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EX-99.1 - EX-99.1 - TRIDENT MICROSYSTEMS INC | f58383exv99w1.htm |
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 10, 2011
TRIDENT MICROSYSTEMS, INC.
(Exact name of registrant as specified in its charter)
0-20784
(Commission File Number)
(Commission File Number)
Delaware (State or other jurisdiction of incorporation) |
77-0156584 (I.R.S. Employer Identification No.) |
1170 Kifer Road
Sunnyvale, California 94086
(Address of principal executive offices, with zip code)
Sunnyvale, California 94086
(Address of principal executive offices, with zip code)
(408) 962-5000
(Registrants telephone number, including area code)
(Registrants telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers. (b), (e)
On February 10, 2011, Ms Sylvia Summers Couder and Trident Microsystems, Inc. (the Company)
entered into a Resignation Agreement and Release of Claims (the Agreement). Pursuant to the
terms of the Agreement, the Company will pay to Ms. Summers a lump sum payment of $1,300,000,
subject to applicable withholding. In addition, the vesting of any equity awards that might vest
within twelve months will be accelerated and the Company will pay certain premiums for coverage
under COBRA. In consideration for these benefits, Ms. Summers granted the Company a release of
claims.
Item 8.01 Other Events.
Settlement of Derivative Litigation
As previously disclosed, shareholder derivative litigation was commenced beginning on May 26, 2006,
on behalf of the Company in connection with the Companys historical stock option granting process
and related matters. Several separate derivative actions were consolidated in the United States
District Court for the Northern District of California (the Court) under the caption In re
Trident Microsystems, Inc. Derivative Litigation, Master File No. C 06-3440-JF (the Derivative
Litigation). In 2010, the Company entered into a partial settlement of the Derivative Litigation
(Partial Settlement), along with the companion consolidated state court derivative litigation
Limke v. Lin, et al., Santa Clara County Superior Court Case No. 1-07-CV-080390. The details of
that Partial Settlement, which disposed of the Derivative Litigation as to all individual
defendants other than Frank C. Lin, and as to the consolidated state court action in its entirety,
were previously described in the Companys Form 8-K filed February 10, 2010. On February 15, 2011,
the Company entered into a Stipulation of Settlement (the Stipulation) to resolve the Derivative
Litigation in its entirety, subject to Court approval (the Proposed Settlement).
The Court
is expected to enter an order preliminarily approving
the Proposed Settlement and scheduling a hearing for consideration of final approval of the
Proposed Settlement on April 8, 2011 before Judge Jeremy Fogel at the United States District Court- Northern District of California, San
Jose Division, located in Courtroom 3, Fifth Floor, 280 South 1st St., San Jose, CA 95113. The
latest information regarding that hearing date and the timing and manner of submission of any
objections to the Proposed Settlement will be made available at Tridents website,
www.Tridentmicro.com.
If the Court gives final approval to the Proposed Settlement, among other things, the insurers will
pay, on behalf of Mr. Lin, a total of over $8.5 million, with the Company retaining approximately
$5.4 million and approximately $3.15 million being paid to counsel for plaintiffs. The Derivative
Litigation will then be dismissed with prejudice.
This
summary of the terms of the Stipulation is qualified entirely by
reference to the stipulation which is attached hereto as Exhibit 99.1, the content of which is incorporated by
reference herein.
Separate Settlement with Former Executive Lin
The Company has also entered into a separate settlement with former executive Frank C. Lin (the
Companys former Chief Executive Officer and Chairman of the Board), to resolve separate claims
that he asserted against the Company. As previously disclosed, Mr. Lin filed a cross-claim against
the Company asserting contract and tort claims in connection with the termination of his employment
and subsequent involvement with the Company, and suspension of his right to exercise certain stock
options, claiming damages in excess of $5,000,000. Under the settlement, the Company will pay Mr.
Lin no cash, but will transfer the rights to holdings in two private companies and one investment
fund, which are valued on the Companys books under GAAP at $658,000. Mr. Lin will release and
dismiss his claims against the Company in their entirety. This separate settlement is expressly
dependent on the condition that the Proposed Settlement be finally approved by the
Court.
Separate Settlement with Insurers
The Company has entered into a separate settlement with two of the liability insurers for itself
and its directors and officers, Navigators Insurance Company and Federal Insurance Company. The
liability insurers had issued insurance policies for a total of $15 million in limits, of which
$2.7 million had been advanced by Federal to the
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Company. Both insurers reserved rights to deny coverage and/or recoup payments to the Company,
citing various policy, statutory, and equitable rights, and Navigators had prepared a complaint
against the Company and certain indemnitees of the Company that it intended to file to receive a
judicial adjudication of those rights in its favor. The Company had a disputed claim against those
insurers for a portion of the total remaining limits. Under the terms of the settlement, the insurers will pay
towards settlement, on behalf of Mr. Lin, a total of over $8.5 million, in addition to the $2.7
million previously advanced by these insurers. The insurers also will release all claims against
the Company and its indemnitees (which include former officers and directors). The Company and Mr.
Lin in turn agreed to release the insurers, and a policy release was executed. There are no other
claims pending under these policies. This separate insurance settlement is expressly dependent on
the condition that the Proposed Settlement be approved by the Court.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. | Description | |
99.1
|
Stipulation of Settlement | |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: February 16, 2011 |
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TRIDENT MICROSYSTEMS, INC. |
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/s/ David L. Teichmann | ||||
David L. Teichmann | ||||
Executive Vice President, General Counsel & Corporate Secretary | ||||
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