Employee Benefit Plans

9 Months Ended

Sep. 30, 2011

Employee Benefit Plans [Abstract]

EMPLOYEE BENEFIT PLANS

15. EMPLOYEE BENEFIT PLANS

Employee Benefit Plans

The Company’s Israeli subsidiary had a pension and severance investment plan pursuant to which the Company was required to make pension and severance payments to its retired or former Israeli employees, and in certain circumstances, other Israeli employees whose employment is terminated. This subsidiary has been closed and all severance costs had been paid as of June 30, 2011.

The Company’s India subsidiary has a gratuity plan and a compensated absence plan pursuant to which the Company is required to make payments. The Company’s liability for gratuity plan is calculated based on the salary of employees multiplied by years of service. The Company’s liability for the compensated absence plan is calculated based on the daily salary of the employees multiplied by 30 days of compensated absence. The resulting balance of $0.6 million is included in other non-current liabilities on the Company’s Condensed Consolidated Balance Sheets. A corresponding asset of $0.3 million is included in other assets, on the Company’s Condensed Consolidated Balance Sheets. The underfunded balance of these plans was $0.3 million as of September 30, 2011.

Employee 401(k) Plan

The Company sponsors the Trident Microsystems, Inc. 401(k) Retirement Plan (the “Retirement Plan”) — a defined contribution plan that is available to substantially all of its employees in the United States. Under Section 401(k) of the Internal Revenue Code, the Retirement Plan allows for tax-deferred salary contributions by eligible employees. Participants can contribute from 1% to 100% of their annual eligible compensation to the Plan on a pretax basis. Employee contributions are limited to a maximum annual amount as set periodically by the Internal Revenue Code. The Company matches eligible participant contributions at 25% of the first 5% of eligible base compensation. The Retirement Plan allows employees who meet the age requirements and reach the Plan contribution limits to make a catch-up contribution not to exceed the limit set forth in the Internal Revenue Code. The catch-up contributions are eligible for matching contributions. All matching contributions vest immediately, but participants must be employed on the last day of the plan year in order to receive the matching contribution. The Company’s matching contributions to the Plan totaled $0.2 million for the nine months ended September 30, 2011.