<PAGE>   1


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-K/A-1
              Annual report pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

For the fiscal year ended June 30, 1999          Commission file number 0-20784

                           TRIDENT MICROSYSTEMS, INC.
             (Exact name of registrant as specified in its charter)

            Delaware                                        77-0156584
(State or other jurisdiction of                          (I.R.S. Employer
incorporation or organization)                           Identification No.)

         2450 Walsh Avenue
       Santa Clara, California                              95051-1303
(Address of principal executive offices)                    (Zip code)

       Registrant's telephone number, including area code: (408) 496-1085

        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 [X]    No [ ]

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K (Section 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. [X]

         The aggregate market value of the voting stock held by non-affiliates
of the Registrant, based upon the closing price of the Common Stock on August
31, 1999 ($9.125 per share), as reported on the NASDAQ National Market was
approximately $97,389,938. 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



<PAGE>   2

to be affiliate. 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, 1999, was 13,200,454.




                                       2
<PAGE>   3

                                    PART III

         ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

         Set forth below for all directors are the names, ages, positions with
the Company and period of service as of August 31, 1999. The term of the office
of each person elected as a director will continue until the next annual meeting
of stockholders or until a successor has been elected and qualified or until
resignation or removal.

<TABLE>
<CAPTION>
                                                    POSITIONS                                   DIRECTOR
NAME                                       AGE      WITH THE COMPANY                              SINCE
----                                       ---      ----------------                            --------
<S>                                        <C>      <C>                                          <C>
Class I Directors whose terms expire
at the 1999 Annual Meeting
of Stockholders:

Charles A. Dickinson                        75       Director                                      1993
Yasushi Chikagami                           60       Director                                      1994

Class II Director nominated for
election at the 2000 Annual Meeting
of Stockholders:

Millard Phelps                              71       Director                                      1995
John Luke                                   67       Director                                      1999

Class III Directors whose terms
expire at the 2001 Annual Meeting
of Stockholders:

Frank C. Lin                                54       President, Chief Executive Officer            1987
                                                     and Chairman of the Board of
                                                     Directors

Glen M. Antle                               61       Director                                      1992
</TABLE>


         Mr. Dickinson has served as a Director of the Company since June 1993.
Since July 1984 Mr. Dickinson has been a member of the Board of Directors of
Solectron Corporation, an electronics manufacturing company. From March 1994
until September 1996, Mr. Dickinson served as the Chairman of the Board of
Directors of Solectron Corporation, and from November 1993 to February 1, 1996
as its President, Europe. From March 1989 to November 1993, Mr. Dickinson was
self employed as a business consultant. Mr. Dickinson is also a Director of
Aavid Thermal Technologies, Inc., a company providing thermal transfer
solutions, Lecroy, a company manufacturing digital oscilloscopes, and Dense Pac
Microsystems, a company manufacturing stacked memory modules.

         Mr. Chikagami has served as a Director of the Company since April 1994.
From 1974 to January 1996, Mr. Chikagami served as Chairman of the EI-EN Group,
a group of private companies located in Asia engaged in the electronics
components and computer peripherals business. Since January 1996, Mr. Chikagami
has served as Chairman of KEIAN Corporation, a computer and communications
component company, operating in Japan. Mr. Chikagami has also served as Vice
Chairman of Eastern Computer Group Co. in China since 1988. He was also a
founder of GVC Corporation, a publicly held Taiwanese company engaged in
activities including the manufacture of electronics components and computer
peripherals. Mr. Chikagami is also a director of Silicon Storage Technology,
Inc.

         Mr. Phelps has served as a Director of the Company since September
1995. From September 1984 to May 1994, he served as a senior technology analyst
for Hambrecht & Quist, an investment banking firm and from May 1994 to July
1994, Mr. Phelps served as an advisory director of Hambrecht & Quist when he
retired. Mr. Phelps is also a director of Pericom, a semiconductor corporation,
and three private semiconductor companies.





                                       3
<PAGE>   4

         Mr. Luke has served as a Director of the Company since January 1999.
From May 1989 to September 1997, Mr. Luke served as President of TSMC, USA and
has been President Emeritus since then. Prior to that, from 1982 to 1989, Mr.
Luke served as Vice President of Sales for Monsanto Electronic Materials, Inc.;
from 1978 to 1982, as Vice President of Worldwide Sales at Signetics
Corporation; from 1976 to 1978, as Vice President of Marketing and International
Sales for American Microsystems, Inc.; from 1974 to 1976, as Vice President of
Marketing and Sales for Monolithic Memories and from 1971 to 1974, as Vice
President of Sales at Fairchild. Mr. Luke also spent 10 years at Texas
Instruments in sales management positions.

         Mr. Lin founded the Company and has served as President, Chief
Executive Officer and Chairman of the Board of Directors of the Company since
July 1987. From June 1984 to July 1987, he was Vice President of Engineering at
Genoa Systems, Inc., a graphics and storage product company that he co-founded.
From 1982 to 1984, Mr. Lin was a senior manager at Olivetti Advanced Technical
Center, a PC peripheral equipment design company. Mr. Lin was also a director of
United Integrated Circuits Corporation, a Taiwanese company jointly formed by
Trident, UMC and a number of other fabless semiconductor companies to build and
manage a semiconductor manufacturing facility located in Taiwan, Republic of
China, prior to its consolidation with UMC.

         Mr. Antle has served as a Director of the Company since July 1992. From
July 1996 to August 1997 Mr. Antle was a director of Compass Design Automation,
a company providing EDA tools and libraries. From February 1991 to June 1993, he
served as Chairman of the Board of Directors of PiE Design Systems, an
electronic design automation company, and from August 1992 to June 1993 as its
Chief Executive Officer. In June 1993, PiE merged into Quickturn Design Systems,
Inc., also an electronic design automation company, and Mr. Antle served as
Chairman of the Board of Directors of Quickturn from June 1993 to June 1999.
From June 1989 to February 1991 Mr. Antle was retired. Mr. Antle was a
co-founder of ECAD, Inc., now Cadence Design Systems, Inc., and served as its
Co-Chairman of the Board of Directors from May 1988 to June 1989 and as Chairman
of the Board of Directors and Chief Executive Officer from August 1982 to May
1988.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers, directors and persons who beneficially own more
than 10% of the Company's Common Stock to file initial reports of ownership and
reports of changes in ownership with the Securities and Exchange Commission
("SEC"). Such persons are required by SEC regulations to furnish the Company
with copies of all Section 16(a) forms filed by such persons.

         Based solely on the Company's review of such forms furnished to the
Company and written representations from certain reporting persons, the Company
believes that, during fiscal 1999, all filing requirements applicable to the
Company's executive officers, directors and more than 10% stockholders were met.




                                       4
<PAGE>   5

ITEM 11.  EXECUTIVE COMPENSATION

                       COMPENSATION OF EXECUTIVE OFFICERS

                           SUMMARY COMPENSATION TABLE

         The following table sets forth information concerning the
  compensation during the fiscal years ended June 30, 1999, June 30, 1998 and
  June 30, 1997 of the Chief Executive Officer of the Company and each of the
  four other most highly compensated executive officers of the Company as of
  June 30, 1999, whose salary and incentive compensation for the fiscal year
  ended June 30, 1999 exceeded $100,000. Amounts under the caption "Bonus" are
  amounts earned for performance during the fiscal year including amounts paid
  after the end of the fiscal year.


<TABLE>
<CAPTION>
                                                                                                  LONG-TERM
                                                                                                 COMPENSATION
                                                           ANNUAL COMPENSATION                   ------------
                                                -------------------------------------------       SECURITIES
                                                                             OTHER ANNUAL         UNDERLYING
   NAME AND PRINCIPAL POSITION      YEAR       SALARY           BONUS       COMPENSATION(1)       OPTIONS (#)
   ---------------------------      ----       ------           -----       ---------------       -----------
   ---------------------------      ----       ------           -----       ---------------       -----------
<S>                                  <C>     <C>              <C>            <C>                  <C>
  Frank C. Lin                       1999    $360,430         $      0         $68,364(1)           385,000(2)
  President and Chief                1998    $394,994         $      0         $84,856(1)           220,000(3)
  Executive Officer                  1997    $352,000         $229,336         $     0              150,000(4)

  Jung-Herng Chang                   1999    $192,575         $      0         $8,740(1)            225,000(5)
  Sr. Vice President, Engineering    1998    $211,000         $      0         $16,801(1)           100,000(6)
                                     1997    $183,500         $ 92,152         $     0               60,000(7)

  Peter Jen                          1999    $190,750         $      0         $23,885(1)           200,000(8)
  Sr. Vice President, Asia           1998    $209,000         $      0         $86,330(9)           100,000(10)
  Operations and Chief Accounting    1997    $174,220         $      0         $85,827(11)           90,000(12)
  Officer

  Gerry Liu                          1999    $173,327         $      0         $     0              165,000(13)
  Sr. Vice President, Marketing      1998    $194,000         $      0         $     0               90,000(14)
                                     1997    $165,000         $ 82,500         $     0              110,000(15)

  W. Steven Rowe                     1999    $170,812         $      0         $13,976(1)            89,050(16)
  Vice President, Human              1998    $183,500         $      0         $     0               60,000(17)
  Resources/Administration and       1997    $148,750         $ 58,000         $     0               60,300(18)
  Acting Chief Financial Officer
</TABLE>

----------
(1)      Accrued vacation pay-out.

(2)      Includes an option to purchase 80,000 shares granted on October 12,
         1998 in consideration for the cancellation of an option for an
         identical number of shares granted in fiscal 1994. Also includes option
         to purchase 50,000 shares granted on October 12, 1998 in consideration
         for the cancellation of an option for an identical number of shares
         granted in fiscal 1995. Also includes option to purchase 50,000 shares
         granted on October 12, 1998, in consideration for the cancellation of
         an option for an identical number of shares granted in fiscal 1997.
         Also includes option to purchase 160,000 shares granted on October 12,
         1998, in consideration for the cancellation of an option for an
         identical number of shares granted in fiscal 1998.



                                       5
<PAGE>   6

(3)      Includes an option to purchase 100,000 shares granted on January 23,
         1998, in consideration for the cancellation of an option for an
         identical number of shares granted in fiscal 1997. Also includes an
         option to purchase 60,000 shares granted on January 23, 1998, in
         consideration for the cancellation of an option for an identical number
         of shares granted in fiscal 1998.

(4)      Includes an option to purchase 50,000 shares granted on July 25, 1996,
         in consideration for the cancellation of an option for an identical
         number of shares granted in fiscal 1996.

(5)      Includes an option to purchase 70,000 shares granted on October 12,
         1998, in consideration for the cancellation of an option for an
         identical number of shares granted in fiscal 1993. Also includes an
         option to purchase 10,000 shares granted on October 12, 1998, in
         consideration for the cancellation of an option for an identical number
         of shares granted in fiscal 1994. Also includes an option to purchase
         30,000 shares granted on October 12, 1998, in consideration for the
         cancellation of an option for an identical number of shares granted in
         fiscal 1995. Also includes an option to purchase 20,000 shares granted
         on October 12, 1998, in consideration for the cancellation of an option
         for an identical number of shares granted in fiscal 1997. Also includes
         an option to purchase 70,000 shares granted on October 12, 1998, in
         consideration for the cancellation of an option for an identical number
         of shares granted in fiscal 1998.

(6)      Includes an option to purchase 40,000 shares granted on January 23,
         1998, in consideration for the cancellation of an option for an
         identical number of shares granted in fiscal 1997. Also includes an
         option to purchase 30,000 shares granted on January 23, 1998, in
         consideration for the cancellation of an option for an identical number
         of shares granted in fiscal 1998.

(7)      Includes an option to purchase 20,000 shares granted on July 25, 1996,
         in consideration for the cancellation of an option for an identical
         number of shares granted in fiscal 1996.

(8)      Includes an option to purchase 40,000 shares granted on October 12,
         1998, in consideration for the cancellation of an option for an
         identical number of shares granted in fiscal 1994. Also includes an
         option to purchase 15,000 shares granted on October 12, 1998, in
         consideration for the cancellation of an option for an identical number
         of shares granted in fiscal 1995. Also includes an option to purchase
         50,000 shares granted on October 12, 1998, in consideration for the
         cancellation of an option for an identical number of shares granted in
         fiscal 1997. Also includes an option to purchase 70,000 shares granted
         on October 12, 1998, in consideration for the cancellation of an option
         for an identical number of shares granted in fiscal 1998.

(9)      Includes $48,815 representing commissions earned and $37,515
         representing accrued vacation pay-out.

(10)     Includes an option to purchase 40,000 shares granted on January 23,
         1998, in consideration for the cancellation of an option for an
         identical number of shares granted in fiscal 1997. Also includes option
         to purchase 30,000 shares granted on January 23, 1998, in consideration
         for the cancellation of an option for an identical number of shares
         granted in fiscal 1998.

(11)     All amounts shown represent commissions earned.

(12)     Includes an option to purchase 50,000 shares granted on July 25, 1996,
         in consideration for the cancellation of an option for an identical
         number of shares granted in fiscal 1996.

(13)     Includes an option to purchase 80,000 shares granted on October 12,
         1998, in consideration for the cancellation of an option for an
         identical number of shares granted in fiscal 1997. Also includes an
         option to purchase 60,000 shares granted on October 12, 1998, in
         consideration for the cancellation of an option for an identical number
         of shares granted in fiscal 1998.

(14)     Includes an option to purchase 30,000 shares granted on January 23,
         1998, in consideration for the cancellation of an option for an
         identical number of shares granted in fiscal 1997. Also includes an
         option to purchase 30,000 shares granted on January 23, 1998, in
         consideration for the cancellation of an option for an identical number
         of shares granted in fiscal 1998.

(15)     Includes an option to purchase 40,000 shares granted on July 25, 1996,
         in consideration for the cancellation of an option for an identical
         number of shares granted in fiscal 1996.

(16)     Includes an option to purchase 44,050 shares granted on January 23,
         1998, in consideration for the cancellation of an option for an
         identical number of shares granted in fiscal 1997. Also includes an
         option




                                       6
<PAGE>   7

         to purchase 30,000 shares granted on January 23, 1998, in
         consideration for the cancellation of an option for an identical
         number of shares granted in fiscal 1998.

(17)     Includes an option to purchase 30,000 shares granted on January 23,
         1998, in consideration for the cancellation of an option for an
         identical number of shares granted in fiscal 1997.

(18)     Includes an option to purchase 28,000 shares granted on July 25, 1996,
         in consideration for the cancellation of an option for an identical
         number of shares granted in fiscal 1996.




                                       7
<PAGE>   8



                        OPTION GRANTS IN 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, 1999 to the persons named in the Summary Compensation Table.

<TABLE>
<CAPTION>
                                           INDIVIDUAL GRANTS
                           ----------------------------------------------------
                           NUMBER OF      % OF TOTAL                                 POTENTIAL REALIZABLE VALUE AT
                           SECURITIES      OPTIONS                                   ASSUMED ANNUAL RATES OF STOCK
                           UNDERLYING     GRANTED TO    EXERCISE                           PRICE APPRECIATION
                            OPTIONS       EMPLOYEES      OR BASE                           FOR OPTION TERM(3)
                            GRANTED       IN FISCAL       PRICE     EXPIRATION        -----------------------------
        NAME                 (#)(1)          YEAR       ($/SH)(2)      DATE              5% ($)           10% ($)
--------------------       ----------     ----------    ---------   -----------       ----------        -----------
<S>                        <C>            <C>             <C>        <C>              <C>               <C>
Frank C. Lin                45,000         0.8960%        $3.375     10/16/08          $95,513.37       $242,049.64
                            60,000(4)      1.1946%        $3.500     10/12/08         $132,067.87       $334,685.92
                            80,000(10)     1.5928%        $3.500     10/12/08         $176,090.50       $446,247.89
                            50,000(8)      0.9955%        $3.500     10/12/08         $110,056.56       $278,904.93
                            38,000(5)      0.7566%        $3.500     10/12/08          $83,642.99       $211,967.75
                            12,000(5)      0.2389%        $3.500     10/12/08          $26,413.57        $66,937.18
                           100,000(4)      1.9910%        $3.500     10/12/08         $220,113.12       $557,809.86

Jung-Herng Chang            25,000         0.4978%        $3.375     10/16/08          $53,062.98       $134,472.02
                            20,000(12)     0.3982%        $3.500     10/12/08          $44,022.62       $111,561.97
                            50,000(12)     0.9955%        $3.500     10/12/08         $110,056.56       $278,904.93
                            30,000(4)      0.5973%        $3.500     10/12/08          $66,033.94       $167,342.96
                            10,000(10)     0.1991%        $3.500     10/12/08          $22,011.31        $55,780.99
                            30,000(9)      0.5973%        $3.500     10/12/08          $66,033.94       $167,342.96
                            40,000(4)      0.7964%        $3.500     10/12/08          $88,045.25       $223,123.94
                            20,000(5)      0.3982%        $3.500     10/12/08          $44,022.62       $111,561.97

Peter Jen                   25,000         0.4978%        $3.375     10/16/08          $53,062.98       $134,472.02
                            30,000(5)      0.5973%        $3.500     10/12/08          $66,033.94       $167,342.96
                            40,000(4)      0.7964%        $3.500     10/12/08          $88,045.25       $223,123.94
                            30,000(4)      0.5973%        $3.500     10/12/08          $66,033.94       $167,342.96
                            20,000(5)      0.3982%        $3.500     10/12/08          $44,022.62       $111,561.97
                            15,000(8)      0.2987%        $3.500     10/12/08          $33,016.97        $83,671.48
                            10,000(10)     0.1991%        $3.500     10/12/08          $22,011.31        $55,780.99
                            30,000(11)     0.5973%        $3.500     10/12/08          $66,033.94       $167,342.96

Gerry Liu                   25,000         0.4978%        $3.375     10/16/08          $53,062.98       $134,472.02
                            40,000(5)      0.7964%        $3.500     10/12/08          $88,045.25       $223,123.94
                            30,000(4)      0.5973%        $3.500     10/12/08          $66,033.94       $167,342.96
                            40,000(7)      0.7964%        $3.500     10/12/08          $88,045.25       $223,123.94
                            30,000(4)      0.5973%        $3.500     10/12/08          $66,033.94       $167,342.96

Steven Rowe                 15,000         0.2987%        $3.375     10/16/08          $31,837.79        $80,683.21
                             2,250(5)      0.0448%        $3.500     10/12/08           $4,952.55        $12,550.72
                             9,000(7)      0.1792%        $3.500     10/12/08          $19,810.18        $50,202.89
                             1,120(5)      0.0223%        $3.500     10/12/08           $2,465.27         $6,247.47
                            16,380(5)      0.3261%        $3.500     10/12/08          $36,054.53        $91,369.26
                            30,000(4)      0.5973%        $3.500     10/12/08          $66,033.94       $167,342.96
                            15,300(6)      0.3046%        $3.500     10/12/08          $33,677.31        $85,344.91
</TABLE>

----------


                                       8
<PAGE>   9

(1)      Generally, the right to exercise an option under the Company's 1992
         Stock Option Plan (the "Option Plan") 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. The exercise
         price of incentive stock options must at least equal the fair market
         value of the Common Stock of the Company on the date of grant. The
         exercise price of nonstatutory stock options must equal at least 85% of
         the fair market value of the Common Stock of the Company on the date of
         grant. The exercise price of incentive stock options granted to any
         person who at the time of grant owns stock representing more than 10%
         of the voting power of all classes of stock of the Company or any
         parent or subsidiary corporations must be at least 110% of the fair
         market value of the Common Stock of the Company on the date of grant
         and the term of such options cannot exceed five years. 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 at or above market value on the date of grant
         as determined by the Compensation Committee.

(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.

(4)      These options represent options that were originally granted on
         January 23, 1998 and were repriced on October 12, 1998.

(5)      These options represent options that were originally granted on
         July 25, 1996 and were repriced on October 12, 1998.

(6)      These options represent options that were originally granted on July
         24, 1996 and were repriced on October 12, 1998.

(7)      These options represent options that were originally granted on July
         15, 1996 and were repriced on October 12, 1998.

(8)      These options represent options that were originally granted on October
         20, 1994 and were repriced on October 12, 1998.

(9)      These options represent options that were originally granted on October
         13, 1994 and were repriced on October 12, 1998.

(10)     These options represent options that were originally granted on October
         7, 1993 and were repriced on October 12, 1998.

(11)     These options represent options that were originally granted on July
         14, 1993 and were repriced on October 12, 1998.

(12)     These options represent options that were originally granted on July 7,
         1992 and were repriced on October 12, 1998.




                                       9
<PAGE>   10



OPTION EXERCISES AND FISCAL 1999 YEAR-END VALUES

    AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL 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, 1999, and unexercised options held as of June 30, 1999, by the
persons named in the Summary Compensation Table.


<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
                              SHARES                         NUMBER OF SECURITIES
                             ACQUIRED                       UNDERLYING UNEXERCISED      VALUE OF UNEXERCISED IN-THE-MONEY
                                ON                            OPTIONS AT FY-END               OPTIONS AT FY-END(2)
                             EXERCISE         VALUE     -----------------------------  ----------------------------------
         NAME                   (#)         REALIZED    EXERCISABLE(1)  UNEXERCISABLE      EXERCISABLE     UNEXERCISABLE
----------------------       --------       --------    --------------  -------------  --------------     ---------------
<S>                          <C>            <C>         <C>              <C>            <C>               <C>
Frank Lin                       0            $   0           232,500       152,500      $1,322,343.75     $872,968.75

Jung-Herng Chang                0            $   0           152,500        72,500      $   867,343.75    $415,468.75

Peter Jen                       0            $   0           125,834        81,666      $   734,055.88    $467,600.38

Gerry Liu                       0            $   0            62,500       102,500      $   355,468.75    $586,093.75

Steven Rowe                     0            $   0            25,567        63,483      $   145,412.32    $362,934.57
</TABLE>

----------

(1)      Company stock options generally become exercisable as to 25% on the
         first anniversary of the date of grant and 25% per year thereafter.

(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, 1999 ($9,1875
         per share) and is net of the exercise price of such options.

COMPENSATION OF DIRECTORS

         Board members other than the Company's outside directors receive no
compensation for attending Board meetings, except for reimbursement of certain
expenses in connection with attendance at Board meetings and Committee meetings.
The Company's outside directors receive $10,000 per year as an annual retainer.
In addition, each outside director receives $1,250 for each Board or Committee
meeting attended in person, and $750 for each Board or Committee meeting
attended by phone.

         The Company's 1994 Outside Directors Stock Option Plan (the "Outside
Directors Plan") provides that on the day immediately following the initial
election or appointment of each new non-employee director (an "Outside
Director"), such Outside Director will automatically receive a grant of an
option to purchase 20,000 shares of the Company's Common Stock and will receive
an additional option to purchase 20,000 shares of the Company's Common Stock on
the date of the first annual meeting of the stockholders following the third
anniversary of his or her previous Outside Directors Plan option grant, provided
that he or she remains in office. Each Outside Director previously granted an
option under the Outside Directors Plan will automatically receive an additional
option to purchase 20,000 shares of the Company's Common Stock on the day
immediately following each third annual meeting of the stockholders of the
Company.





                                       10
<PAGE>   11

         On December 17, 1998, each Outside Director remaining in office
following last year's Annual Meeting automatically received an option to
purchase 20,000 shares of the Company's Common Stock on the date of the meeting
and will receive an additional option to purchase 20,000 shares of the Company's
Common Stock on the date of each third annual meeting of the stockholders
thereafter, provided that he or she remains in office.

         In August 1995, the Company entered into a joint venture agreement with
United Microelectronic Corporation ("UMC") pursuant to which the Company is
committed to invest a certain amount over a three year period for a 10% equity
interest in the joint venture entity, United Integrated Circuits Corporation
("UICC"), which constructed a wafer fabrication facility in Taiwan. Following
the consummation of this transaction, Frank Lin was appointed as a director of
UICC and as such was entitled to compensation as a director of that entity. Part
of the joint venture funding facility was destroyed in a fire on October 3,
1997. In June 1999, the Company announced that it received confirmation from UMC
that, subject to the approval of the Taiwanese government, the UICC joint
venture will be consolidated with UMC by the end of 1999. Trident expects to
receive approximately 46.5 million shares of UMC stock in the consolidation.
These shares represent about 0.5% of the outstanding stock of UMC.

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, the Board of Directors shall provide that all
outstanding options under the Option Plan will be fully exercisable 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 Outside 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 Outside Directors Plan unless the surviving, continuing,
successor, or purchasing corporation or parent corporation thereof, as the case
may be (the "Acquiring Corporation"), either assumes or substitutes Acquiring
Corporation options for options outstanding under the Outside Directors Plan.
Any such options which are neither assumed or substituted for by the Acquiring
Corporation nor exercised will terminate as of the date of the change in
control.

COMPENSATION COMMITTEE REPORT ON REPRICING OF OPTIONS

         The following is the report of the Compensation Committee of the Board
of Directors describing the repricing of stock options.

         In October 1998, the Compensation Committee, consisting of Charles A.
Dickinson and Glen M. Antle, considered the options held by the Company's
executive officers and employees and the fact that a broad decline in the price
of the Common Stock of the Company had resulted in a substantial number of stock
options granted pursuant to the Company's 1992 Stock Option Plan and the 1996
Nonstatutory Stock Option Plan (together, the "Plans") having exercise prices
well above the recent historical trading prices of the Common Stock. The
Company's management advised the Committee that it believed employee turnover
was likely to increase in part because the Company's total compensation package
for long-term employees, which included substantial options with exercise prices
well above the then current trading price, was less attractive than compensation
offered by other companies in the same geographic location, since options
granted to new hires at other companies would be granted at current trading
prices.


                                       11
<PAGE>   12

         The Committee determined (i) that the Company's success in the future
would depend in large part on its ability to retain its highly skilled technical
and managerial personnel, (ii) that competition for such personnel would be
intense, (iii) that the loss of key employees could have a significant adverse
impact on the Company's business, (iv) that it would be important and
cost-effective to provide equity incentives to employees and executive officers
of the Company to improve the Company's performance and the value of the Company
for its stockholders, and (v) that the morale of long-term employees holding
stock options with exercise prices well above the current trading price would
suffer as more recently hired employees are granted options with exercise prices
set at current, lower market prices. The Committee recognized that an exchange
of existing options with exercise prices higher than fair market value for
options granted at fair market value would restore incentives to employees
because of the increased potential for appreciation. The Committee also
recognized that it could require the new options to be subject to restrictions
on exercise so that optionees participating in the exchange would have
incentives to remain with the Company. Considering these factors, the Committee
determined it to be in the best interests of the Company and its stockholders to
restore the incentives for employees and executive officers to remain as
employees of the Company and to exert their maximum efforts on behalf of the
Company by granting replacement stock options under the Plans at the optionee's
election, with exercise restrictions and with exercise prices equal to the then
current market value.

         Accordingly, in October 1998, the Committee approved an offer,
effective October 12, 1998, to all employees of the Company, including executive
officers, other than those who have given notice of or been notified of their
termination of employment, to exchange certain outstanding options with exercise
prices above the then current trading price for new options with exercise prices
equal to the current trading price ("New Options"). The Committee provided that
New Options would not be exercisable during periods ranging from six to twelve
months depending on the employee's length of service, except in certain limited
circumstances. Such circumstances are (i) the employee's involuntary termination
other than for cause, (ii) the employee's death or permanent and total
disability, or (iii) a merger, liquidation or dissolution of the Company. In
addition, the annual vesting dates for those portions of the New Options not
received in exchange for vested portions of the canceled old options were
delayed for periods ranging from four to eight months depending on the
employee's length of service. All New Options terminate no later than ten years
from the date of the exchange. Optionees who participated in the exchange
received a lower exercise price in exchange for the cancellation of the holder's
exchanged option. In October 1998, the Company canceled outstanding options for
3,643,000 shares with exercise prices greater than $3.50 and reissued the
options with an exercise price of $3.50. In January 1998, the Company canceled
1,702,000 outstanding options granted after July 25, 1996 with exercise prices
greater than $8.63 and reissued the options with an exercise price of $8.63. In
July 1996, the Company cancelled 1,077,000 options outstanding under the option
plan with exercise prices greater than $9.38 and reissued the options with an
exercise price of $9.38. See EXECUTIVE COMPENSATION AND OTHER MATTERS -
"Ten-Year Option Repricings" table for further information concerning the
repricing.

                                            1999 COMPENSATION COMMITTEE

                                            Charles A. Dickinson
                                            Glen M. Antle



                                       12
<PAGE>   13



REPRICING OF STOCK OPTIONS

         The following table provides the specified information concerning all
repricings of options to purchase the Company's Common Stock held by any
executive officer of the Company since December 16, 1992, the date of the
Company's initial public offering.

                           TEN-YEAR OPTION REPRICINGS


<TABLE>
<CAPTION>
                                                                              EXERCISE
                                                                              PRICE AT
                                            NUMBER OF       MARKET PRICE      TIME OF                   LENGTH OF ORIGINAL
                                           SECURITIES        OF STOCK AT     REPRICING                     OPTION TERM
                                           UNDERLYING          TIME OF           OR           NEW       REMAINING AT DATE
                            REPRICING   OPTIONS REPRICED    REPRICING OR     AMENDMENT      EXERCISE     OF REPRICING OR
    NAME AND POSITION          DATE      OR AMENDED (#)     AMENDMENT($)        (#)        PRICE ($)        AMENDMENT
    -----------------       ----------   ---------------    ------------     ---------     ---------    -------------------
<S>                         <C>              <C>                 <C>          <C>           <C>         <C>
Frank Lin, President and    7/14/93          120,000             $5.00         $ 8.00       $ 5.00      9 years, 94 days
Chief Executive Officer     7/25/96(1)        50,000             $9.38         $20.49(2)    $10.31(2)   4 years, 71 days
                            1/23/98(3)       100,000             $8.63         $11.28(2)    $ 8.63      3 years, 229 days
                            1/23/98(3)        60,000             $8.63         $15.63       $ 8.63      9 years, 179 days
                            10/12/98(4)       80,000             $3.50         $ 5.63       $ 3.50      4 years, 360 days
                            10/12/98(4)       50,000             $3.50         $ 7.70(2)    $ 3.50      1 year, 8 days
                            10/12/98(4)       50,000             $3.50         $10.31(2)    $ 3.50      2 years, 286 days
                            10/12/98(4)       60,000             $3.50         $ 8.63       $ 3.50      9 years, 103 days
                            10/12/98(4)      100,000             $3.50         $ 8.63       $ 3.50      9 years, 103 days

Jung-Herng Chang, Sr.       7/25/96(1)        20,000             $9.38         $18.63       $ 9.38      9 years, 71 days
Vice President,             1/23/98(3)        40,000             $8.63         $10.25       $ 8.63      8 years, 229 days
Engineering                 1/23/98(3)        30,000             $8.63         $15.63       $ 8.63      9 years, 179 days
                            10/12/98(4)       50,000             $3.50         $ 5.00       $ 3.50      3 years, 268 days
                            10/12/98(4)       20,000             $3.50         $ 5.00       $ 3.50      3 years, 269 days
                            10/12/98(4)       10,000             $3.50         $ 5.63       $ 3.50      4 years, 360 days
                            10/12/98(4)       30,000             $3.50         $ 6.00       $ 3.50      6 years, 1 day
                            10/12/98(4)       20,000             $3.50         $ 9.38       $ 3.50      7 years, 286 days
                            10/12/98(4)       30,000             $3.50         $ 8.63       $ 3.50      9 years, 103 days
                            10/12/98(4)       40,000             $3.50         $ 8.63       $ 3.50      9 years, 103 days

Peter Jen, Sr. Vice         7/14/93           30,000             $5.00         $ 5.50       $ 5.00      9 years, 49 days
President, Asia Operations  7/14/93           10,000             $5.00         $ 8.00       $ 5.00      9 years, 95 days
and Chief Accounting        7/25/96(1)        20,000             $9.38         $15.50       $ 9.38      8 years, 261 days
Officer                     7/25/96(1)        30,000             $9.38         $18.63       $ 9.38      9 years, 71 days
                            1/23/98(3)        40,000             $8.63         $10.25       $ 8.63      8 years, 229 days
                            1/23/98(3)        30,000             $8.63         $15.63       $ 8.63      9 years, 179 days
                            10/12/98(4)       30,000             $3.50         $ 5.00       $ 3.50      4 years, 275 days
                            10/12/98(4)       10,000             $3.50         $ 5.63       $ 3.50      4 years, 360 days
                            10/12/98(4)       15,000             $3.50         $ 7.00       $ 3.50      6 years, 8 days
                            10/12/98(4)       20,000             $3.50         $ 9.38       $ 3.50      7 years, 286 days
                            10/12/98(4)       30,000             $3.50         $ 9.38       $ 3.50      7 years, 286 days
                            10/12/98(4)       30,000             $3.50         $ 8.63       $ 3.50      9 years, 103 days
                            10/12/98(4)       40,000             $3.50         $ 8.63       $ 3.50      9 years, 103 days

Gerry Liu, Sr. Vice         7/25/96(1)        40,000             $9.38         $13.25       $ 9.38      9 years, 178 days
President, Marketing        1/23/98(3)        30,000             $8.63         $10.25       $ 8.63      8 years, 229 days
                            1/23/98(3)        30,000             $8.63         $15.63       $ 8.63      9 years, 179 days
                            10/12/98(4)       40,000             $3.50         $ 9.00       $ 3.50      7 years, 276 days
                            10/12/98(4)       40,000             $3.50         $ 9.38       $ 3.50      7 years, 286 days
                            10/12/98(4)       30,000             $3.50         $ 8.63       $ 3.50      9 years, 103 days
                            10/12/98(4)       30,000             $3.50         $ 8.63       $ 3.50      9 years, 103 days
</TABLE>



                                       13
<PAGE>   14


<TABLE>
<CAPTION>
                                                                              EXERCISE                   LENGTH OF ORIGINAL
                                            NUMBER OF                         PRICE AT                      OPTION TERM
                                           SECURITIES       MARKET PRICE      TIME OF                    REMAINING AT DATE
                                           UNDERLYING        OF STOCK AT     REPRICING        NEW         OF REPRICING OR
                            REPRICING   OPTIONS REPRICED       TIME OF           OR         EXERCISE         AMENDMENT
    NAME AND POSITION          DATE      OR AMENDED (#)     REPRICING OR     AMENDMENT     PRICE ($)
                                                            AMENDMENT($)        (#)
    -----------------       ----------   ---------------    ------------     ---------     ---------    -------------------
<S>                         <C>              <C>                 <C>          <C>           <C>         <C>
W. Steven Rowe              7/25/96(1)        25,000             $9.38        $16.75         $9.38      8 years, 317 days
Vice President, HR/         7/25/96(1)         3,000             $9.38        $13.25         $9.38      9 years, 178 days
Administration, Acting      1/23/98(3)        30,000             $8.63        $15.63         $8.63      9 years, 179 days
Chief Financial Officer     10/12/98(4)        9,000             $3.50        $ 9.00         $3.50      7 years, 276 days
                            10/12/98(4)       15,300             $3.50        $ 9.13         $3.50      7 years, 285 days
                            10/12/98(4)       19,750             $3.50        $ 9.38         $3.50      7 years, 286 days
                            10/12/98(4)       30,000             $3.50        $ 8.63         $3.50      9 years, 103 days

Amir Mashkoori, Former      7/25/96(1)       100,000             $9.38        $13.25         $9.38      9 years, 178 days
Sr. Vice President,         1/23/98(3)        30,000             $8.63        $15.63         $8.63      9 years, 179 days
Operations and Business     10/12/98(4)       75,000             $3.50        $ 9.38         $3.50      7 years, 286 days
Development                 10/12/98(4)       30,000             $3.50        $ 8.63         $3.50      9 years, 103 days

Richard Hegberg, Former     7/25/96(1)       100,000             $9.38        $10.38         $9.38      9 years, 362 days
Vice President, Worldwide
Sales

James T. Lindstrom,         7/14/93           10,000             $5.00        $ 8.00         $5.00      9 years, 95 days
Former Vice President,      7/25/96(1)        20,000             $9.38        $18.63         $9.38      9 years, 71 days
Finance, Chief Financial
Officer and Secretary

Tung-Liang Chang, Former    7/14/93           30,000             $5.00        $ 8.00         $5.00      9 years, 95 days
Vice President, ASIC
Technology
</TABLE>

----------
(1)      Options that were repriced on July 25, 1996 vest and become exercisable
         according to the following schedule: (i) in three substantially equal
         annual installments on the first three anniversaries of July 25, 1996,
         if the holder of the exchanged option had completed twelve or more
         months of continuous service as of July 25, 1996, (ii) 25% of the
         number of shares subject to the new option on January 25, 1997 and the
         remainder in three substantially equal annual installments on each of
         the first three anniversaries of January 25, 1997, if the holder had
         completed six months or more but less than twelve months of continuous
         service as of July 25, 1996, or (iii) in four substantially equal
         annual installments on the first four anniversaries of July 25, 1996,
         if the holder had completed less than six months of continuous service
         as of July 25, 1996.

(2)      Represents 110% of the fair market value of the Company's Common Stock
         on the date of grant, as this grant is an incentive stock option and
         Mr. Lin holds more than 10% of the Common Stock of the Company.

(3)      Options that were repriced on January 23, 1998 continue to vest at the
         same rate as applied prior to their repricing but may not exercised
         prior to January 24, 1999, except upon the holder's death, permanent
         and total disability or involuntary termination other than for cause,
         or in the event of a merger, liquidation or dissolution of the Company.

(4)      Options that were repriced on October 12, 1998 continue to vest at the
         same rate as applied prior to their repricing. However, the remaining
         annual vesting dates applicable to shares that have not vested under
         the old option prior to the repricing will be delayed for a period of
         time determined on the basis of the holder's total length of service
         with the Company and its subsidiaries. Each new option, including
         vested shares, will be subject to a restriction on exercise during a
         restriction period also determined on the basis of optionee's total
         length of service, except upon the holder's death, permanent and total
         disability or




                                       14
<PAGE>   15

         involuntary termination other than for cause, or in the event of
         a merger, liquidation or dissolution of the Company. See
         "REPORT OF THE COMPENSATION COMMITTEE ON REPRICING OF OPTIONS."

COMPENSATION COMMITTEE

         Charles A. Dickinson was the sole member of the Compensation Committee
at the beginning of fiscal 1999. Mr. Antle was appointed to the Committee for
part of the year and was replaced by John Luke in April 1999. The Compensation
Committee's primary function is to review and recommend salary levels of, to
approve bonus plans for, and to approve stock option grants to executive
officers, and to set the compensation of the Chief Executive Officer.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

         The following is the report of the Compensation Committee of the Board
of Directors describing compensation policies and rationales applicable to the
Company's executive officers for the fiscal year ended June 30, 1999.

COMPENSATION PHILOSOPHY

         The Compensation Committee strives to align executive compensation with
the value achieved by the executive team for the Company's stockholders. Toward
that goal, the Company's compensation program emphasizes both short- and
long-term incentives designed to attract, motivate, and retain highly qualified
executives who will effectively manage the Company and maximize stockholder
value. The Company uses salary, executive officer bonuses and stock options to
motivate executive officers to achieve the Company's business objectives and to
align the incentives of officers with the long-term interests of stockholders.
The Compensation Committee reviews and evaluates each executive officer's base
and variable compensation annually relative to corporate performance and
comparative market information.

         In setting total compensation, the Compensation Committee considers
individual and Company performance, as well as market information in the form of
published survey data provided to the Compensation Committee by the Company's
human resources staff. The market data consists primarily of base salary and
total cash compensation rates, as well as incentive bonus and stock programs, of
companies considered by the Compensation Committee to be comparable technology
companies as well as companies in the semiconductor design industry. The
Compensation Committee's policy is generally to target levels of cash and equity
compensation paid to its executive officers so that such compensation is
competitive with that paid by such comparable companies.

         In preparing the performance graph for this Proxy Statement, the
Company has selected the H&Q Semiconductors Sector Index, and the Nasdaq Stock
Market-U.S. Index as its peer groups. The companies that the Company included in
its stratified salary surveys are not necessarily those included in the indices,
as such companies may not be competitive with the Company for executive talent,
particularly those companies located outside the Silicon Valley, where
competition for employees has been intense.

         The Company has considered the potential impact of Section 162(m) of
the Internal Revenue Code ("Section 162(m)") adopted under the federal Revenue
Reconciliation Act of 1993. Section 162(m) disallows a tax deduction to any
publicly-held corporation for individual compensation exceeding $1 million in
any taxable year paid to the chief executive officers or any of the four other
most highly compensated executive officers, unless the compensation is
commission or performance-based. The Company's policy is to qualify to the
extent reasonable its executive officers' compensation for



                                       15
<PAGE>   16

deductibility under applicable tax laws. Since the targeted cash compensation of
each of the named executive officers is well below the $1 million threshold and
the Company believes that compensation attributable to any options granted under
the Company's 1992 Stock Option Plan as of June 30, 1999 qualified as
performance-based compensation in accordance with the regulations under Section
162(m), the Compensation Committee believes that Section 162(m) generally will
not reduce the tax deduction available to the Company. However, as a result of
the stock option repricing effective October 12, 1998 (See "REPORT OF THE
COMPENSATION COMMITTEE ON REPRICING OF OPTIONS"), options for an aggregate of
460,000 shares granted to persons named in the Summary Compensation Table do not
qualify as performance-based for purposes of Section 162(m).

FORMS OF COMPENSATION

         Salary. The Company strives to offer executive officers salaries that
are competitive with comparable companies in the technology sector generally and
in the semiconductor design industry. Frank C. Lin, President and Chief
Executive Officer of the Company, approves executive salaries at the time
executives join the Company, which are subject to review and approval by the
Compensation Committee. Thereafter, Mr. Lin periodically reviews salaries of the
executive officers and recommends adjustments to the base salaries of those
officers which are subject to review and approval by the Compensation Committee.
The Compensation Committee reviews Mr. Lin's performance and makes adjustments
to his salary. Adjustments made by Mr. Lin and the Compensation Committee are
based on individual executive officer performance, cost of living increases,
Company performance, and adjustments to retain qualified personnel. Mr. Lin's
base salary is reviewed annually by the Compensation Committee and reflects his
position, duties, and responsibilities. Management determined to reduce
executive salaries by 10% in fiscal 1999 and reported this decision to the
compensation committee.

         Incentive Compensation. The Board of Directors reviews and approves an
executive bonus plan ("Plan") based upon Company and individual performance. The
Compensation Committee believes that significant bonus incentives based on
performance of the Company and personal performance provide substantial
motivations to achieve corporate goals. Under the Plan, Company performance is
measured for the fiscal year on a basis of actual operating profit as compared
with budgeted operating profit. The Company performance portion of any
executive's incentive bonus could be higher if the Company's performance
exceeded the goal. Individual performance against management-by-objective
("MBO") goals comprises a significant component of the bonus for most
executives; however, Company performance is given more weight in any bonus
calculation. The Plan is approved by the Compensation Committee with Mr. Lin
determining whether executive officers, other than himself, met their individual
MBO goals and with the Compensation Committee making such determination as to
Mr. Lin. The Compensation Committee believes the incentives paid to the
Company's executives on a basis of Company performance and individual
performance are comparable to those paid under industry standard incentive
compensation programs.

         Management determined to maintain management salaries at the same
reduced levels paid in 1998, and not to pay any bonuses for fiscal 1999, whether
or not such bonuses were earned under the terms of the plan. The Compensation
Committee has not met during fiscal 1999.

         Stock Options. The Compensation Committee strives to maintain the
equity position of all executive officers at levels competitive with comparable
companies. The Compensation Committee believes that equity ownership provides
significant additional motivation to executive officers to maximize value for
the Company's stockholders, and therefore grants stock options under the
Company's 1992 Stock Option Plan at the commencement of an executive officer's
employment and, depending on that officer's performance and the appropriateness
of additional awards to retain key employees,




                                       16
<PAGE>   17

periodically thereafter. Stock options are granted at the prevailing market
price, vest over a period of years and will only have value if the Company's
stock price increases over the exercise price. Therefore, the Compensation
Committee believes that stock options serve to align the interests of executive
officers closely with other stockholders because of the direct benefit executive
officers receive through improved stock price performance.

         In October 1998, the Compensation Committee granted options to
executive officers, including Mr. Lin. Mr. Lin received a grant of 45,000 shares
with an exercise price of $3.375. The grant is based on Mr. Lin's senior
position, his responsibilities, and his past and expected contributions to the
Company's future success and was intended to provide competitive equity
compensation for the Company's 1999 fiscal year.

                                    1999 COMPENSATION COMMITTEE

                                    Charles A. Dickinson
                                    John Luke




                                       17
<PAGE>   18

ITEM 12.  STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth certain information, as of August 31,
1999, with respect to the beneficial ownership of the Company's Common Stock by
(i) all persons known by the Company to be the beneficial owners of more than 5%
of the outstanding Common Stock of the Company, (ii) each director and
director-nominee of the Company, (iii) the Chief Executive Officer and the four
other most highly compensated executive officers of the Company as of June 30,
1999, whose salary and incentive compensation for the fiscal year ended June 30,
1999 exceeded $100,000, and (iv) all executive officers and directors of the
Company as a group.


<TABLE>
<CAPTION>
                                                                   SHARES OWNED (1)
         NAME AND ADDRESS OF                                   NUMBER       PERCENTAGE
         BENEFICIAL OWNERS                                    OF SHARES     OF CLASS
         -----------------                                    ---------     --------
<S>                                                           <C>           <C>
Glen M. Antle(2).............................................      53,250       *
Yasushi Chikagami(3).........................................      34,127       *
Charles A. Dickinson(4)......................................      59,650       *
Frank C. Lin(5)..............................................   1,874,659     14.20%
   c/o Trident Microsystems, Inc.
   2450 Walsh Avenue
   Santa Clara, CA  95051
John Luke....................................................           *       *
Millard Phelps(6)............................................      28,506       *
Jung-Herng Chang(7)..........................................     202,381      1.53%
Peter Jen(8).................................................     171,138      1.30%
Gerry Liu(9).................................................      85,056       *
Steven Rowe(10)..............................................      18,817       *
Executive officers and directors
as a group (10 persons)(11)..................................   2,527,584     19.15%
</TABLE>

----------
* Less than 1%

(1)      Except as otherwise noted, the persons named in the table have the sole
         voting and investment power with respect to all shares shown as
         beneficially owned by them, subject to the information contained in the
         footnotes to this table.

(2)      Includes 41,250 shares subject to options exercisable by Mr. Antle
         within sixty days of August 31, 1999.

(3)      Includes 5,000 shares held by a joint tenant account for Mr.
         Chikagami's wife, son and daughter. Also includes 29,127 shares subject
         to options exercisable by Mr. Chikagami within sixty days of August 31,
         1999.



                                       18
<PAGE>   19

(4)      Includes 22,500 shares subject to options exercisable by Mr. Dickinson
         within sixty days of August 31, 1999.

(5)      Includes 247,500 shares subject to options exercisable by Mr. Lin
         within sixty days of August 31, 1999. Also includes 10,500 shares held
         by Mr. Lin's wife and 29,956 shares held by a custodian for the benefit
         of Mr. Lin's two minor children.

(6)      Includes 27,551 shares subject to options exercisable by Mr. Phelps
         within sixty days of August 31, 1999.

(7)      Includes 160,834 shares subject to options exercisable by Mr. Chang
         within sixty days of August 31, 1999.

(8)      Includes 134,168 shares subject to options exercisable by Mr. Jen
         within sixty days of August 31, 1999.

(9)      Includes 80,834 shares subject to options exercisable by Mr. Liu within
         sixty days of August 31, 1999.

(10)     Includes 18,817 shares subject to options exercisable by Mr. Rowe
         within sixty days of August 31, 1999.

(11)     Includes 762,581 shares subject to options exercisable within sixty
         days of August 31, 1999.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         On December 21, 1998, Mr. Mashkoori paid to the Company $72,426.03 as
payment in full for the principal amount and accrued interest owed under the
Company's loan to Mr. Mashkoori originally granted on May 5, 1997 and amended on
May 5, 1998.

         On July 9, 1999, the loan originally entered into with W. Steven Rowe
on July 9, 1997 was amended to increase the amount from $159,105 to $167,951.24
and to extend the term for one year, making the loan payable on July 9, 2000
with interest at a rate of 5.32% per annum.


         In October 1998, the Board approved a loan to Frank Lin pursuant to
which Mr. Lin could borrow $500,000 from the Company. As of the date of this
proxy statement, the Company and Mr. Lin have not entered into a loan agreement
and Mr. Lin has not borrowed any money from the Company under this arrangement.



                                       19
<PAGE>   20



                        COMPARISON OF STOCKHOLDER RETURN

         In accordance with Exchange Act regulations, set forth below is a line
graph comparing the annual percentage change in the cumulative total return on
the Company's Common Stock with the cumulative total return of the Hambrecht &
Quist Semiconductors Sector Index ("H&Q Semiconductor Index") and the Nasdaq
Stock Market Index (U.S. Companies) ("Nasdaq US") for the period commencing on
June 30, 1994 and ending on June 30, 1999. The information contained in the
performance graphs shall not be deemed to be "soliciting material" or to be
"filed" with the Securities and Exchange Commission, nor shall such information
be incorporated by reference into any future filing under the Securities Act of
1933, as amended, or the Exchange Act, except to the extent that the Company
specifically incorporates it by reference into such filing.



            COMPARISON OF CUMULATIVE TOTAL RETURN FROM JUNE 30, 1994
                            THROUGH JUNE 30, 1999(1)

    TRIDENT MICROSYSTEMS, INC., HAMBRECHT & QUIST SEMICONDUCTORS SECTOR INDEX
                  AND THE NASDAQ STOCK MARKET (U.S. COMPANIES)

                                     [GRAPH]

<TABLE>
<CAPTION>

                              Jun-94        Jun-95        Jun-96         Jun-97        Jun-98        Jun-99
                              ------        ------        ------         ------        ------        ------
<S>                           <C>           <C>           <C>             <C>          <C>           <C>
 Nasdaq US                    $100.00       $132.22       $167.85         $204.26      $288.38       $408.83
 Trident Microsystems         $100.00       $332.00       $202.00         $180.00       $85.00       $147.00
 H&Q Semiconductor Index      $100.00       $194.93       $144.52         $261.62      $214.28       $453.81
</TABLE>

----------
(1)      Assumes that $100.00 was invested on June 30, 1994 in the Company's
         Common Stock and each index, and that all dividends were reinvested. No
         dividends have been declared on the Company's Common Stock. Stockholder
         returns over the indicated period should not be considered indicative
         of future stockholder returns.



                                       20
<PAGE>   21

                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1924, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on October 28, 1999.


                         TRIDENT MICROSYSTEMS, INC.
                         (Registrant)



                         By: /s/ PETER JEN
                             ------------------------------------------------
                             Peter Jen
                             Senior Vice President, Asia Operations and Chief
                             Accounting Officer (Principal Financial and
                             Accountng Officer)

<TABLE>
<CAPTION>
    Signature                                        Title
    ---------                                        -----
<S>                                   <C>
*Frank C. Lin                         President, Chief Executive Officer and Chairman
-------------------------             of the Board (Principal Executive Officer)
(Frank C. Lin)

/s/ PETER JEN                         Senior Vice President, Asia Operations and Chief
-------------------------             Accounting Officer (Principal Financial and
(Peter Jen)                           Accounting Officer)


*Glen M. Antle                        Director
-------------------------
(Glen M. Antle)

*Yasushi Chikagami                    Director
-------------------------
(Yasushi Chikagami)

*Charles A. Dickinson                 Director
-------------------------
(Charles A. Dickinson)


*John Luke                            Director
-------------------------
(John Luke)

*Millard Phelps                       Director
-------------------------
(Millard Phelps)

*By:    /s/ PETER JEN
     --------------------
     Peter Jen
     Attorney-in-Fact
</TABLE>



                                       21