Document:

exv10w23

 

Exhibit 10.23

TRIDENT MICROSYSTEMS, INC.

STOCK OPTION AGREEMENT

     Trident Microsystems, Inc. has granted to the Participant named in the Notice of Grant of
Stock Option (the “Grant Notice”) to which this Stock Option Agreement (the “Option Agreement”) is
attached an option (the “Option”) to purchase certain shares of Stock upon the terms and conditions
set forth in the Grant Notice and this Option Agreement. The Option has been granted pursuant to
and shall in all respects be subject to the terms and conditions of the Trident Microsystems, Inc.
2006 Equity Incentive Plan (the “Plan”), as amended to the Date of Grant, the provisions of which
are incorporated herein by reference. By signing the Grant Notice, the Participant: (a)
acknowledges receipt of and represents that the Participant has read and is familiar with the Grant
Notice, this Option Agreement, the Plan and a prospectus for the Plan prepared in connection with
the registration with the Securities and Exchange Commission of shares issuable pursuant to the
Option (the “Plan Prospectus”), (b) accepts the Option subject to all of the terms and conditions
of the Grant Notice, this Option Agreement and the Plan and (c) agrees to accept as binding,
conclusive and final all decisions or interpretations of the Committee upon any questions arising
under the Grant Notice, this Option Agreement or the Plan.

     1. Definitions and Construction.

          1.1 Definitions. Unless otherwise defined herein, capitalized terms shall have the meanings
assigned to such terms in the Grant Notice or the Plan.

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

     2. Tax Consequences.

          2.1 Tax Status of Option. This Option is intended to have the tax status designated in the
Grant Notice.

               (a) Incentive Stock Option. If the Grant Notice so designates, this Option is intended to be
an Incentive Stock Option within the meaning of Section 422(b) of the Code, but the Company does
not represent or warrant that this Option qualifies as such. The Participant should consult with
the Participant’s own tax advisor regarding the tax effects of this Option and the requirements
necessary to obtain favorable income tax treatment under Section 422 of the Code, including, but
not limited to, holding period requirements. (NOTE TO PARTICIPANT: If the Option is exercised more
than three (3) months after the date on which you cease to be an Employee (other than by reason of
your death or permanent and total disability as defined in Section 22(e)(3) of the Code), the
Option will be treated as a Nonstatutory Stock Option and not as an Incentive Stock Option to the
extent required by Section 422 of the Code.)

 

 

               (b) Nonstatutory Stock Option. If the Grant Notice so designates, this Option is intended to
be a Nonstatutory Stock Option and shall not be treated as an Incentive Stock Option within the
meaning of Section 422(b) of the Code.

          2.2 ISO Fair Market Value Limitation. If the Grant Notice designates this Option as an
Incentive Stock Option, then to the extent that the Option (together with all Incentive Stock
Options granted to the Participant under all stock option plans of the Participating Company Group,
including the Plan) becomes exercisable for the first time during any calendar year for shares
having a Fair Market Value greater than One Hundred Thousand Dollars ($100,000), the portion of
such options which exceeds such amount will be treated as Nonstatutory Stock Options. For purposes
of this Section 2.2, options designated as Incentive Stock Options are taken into account in the
order in which they were granted, and the Fair Market Value of stock is determined as of the time
the option with respect to such stock is granted. If the Code is amended to provide for a
different limitation from that set forth in this Section 2.2, such different limitation shall be
deemed incorporated herein effective as of the date required or permitted by such amendment to the
Code. If the Option is treated as an Incentive Stock Option in part and as a Nonstatutory Stock
Option in part by reason of the limitation set forth in this Section 2.2, the Participant may
designate which portion of such Option the Participant is exercising. In the absence of such
designation, the Participant shall be deemed to have exercised the Incentive Stock Option portion
of the Option first. Separate certificates representing each such portion shall be issued upon the
exercise of the Option. (NOTE TO PARTICIPANT: If the aggregate Exercise Price of the Option (that
is, the Exercise Price multiplied by the Number of Option Shares) plus the aggregate exercise price
of any other Incentive Stock Options you hold (whether granted pursuant to the Plan or any other
stock option plan of the Participating Company Group) is greater than $100,000, you should contact
the Chief Financial Officer of the Company to ascertain whether the entire Option qualifies as an
Incentive Stock Option.)

     3. Administration.

          All questions of interpretation concerning this Option Agreement shall be determined by the
Committee. All determinations by the Committee shall be final and binding upon all persons having
an interest in the Option as provided by the Plan. Any Officer shall have the authority to act on
behalf of the Company with respect to any matter, right, obligation, or election which is the
responsibility of or which is allocated to the Company herein, provided the Officer has apparent
authority with respect to such matter, right, obligation, or election.

     4. Exercise of the Option.

          4.1 Right to Exercise. Except as otherwise provided herein, the Option shall be exercisable
on and after the Initial Vesting Date and prior to the termination of the Option (as provided in
Section 6) in an amount not to exceed the number of Vested Shares less the number of shares
previously acquired upon exercise of the Option. In no event shall the Option be exercisable for
more shares than the Number of Option Shares, as adjusted pursuant to Section 9.

          4.2 Method of Exercise. Exercise of the Option shall be by means of electronic or written
notice (the “Exercise Notice”) in a form authorized by the Company. An

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electronic Exercise Notice must be digitally signed or authenticated by the Participant in
such manner as required by the notice and transmitted to the Company or an authorized
representative of the Company (including a third-party administrator designated by the Company).
In the event that the Participant is not authorized or is unable to provide an electronic Exercise
Notice, the Option shall be exercised by a written Exercise Notice addressed to the Company, which
shall be signed by the Participant and delivered in person, by certified or registered mail, return
receipt requested, by confirmed facsimile transmission, or by such other means as the Company may
permit, to the Company, or an authorized representative of the Company (including a third-party
administrator designated by the Company). Each Exercise Notice, whether electronic or written,
must state the Participant’s election to exercise the Option, the number of whole shares of Stock
for which the Option is being exercised and such other representations and agreements as to the
Participant’s investment intent with respect to such shares as may be required pursuant to the
provisions of this Option Agreement. Further, each Exercise Notice must be received by the Company
prior to the termination of the Option as set forth in Section 6 and must be accompanied by full
payment of the aggregate Exercise Price for the number of shares of Stock being purchased. The
Option shall be deemed to be exercised upon receipt by the Company of such electronic or written
Exercise Notice and the aggregate Exercise Price.

          4.3 Payment of Exercise Price.

               (a) Forms of Consideration Authorized. Except as otherwise provided below, payment of the
aggregate Exercise Price for the number of shares of Stock for which the Option is being exercised
shall be made (i) in cash or by check or cash equivalent, (ii) if permitted by the Company, by
tender to the Company, or attestation to the ownership, of whole shares of Stock owned by the
Participant having a Fair Market Value not less than the aggregate Exercise Price, (iii) by means
of a Cashless Exercise, as defined in Section 4.3(b), or (iv) by any combination of the foregoing.

               (b) Limitations on Forms of Consideration.

                    (i) Tender of Stock. Notwithstanding the foregoing, the Option may not be exercised by tender
to the Company, or attestation to the ownership, of shares of Stock to the extent such tender or
attestation would constitute a violation of the provisions of any law, regulation or agreement
restricting the redemption of the Company’s stock. If required by the Company, the Option may not
be exercised by tender to the Company, or attestation to the ownership, of shares of Stock unless
such shares either have been owned by the Participant for more than six (6) months or such other
period, if any, required by the Company (and not used for another option exercise by attestation
during such period) or were not acquired, directly or indirectly, from the Company.

                    (ii) Cashless Exercise. A “Cashless Exercise” means the delivery of a properly executed
notice together with irrevocable instructions to a broker in a form acceptable to the Company
providing for the assignment to the Company of the proceeds of a sale or loan with respect to some
or all of the shares of Stock acquired upon the exercise of the Option pursuant to a program or
procedure approved by the Company (including, without limitation, through an exercise complying
with the provisions of Regulation T as promulgated from time to time by the Board of Governors of
the Federal Reserve System). The Company

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reserves, at any and all times, the right, in the Company’s sole and absolute discretion, to
establish, decline to approve or terminate any such program or procedure, including with respect to
the Participant notwithstanding that such program or procedures may be available to others.

          4.4 Tax Withholding.

               (a) In General. At the time the Option is exercised, in whole or in part, or at any time
thereafter as requested by the Company, the Participant hereby authorizes withholding from payroll
and any other amounts payable to the Participant, and otherwise agrees to make adequate provision
for (including by means of a Cashless Exercise to the extent permitted by the Company), any sums
required to satisfy the federal, state, local and foreign tax withholding obligations of the
Participating Company Group, if any, which arise in connection with the Option. The Company shall
have no obligation to deliver shares of Stock until the tax withholding obligations of the
Participating Company Group have been satisfied by the Participant.

               (b) Withholding in Shares. The Company may permit or require the Participant to satisfy all
or any portion of a Participating Company’s tax withholding obligations upon exercise of the Option
by deducting from the shares of Stock otherwise issuable to the Participant upon such exercise a
number of whole shares having a fair market value, as determined by the Company as of the date of
exercise, not in excess of the amount of such tax withholding obligations determined by the
applicable minimum statutory withholding rates. Any adverse consequences to the Participant
resulting from the procedure permitted under this Section, including, without limitation, tax
consequences, shall be the sole responsibility of the Participant.

          4.5 Beneficial Ownership of Shares; Certificate Registration. The Participant hereby
authorizes the Company, in its sole discretion, to deposit for the benefit of the Participant with
any broker with which the Participant has an account relationship of which the Company has notice
any or all shares acquired by the Participant pursuant to the exercise of the Option. Except as
provided by the preceding sentence, a certificate for the shares as to which the Option is
exercised shall be registered in the name of the Participant, or, if applicable, in the names of
the heirs of the Participant.

          4.6 Restrictions on Grant of the Option and Issuance of Shares. The grant of the Option and
the issuance of shares of Stock upon exercise of the Option shall be subject to compliance with all
applicable requirements of federal, state or foreign law with respect to such securities. The
Option may not be exercised if the issuance of shares of Stock upon exercise would constitute a
violation of any applicable federal, state or foreign securities laws or other law or regulations
or the requirements of any stock exchange or market system upon which the Stock may then be listed.
In addition, the Option may not be exercised unless (i) a registration statement under the
Securities Act shall at the time of exercise of the Option be in effect with respect to the shares
issuable upon exercise of the Option or (ii) in the opinion of legal counsel to the Company, the
shares issuable upon exercise of the Option may be issued in accordance with the terms of an
applicable exemption from the registration requirements of the Securities Act. THE PARTICIPANT IS
CAUTIONED THAT THE OPTION MAY NOT BE EXERCISED UNLESS THE FOREGOING CONDITIONS ARE SATISFIED.
ACCORDINGLY, THE

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PARTICIPANT MAY NOT BE ABLE TO EXERCISE THE OPTION WHEN DESIRED EVEN THOUGH THE OPTION IS
VESTED. The inability of the Company to obtain from any regulatory body having jurisdiction the
authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and
sale of any shares subject to the Option shall relieve the Company of any liability in respect of
the failure to issue or sell such shares as to which such requisite authority shall not have been
obtained. As a condition to the exercise of the Option, the Company may require the Participant to
satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any
applicable law or regulation and to make any representation or warranty with respect thereto as may
be requested by the Company.

          4.7 Fractional Shares. The Company shall not be required to issue fractional shares upon the
exercise of the Option.

     5. Nontransferability of the Option.

          During the lifetime of the Participant, the Option shall be exercisable only by the
Participant or the Participant’s guardian or legal representative. The Option shall not be subject
in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge,
encumbrance, or garnishment by creditors of the Participant or the Participant’s beneficiary,
except transfer by will or by the laws of descent and distribution. Following the death of the
Participant, the Option, to the extent provided in Section 7, may be exercised by the Participant’s
legal representative or by any person empowered to do so under the deceased Participant’s will or
under the then applicable laws of descent and distribution.

     6. Termination of the Option.

          The Option shall terminate and may no longer be exercised after the first to occur of (a) the
close of business on the Option Expiration Date, (b) the close of business on the last date for
exercising the Option following termination of the Participant’s Service as described in Section 7,
or (c) a Change in Control to the extent provided in Section 8.

     7. Effect of Termination of Service.

          7.1 Option Exercisability. The Option shall terminate immediately upon the Participant’s
termination of Service to the extent that it is then unvested and shall be exercisable after the
Participant’s termination of Service to the extent it is then vested only during the applicable
time period as determined below and thereafter shall terminate.

               (a) Disability. If the Participant’s Service terminates because of the Disability of the
Participant, the Option, to the extent unexercised and exercisable for Vested Shares on the date on
which the Participant’s Service terminated, may be exercised by the Participant (or the
Participant’s guardian or legal representative) at any time prior to the expiration of twelve (12)
months after the date on which the Participant’s Service terminated, but in any event no later than
the Option Expiration Date.

               (b) Death. If the Participant’s Service terminates because of the death of the Participant,
the Option, to the extent unexercised and exercisable for Vested Shares on the date on which the
Participant’s Service terminated, may be exercised by the Participant’s legal

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representative or other person who acquired the right to exercise the Option by reason of the
Participant’s death at any time prior to the expiration of twelve (12) months after the date on
which the Participant’s Service terminated, but in any event no later than the Option Expiration
Date. The Participant’s Service shall be deemed to have terminated on account of death if the
Participant dies within three (3) months after the Participant’s termination of Service.

               (c) Termination for Cause. If the Participant’s Service is terminated for Cause or if,
following the Participant’s termination of Service and during any period in which the Option
otherwise would remain exercisable, the Participant engages in any act that would constitute Cause,
the Option shall terminate in its entirety and cease to be exercisable immediately upon such
termination of Service or act.

               (d) Other Termination of Service. If the Participant’s Service terminates for any reason,
except Disability, death or Cause, the Option, to the extent unexercised and exercisable for Vested
Shares by the Participant on the date on which the Participant’s Service terminated, may be
exercised by the Participant at any time prior to the expiration of three (3) months after the
date on which the Participant’s Service terminated, but in any event no later than the Option
Expiration Date.

          7.2 Extension if Exercise Prevented by Law or Insider Trading Policy. Notwithstanding the
foregoing, other than termination of Service for Cause, if the exercise of the Option within the
applicable time periods set forth in Section 7.1 is prevented by the provisions of Section 4.6 or a
sale of shares pursuant to a Cashless Exercise of the Option would violate the provisions of the
Insider Trading Policy, the Option shall remain exercisable until thirty (30) days after the date
such exercise or sale, as the case may be, would no longer be prevented by such provisions, but in
any event no later than the Option Expiration Date.

     8. Effect of Change in Control.

          In the event of a Change in Control, except to the extent that the Committee determines to
cash out the Option in accordance with Section 15.1(c) of the Plan, the surviving, continuing,
successor, or purchasing entity or parent thereof, as the case may be (the “Acquiror”), may,
without the consent of the Participant, assume or continue in full force and effect the Company’s
rights and obligations under all or any portion of the Option or substitute for all or any portion
of the Option a substantially equivalent option for the Acquiror’s stock. For purposes of this
Section, the Option or any portion thereof shall be deemed assumed if, following the Change in
Control, the Option confers the right to receive, subject to the terms and conditions of the Plan
and this Option Agreement, for each share of Stock subject to such portion of the Option
immediately prior to the Change in Control, the consideration (whether stock, cash, other
securities or property or a combination thereof) to which a holder of a share of Stock on the
effective date of the Change in Control was entitled; provided, however, that if such consideration
is not solely common stock of the Acquiror, the Committee may, with the consent of the Acquiror,
provide for the consideration to be received upon the exercise of the Option, for each share of
Stock subject to the Option, to consist solely of common stock of the Acquiror equal in Fair Market
Value to the per share consideration received by holders of Stock pursuant to the Change in
Control. The Option shall terminate and cease to be outstanding effective as of the time of
consummation of the Change in Control to the extent that the Option is neither

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assumed or continued by the Acquiror in connection with the Change in Control nor exercised as
of the date of the Change in Control.

     9. Adjustments for Changes in Capital Structure.

          Subject to any required action by the stockholders of the Company, in the event of any change
in the Stock effected without receipt of consideration by the Company, whether through merger,
consolidation, reorganization, reincorporation, recapitalization, reclassification, stock dividend,
stock split, reverse stock split, split-up, split-off, spin-off, combination of shares, exchange of
shares, or similar change in the capital structure of the Company, or in the event of payment of a
dividend or distribution to the stockholders of the Company in a form other than Stock (excepting
normal cash dividends) that has a material effect on the Fair Market Value of shares of Stock,
appropriate and proportionate adjustments shall be made in the number, Exercise Price and kind of
shares subject to the Option, in order to prevent dilution or enlargement of the Participant’s
rights under the Option. For purposes of the foregoing, conversion of any convertible securities
of the Company shall not be treated as “effected without receipt of consideration by the Company.”
Any fractional share resulting from an adjustment pursuant to this Section shall be rounded down to
the nearest whole number, and in no event may the Exercise Price be decreased to an amount less
than the par value, if any, of the stock subject to the Option. The Committee in its sole
discretion, may also make such adjustments in the terms of the Option to reflect, or related to,
such changes in the capital structure of the Company or distributions as it deems appropriate. The
adjustments determined by the Committee pursuant to this Section shall be final, binding and
conclusive.

     10. Rights as a Stockholder, Director, Employee or Consultant.

          The Participant shall have no rights as a stockholder with respect to any shares covered by
the Option until the date of the issuance of the shares for which the Option has been exercised (as
evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company). No adjustment shall be made for dividends, distributions or other rights
for which the record date is prior to the date the shares are issued, except as provided in Section
9. If the Participant is an Employee, the Participant understands and acknowledges that, except as
otherwise provided in a separate, written employment agreement between a Participating Company and
the Participant, the Participant’s employment is “at will” and is for no specified term. Nothing
in this Option Agreement shall confer upon the Participant any right to continue in the Service of
a Participating Company or interfere in any way with any right of the Participating Company Group
to terminate the Participant’s Service as a Director, an Employee or Consultant, as the case may
be, at any time.

     11. Notice of Sales Upon Disqualifying Disposition.

          The Participant shall dispose of the shares acquired pursuant to the Option only in accordance
with the provisions of this Option Agreement. In addition, if the Grant Notice designates this
Option as an Incentive Stock Option, the Participant shall (a) promptly notify the Chief Financial
Officer of the Company if the Participant disposes of any of the shares acquired pursuant to the
Option within one (1) year after the date the Participant exercises all or part of the Option or
within two (2) years after the Date of Grant and (b) provide the Company with a

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description of the circumstances of such disposition. Until such time as the Participant
disposes of such shares in a manner consistent with the provisions of this Option Agreement, unless
otherwise expressly authorized by the Company, the Participant shall hold all shares acquired
pursuant to the Option in the Participant’s name (and not in the name of any nominee) for the
one-year period immediately after the exercise of the Option and the two-year period immediately
after Date of Grant. At any time during the one-year or two-year periods set forth above, the
Company may place a legend on any certificate representing shares acquired pursuant to the Option
requesting the transfer agent for the Company’s stock to notify the Company of any such transfers.
The obligation of the Participant to notify the Company of any such transfer shall continue
notwithstanding that a legend has been placed on the certificate pursuant to the preceding
sentence.

     12. Legends.

          The Company may at any time place legends referencing any applicable federal, state or foreign
securities law restrictions on all certificates representing shares of stock subject to the
provisions of this Option Agreement. The Participant shall, at the request of the Company,
promptly present to the Company any and all certificates representing shares acquired pursuant to
the Option in the possession of the Participant in order to carry out the provisions of this
Section. Unless otherwise specified by the Company, legends placed on such certificates may
include, but shall not be limited to, the following:

“THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED BY THE CORPORATION TO THE
REGISTERED HOLDER UPON EXERCISE OF AN INCENTIVE STOCK OPTION AS DEFINED IN SECTION
422 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (“ISO”). IN ORDER TO OBTAIN
THE PREFERENTIAL TAX TREATMENT AFFORDED TO ISOs, THE SHARES SHOULD NOT BE
TRANSFERRED PRIOR TO [INSERT DISQUALIFYING DISPOSITION DATE HERE]. SHOULD THE
REGISTERED HOLDER ELECT TO TRANSFER ANY OF THE SHARES PRIOR TO THIS DATE AND FOREGO
ISO TAX TREATMENT, THE TRANSFER AGENT FOR THE SHARES SHALL NOTIFY THE CORPORATION
IMMEDIATELY. THE REGISTERED HOLDER SHALL HOLD ALL SHARES PURCHASED UNDER THE
INCENTIVE STOCK OPTION IN THE REGISTERED HOLDER’S NAME (AND NOT IN THE NAME OF ANY
NOMINEE) PRIOR TO THIS DATE OR UNTIL TRANSFERRED AS DESCRIBED ABOVE.”

     13. Miscellaneous Provisions.

          13.1 Termination or Amendment. The Committee may terminate or amend the Plan or the Option at
any time; provided, however, that except as provided in Section 8 in connection with a Change in
Control, no such termination or amendment may adversely affect the Option or any unexercised
portion hereof without the consent of the Participant unless such termination or amendment is
necessary to comply with any applicable law or government regulation, including, but not limited
to, Section 409A. No amendment or addition to this Option Agreement shall be effective unless in
writing.

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          13.2 Further Instruments. The parties hereto agree to execute such further instruments and to
take such further action as may reasonably be necessary to carry out the intent of this Option
Agreement.

          13.3 Binding Effect. Subject to the restrictions on transfer set forth herein, this Option
Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective
heirs, executors, administrators, successors and assigns.

          13.4 Delivery of Documents and Notices. Any document relating to participation in the Plan or
any notice required or permitted hereunder shall be given in writing and shall be deemed
effectively given (except to the extent that this Option Agreement provides for effectiveness only
upon actual receipt of such notice) upon personal delivery, electronic delivery at the e-mail
address, if any, provided for the Participant by a Participating Company, or upon deposit in the
U.S. Post Office or foreign postal service, by registered or certified mail, or with a nationally
recognized overnight courier service, with postage and fees prepaid, addressed to the other party
at the address of such party set forth in the Grant Notice or at such other address as such party
may designate in writing from time to time to the other party.

               (a) Description of Electronic Delivery. The Plan documents, which may include but do not
necessarily include: the Plan, the Grant Notice, this Option Agreement, the Plan Prospectus, and
any reports of the Company provided generally to the Company’s stockholders, may be delivered to
the Participant electronically. In addition, the Participant may deliver electronically the Grant
Notice and Exercise Notice called for by Section 4.2 to the Company or to such third party involved
in administering the Plan as the Company may designate from time to time. Such means of electronic
delivery may include but do not necessarily include the delivery of a link to a Company intranet or
the Internet site of a third party involved in administering the Plan, the delivery of the document
via e-mail or such other means of electronic delivery specified by the Company.

               (b) Consent to Electronic Delivery. The Participant acknowledges that the Participant has
read Section 13.4(a) of this Option Agreement and consents to the electronic delivery of the Plan
documents and the delivery of the Grant Notice and Exercise Notice, as described in Section
13.4(a). The Participant acknowledges that he or she may receive from the Company a paper copy of
any documents delivered electronically at no cost to the Participant by contacting the Company by
telephone or in writing. The Participant further acknowledges that the Participant will be
provided with a paper copy of any documents if the attempted electronic delivery of such documents
fails. Similarly, the Participant understands that the Participant must provide the Company or any
designated third party administrator with a paper copy of any documents if the attempted electronic
delivery of such documents fails. The Participant may revoke his or her consent to the electronic
delivery of documents described in Section 13.4(a) or may change the electronic mail address to
which such documents are to be delivered (if Participant has provided an electronic mail address)
at any time by notifying the Company of such revoked consent or revised e-mail address by
telephone, postal service or electronic mail. Finally, the Participant understands that he or she
is not required to consent to electronic delivery of documents described in Section 13.4(a).

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          13.5 Integrated Agreement. The Grant Notice, this Option Agreement and the Plan, together
with any the Superseding Agreement, if any, shall constitute the entire understanding and agreement
of the Participant and the Participating Company Group with respect to the subject matter contained
herein and supersede any prior agreements, understandings, restrictions, representations, or
warranties among the Participant and the Participating Company Group with respect to such subject
matter. To the extent contemplated herein, the provisions of the Grant Notice, the Option
Agreement and the Plan shall survive any exercise of the Option and shall remain in full force and
effect.

          13.6 Applicable Law. This Option Agreement shall be governed by the laws of the State of
California as such laws are applied to agreements between California residents entered into and to
be performed entirely within the State of California.

          13.7 Counterparts. The Grant Notice may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same instrument.

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	TM Incentive Stock Option

	 	Participant:	 	 
	 

	 	 	 	 

	TM Nonstatutory Stock Option

	 	Date:	 	 
	 

	 	 	 	 

STOCK OPTION EXERCISE NOTICE

Trident Microsystems, Inc.

Attention: Stock Administration

1090 East Arques Avenue

Sunnyvale, CA 94085

Ladies and Gentlemen:

     1. Option. I was granted an option (the “Option”) to purchase shares of the common
stock (the “Shares”) of Trident Microsystems, Inc. (the “Company”) pursuant to the Company’s 2006
Equity Incentive Plan (the “Plan”), my Notice of Grant of Stock Option (the “Grant Notice”) and my
Stock Option Agreement (the “Option Agreement”) as follows:

	 	 	 	 	 
	 

	 	Date of Grant:	 	 
	 

	 	 	 	 

	 

	 	Number of Option Shares:	 	 
	 

	 	 	 	 

	 

	 	Exercise Price per Share:
	 	$
	 

	 	 	 	 

     2. Exercise of Option. I hereby elect to exercise the Option to purchase the
following number of Shares, all of which are Vested Shares in accordance with the Grant Notice and
the Option Agreement:

	 	 	 	 	 
	 

	 	Total Shares Purchased:	 	 
	 

	 	 	 	 

	 

	 	Total Exercise Price (Total Shares X Price per Share)
	 	$
	 

	 	 	 	 

     3. Payments. I enclose payment in full of the total exercise price for the Shares in
the following form(s), as authorized by my Option Agreement:

	 	 	 	 	 
	 

	 	TM Cash:
	 	$
	 
	 	 	 	 

	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	TM Check:
	 	$
	 

	 	 	 	 

	 

	 	TM Tender of Company Stock:
	 	Contact Plan Administrator
	 
	 	 	 	 
	 

	 	TM Cashless Exercise (same-day sale):
	 	Contact Plan Administrator

     4. Tax Withholding. I authorize payroll withholding and otherwise will make adequate
provision for the federal, state, local and foreign tax withholding obligations of the Company, if
any, in connection with the Option. If I am exercising a Nonstatutory Stock Option, I enclose
payment in full of my withholding taxes, if any, as follows:

(Contact Plan Administrator for amount of tax due.)

	 	 	 	 	 
	 

	 	TM Cash:
	 	$
	 
	 	 	 	 

	 
	 	 

	 	 
	 
	 	 	 	 
	 

	 	TM Check:
	 	$
	 

	 	 	 	 

	 

	 	TM Tender of Company Stock:
	 	Contact Plan Administrator
	 
	 	 	 	 

 

 

	 	 	 	 	 
	 

	 	TM Cashless Exercise (same-day sale):
	 	Contact Plan Administrator

5. Participant Information.

	 	 	 	 	 
	 

	 	My address is:	 	 
	 

	 	 	 	 

	 
	 	 	 	 
	 

	 	 	 	 

	 	 	 	 	 
	 

	 	My Social Security Number is:
	 	 
	 

	 	 	 	 

     6. Notice of Disqualifying Disposition. If the Option is an Incentive Stock Option, I
agree that I will promptly notify the Chief Financial Officer of the Company if I transfer any of
the Shares within one (1) year from the date I exercise all or part of the Option or within two (2)
years of the Date of Grant.

     7. Binding Effect. I agree that the Shares are being acquired in accordance with and
subject to the terms, provisions and conditions of the Grant Notice, the Option Agreement and the
Plan, to all of which I hereby expressly assent. This Agreement shall inure to the benefit of and
be binding upon my heirs, executors, administrators, successors and assigns.

	 	 	 	 	 
	 	Very truly yours,	 
	 	 	 
	 	
	 
	 	(Signature)	 
	 	 	 
	 

Receipt of the above is hereby acknowledged.

TRIDENT MICROSYSTEMS, INC.

	 	 	 	 	 
	By:

	 	 
	 	 
	 

	 	 
	 	 
	Title:
	 	 	 	 
	 

	 	 
	 	 
	Dated:
	 	 	 	 
	 

	 	 
	 	 

2

 

TRIDENT MICROSYSTEMS, INC.

RESTRICTED STOCK AGREEMENT

     Trident Microsystems, Inc. has granted to the Participant named in the Notice of Grant of
Restricted Stock (the “Grant Notice”) to which this Restricted Stock Agreement (the “Agreement”) is
attached an Award consisting of Shares subject to the terms and conditions set forth in the Grant
Notice and this Agreement. The Award has been granted pursuant to the Trident Microsystems, Inc.
2006 Equity Incentive Plan (the “Plan”), as amended to the Date of Grant, the provisions of which
are incorporated herein by reference. By signing the Grant Notice, the Participant: (a)
acknowledges receipt of and represents that the Participant has read and is familiar with the Grant
Notice, this Agreement, the Plan and a prospectus for the Plan prepared in connection with the
registration with the Securities and Exchange Commission of the Shares (the “Plan Prospectus”), (b)
accepts the Award subject to all of the terms and conditions of the Grant Notice, this Agreement
and the Plan and (c) agrees to accept as binding, conclusive and final all decisions or
interpretations of the Committee upon any questions arising under the Grant Notice, this Agreement
or the Plan.

	 	1.	 	Definitions and Construction.

               1.1 Definitions. Unless otherwise defined herein, capitalized terms shall have the meanings
assigned to such terms in the Grant Notice or the Plan.

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

	 	2.	 	Administration.

               All questions of interpretation concerning the Grant Notice and this Agreement shall be
determined by the Committee. All determinations by the Committee shall be final and binding upon
all persons having an interest in the Award as provided by the Plan. Any Officer of a
Participating Company shall have the authority to act on behalf of the Company with respect to any
matter, right, obligation, or election which is the responsibility of or which is allocated to the
Company herein, provided the Officer has apparent authority with respect to such matter, right,
obligation, or election.

	 	3.	 	The Award.

               3.1 Grant and Issuance of Shares. On the Date of Grant, the Participant shall acquire and the
Company shall issue, subject to the provisions of this Agreement, a number of Shares equal to the
Total Number of Shares set forth in the Grant Notice, subject to adjustment as provided in Section
8. As a condition to the issuance of the Shares, the Participant shall execute and deliver to the
Company along with the Grant Notice the Assignment Separate from Certificate duly endorsed (with
date and number of shares blank) in the form attached to the Grant Notice.

 

 

               3.2 No Monetary Payment Required. The Participant is not required to make any monetary
payment (other than applicable tax withholding, if any) as a condition to receiving the Shares, the
consideration for which shall be past services actually rendered and/or future services to be
rendered to a Participating Company or for its benefit. Notwithstanding the foregoing, if required
by applicable state corporate law, the Participant shall furnish consideration in the form of cash
or past services rendered to a Participating Company or for its benefit having a value not less
than the par value of the Shares issued pursuant to the Award.

               3.3 Beneficial Ownership of Shares; Certificate Registration. The Participant hereby
authorizes the Company, in its sole discretion, to deposit the Shares with the Company’s transfer
agent, including any successor transfer agent, to be held in book entry form during the term of the
Escrow pursuant to Section 6. Furthermore, the Participant hereby authorizes the Company, in its
sole discretion, to deposit, following the term of such Escrow, for the benefit of the Participant
with any broker with which the Participant has an account relationship of which the Company has
notice any or all Shares which are no longer subject to such Escrow. Except as provided by the
foregoing, a certificate for the Shares shall be registered in the name of the Participant, or, if
applicable, in the names of the heirs of the Participant.

               3.4 Issuance of Shares in Compliance with Law. The issuance of the Shares shall be subject to
compliance with all applicable requirements of federal, state or foreign law with respect to such
securities. No Shares shall be issued hereunder if their issuance would constitute a violation of
any applicable federal, state or foreign securities laws or other law or regulations or the
requirements of any stock exchange or market system upon which the Stock may then be listed. The
inability of the Company to obtain from any regulatory body having jurisdiction the authority, if
any, deemed by the Company’s legal counsel to be necessary to the lawful issuance of any Shares
shall relieve the Company of any liability in respect of the failure to issue such Shares as to
which such requisite authority shall not have been obtained. As a condition to the issuance of the
Shares, the Company may require the Participant to satisfy any qualifications that may be necessary
or appropriate, to evidence compliance with any applicable law or regulation and to make any
representation or warranty with respect thereto as may be requested by the Company.

	 	4.	 	Vesting of Shares.

               The Shares shall vest and become Vested Shares as provided in the Grant Notice. For purposes
of determining the number of Vested Shares following an Ownership Change Event, credited Service
shall include all Service with any corporation which is a Participating Company at the time the
Service is rendered, whether or not such corporation is a Participating Company both before and
after the Ownership Change Event.

	 	5.	 	Company Reacquisition Right.

               5.1 Grant of Company Reacquisition Right. Except to the extent otherwise provided by the
Superseding Agreement, in the event that (a) the Participant’s Service terminates for any reason or
no reason, with or without cause, or (b) the Participant, the Participant’s legal representative,
or other holder of the Shares, attempts to sell, exchange, transfer, pledge, or otherwise dispose
of (other than pursuant to an Ownership Change Event), including, without

2

 

limitation, any transfer to a nominee or agent of the Participant, any Shares which are not
Vested Shares (“Unvested Shares”), the Company shall automatically reacquire the Unvested Shares,
and the Participant shall not be entitled to any payment therefor (the “Company Reacquisition
Right”).

               5.2 Ownership Change Event. Upon the occurrence of an Ownership Change Event, any and all
new, substituted or additional securities or other property to which the Participant is entitled by
reason of the Participant’s ownership of Unvested Shares shall be immediately subject to the
Company Reacquisition Right and included in the terms “Shares,” “Stock” and “Unvested Shares” for
all purposes of the Company Reacquisition Right with the same force and effect as the Unvested
Shares immediately prior to the Ownership Change Event.

	 	6.	 	Escrow.

               6.1 Appointment of Agent. To ensure that Shares subject to the Company Reacquisition Right
will be available for reacquisition, the Participant and the Company hereby appoint the Secretary
of the Company, or any other person designated by the Company, as their agent and as
attorney-in-fact for the Participant (the “Agent”) to hold any and all Unvested Shares and to sell,
assign and transfer to the Company any such Unvested Shares reacquired by the Company pursuant to
the Company Reacquisition Right. The Participant understands that appointment of the Agent is a
material inducement to make this Agreement and that such appointment is coupled with an interest
and is irrevocable. The Agent shall not be personally liable for any act the Agent may do or omit
to do hereunder as escrow agent, agent for the Company, or attorney in fact for the Participant
while acting in good faith and in the exercise of the Agent’s own good judgment, and any act done
or omitted by the Agent pursuant to the advice of the Agent’s own attorneys shall be conclusive
evidence of such good faith. The Agent may rely upon any letter, notice or other document executed
by any signature purporting to be genuine and may resign at any time.

               6.2 Establishment of Escrow. The Participant authorizes the Company to deposit the Unvested
Shares with the Company’s transfer agent to be held in book entry form, as provided in Section 3.3,
and the Participant agrees to deliver to and deposit with the Agent each certificate, if any,
evidencing the Shares and an Assignment Separate from Certificate with respect to such book entry
shares and each such certificate duly endorsed (with date and number of Shares blank) in the form
attached to the Grant Notice, to be held by the Agent under the terms and conditions of this
Section 6 (the “Escrow”). Upon the occurrence of an Ownership Change Event or a change, as
described in Section 8, in the character or amount of any outstanding stock of the corporation the
stock of which is subject to the provisions of this Agreement, any and all new, substituted or
additional securities or other property to which the Participant is entitled by reason of his or
her ownership of the Shares that remain, following such Ownership Change Event or change described
in Section 8, subject to the Company Reacquisition Right shall be immediately subject to the Escrow
to the same extent as the Shares immediately before such event. The Company shall bear the
expenses of the Escrow.

               6.3 Delivery of Shares to Participant. The Escrow shall continue with respect to any Shares
for so long as such Shares remain subject to the Company Reacquisition Right. Upon termination of
the Reacquisition Right with respect to Shares, the Company shall

3

 

so notify the Agent and direct the Agent to deliver such number of Shares to the Participant.
As soon as practicable after receipt of such notice, the Agent shall cause to be delivered to the
Participant the Shares specified by such notice, and the Escrow shall terminate with respect to
such Shares.

	 	7.	 	Tax Matters.

	 	7.1	 	Tax Withholding.

                         (a) In General. At the time the Grant Notice is executed, or at any time thereafter as
requested by a Participating Company, the Participant hereby authorizes withholding from payroll
and any other amounts payable to the Participant, and otherwise agrees to make adequate provision
for, any sums required to satisfy the federal, state, local and foreign tax withholding obligations
of the Participating Company, if any, which arise in connection with the Award, including, without
limitation, obligations arising upon (a) the transfer of Shares to the Participant, (b) the lapsing
of any restriction with respect to any Shares, (c) the filing of an election to recognize tax
liability, or (d) the transfer by the Participant of any Shares. The Company shall have no
obligation to deliver the Shares or to release any Shares from the Escrow established pursuant to
Section 6 until the tax withholding obligations of the Participating Company have been satisfied by
the Participant.

                         (b) Assignment of Sale Proceeds; Payment of Tax Withholding by Check. Subject to compliance
with applicable law and the Company’s Insider Trading Policy, the Participant shall satisfy the
Participating Company’s tax withholding obligations in accordance with procedures established by
the Company providing for delivery by the Participant to the Company or a broker approved by the
Company of properly executed instructions, in a form approved by the Company, providing for the
assignment to the Company of the proceeds of a sale with respect to some or all of the shares
becoming Vested Shares on a Vesting Date as provided in the Grant Notice. Notwithstanding the
foregoing, the Participant may elect to pay by check the amount of the Participating Company’s tax
withholding obligations arising on any Vesting Date by delivering written notice of such election
to the Company on a form specified by the Company for this purpose at least thirty (30) days (or
such other period established by the Company) prior to such Vesting Date. By making such election,
the Participant agrees to deliver a check for the full amount of the required tax withholding to
the applicable Participating Company on or before the third business day following the Vesting
Date. If the Participant elects to pay the required tax withholding by check but fails to make
such payment as required by the preceding sentence, the Company is hereby authorized at its
discretion, to satisfy the tax withholding obligations through any means authorized by this Section
7, including by directing a sale for the account of the Participant of some or all of the shares
becoming Vested Shares on the Vesting Date from which the required taxes shall be withheld, by
withholding from payroll and any other amounts payable to the Participant or by withholding shares
in accordance with Section 7.1(c).

                         (c) Withholding in Shares. The Company may permit or require the Participant to satisfy all
or any portion of a Participating Company’s tax withholding obligations by deducting a number of
whole, Vested Shares otherwise deliverable to the Participant or by the Participant’s tender to the
Company of a number of whole, Vested Shares or vested shares

4

 

acquired otherwise than pursuant to the Award having, in any such case, a fair market value,
as determined by the Company as of the date on which the tax withholding obligations arise, not in
excess of the amount of such tax withholding obligations determined by the applicable minimum
statutory withholding rates. Any adverse consequences to the Participant resulting from the
procedure permitted under this Section, including, without limitation, tax consequences, shall be
the sole responsibility of the Participant.

	 	7.2	 	Election Under Section 83(b) of the Code.

                         (a) The Participant understands that Section 83 of the Code taxes as ordinary income the
difference between the amount paid for the Shares, if anything, and the fair market value of the
Shares as of the date on which the Shares are “substantially vested,” within the meaning of Section
83. In this context, “substantially vested” means that the right of the Company to reacquire the
Shares pursuant to the Company Reacquisition Right has lapsed. The Participant understands that he
or she may elect to have his or her taxable income determined at the time he or she acquires the
Shares rather than when and as the Company Reacquisition Right lapses by filing an election under
Section 83(b) of the Code with the Internal Revenue Service no later than thirty (30) days after
the date of acquisition of the Shares. The Participant understands that failure to make a timely
filing under Section 83(b) will result in his or her recognition of ordinary income, as the Company
Reacquisition Right lapses, on the difference between the purchase price, if anything, and the fair
market value of the Shares at the time such restrictions lapse. The Participant further
understands, however, that if Shares with respect to which an election under Section 83(b) has been
made are forfeited to the Company pursuant to its Company Reacquisition Right, such forfeiture will
be treated as a sale on which there is realized a loss equal to the excess (if any) of the amount
paid (if any) by the Participant for the forfeited Shares over the amount realized (if any) upon
their forfeiture. If the Participant has paid nothing for the forfeited Shares and has received no
payment upon their forfeiture, the Participant understands that he or she will be unable to
recognize any loss on the forfeiture of the Shares even though the Participant incurred a tax
liability by making an election under Section 83(b).

                         (b) The Participant understands that he or she should consult with his or her tax advisor
regarding the advisability of filing with the Internal Revenue Service an election under Section
83(b) of the Code, which must be filed no later than thirty (30) days after the date of the
acquisition of the Shares pursuant to this Agreement. Failure to file an election under Section
83(b), if appropriate, may result in adverse tax consequences to the Participant. The Participant
acknowledges that he or she has been advised to consult with a tax advisor regarding the tax
consequences to the Participant of the acquisition of Shares hereunder. ANY ELECTION UNDER SECTION
83(b) THE PARTICIPANT WISHES TO MAKE MUST BE FILED NO LATER THAN 30 DAYS AFTER THE DATE ON WHICH
THE PARTICIPANT ACQUIRES THE SHARES. THIS TIME PERIOD CANNOT BE EXTENDED. THE PARTICIPANT
ACKNOWLEDGES THAT TIMELY FILING OF A SECTION 83(b) ELECTION IS THE PARTICIPANT’S SOLE
RESPONSIBILITY, EVEN IF THE PARTICIPANT REQUESTS THE COMPANY OR ITS REPRESENTATIVE TO FILE SUCH
ELECTION ON HIS OR HER BEHALF.

                         (c) The Participant will notify the Company in writing if the Participant files an election
pursuant to Section 83(b) of the Code. The Company intends, in the

5

 

event it does not receive from the Participant evidence of such filing, to claim a tax
deduction for any amount which would otherwise be taxable to the Participant in the absence of such
an election.

	 	8.	 	Adjustments for Changes in Capital Structure.

               Subject to any required action by the stockholders of the Company, in the event of any change
in the Stock effected without receipt of consideration by the Company, whether through merger,
consolidation, reorganization, reincorporation, recapitalization, reclassification, stock dividend,
stock split, reverse stock split, split-up, split-off, spin-off, combination of shares, exchange of
shares, or similar change in the capital structure of the Company, or in the event of payment of a
dividend or distribution to the stockholders of the Company in a form other than Stock (excepting
normal cash dividends) that has a material effect on the Fair Market Value of shares of Stock,
appropriate and proportionate adjustments shall be made in the number and kind of shares subject to
the Award, in order to prevent dilution or enlargement of the Participant’s rights under the Award.
For purposes of the foregoing, conversion of any convertible securities of the Company shall not
be treated as “effected without receipt of consideration by the Company.” Any fractional share
resulting from an adjustment pursuant to this Section shall be rounded down to the nearest whole
number. Such adjustments shall be determined by the Committee, and its determination shall be
final, binding and conclusive.

	 	9.	 	Rights as a Stockholder, Director, Employee or Consultant.

               The Participant shall have no rights as a stockholder with respect to any Shares subject to
the Award until the date of the issuance of the Shares (as evidenced by the appropriate entry on
the books of the Company or of a duly authorized transfer agent of the Company). No adjustment
shall be made for dividends, distributions or other rights for which the record date is prior to
the date the Shares are issued, except as provided in Section 8. Subject the provisions of this
Agreement, the Participant shall exercise all rights and privileges of a stockholder of the Company
with respect to Shares deposited in the Escrow pursuant to Section 6. If the Participant is an
Employee, the Participant understands and acknowledges that, except as otherwise provided in a
separate, written employment agreement between a Participating Company and the Participant, the
Participant’s employment is “at will” and is for no specified term. Nothing in this Agreement
shall confer upon the Participant any right to continue in the Service of a Participating Company
or interfere in any way with any right of the Participating Company Group to terminate the
Participant’s Service at any time.

	 	10.	 	Legends.

               The Company may at any time place legends referencing the Company Reacquisition Right and any
applicable federal, state or foreign securities law restrictions on all certificates representing
the Shares. The Participant shall, at the request of the Company, promptly present to the Company
any and all certificates representing the Shares in the possession of the Participant in order to
carry out the provisions of this Section. Unless otherwise specified by the Company, legends
placed on such certificates may include, but shall not be limited to, the following:

6

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS SET FORTH IN AN
AGREEMENT BETWEEN THIS CORPORATION AND THE REGISTERED HOLDER, OR HIS PREDECESSOR IN
INTEREST, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THIS CORPORATION.”

	 	11.	 	Transfers in Violation of Agreement.

               No Shares may be sold, exchanged, transferred, assigned, pledged, hypothecated or otherwise
disposed of, including by operation of law, in any manner which violates any of the provisions of
this Agreement and, except pursuant to an Ownership Change Event, until the date on which such
shares become Vested Shares, and any such attempted disposition shall be void. The Company shall
not be required (a) to transfer on its books any Shares which will have been transferred in
violation of any of the provisions set forth in this Agreement or (b) to treat as owner of such
Shares or to accord the right to vote as such owner or to pay dividends to any transferee to whom
such Shares will have been so transferred. In order to enforce its rights under this Section, the
Company shall be authorized to give a stop transfer instruction with respect to the Shares to the
Company’s transfer agent.

	 	12.	 	Miscellaneous Provisions.

               12.1 Termination or Amendment. The Committee may terminate or amend the Plan or this
Agreement at any time; provided, however, that no such termination or amendment may adversely
affect the Participant’s rights under this Agreement without the consent of the Participant unless
such termination or amendment is necessary to comply with applicable law or government regulation.
No amendment or addition to this Agreement shall be effective unless in writing.

               12.2 Nontransferability of the Award. The right to acquire Shares pursuant to the Award shall
not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment,
pledge, encumbrance, or garnishment by creditors of the Participant or the Participant’s
beneficiary, except transfer by will or by the laws of descent and distribution. All rights with
respect to the Award shall be exercisable during the Participant’s lifetime only by the Participant
or the Participant’s guardian or legal representative.

               12.3 Further Instruments. The parties hereto agree to execute such further instruments and to
take such further action as may reasonably be necessary to carry out the intent of this Agreement.

               12.4 Binding Effect. This Agreement shall inure to the benefit of the successors and assigns
of the Company and, subject to the restrictions on transfer set forth herein, be binding upon the
Participant and the Participant’s heirs, executors, administrators, successors and assigns.

               12.5 Delivery of Documents and Notices. Any document relating to participation in the Plan or
any notice required or permitted hereunder shall be given in writing and shall be deemed
effectively given (except to the extent that this Agreement provides for

7

 

effectiveness only upon actual receipt of such notice) upon personal delivery, electronic
delivery at the e-mail address, if any, provided for the Participant by a Participating Company, or
upon deposit in the U.S. Post Office or foreign postal service, by registered or certified mail, or
with a nationally recognized overnight courier service, with postage and fees prepaid, addressed to
the other party at the address shown below that party’s signature to the Grant Notice or at such
other address as such party may designate in writing from time to time to the other party.

                         (a) Description of Electronic Delivery. The Plan documents, which may include but do not
necessarily include: the Plan, the Grant Notice, this Agreement, the Plan Prospectus, and any
reports of the Company provided generally to the Company’s stockholders, may be delivered to the
Participant electronically. In addition, the parties may deliver electronically any notices called
for in connection with the Escrow and the Participant may deliver electronically the Grant Notice
to the Company or to such third party involved in administering the Plan as the Company may
designate from time to time. Such means of electronic delivery may include but do not necessarily
include the delivery of a link to a Company intranet or the Internet site of a third party involved
in administering the Plan, the delivery of the document via e-mail or such other means of
electronic delivery specified by the Company.

                         (b) Consent to Electronic Delivery. The Participant acknowledges that the Participant has
read Section 12.5(a) of this Agreement and consents to the electronic delivery of the Plan
documents, the Grant Notice and notices in connection with the Escrow, as described in Section
12.5(a). The Participant acknowledges that he or she may receive from the Company a paper copy of
any documents delivered electronically at no cost to the Participant by contacting the Company by
telephone or in writing. The Participant further acknowledges that the Participant will be
provided with a paper copy of any documents if the attempted electronic delivery of such documents
fails. Similarly, the Participant understands that the Participant must provide the Company or any
designated third party administrator with a paper copy of any documents if the attempted electronic
delivery of such documents fails. The Participant may revoke his or her consent to the electronic
delivery of documents described in Section 12.5(a) or may change the electronic mail address to
which such documents are to be delivered (if Participant has provided an electronic mail address)
at any time by notifying the Company of such revoked consent or revised e-mail address by
telephone, postal service or electronic mail. Finally, the Participant understands that he or she
is not required to consent to electronic delivery of documents described in Section 12.5(a).

               12.6 Integrated Agreement. The Grant Notice, this Agreement and the Plan together with the
Superseding Agreement, if any, shall constitute the entire understanding and agreement of the
Participant and the Participating Company Group with respect to the subject matter contained herein
or therein and supersedes any prior agreements, understandings, restrictions, representations, or
warranties among the Participant and the Participating Company Group with respect to such subject
matter other than those as set forth or provided for herein or therein. To the extent contemplated
herein or therein, the provisions of the Grant Notice and the Agreement shall survive any
settlement of the Award and shall remain in full force and effect.

8

 

               12.7 Applicable Law. This Agreement shall be governed by the laws of the State of California
as such laws are applied to agreements between California residents entered into and to be
performed entirely within the State of California.

               12.8 Counterparts. The Grant Notice may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same instrument.

9

 

ASSIGNMENT SEPARATE FROM CERTIFICATE

     FOR VALUE RECEIVED the undersigned does hereby sell, assign and transfer unto

 

                                                             (              
      ) shares of the Capital Stock of Trident Microsystems, Inc.
standing in the undersigned’s name on the books of said corporation represented by Certificate No.
                     herewith and does hereby irrevocably constitute and appoint
                                         Attorney to transfer the said stock on the books of said corporation with
full power of substitution in the premises.

	 	 	 	 	 
	Dated:

	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	Signature
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	Print Name

Instructions: Please do not fill in any blanks other than the signature line. The purpose
of this assignment is to enable the Company to exercise its Company Reacquisition Right set forth
in the Restricted Stock Agreement without requiring additional signatures on the part of the
Participant.

 

 

TRIDENT MICROSYSTEMS, INC.

RESTRICTED STOCK UNITS AGREEMENT

     Trident Microsystems, Inc. has granted to the Participant named in the Notice of Grant of
Restricted Stock Units (the “Grant Notice”) to which this Restricted Stock Units Agreement (the
“Agreement”) is attached an Award consisting of Restricted Stock Units (the “Units”) subject to the
terms and conditions set forth in the Grant Notice and this Agreement. The Award has been granted
pursuant to the Trident Microsystems, Inc. 2006 Equity Incentive Plan (the “Plan”), as amended to
the Date of Grant, the provisions of which are incorporated herein by reference. By signing the
Grant Notice, the Participant: (a) acknowledges receipt of and represents that the Participant has
read and is familiar with the Grant Notice, this Agreement, the Plan and a prospectus for the Plan
prepared in connection with the registration with the Securities and Exchange Commission of the
shares issuable pursuant to the Award (the “Plan Prospectus”), (b) accepts the Award subject to all
of the terms and conditions of the Grant Notice, this Agreement and the Plan and (c) agrees to
accept as binding, conclusive and final all decisions or interpretations of the Committee upon any
questions arising under the Grant Notice, this Agreement or the Plan.

1. Definitions and Construction.

          1.1 Definitions. Unless otherwise defined herein, capitalized terms shall have the meanings
assigned to such terms in the Grant Notice or the Plan.

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

     2. Administration.

          All questions of interpretation concerning the Grant Notice and this Agreement shall be
determined by the Committee. All determinations by the Committee shall be final and binding upon
all persons having an interest in the Award as provided by the Plan. Any Officer shall have the
authority to act on behalf of the Company with respect to any matter, right, obligation, or
election which is the responsibility of or which is allocated to the Company herein, provided the
Officer has apparent authority with respect to such matter, right, obligation, or election.

     3. The Award.

          3.1 Grant of Units. On the Date of Grant, the Participant shall acquire, subject to the
provisions of this Agreement, the Number of Restricted Stock Units set forth in the Grant Notice,
subject to adjustment as provided in Section 9. Each Unit represents a right to receive on a date
determined in accordance with the Grant Notice and this Agreement one (1) share of Stock.

 

 

          3.2 No Monetary Payment Required. The Participant is not required to make any monetary
payment (other than applicable tax withholding, if any) as a condition to receiving the Units or
shares of Stock issued upon settlement of the Units, the consideration for which shall be past
services actually rendered and/or future services to be rendered to a Participating Company or for
its benefit. Notwithstanding the foregoing, if required by applicable state corporate law, the
Participant shall furnish consideration in the form of cash or past services rendered to a
Participating Company or for its benefit having a value not less than the par value of the shares
of Stock issued upon settlement of the Units.

     4. Vesting of Units.

          The Units shall vest and become Vested Units as provided in the Grant Notice. For purposes of
determining the number of Vested Units following an Ownership Change Event, credited Service shall
include all Service with any corporation which is a Participating Company at the time the Service
is rendered, whether or not such corporation is a Participating Company both before and after the
Ownership Change Event.

     5. Company Reacquisition Right.

          5.1 Grant of Company Reacquisition Right. Except to the extent otherwise provided by the
Superseding Agreement, in the event that the Participant’s Service terminates for any reason or no
reason, with or without cause, the Participant shall forfeit and the Company shall automatically
reacquire all Units which are not, as of the time of such termination, Vested Units (“Unvested
Units”), and the Participant shall not be entitled to any payment therefor (the “Company
Reacquisition Right”).

          5.2 Ownership Change Event. Upon the occurrence of an Ownership Change Event, any and all
new, substituted or additional securities or other property to which the Participant is entitled by
reason of the Participant’s ownership of Unvested Units shall be immediately subject to the Company
Reacquisition Right and included in the terms “Units” and “Unvested Units” for all purposes of the
Company Reacquisition Right with the same force and effect as the Unvested Units immediately prior
to the Ownership Change Event.

     6. Settlement of the Award.

          6.1 Issuance of Shares of Stock. Subject to the provisions of Section 6.3 below, the Company
shall issue to the Participant on the Settlement Date with respect to each Vested Unit to be
settled on such date one (1) share of Stock. Shares of Stock issued in settlement of Units shall
not be subject to any restriction on transfer other than any such restriction as may be required
pursuant to Section 6.3, Section 7 or the Company’s Insider Trading Policy.

          6.2 Beneficial Ownership of Shares; Certificate Registration. The Participant hereby
authorizes the Company, in its sole discretion, to deposit for the benefit of the Participant with
any broker with which the Participant has an account relationship of which the Company has notice
any or all shares acquired by the Participant pursuant to the settlement of the Award. Except as
provided by the preceding sentence, a certificate for the shares as to which

2

 

           the Award is settled shall be registered in the name of the Participant, or, if applicable, in
the names of the heirs of the Participant.

          6.3 Restrictions on Grant of the Award and Issuance of Shares. The grant of the Award and
issuance of shares of Stock upon settlement of the Award shall be subject to compliance with all
applicable requirements of federal, state or foreign law with respect to such securities. No
shares of Stock may be issued hereunder if the issuance of such shares would constitute a violation
of any applicable federal, state or foreign securities laws or other law or regulations or the
requirements of any stock exchange or market system upon which the Stock may then be listed. The
inability of the Company to obtain from any regulatory body having jurisdiction the authority, if
any, deemed by the Company’s legal counsel to be necessary to the lawful issuance of any shares
subject to the Award shall relieve the Company of any liability in respect of the failure to issue
such shares as to which such requisite authority shall not have been obtained. As a condition to
the settlement of the Award, the Company may require the Participant to satisfy any qualifications
that may be necessary or appropriate, to evidence compliance with any applicable law or regulation
and to make any representation or warranty with respect thereto as may be requested by the Company.

          6.4 Fractional Shares. The Company shall not be required to issue fractional shares upon the
settlement of the Award.

     7. Tax Withholding.

          7.1 In General. At the time the Grant Notice is executed, or at any time thereafter as
requested by a Participating Company, the Participant hereby authorizes withholding from payroll
and any other amounts payable to the Participant, and otherwise agrees to make adequate provision
for, any sums required to satisfy the federal, state, local and foreign tax withholding obligations
of the Participating Company, if any, which arise in connection with the Award or the issuance of
shares of Stock in settlement thereof. The Company shall have no obligation to deliver shares of
Stock until the tax withholding obligations of the Company have been satisfied by the Participant.

          7.2 Assignment of Sale Proceeds; Payment of Tax Withholding by Check. Subject to compliance
with applicable law and the Company’s Insider Trading Policy, the Participant shall satisfy the
Participating Company’s tax withholding obligations in accordance with procedures established by
the Company providing for delivery by the Participant to the Company or a broker approved by the
Company of properly executed instructions, in a form approved by the Company, providing for the
assignment to the Company of the proceeds of a sale with respect to some or all of the shares being
acquired upon settlement of Units. Notwithstanding the foregoing, the Participant may elect to pay
by check the amount of the Participating Company’s tax withholding obligations arising on any
Settlement Date by delivering written notice of such election to the Company on a form specified by
the Company for this purpose at least thirty (30) days (or such other period established by the
Company) prior to such Settlement Date. By making such election, the Participant agrees to deliver
a check for the full amount of the required tax withholding to the applicable Participating Company
on or before the third business day following the Settlement Date. If the Participant elects to
pay the required tax withholding by check but fails to make such payment as required by the
preceding

3

 

sentence, the Company is hereby authorized at its discretion, to satisfy the tax withholding
obligations through any means authorized by this Section 7, including by directing a sale for the
account of the Participant of some or all of the shares being acquired upon settlement of Units
from which the required taxes shall be withheld, by withholding from payroll and any other amounts
payable to the Participant or by withholding shares in accordance with Section 7.3.

     7.3 Withholding in Shares. The Company may permit or require the Participant to satisfy all
or any portion of a Participating Company’s tax withholding obligations by deducting from the
shares of Stock otherwise deliverable to the Participant in settlement of the Award a number of
whole shares having a fair market value, as determined by the Company as of the date on which the
tax withholding obligations arise, not in excess of the amount of such tax withholding obligations
determined by the applicable minimum statutory withholding rates. Any adverse consequences to the
Participant resulting from the procedure permitted under this Section, including, without
limitation, tax consequences, shall be the sole responsibility of the Participant.

     8. Effect of Change in Control on Award.

          In the event of a Change in Control, except to the extent that the Committee determines to
cash out the Award in accordance with Section 15.1(c) of the Plan, the surviving, continuing,
successor, or purchasing entity or parent thereof, as the case may be (the “Acquiror”), may,
without the consent of the Participant, either assume or continue the Company’s rights and
obligations with respect to all or any portion of the outstanding Units or substitute for all or
any portion of the outstanding Units substantially equivalent rights with respect to the Acquiror’s
stock. For purposes of this Section, a Unit shall be deemed assumed if, following the Change in
Control, the Unit confers the right to receive, subject to the terms and conditions of the Plan and
this Agreement, the consideration (whether stock, cash, other securities or property or a
combination thereof) to which a holder of a share of Stock on the effective date of the Change in
Control was entitled; provided, however, that if such consideration is not solely common stock of
the Acquiror, the Committee may, with the consent of the Acquiror, provide for the consideration to
be received upon settlement of the Unit to consist solely of common stock of the Acquiror equal in
Fair Market Value to the per share consideration received by holders of Stock pursuant to the
Change in Control. In the event the Acquiror elects not to assume, continue or substitute for the
outstanding Units in connection with a Change in Control, the Award, to the extent of any Units
which are then unvested, shall terminate and cease to be outstanding effective as of the time of
the Change in Control.

     9. Adjustments for Changes in Capital Structure.

          Subject to any required action by the stockholders of the Company, in the event of any change
in the Stock effected without receipt of consideration by the Company, whether through merger,
consolidation, reorganization, reincorporation, recapitalization, reclassification, stock dividend,
stock split, reverse stock split, split-up, split-off, spin-off, combination of shares, exchange of
shares, or similar change in the capital structure of the Company, or in the event of payment of a
dividend or distribution to the stockholders of the Company in a form other than Stock (excepting
normal cash dividends) that has a material effect on the Fair Market Value of shares of Stock,
appropriate and proportionate adjustments shall be made in the number of Units

4

 

subject to the Award and/or the number and kind of shares to be issued in settlement of the
Award, in order to prevent dilution or enlargement of the Participant’s rights under the Award.
For purposes of the foregoing, conversion of any convertible securities of the Company shall not be
treated as “effected without receipt of consideration by the Company.” Any fractional share
resulting from an adjustment pursuant to this Section shall be rounded down to the nearest whole
number. Such adjustments shall be determined by the Committee, and its determination shall be
final, binding and conclusive.

     10. Rights as a Stockholder or Employee.

          The Participant shall have no rights as a stockholder with respect to any shares which may be
issued in settlement of this Award until the date of the issuance of a certificate for such shares
(as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company). No adjustment shall be made for dividends, distributions or other rights
for which the record date is prior to the date such certificate is issued, except as provided in
Section 9. If the Participant is an Employee, the Participant understands and acknowledges that,
except as otherwise provided in a separate, written employment agreement between a Participating
Company and the Participant, the Participant’s employment is “at will” and is for no specified
term. Nothing in this Agreement shall confer upon the Participant any right to continue in the
Service of a Participating Company or interfere in any way with any right of the Participating
Company Group to terminate the Participant’s Service at any time.

     11. Legends.

          The Company may at any time place legends referencing any applicable federal, state or foreign
securities law restrictions on all certificates representing shares of stock issued pursuant to
this Agreement. The Participant shall, at the request of the Company, promptly present to the
Company any and all certificates representing shares acquired pursuant to this Award in the
possession of the Participant in order to carry out the provisions of this Section.

     12. Miscellaneous Provisions.

          12.1 Termination or Amendment. The Committee may terminate or amend the Plan or this
Agreement at any time; provided, however, that except as provided in Section 8 in connection with a
Change in Control, no such termination or amendment may adversely affect the Participant’s rights
under this Agreement without the consent of the Participant unless such termination or amendment is
necessary to comply with applicable law or government regulation, including, but not limited to,
Section 409A. No amendment or addition to this Agreement shall be effective unless in writing.

          12.2 Nontransferability of the Award. Prior to the issuance of shares of Stock on the
applicable Settlement Date, neither this Award nor any Units subject to this Award shall be subject
in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge,
encumbrance, or garnishment by creditors of the Participant or the Participant’s beneficiary,
except transfer by will or by the laws of descent and distribution. All rights with

5

 

respect to the Award shall be exercisable during the Participant’s lifetime only by the
Participant or the Participant’s guardian or legal representative.

     12.3 Further Instruments. The parties hereto agree to execute such further instruments and to
take such further action as may reasonably be necessary to carry out the intent of this Agreement.

     12.4 Binding Effect. This Agreement shall inure to the benefit of the successors and assigns
of the Company and, subject to the restrictions on transfer set forth herein, be binding upon the
Participant and the Participant’s heirs, executors, administrators, successors and assigns.

     12.5 Delivery of Documents and Notices. Any document relating to participation in the Plan or
any notice required or permitted hereunder shall be given in writing and shall be deemed
effectively given (except to the extent that this Agreement provides for effectiveness only upon
actual receipt of such notice) upon personal delivery, electronic delivery at the e-mail address,
if any, provided for the Participant by a Participating Company, or upon deposit in the U.S. Post
Office or foreign postal service, by registered or certified mail, or with a nationally recognized
overnight courier service, with postage and fees prepaid, addressed to the other party at the
address shown below that party’s signature to the Grant Notice or at such other address as such
party may designate in writing from time to time to the other party.

          (a) Description of Electronic Delivery. The Plan documents, which may include but do not
necessarily include: the Plan, the Grant Notice, this Agreement, the Plan Prospectus, and any
reports of the Company provided generally to the Company’s stockholders, may be delivered to the
Participant electronically. In addition, the Participant may deliver electronically the Grant
Notice to the Company or to such third party involved in administering the Plan as the Company may
designate from time to time. Such means of electronic delivery may include but do not necessarily
include the delivery of a link to a Company intranet or the Internet site of a third party involved
in administering the Plan, the delivery of the document via e-mail or such other means of
electronic delivery specified by the Company.

          (b) Consent to Electronic Delivery. The Participant acknowledges that the Participant has
read Section 12.5(a) of this Agreement and consents to the electronic delivery of the Plan
documents and Grant Notice, as described in Section 12.5(a). The Participant acknowledges that he
or she may receive from the Company a paper copy of any documents delivered electronically at no
cost to the Participant by contacting the Company by telephone or in writing. The Participant
further acknowledges that the Participant will be provided with a paper copy of any documents if
the attempted electronic delivery of such documents fails. Similarly, the Participant understands
that the Participant must provide the Company or any designated third party administrator with a
paper copy of any documents if the attempted electronic delivery of such documents fails. The
Participant may revoke his or her consent to the electronic delivery of documents described in
Section 12.5(a) or may change the electronic mail address to which such documents are to be
delivered (if Participant has provided an electronic mail address) at any time by notifying the
Company of such revoked consent or revised e-mail address by telephone, postal service or
electronic mail. Finally, the Participant

6

 

understands that he or she is not required to consent to electronic delivery of documents
described in Section 12.5(a).

          12.6 Integrated Agreement. The Grant Notice, this Agreement and the Plan, together with the
Superseding Agreement, if any, shall constitute the entire understanding and agreement of the
Participant and the Participating Company Group with respect to the subject matter contained herein
or therein and supersedes any prior agreements, understandings, restrictions, representations, or
warranties among the Participant and the Participating Company Group with respect to such subject
matter other than those as set forth or provided for herein or therein. To the extent contemplated
herein or therein, the provisions of the Grant Notice and the Agreement shall survive any
settlement of the Award and shall remain in full force and effect.

          12.7 Applicable Law. This Agreement shall be governed by the laws of the State of California
as such laws are applied to agreements between California residents entered into and to be
performed entirely within the State of California.

          12.8 Counterparts. The Grant Notice may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same instrument.

7exv10w1

 

Exhibit 10.1

SEPARATION AGREEMENT AND RELEASE

     This Separation Agreement and Release (“Agreement”) is made by and between Clyde R. Wallin
(“Employee”) and Sipex Corporation (the “Company”) (collectively referred to as the “Parties” or
individually referred to as a “Party”).

     WHEREAS, Employee was employed by the Company;

     WHEREAS, Employee signed both the Company’s Code of Business Ethics and Conduct (the
“Confidentiality Agreement”) and Employment Agreement on April 6, 2004;

     WHEREAS, the Company and Employee have entered into a Stock Option Agreement, dated December
20, 2004, September 6, 2005, January 17, 2006 and December 4, 2006 granting Employee the option to
purchase shares of the Company’s common stock subject to the terms and conditions of the Company’s
1999 Stock Plan, 2002 Non-Statutory Stock Plan, 2005 Stand Alone Stock Option Grant Agreement and
the 2006 Stand Alone Stock Option Plan, respectively and the individual Stock Option Agreement
(collectively the “Stock Agreements”);

     WHEREAS, the Company and Employee entered into an Offer Letter dated April 23, 2007 amending
and updating Employee’s offer letter dated March 26, 2004 (collectively, the “Offer Letters”);

     WHEREAS, the Employee’s employment with the Company will terminate immediately after the
closing of the merger (the “Merger”) of the Company with a wholly-owned subsidiary (the
“Subsidiary”) of Exar Corporation (“Exar”) pursuant to that certain Agreement and Plan of Merger
between the Company, Exar and the Subsidiary;

     WHEREAS, the Parties agree that termination of Employee’s employment constitutes an
Involuntary Termination as defined under the Offer Letters; and

     WHEREAS, the Parties wish to resolve any and all disputes, claims, complaints, grievances,
charges, actions, petitions, and demands that the Employee may have against the Company and any of
the Releasees as defined below, including, but not limited to, any and all claims arising out of or
in any way related to Employee’s employment with or separation from the Company;

     NOW, THEREFORE, in consideration of the mutual promises made herein, the Company and Employee
hereby agree as follows:

     1. Termination of Employment. As of the close of business on the date on which
the Merger will close, which is expected to be on August 24, 2007, and following the time of such
closing, Employee’s employment with the Company shall terminate for all purposes (the “Termination
Date”). This Agreement shall become effective upon the later of the Effective Time of this
Agreement (as set forth below) or the Termination Date.

     2. Consideration.

Page 1 of 9

 

          a. Payment. The Company agrees to pay Employee a lump sum equivalent to twelve (12)
months of Employee’s base salary, for a total of Two Hundred Twenty-Five Thousand Dollars
($225,000), less applicable withholding. This payment will be made to Employee within ten (10)
business days after the Effective Date of this Agreement.

          b. Medical Coverage Benefits. In settlement of all benefits owed to Employee under the
Offer Letters regarding continuation of medical benefits coverage following his Termination Date,
the Company agrees to pay Employee a lump sum amount of Thirty-Two Thousand One Hundred Fourty-Six
Dollars and Sixty-Four Cents ($32,146.64), less applicable withholding, within ten (10) business
days after the Effective Date of this Agreement.

          c. Other. The Company agrees that Employee may retain for his personal use the cell
phone provided to the Employee by the Company, with the account and phone number to be transferred
from the Company to Employee. In addition, the Company agrees that Employee may retain the laptop
computer provided to the Employee by the Company, after the Company cleanses it of Company
documents. Employee agrees that he will be responsible for any applicable taxes that apply in
connection with the transfer of these assets.

     3. Stock. The Parties agree that for purposes of determining the number of shares of
the Company’s common stock that Employee is entitled to purchase from the Company, pursuant to the
exercise of outstanding options, Employee will be considered to have fully vested in all of the
outstanding options granted to him by the Company. Employee acknowledges that as of the Termination
Date, Employee will have vested in and hold unexercised options (the “Options”) to purchase 114,200
shares and no more. The exercise of Employee’s vested options and shares shall continue to be
governed by the terms and conditions of the Company’s Stock Agreements. Pursuant to the Offer
Letters and the Merger Agreement, Employee’s Options will be assumed by Exar and otherwise entitled
to the treatment set forth in Section 5.10 of the Merger Agreement, and will remain exercisable by
him until the earlier of the first anniversary of the Termination Date or the applicable option
expiration date in which to exercise any vested option shares.

     4. Benefits. Subject to the Company’s obligations under Section l.b. above, Employee’s
Company health insurance benefits shall cease on the last day of August 2007. Employee’s
participation in all benefits and incidents of employment, including, but not limited to, vesting
in stock options, and the accrual of bonuses, vacation, and paid time off, shall cease as of the
Termination Date.

     5. Payment of Salary and Receipt of All Benefits. Employee acknowledges and represents
that as of the Effective Date, and other than the consideration set forth in this Agreement, the
Company has paid or provided all salary, wages, bonuses, accrued vacation/paid time off, housing
allowances, relocation costs, interest, severance, outplacement costs, fees, reimbursable expenses,
commissions, stock, stock options, vesting, and any and all other benefits and compensation due to
Employee.

     6. Release of Claims. Employee agrees that the foregoing consideration represents
settlement in full of all outstanding obligations owed to Employee by the Company and its current
and former officers, directors, employees, agents, investors, attorneys, shareholders,
administrators, affiliates, divisions, and subsidiaries, and predecessor and successor corporations
and assigns

Page 2 of 9

 

(collectively, the “Releasees”). Employee, on his own behalf and on behalf of his respective heirs,
family members, executors, agents, and assigns, hereby fully and forever releases the Releasees
from, and agrees not to sue concerning, or in any manner to institute, prosecute, or pursue, any
claim, complaint, charge, duty, obligation, or cause of action relating to any matters of any kind,
whether presently known or unknown, suspected or unsuspected, that Employee may possess against any
of the Releasees arising from any omissions, acts, facts, or damages that have occurred up until
and including the Effective Date of this Agreement, including, without limitation:

          a. any and all claims relating to or arising from Employee’s employment relationship with
the Company and the termination of that relationship;

          b. any and all claims relating to, or arising from, Employee’s right to purchase, or actual
purchase of shares of stock of the Company, including, without limitation, any claims for fraud,
misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law,
and securities fraud under any state or federal law;

          c. any and all claims for wrongful discharge of employment; termination in violation of public
policy; discrimination; harassment; retaliation; breach of contract, both express and implied;
breach of covenant of good faith and fair dealing, both express and implied; promissory estoppel;
negligent or intentional infliction of emotional distress; fraud; negligent or intentional
misrepresentation; negligent or intentional interference with contract or prospective economic
advantage; unfair business practices; defamation; libel; slander; negligence; personal injury;
assault; battery; invasion of privacy; false imprisonment; conversion; and disability benefits;

          d. any and all claims for violation of any federal, state, or municipal statute, including,
but not limited to, Title VII of the Civil Rights Act of 1964; the Civil Rights Act of 1991; the
Rehabilitation Act of 1973; the Americans with Disabilities Act of 1990; the Equal Pay Act; the
Fair Labor Standards Act, except as prohibited by law; the Fair Credit Reporting Act; the Age
Discrimination in Employment Act of 1967; the Older Workers Benefit Protection Act; the Employee
Retirement Income Security Act of 1974; the Worker Adjustment and Retraining Notification Act; the
Family and Medical Leave Act, except as prohibited by law; the Sarbanes- Oxley Act of 2002; the
Uniformed Services Employment and Reemployment Rights Act; the California Family Rights Act; the
California Labor Code, except as prohibited by law; the California Workers’ Compensation Act,
except as prohibited by law; and the California Fair Employment and Housing Act;

          e. any and all claims for violation of the federal or any state constitution;

          f. any and all claims arising out of any other laws and regulations relating to employment or
employment discrimination;

          g. any claim for any loss, cost, damage, or expense arising out of any dispute over the
non-withholding or other tax treatment of any of the proceeds received by Employee as a result of
this Agreement; and

          h. any and all claims for attorneys’ fees and costs.

Page 3 of 9

 

Employee agrees that the release set forth in this section shall be and remain in effect in
all respects as a complete general release as to the matters released.

     Notwithstanding the above, this release does not extend to any obligations incurred under this
Agreement. In addition, this release does not release claims that cannot be released as a matter of
law, including, but not limited to: (1) Employee’s right to file a charge with or participate in a
charge by the Equal Employment Opportunity Commission or comparable state agency against the
Company (with the understanding that any such filing or participation does not give Employee the
right to recover any monetary damages against the Company; Employee’s release of claims herein bars
Employee from recovering such monetary relief from the Company); (2) claims under Division 3,
Article 2 of the California Labor Code (which includes California Labor Code section 2802 regarding
indemnity for necessary expenditures or losses by employee); (3) claims prohibited from release as
set forth in California Labor Code section 206.5 (specifically “any claim or right on account of
wages due, or to become due, or made as an advance on wages to be earned, unless payment of such
wages has been made”); (4) any claim for coverage of, or payment of benefits to, Employee and his
dependents with respect to claims arising during such period as he or they have been covered by
Company healthcare benefits plans; (5) Employee’s vested rights, if any, in the Company’s 401 (k)
plan; or (6) any claim or right he has to seek indemnification with respect to any potential
liability alleged against him in connection with his role as an officer of the Company in
accordance with the Company’s bylaws, applicable law, any directors and officers liability
insurance policy maintained by the Company (including any policy obtained at the time of or in
connection with the Merger) and/or any indemnification agreement between him and the Company in
effect immediately prior to the date of this Agreement.

     7. Acknowledgment of Waiver of Claims under ADEA. Employee acknowledges that he is
waiving and releasing any rights he may have under the Age Discrimination in Employment Act of 1967
(“ADEA”), and that this waiver and release is knowing and voluntary. Employee agrees that this
waiver and release does not apply to any rights or claims that may arise under the ADEA after the
Effective Date of this Agreement. Employee acknowledges that the consideration given for this
waiver and release is in addition to anything of value to which Employee was already entitled.
Employee further acknowledges that he has been advised by this writing that: (a) he should consult
with an attorney prior to executing this Agreement; (b) he has twenty-one (21) days within
which to consider this Agreement; (c) he has seven (7) days following his execution of this
Agreement to revoke this Agreement; (d) this Agreement shall not be effective until after the
revocation period has expired; and (e) nothing in this Agreement prevents or precludes Employee
from challenging or seeking a determination in good faith of the validity of this waiver under the
ADEA, nor does it impose any condition precedent, penalties, or costs for doing so, unless
specifically authorized by federal law. In the event Employee signs this Agreement and returns it
to the Company in less than the 21-day period identified above, Employee hereby acknowledges that
he has freely and voluntarily chosen to waive the time period allotted for considering this
Agreement.

     8. California Civil Code Section 1542. Employee acknowledges that he has been advised
to consult with legal counsel and is familiar with the provisions of California Civil Code Section
1542, a statute that otherwise prohibits the release of unknown claims, which provides as follows:

Page 4 of 9

 

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.

     Employee, being aware of said code section, agrees to expressly waive any rights he may have
thereunder, as well as under any other statute or common law principles of similar effect.

     9. No Pending or Future Lawsuits. Employee represents that he has no lawsuits, claims,
or actions pending in his name, or on behalf of any other person or entity, against the Company or
any of the other Releasees. Employee also represents that he does not intend to bring any claims on
his own behalf or on behalf of any other person or entity against the Company or any of the other
Releasees.

     10. Confidentiality. Except to the extent that this Agreement is required to be
publicly filed, or it or its terms become(s) public through no fault of Employee, Employee agrees
to maintain in complete confidence the existence of this Agreement, the contents and terms of this
Agreement, and the consideration for this Agreement (hereinafter collectively referred to as
“Separation Information”). Except as required by law, Employee may disclose Separation Information
only to his immediate family members, the Court in any proceedings to enforce the terms of this
Agreement, Employee’s undersigned counsel, and Employee’s accountant and any professional tax
advisor to the extent that they need to know the Separation Information in order to provide advice
on tax treatment or to prepare tax returns, and must prevent disclosure of any Separation
Information to all other third parties. Employee agrees that he will not publicize, directly or
indirectly, any Separation Information.

     11. Trade Secrets and Confidential Information/Company Property. Employee reaffirms
and agrees to observe and abide by the terms of the Confidentiality Agreement, specifically
including the provisions therein regarding nondisclosure of the Company’s trade secrets and
confidential and proprietary information, and non-solicitation of Company employees. Employee’s
signature below constitutes his certification under penalty of perjury that he has returned all
documents and other items provided to Employee by the Company, developed or obtained by Employee in
connection with his employment with the Company, or otherwise belonging to the Company.

     12. No Cooperation. Employee agrees not to act in any manner that might damage the
business of the Company. Employee further agrees that he will not knowingly encourage, counsel, or
assist any attorneys or their clients in the presentation or prosecution of any disputes,
differences, grievances, claims, charges, or complaints by any third party against Company or any
of its related Releasees, unless under a subpoena or other court order to do so or as related
directly to the ADEA waiver in this Agreement. Employee agrees both to immediately notify the
Company upon receipt of any such subpoena or court order, and to furnish, within three (3) business
days of its receipt, a copy of such subpoena or other court order. If approached by anyone for
counsel or assistance in the presentation or prosecution of any disputes, differences, grievances,
claims, charges, or complaints against any of the Company or its respective Releasees, Employee
shall state no more than that he cannot provide counsel or assistance.

Page 5 of 9

 

 

     13. Breach. Employee acknowledges and agrees that any material breach of this
Agreement, unless such breach constitutes a legal action by Employee challenging or seeking a
determination in good faith of the validity of the waiver herein under the ADEA, or of any
provision of the Confidentiality Agreement shall entitle the Company immediately to recover and/or
cease providing the consideration provided to Employee under this Agreement, except as provided by
law.

     14. No Admission of Liability. Employee understands and acknowledges that this
Agreement constitutes a compromise and settlement of any and all actual or potential disputed
claims by Employee. No action taken by the Company hereto, either previously or in connection with
this Agreement, shall be deemed or construed to be (a) an admission of the truth or falsity of any
actual or potential claims or (b) an acknowledgment or admission by the Company of any fault or
liability whatsoever to Employee or to any third party.

     15. Costs. The Parties shall each bear their own costs, attorneys’ fees, and other
fees incurred in connection with the preparation of this Agreement.

     16. Arbitration. THE PARTIES AGREE THAT ANY AND ALL DISPUTES ARISING OUT OF THE TERMS
OF THIS AGREEMENT, THEIR INTERPRETATION, AND ANY OF THE MATTERS HEREIN RELEASED, SHALL BE SUBJECT
TO ARBITRATION IN SANTA CLARA COUNTY, BEFORE JAMS, PURSUANT TO ITS EMPLOYMENT ARBITRATION RULES &
PROCEDURES (“JAMS RULES”). THE ARBITRATOR MAY GRANT INJUNCTIONS AND OTHER RELIEF IN SUCH DISPUTES.
THE ARBITRATOR SHALL ADMINISTER AND CONDUCT ANY ARBITRATION IN ACCORDANCE WITH CALIFORNIA LAW,
INCLUDING THE CALIFORNIA CODE OF CIVIL PROCEDURE, AND THE ARBITRATOR SHALL APPLY SUBSTANTIVE AND
PROCEDURAL CALIFORNIA LAW TO ANY DISPUTE OR CLAIM, WITHOUT REFERENCE TO ANY CONFLICT-OF-LAW
PROVISIONS OF ANY JURISDICTION. TO THE EXTENT THAT THE JAMS RULES CONFLICT WITH CALIFORNIA LAW,
CALIFORNIA LAW SHALL TAKE PRECEDENCE. THE DECISION OF THE ARBITRATOR SHALL BE FINAL, CONCLUSIVE,
AND BINDING ON THE PARTIES TO THE ARBITRATION. THE PARTIES AGREE THAT THE PREVAILING PARTY IN ANY
ARBITRATION SHALL BE ENTITLED TO INJUNCTIVE RELIEF IN ANY COURT OF COMPETENT JURISDICTION TO
ENFORCE THE ARBITRATION AWARD. THE COMPANY WILL PAY FOR ANY ADMINISTRATIVE OR HEARING FEES CHARGED
BY THE ARBITRATOR OR JAMS EXCEPT THAT EMPLOYEE WILL PAY THE FIRST $125.00 OF ANY FILING FEES
ASSOCIATED WITH ANY ARBITRATION EMPLOYEE INITIATES. EACH PARTY SHALL SEPARATELY PAY FOR ITS
RESPECTIVE COUNSEL FEES AND EXPENSES; PROVIDED, HOWEVER, THAT THE ARBITRATOR SHALL AWARD ATTORNEYS’
FEES AND COSTS TO THE PREVAILING PARTY, EXCEPT AS PROHIBITED BY LAW. THE PARTIES HEREBY AGREE TO
WAIVE THEIR RIGHT TO HAVE ANY DISPUTE BETWEEN THEM RESOLVED IN A COURT OF LAW BY A JUDGE OR JURY.
NOTWITHSTANDING THE FOREGOING, THIS SECTION WILL NOT PREVENT EITHER PARTY FROM SEEKING INJUNCTIVE
RELIEF (OR ANY OTHER PROVISIONAL REMEDY) FROM ANY COURT HAVING JURISDICTION OVER THE PARTIES AND
THE SUBJECT MATTER OF THEIR DISPUTE RELATING TO THIS AGREEMENT AND THE AGREEMENTS INCORPORATED
HEREIN BY REFERENCE. SHOULD ANY PART OF THE ARBITRATION AGREEMENT CONTAINED IN THIS

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PARAGRAPH CONFLICT WITH ANY OTHER ARBITRATION AGREEMENT BETWEEN THE PARTIES, THE PARTIES
AGREE THAT THIS ARBITRATION AGREEMENT SHALL GOVERN.

     17. Tax Consequences. The Company makes no representations or warranties with respect
to the tax consequences of the payments and any other consideration provided to Employee or made on
his behalf under the terms of this Agreement. Employee agrees and understands that he is
responsible for payment, if any, of local, state, and/or federal taxes on the payments and any
other consideration provided hereunder by the Company and any penalties or assessments thereon.
Employee further agrees to indemnify and hold the Company harmless from any claims, demands,
deficiencies, penalties, interest, assessments, executions, judgments, or recoveries by any
government agency against the Company for any amounts claimed due on account of (a) Employee’s
failure to pay or the Company’s failure to withhold, or Employee’s delayed payment of, federal or
state taxes, or (b) damages sustained by the Company by reason of any such claims, including
attorneys’ fees and costs.

     18. Authority. The Company represents and warrants that the undersigned has the
authority to act on behalf of the Company and to bind the Company and all who may claim through it
to the terms and conditions of this Agreement. Employee represents and warrants that he has the
capacity to act on his own behalf and on behalf of all who might claim through him to bind them to
the terms and conditions of this Agreement. Each Party warrants and represents that there are no
liens or claims of lien or assignments in law or equity or otherwise of or against any of the
claims or causes of action released herein.

     19. No Representations. Employee represents that he has had an opportunity to consult
with an attorney, and has carefully read and understands the scope and effect of the provisions of
this Agreement. Employee has not relied upon any representations or statements made by the Company
that are not specifically set forth in this Agreement.

     20. Severability. In the event that any provision or any portion of any provision
hereof or any surviving agreement made a part hereof becomes or is declared by a court of competent
jurisdiction or arbitrator to be illegal, unenforceable, or void, this Agreement shall continue in
full force and effect without said provision or portion of provision.

     21. Attorneys’ Fees. Except with regard to a legal action challenging or seeking a
determination in good faith of the validity of the waiver herein under the ADEA, in the event that
either Party brings an action to enforce or effect its rights under this Agreement, the prevailing
Party shall be entitled to recover its costs and expenses, including the costs of mediation,
arbitration, litigation, court fees, and reasonable attorneys’ fees incurred in connection with
such an action.

     22. Entire Agreement. This Agreement represents the entire agreement and understanding
between the Company and Employee concerning the subject matter of this Agreement and Employee’s
employment with and separation from the Company and the events leading thereto and associated
therewith, and supersedes and replaces any and all prior agreements and understandings concerning
the subject matter of this Agreement and Employee’s relationship with the Company, with the
exception of the Confidentiality Agreement and the Stock Agreements.

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     23. No Oral Modification. This Agreement may only be amended in a writing signed by
Employee and the Company’s Chief Executive Officer.

     24. Governing Law. This Agreement shall be governed by the laws of the State of
California, without regard for choice-of-law provisions. Employee consents to personal and
exclusive jurisdiction and venue in the State of California.

     25. Effective Date. Each Party has seven (7) days after that Party signs this
Agreement to revoke it. This Agreement will become effective on the eighth (8th) day after Employee
signed this Agreement, so long as it has been signed by the Parties and has not been revoked by
either Party before that date (the “Effective Date”).

     26. Counterparts. This Agreement may be executed in counterparts and by facsimile, and
each counterpart and facsimile shall have the same force and effect as an original and shall
constitute an effective, binding agreement on the part of each of the undersigned.

     27. Voluntary Execution of Agreement. Employee understands and agrees that he executed
this Agreement voluntarily, without any duress or undue influence on the part or behalf of the
Company or any third party, with the full intent of releasing all of his claims against the Company
and any of the other Releasees. Employee acknowledges that:

	 	(a)	 	he has read this Agreement;
	 
	 	(b)	 	he has been represented in the preparation, negotiation, and
execution of this Agreement by legal counsel of his own choice or has elected
not to retain legal counsel;
	 
	 	(c)	 	he understands the terms and consequences of this Agreement
and of the releases it contains; and
	 
	 	(d)	 	he is fully aware of the legal and binding effect of this Agreement.

     29. Assignment. This Agreement will be binding upon and inure to the benefit of
(a) the heirs, executors and legal representatives of Employee upon Employee’s death and (b) any
successor of the Company, including without limitation Exar. Any such successor of the Company will
be deemed substituted for the Company under the terms of this Agreement for all purposes. For this
purpose, “successor” means any person, firm, corporation or other business entity which at any
time, whether by purchase, merger or otherwise, directly or indirectly acquires all or
substantially all of the assets or business of the Company. None of the rights of Employee to
receive any form of compensation payable pursuant to this Agreement may be assigned or transferred
except by will or the laws of descent and distribution. Any other attempted assignment, transfer,
conveyance or other disposition of Employee’s right to compensation or other benefits will be null
and void.

     IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set
forth below.

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	 	CLYDE R. WALLIN, an individual
	 	 
	 
	 	 	 	 
	Dated:
8/17/07

	 	/s/ Clyde R. Wallin	 	 
	 

	 	 	 	 
	 

	 	Clyde R. Wallin	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	SIPEX CORPORATION	 	 

	 	 	 	 	 
	Dated: 8/17/07

	By 	/s/ Ralph Schmitt	 	 
	 

	 	 	 	 
	 

	 	Ralph Schmitt	 	 
	 

	 	Chief Executive Officer	 	 

Page 9 of 9

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