, 2004, to read in its entirety as provided below. The purpose of
this amendment is to revise the potential realizable value figures in the table
of TTI options granted during the last fiscal year to correct calculation
errors. -2-




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PART III 
 Item 11. Executive Compensation EXECUTIVE COMPENSATION AND OTHER MATTERS The following table sets forth information concerning the compensation
during the fiscal years ended June 30, 2004, June 30, 2003 and June 30, 2002 of
the Chief Executive Officer of the Company and the two most highly compensated
executive officers of the Company as of June 30, 2004, whose salary and bonus
for the fiscal year ended June 30, 2004 exceeded $100,000. Amounts under the
caption Bonus are amounts earned during the fiscal year, including amounts
paid after the end of the fiscal year, but exclude amounts paid in one fiscal
year for performance in the prior fiscal year. Summary Compensation Table Long-TermAnnual Compensation
    
    CompensationSecuritiesOther Annual
    
    UnderlyingName and Principal Position
    
    Year
    
    Salary
    
    Bonus
    
    Compensation
    
    Options (#)Frank C. Lin
    
    
    2004
    
    
    $
    505,523
    
    
    $
    186,821
    
    
    $
    319,425
    (1)
    
    
    0
    (5)President and Chief
    
    
    2003
    
    
    $
    505,523
    
    
    $
    228,787
    
    
    $
    0
    
    
    
    80,000Executive Officer
    
    
    2002
    
    
    $
    505,523
    
    
    $
    0
    
    
    $
    25,962
    (2)
    
    
    100,000Jung-Herng Chang
    
    
    2004
    
    
    $
    272,200
    
    
    $
    58,789
    
    
    $
    55,675
    (3)
    
    
    0
    (5)President, Digital Media
    
    
    2003
    
    
    $
    272,200
    
    
    $
    47,399
    
    
    $
    0
    
    
    
    30,000Business Unit
    
    
    2002
    
    
    $
    272,200
    
    
    $
    0
    
    
    $
    2,025
    (4)
    
    
    50,000Peter Jen
Sr. Vice President, Asia
    
    
    2004
    
    
    $
    268,840
    
    
    $
    48,224
    
    
    $
    68,705
    (3)
    
    
    0
    (5)Operations and Chief
    
    
    2003
    
    
    $
    268,840
    
    
    $
    45,853
    
    
    $
    0
    
    
    
    30,000Accounting Officer
    
    
    2002
    
    
    $
    268,964
    
    
    $
    0
    
    
    $
    6,246
    (4)
    
    
    50,000
   (1)
    
    Includes $128,320.16 accrued vacation payout. Also includes $191,104.94
overseas housing (rental fee) and hardship allowance.(2)
    
    Includes $7,290.92 accrued vacation payout for 9-11 donation. Also
includes $18,670.95 loan interest reduction due to an amendment of loan
agreement, in which interest rate was retroactively changed, effective
January 1, 2001, to the monthly Applicable Federal Rates, as published by
revenue rulings of the U.S. Internal Revenue Service.(3)
    
    Accrued vacation payout.(4)
    
    Reflects accrued vacation payout for 9-11 donation.(5)
    
    No options to purchase shares of the Companys stock were granted in
fiscal year 2004. However, options to purchase shares of the common stock
of the Companys Taiwanese subsidiary, TTI, were granted in fiscal year
2004. See TTI STOCK OPTIONS GRANTED DURING LAST FISCAL YEAR. TMI Stock Options Granted During Last Fiscal Year The following table provides the specified information concerning grants
of options to purchase the Companys Common Stock made during the fiscal year
ended June 30, 2004 to the persons named in the Summary Compensation Table and
John Edmunds, who joined the Company in the capacity of Chief Financial Officer
on June 14, 2004. -3-




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TMI Option Grants In Last Fiscal Year Potential Realizable Value atAssumed Annual Rates of StockPrice AppreciationIndividual Grants
    
    for Option Term(3)Number of
    
    % of TotalSecurities
    
    OptionsUnderlying
    
    Granted to
    
    ExerciseOptions
    
    Employees
    
    or BaseGranted
    
    in Fiscal
    
    Price
    
    ExpirationName
    
    (#)(1)
    
    Year
    
    ($/Sh)(2)
    
    Date
    
    5% ($)
    
    10% ($)Frank C. Lin
    
    
    0
    
    
    
    0
    %
    
    $
    0.00
    
    
    
    N/A
    
    
    $
    0.00
    
    
    $
    0.00Jung-Herng Chang
    
    
    0
    
    
    
    0
    %
    
    $
    0.00
    
    
    
    N/A
    
    
    $
    0.00
    
    
    $
    0.00John Edmunds
    
    
    150,000
    
    
    
    42.9
    %
    
    $
    13.77
    
    
    
    6/14/14
    
    
    $
    1,298,982
    
    
    $
    3,291,875Peter Jen
    
    
    0
    
    
    
    0
    %
    
    $
    0.00
    
    
    
    N/A
    
    
    $
    0.00
    
    
    $
    0.00
   (1)
    
    The option listed was granted on June 14, 2004 under the 2002 Stock
Option Plan (the Option Plan) and vests as to one-fourth of the shares
subject to the option on each anniversary of the date of grant. The
Option Plan permits the grant of both incentive stock options within the
meaning of Section 422 of the Internal Revenue Code, as amended (the
Code), and nonstatutory stock options. 29,000 shares underlying the
option granted to John Edmunds in the above table were under an incentive
stock option and 121,000 shares were under a nonstatutory stock options.
Under the Option Plan, the Compensation Committee retains discretion to
modify the terms, including the exercise price of outstanding options.
See CHANGE IN CONTROL ARRANGEMENTS.(2)
    
    All options were granted with exercise prices at or above the market
value of a share of our common stock on the date of grant.(3)
    
    Potential gains are net of exercise price, but before taxes associated
with exercise. These amounts represent certain assumed rates of
appreciation only, based on the Securities and Exchange Commission rules.
Actual gains, if any, on stock option exercises are dependent on the
future performance of the Common Stock, overall market conditions and the
option-holders continued employment through the vesting period. The
amounts reflected in this table may not necessarily be achieved. TTI Stock Options Granted During Last Fiscal Year The following table provides the specified information concerning grants
of options to purchase stock in the Companys Taiwanese subsidiary, TTI, made
during the fiscal year ended June 30, 2004 to the persons named in the Summary
Compensation Table and John Edmunds, who joined the Company in the capacity of
Chief Financial Officer on June 14, 2004. -4-




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TTI Option Grants in Last Fiscal Year Potential Realizable Value at Assumed AnnualRates of Stock Price Appreciation for optionIndividual Grants
    
    Term (3)Number of
    
    % of TotalSecurities
    
    OptionsUnderlying
    
    Granted to
    
    ExerciseOptions
    
    Employees
    
    or Base
    
    
    
    
    
    
    
    
    
    Base
    
    BaseGranted
    
    in Fiscal
    
    Price
    
    Expiration
    
    
    
    
    
    Appreciation
    
    AppreciationName
    
    (#)(1)
    
    Year
    
    ($/Sh)(2)
    
    Date
    
    0% ($)
    
    5% ($)
    
    10% ($)Frank C. Lin
    
    
    2,720,000
    
    
    
    19.2
    %
    
    $
    0.30
    
    
    August 2013
    
    $
    642,570
    
    
    $
    1,551,816
    
    
    $
    2,946,776Jung-Hern Chang
    
    
    1,900,000
    
    
    
    13.4
    %
    
    $
    0.30
    
    
    August 2013
    
    $
    448,854
    
    
    $
    1,083,989
    
    
    $
    2,058,410John Edmunds
    
    
    130,000
    
    
    
    0.9
    %
    
    $
    0.30
    
    
    July 2008
    
    $
    242,925
    
    
    $
    304,974
    
    
    $
    376,914Peter Jen
    
    
    130,000
    
    
    
    0.9
    %
    
    $
    0.30
    
    
    August 2013
    
    $
    30,711
    
    
    $
    74,166
    
    
    $
    140,839
   (1)
    
    The share numbers represent shares of the common stock of TTI. As of
June 30, 2004, there were outstanding 65.0 million shares of TTI common
stock, and options to purchase a further 14.2 million shares of TTI common
stock, none of which were exercisable as of that date. See TRIDENT
TECHNOLOGIES, INC. (TTI) in Item 1 of Part I, as amended, above. Each
option grant listed was granted under the TTI 2003 stock option plan (the
TTI Plan) and vests 35% on the first anniversary of the date of grant,
15% on the second anniversary of the date of grant, 25% on the third
anniversary of the date of grant and 25% on the fourth anniversary of the
date of grant.(2)
    
    All TTI options were granted at an exercise price of NT$ 10, or
approximately $0.30 based upon an exchange rate of NT$ 33.864 per $1 on
October 15, 2004. As is the practice in Taiwan, the exercise price of
these options is initially fixed at the inception of the plan for a given
pool of options, and then options are granted at that price until the pool
is depleted. The initial fixed exercise price of NT$ 10 for TTIs initial
16.2 million share pool was customary for an emerging company in Taiwan,
and is equivalent to the par value of the stock. As stock options are
granted, this fixed exercise price may be well below the fair market value
of the stock at the time of grant. Consistent with generally accepted
accounting principles, the Company measures the intrinsic value of these
stock options and records deferred compensation at the time of grant to be
amortized to expense over the vesting period of the option. See Note 8,
Stock Options in TTIin the Notes to Consolidated Financial Statements
filed as part of the Annual Report on Form 10-K for the fiscal year ended
June 30, 2004, filed with the SEC on September 13, 2004. However, given
the fact that TTI is not a widely traded public company, in Taiwan or elsewhere, the
fair market value of TTI common stock is difficult to ascertain precisely
as of any given date.(3)
    
    Potential gains are net of exercise price, but before taxes associated
with exercise. These amounts represent certain assumed rates of
appreciation only, based on the Securities and Exchange Commission rules.
Actual gains, if any, on stock option exercises are dependent on the
further development of a liquid market for TTI common stock or other
transactions involving TTI common stock, the future performance of the TTI
common stock, overall market conditions and the option-holders continued
employment through the vesting period. The amounts reflected in this
table may not necessarily be achieved. The 0% column represents the
difference between the exercise price and fair value on the date of grant. TMI Option Exercises and Fiscal 2004 Year-End Values The following table provides the specified information concerning
exercises of options to purchase the Companys Common Stock in the fiscal year
ended June 30, 2004, and unexercised options held as of June 30, 2004, by the
persons named in the Summary Compensation Table. -5-




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Aggregate TMI Option Exercises in Last Fiscal Year And Fiscal Year-End ValuesNumber of Securities UnderlyingUnexercised Options at FY-
    
    Value of Unexercised In-the-MoneyEnd(1)
    
    Options at FY-End(2)SharesAcquiredOnExercise
    
    ValueName
    
    (#)
    
    Realized
    
    Exercisable
    
    Unexercisable
    
    Exercisable
    
    UnexercisableFrank Lin
    
    
    0
    
    
    $
    0
    
    
    
    1,027,500
    
    
    
    60,000
    
    
    $
    6,416,361
    
    
    $
    415,002Jung-Herng Chang
    
    
    125,000
    
    
    $
    1,721,515
    
    
    
    437,500
    
    
    
    22,500
    
    
    $
    2,676,178
    
    
    $
    155,626John Edmunds
    
    
    0
    
    
    $
    0
    
    
    
    0
    
    
    
    150,000
    
    
    $
    0
    
    
    $
    0Peter Jen
    
    
    97,500
    
    
    $
    1,220,242
    
    
    
    412,500
    
    
    
    22,500
    
    
    $
    2,552,554
    
    
    $
    155,626   (1)
    
    The options of Frank Lin, Jung-Herng Chang and Peter Jen were granted
under the 1992 Stock Option Plan and the options of John Edmunds were
granted under the 2002 Stock Option Plan.(2)
    
    The value of the unexercised in-the-money options is based on the closing
price of the Companys Common Stock on June 30, 2004 ($11.37 per share),
as reported by the Nasdaq National Market, and is net of the exercise
price of such options. TTI Option Exercises and Fiscal 2004 Year-End Values There were no exercises of TTI options by the named officers of the
Company during Fiscal 2004. Compensation of Directors Board members other than the Companys non-employee directors receive no
compensation for attending Board meetings. The Companys non-employee
directors receive $20,000 per year as an annual retainer and reimbursement of
certain expenses in connection with attendance at Board meetings and Committee
meetings. In addition, each non-employee director receives $1,500 for each
Board or Committee meeting attended in person, and $1,000 for each Board or
Committee meeting attended by telephone. In July 2004, the Board and the
Compensation Committee approved a new director compensation package which
continues an annual retainer of $20,000 and $1,500 for each Board meeting
attended in person, but lowers the fees to $1,250 for the Committee chairperson
and $1,000 for the committee member for each Committee meeting attended in
person. The fee for each Board or Committee meeting attended by telephone is
also decreased from $1,000 to $500. Under the Companys 1994 Outside Directors Stock Option Plan (the
Directors Plan), on the day of the initial election or appointment of each
new non-employee director, such non-employee director automatically receives an
option to purchase 20,000 shares of the Companys Common Stock and receives an
additional option to purchase 20,000 shares of the Companys Common Stock on
the date of the first annual meeting of stockholders following the third
anniversary of his or her previous Directors Plan option grant, provided that
he or she remains in office. Furthermore, each non-employee director currently
in office who previously was granted an option under the Directors Plan
automatically receives an additional option to purchase 20,000 shares of the
Companys Common Stock on the day of each third annual meeting of stockholders
of the Company subsequent to the date of the prior option grant after which the
individual remains in office. Each option granted under the Directors Plan
becomes exercisable in three annual installments, subject to the non-employee
directors continued Board service. In July 2004, pursuant to the new
director compensation package approved by the Compensation Committee and the
Board, the director stock option grant to non-employee directors was increased
from 20,000 shares to 25,000 shares vesting over a three year period effective
as of the date of the Companys 2004 Annual Meeting of Stockholders. Such
grants will be made under the Companys 2002 Stock Option Plan. Change-in-Control Arrangements The Companys 1992 Stock Option Plan (the Option Plan) provides that in
the event of a merger of the Company with or into another corporation, unless
the successor corporation assumes or substitutes equivalent options for options
granted under the Option Plan, all outstanding options under the Option Plan
will become fully exercisable -6-




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prior to the merger. Options which are neither assumed or substituted for
by the successor corporation, nor exercised prior to the expiration of a 15-day
notice period, will terminate upon the expiration of such period. All shares subject to options granted under the Directors Plan will become
fully vested and exercisable as of the date 15 days prior to a change in
control of the Company, as defined in the Directors Plan, unless the surviving
or successor corporation either assumes or substitutes its options for options
outstanding under the Directors Plan. Any such options which are neither
assumed or substituted for by the successor corporation, nor exercised, will
terminate as of the date of the change in control. The Company entered into a change-in-control agreement, effective
September 25, 2001, with Frank Lin, the Chairman, CEO and President of the
Company. The agreement provides for severance and other benefits to be paid to
Mr. Lin in the event of Mr. Lins termination following a change in control
of the Company. The agreement defines a change in control as a merger or
consolidation or the sale, or exchange by the stockholders of the Company of
40% or more of the capital stock of the Company, or the sale or exchange of 40%
or more of the Companys assets. The agreement provides that in the event of
Mr. Lins involuntary termination, constructive termination, death or
disability within 36 months following a change in control, Mr. Lin will be
entitled to receive: (1) severance in the amount of 36 months of Mr. Lins
annual base salary then in effect, (2) three times Mr. Lins potential annual
bonus then in effect, (3) acceleration in vesting of up to 1,000,000 of Mr.
Lins options, and (4) continued group insurance coverage of medical, dental,
prescription drug, vision care and life insurance for 36 months following Mr.
Lins termination. The Board of Directors believes that the agreement is in the best
interests of the Company in order to ensure the continued dedication and
objectivity of Mr. Lin, notwithstanding the possibility of a change in
control. Compensation Committee Interlocks and Insider Participation The Compensation Committee of the Companys Board of Directors was
composed of two independent, non-employee directors of the Company, John Luke
and Yasushi Chikagami during the first nine months of fiscal 2004. On April
21, 2004, Glen Antle, an independent, non-employee director of the Company, was
appointed to the Compensation Committee, joining Messrs Luke and Chikagami. No
member of the Compensation Committee is a former employee of the Company, and
no member of the Compensation Committee or executive officer of the Company has
a relationship that would constitute an interlocking relationship with
executive officers or directors of another entity. - 7 -




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PART IV 
 Item 15. Exhibits and Financial Statement Schedules 3. Exhibits Exhibit
    
    Description31.1
    
    Rule 13a-14(a) Certification of Chief Executive Officer*31.2
    
    Rule 13a-14(a) Certification of Chief Financial Officer*
   *
    
    Filed herewith. - 8 -




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SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized. TRIDENT MICROSYSTEMS, INC.Dated: February 24, 2005
    /s/ John S. EdmundsJohn S. EdmundsChief Financial Officer - 9 -




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Index to Exhibits Exhibit
    
    Description31.1
    
    Rule 13a-14(a) Certification of Chief Executive Officer*31.2
    
    Rule 13a-14(a) Certification of Chief Financial Officer*
   *
    
    Filed herewith.