Attached files
file | filename |
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8-K - FORM 8-K - TRIDENT MICROSYSTEMS INC | f57655e8vk.htm |
EX-10.48 - EX-10.48 - TRIDENT MICROSYSTEMS INC | f57655exv10w48.htm |
EX-10.50 - EX-10.50 - TRIDENT MICROSYSTEMS INC | f57655exv10w50.htm |
Exhibit 10.49
TRIDENT MICROSYSTEMS, INC.
CHANGE OF CONTROL POLICY FOR
NON-EXECUTIVE OFFICERS AND EMPLOYEES
CHANGE OF CONTROL POLICY FOR
NON-EXECUTIVE OFFICERS AND EMPLOYEES
1. Purpose and Eligibility
1.1 Purpose. This Trident Microsystems, Inc. Change of Control Policy for Non-Executive
Officers and Employees (Policy) is effective as of December 15, 2010. The purpose of this Policy
is to encourage the continued dedication of Trident Microsystems Inc.s (Company) employees
notwithstanding the possibility or occurrence of a Change in Control (as defined below).
1.2 Eligibility. This Policy applies only to non-executive officers and employees of the
Company Group (employees at or below the level of Senior Vice President). This Policy does not
apply to any executive officers or employees of the Company Group who are covered by the Companys
Amended and Restated Executive Retention and Severance Plan. Employees covered by this Policy are
referred to hereafter as an Eligible Employee or Eligible Employees.
2. Definitions
As used in this Policy:
(a) Annual Target Bonus Rate means an amount equal to the aggregate of all annual incentive
bonuses that would be earned by the Eligible Employee at the targeted annual rate (assuming
attainment of 100% of all applicable performance goals) under the terms of the programs, plans or
agreements providing for such bonuses in which the Eligible Employee was participating for the
fiscal year of the Company in which the Eligible Employees Termination occurs. For this purpose,
annual incentive bonuses shall not include signing bonuses or other nonrecurring cash incentive
awards.
(b) Base Salary Rate means the greater of the Eligible Employees (i) monthly base salary
rate in effect immediately prior to his/her Termination, or (ii) monthly base salary rate in effect
immediately prior to a Change in Control, in either case without giving effect to any reduction in
the Eligible Employees base salary rate that constitutes a Good Reason. For this purpose, base
salary does not include any bonuses, commissions, fringe benefits, car allowances, other irregular
payments or any other compensation except base salary.
(c) Cause means the occurrence of any of the following: (1) the Eligible Employees theft,
dishonesty, misconduct, breach of fiduciary duty for personal profit, or falsification of any
documents or records of the Company Group (as defined below); (2) the Eligible Employees material
failure to abide by the code of conduct or other policies (including, without limitation, policies
relating to confidentiality and reasonable workplace conduct) of any member of the Company Group;
(3) the Eligible Employees unauthorized use, misappropriation, destruction or diversion of any
tangible or intangible asset or corporate
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opportunity of a member of the Company Group (including, without limitation, the Eligible
Employees improper use or disclosure of the confidential or proprietary information of a member of
the Company Group); (4) any intentional act by the Eligible Employee which has a material
detrimental effect on the reputation or business of a member of the Company Group; (5) the Eligible
Employees repeated failure or inability to perform any reasonable assigned duties after written
notice from a member of the Company Group of, and a reasonable opportunity to cure, such failure or
inability; (6) any material breach by the Eligible Employee of any agreement between the Eligible
Employee and a member of the Company Group; or (7) the Eligible Employees conviction (including
any plea of guilty or nolo contendere) of any criminal act involving fraud, dishonesty,
misappropriation or moral turpitude, or which impairs the Eligible Employees ability to perform
his or her duties for a member of the Company Group.
(d) Change in Control means the occurrence of any of the following:
(1) any person (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended (the Exchange Act)), other than a trustee or other fiduciary holding
securities of the Company under an employee benefit plan of the Company, acquires (or has acquired
during the 12-month period ending on the date of the most recent acquisition by such person)
beneficial ownership (as defined in Rule 13d-3 promulgated under the Exchange Act), directly or
indirectly, of stock of the Company representing more than percent (50%) of the total combined
voting power of the Companys then-outstanding stock entitled to vote generally in the election of
directors;
(2) the Company is party to a merger or consolidation which results in the holders of the
voting stock of the Company outstanding immediately prior thereto failing to retain immediately
after such merger or consolidation direct or indirect beneficial ownership of more than fifty
percent (50%) of the total combined voting power of the stock entitled to vote generally in the
election of directors of the Company or the surviving entity outstanding immediately after such
merger or consolidation;
(3) the sale or disposition of all or substantially all of the Companys assets or
consummation of any transaction having similar effect (other than a sale or disposition to one or
more subsidiaries of the Company); or
(4) a change in the composition of the Companys Board of Directors (the Board) within any
consecutive 12-month period as a result of which fewer than a majority of the directors are
Incumbent Directors;
provided, however, that a Change in Control shall be deemed not to include a transaction
described in subsections (1) or (2) of this Section in which a majority of the members of the board
of directors of the continuing, surviving or successor entity, or parent thereof, immediately after
such transaction is comprised of directors who were members of the Board immediately prior to
consummation of such transaction. Notwithstanding the foregoing, to the extent that any amount
constituting Section 409A Deferred Compensation would become payable under this Plan by reason of a
Change in Control, such amount shall become payable only if the event constituting a Change in
Control would also constitute a change in ownership or effective control
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of the Company or a change in the ownership of a substantial portion of the assets of the Company
within the meaning of Section 409A.
(e) Change in Control Period means a period commencing upon the consummation of a Change in
Control and ending on the date occurring eighteen (18) months thereafter.
(f) Code means the Internal Revenue Code of 1986, as amended, or any successor thereto and
any applicable regulations promulgated thereunder.
(g) Company means Trident Microsystems, Inc., a Delaware corporation, and, following a
Change in Control, a Successor that agrees to assume all of the terms and provisions of this Policy
or a Successor that otherwise becomes bound by operation of law to this Policy.
(h) Company Group means the group consisting of the Company and each present or future
parent and subsidiary corporation or other business entity thereof.
(i) Disability means an Eligible Employees permanent and total disability within the
meaning of Section 22(e)(3) of the Code.
(j) Equity Award means any stock option, restricted stock, restricted stock units,
performance shares, performance units or other stock-based compensation award granted by the
Company or any other Company Group member to an Eligible Employee, including any such award which
is assumed by, or for which a replacement award is substituted by, the Companys successor or any
other member of the Company Group in connection with a Change in Control.
(k) Good Reason means the occurrence of any of the following conditions without the Eligible
Employees written consent, which condition(s) remain(s) in effect thirty (30) days after written
notice to the Company from the Eligible Employee of such condition(s) and which notice must have
been given within ninety (90) days following the initial occurrence of such condition(s):
(1) a material diminution in the Eligible Employees authority, duties or responsibilities,
causing the Eligible Employees position to be of materially lesser rank or responsibility within
the Company or an equivalent business unit of its parent, as measured against the Eligible
Employees authority, duties or responsibilities immediately prior to (A) such diminution, or (B) a
Change in Control;
(2) a material decrease in the Eligible Employees Base Salary Rate or Annual Target Bonus
Rate (subject to applicable performance requirements with respect to the actual amount of the
Annual Target Bonus Rate earned and paid), other than any such material decrease that occurs in
connection with a decrease that is imposed on all employees of the Company Group at the time of
such decrease; or
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(3) the relocation of the Eligible Employees work place for the Company Group to a location
that increases the regular commute distance between the Eligible Employees residence and work
place by more than thirty (30) miles (one-way).
In the event that an Eligible Employee continues his/her employment with the Company for a period
of one hundred eighty (180) days or more following the occurrence of any condition constituting
Good Reason, such condition shall no longer constitute Good Reason.
(l) Incumbent Director means a director who either (1) is a member of the Board as of the
Effective Date, or (2) is elected, or nominated for election, to the Board with the affirmative
votes of at least a majority of the Incumbent Directors at the time of such election or nomination,
but (3) was not elected or nominated in connection with an actual or threatened proxy contest
relating to the election of directors of the Company.
(m) Performance-Based Equity Award means an Equity Award granted to an Eligible Employee
prior to any Change in Control, the vesting or earning of which is conditioned in whole or in part
upon the achievement of one or more performance goals (e.g., the attainment of a target stock price
or achievement of a corporate financial goal), notwithstanding that the vesting or earning of such
Equity Award may also be conditioned upon the continued performance of services by the Eligible
Employee for the Company Group.
(n) Separation Agreement and Release means a separation agreement in a form satisfactory to
the Company Group, which agreement includes a general release of all known and unknown claims
against the Company Group and their affiliated persons and entities.
(o) Section 409A means Section 409A of the Code and any applicable regulations and other
administrative guidance promulgated thereunder.
(p) Section 409A Deferred Compensation means compensation and benefits provided by the
Policy that constitute deferred compensation subject to and not exempted from the requirements of
Section 409A.
(q) Separation from Service means a separation from service within the meaning of Section
409A.
(r) Service-Based Equity Award means an Equity Award granted to an Eligible Employee prior
to any Change in Control, the vesting or earning of which is conditioned solely upon the continued
performance of services by the Eligible Employee for the Company Group.
(s) Specified Employee means a specified employee within the meaning of Section 409A.
(t) Successor means any successor in interest to substantially all of the business and/or
assets of the Company.
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(u) Termination means the termination of an Eligible Employees employment by a member of
the Company Group, or a resignation by an Eligible Employee from all employment with the Company
Group.
(v) Termination Upon a Change in Control means the occurrence of any of the following events
during the Change in Control Period:
(1) a Termination of the Eligible Employee by the Company for any reason other than Cause; or
(2) the Eligible Employees resignation for Good Reason from all capacities in which the
Eligible Employee is then rendering service to the Company Group, provided that such resignation
occurs no later than one hundred eighty (180) days following the initial occurrence of the
condition constituting Good Reason.
A Termination Upon a Change in Control will not include any Termination which is (i) for Cause,
(ii) a result of the Eligible Employees death or Disability, or (iii) a result of the Eligible
Employees voluntary termination of employment other than for Good Reason.
3. Treatment of Equity Awards Upon a Change in Control
3.1 Acceleration of Vesting Upon Non-Assumption of Service-Based Equity Awards.
Notwithstanding any provision to the contrary contained in any plan or agreement evidencing a
Service-Based Equity Award, in the event of a Change in Control in which the surviving, continuing,
successor, or purchasing corporation or other business entity or parent thereof, as the case may be
(the Acquiring Corporation), does not assume or continue the Companys rights and obligations
under the then-outstanding Service-Based Equity Award or substitute for such Service-Based Equity
Award a substantially equivalent equity award for the Acquiring Corporations stock, then the
vesting and exercisability of such Service-Based Equity Award which is not assumed, continued or
substituted for shall be accelerated in full effective immediately prior to but conditioned upon
the consummation of the Change in Control, provided that the Eligible Employee remains an employee
or other service provider with the Company Group immediately prior to the Change in Control.
3.2 Acceleration of Vesting of Performance-Based Equity Awards. Notwithstanding any provision
to the contrary contained in any plan or agreement evidencing a Performance-Based Equity Award, in
the event of a Change in Control, the vesting and exercisability of such Performance-Based Equity
Awards shall be accelerated in full immediately prior to but conditioned upon the consummation of
the Change in Control (assuming for the purpose of determining the extent of such acceleration, if
applicable, that one hundred percent (100%) of the target level of performance has been achieved),
provided that the Eligible Employee remains an employee or other service provider with the Company
Group immediately prior to the Change in Control.
The provisions of this Section 3 with respect to all benefits that constitute Section 409A Deferred
Compensation shall be subject to, limited by and construed in accordance with the requirements of
Section 409A and Section 6.2 below.
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4. Accelerated Vesting of Equity Awards Following A Termination Upon A
Change in Control
In the event of an Eligible Employees Termination Upon a Change in Control, and provided that
the Eligible Employee executes the Separation Agreement and Release applicable to such Eligible
Employee and such Release becomes effective in accordance with its terms within 60 days following
the Eligible Employees Termination Upon a Change in Control, and notwithstanding any provision to
the contrary contained in any plan or agreement evidencing an Equity Award granted to the Eligible
Employee, the Eligible Employees outstanding Equity Awards which were not otherwise accelerated
pursuant to Section 3 shall be accelerated in full effective as of the date on which the Release
becomes effective so that each Equity Award held by the Eligible Employee shall be immediately
exercisable and fully vested (and, in the case of Restricted Stock Units, performance shares,
performance units and similar stock-based compensation, shall be settled in full), as of the date
on which the Release becomes effective (provided, however, that with respect to Section 409A
Deferred Compensation, the effective date of the vesting and settlement shall be the date which is
sixty (60) days following the Eligible Employees Termination Upon a Change in Control).
The provisions of this Section 4 with respect to all benefits that constitute Section 409A Deferred
Compensation shall be subject to, limited by and construed in accordance with the requirements of
Section 409A and Section 6.2 below.
5. Other Termination
In the event of an Eligible Employees Termination other than a Termination Upon a Change in
Control, he/she shall not be entitled to any accelerated vesting of Equity Awards or other benefits
pursuant to this Policy.
6. Certain Federal Tax Considerations
6.1 Federal Excise Tax Under Section 4999 of the Code.
(a) Treatment of Excess Parachute Payments. In the event that any payment or benefit received
or to be received by an Eligible Employee pursuant to this Policy or otherwise payable to the
Eligible Employee (collectively, the Payments) would subject the Eligible Employee to any excise
tax pursuant to Section 4999 of the Code, or any similar or successor provision (the Excise Tax),
due to the characterization of the Payments as excess parachute payments under Section 280G of
the Code or any similar or successor provision (Section 280G), then, notwithstanding the other
provisions of this Plan, the amount of such Payments will not exceed the amount which produces the
greatest after-tax benefit to the Eligible Employee.
(b) Determination of Amounts. All computations and determinations called for by this Section
6.1 shall be promptly determined and reported in writing to the Company and the Eligible Employee
by independent public accountants or other independent advisors selected by the Company and
reasonably acceptable to the Eligible Employee (the Accountants), and all such computations and
determinations shall be conclusive and binding upon the Eligible Employee and the Company. For the
purposes of such determinations, the
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Accountants may rely on reasonable, good faith interpretations concerning the application of
Sections 280G and 4999 of the Code. The Company and the Eligible Employee shall furnish to the
Accountants such information and documents as the Accountants may reasonably request in order to
make their required determinations. The Company shall bear all fees and expenses charged by the
Accountants in connection with such services.
6.2 Compliance with Section 409A. Notwithstanding any other provision of the Policy to the
contrary, the provision, time and manner of distribution of all benefits provided by the Policy
that constitute Section 409A Deferred Compensation shall be subject to, limited by and construed in
accordance with the requirements of Section 409A, including the following:
(a) Separation from Service. Benefits constituting Section 409A Deferred Compensation
otherwise provided pursuant to Sections 3 or 4 upon an Eligible Employees Termination shall be
provided only at the time of a Termination of the Eligible Employees employment which constitutes
a Separation from Service.
(b) Six-Month Delay Applicable to Specified Employees. Benefits constituting Section 409A
Deferred Compensation to be provided pursuant to Sections 3 or 4 pursuant to the Separation from
Service of an Eligible Employee who is a Specified Employee shall be paid or provided commencing on
the later of (1) the date that is six (6) months and one (1) day after the date of such Separation
from Service or, if earlier, the date of death of the Eligible Employee (in either case, the
Delayed Payment Date), or (2) the date or dates on which such Section 409A Deferred Compensation
would otherwise be provided in accordance with Section 3 or 4, as applicable. All such benefits
that would, but for this Section 6.2(b), be provided prior to the Delayed Payment Date shall be
accumulated and provided on the Delayed Payment Date.
(c) Equity Awards. The vesting of any Equity Award which constitutes Section 409A Deferred
Compensation and is held by an Eligible Employee who is a Specified Employee shall be accelerated
in accordance with Section 3 or 4 to the extent applicable; provided, however, that the payment in
settlement of any such Equity Award shall occur on the Delayed Payment Date. Equity Awards which
vest and become payable upon a Change in Control in accordance with Section 3 shall not be subject
to this Section.
7. No Contract of Employment
Nothing contained in this Policy shall alter the at-will employment relationship between the
Eligible Employee and the Company. Accordingly, either the Eligible Employee or the Company may
terminate their employment relationship at any time, with or without cause, and with or without
notice.
8. Termination and Amendment of Policy
This Policy may be amended or terminated by the Company at any time, provided that no such
amendment or termination may adversely affect the rights of any Eligible Employee under any then
outstanding Equity Award subject to this Policy without the consent of the affected Eligible
Employee, unless such amendment or termination is deemed by the Company to be necessary or
advisable to comply with applicable law.
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9. Administration
This Policy shall be administered by the Compensation Committee of the Board (the
Committee). The Committee shall have the exclusive discretion and authority to establish rules,
forms and procedures for the administration of the Policy, to construe and interpret the Policy,
and to decide all questions of fact, interpretation, definition, computation or administration
arising in connection with the Policy. The rules, interpretations and other actions of the
Committee shall be binding and conclusive on all persons.
10. Tax Withholding
All benefits provided pursuant to this Policy will be subject to withholding of applicable
income and employment taxes.
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