Exhibit 10.1

 

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1060 East. Arques Ave.

 

Sunnyvale CA 94085

 

Ph:  (408) 616-4000

 

Fax: (408) 830-9525

 

April 1, 2004

 

Steve Tirado

18052 Center Street

Castro Valley, CA 94546

 

Dear Steve:

 

Silicon Image, Inc. (the “Company”) is pleased to confirm our offer of continued
employment to you. The terms of our offer and the benefits provided by the
Company are as follows:

 

1.     You will report to the Chief Executive Officer in the position of
Division President of Storage Group of the Company.  By your signature below,
you hereby concurrently resign from your positions as President and Chief
Operating Officer of the Company.

 

2.     Your annual base salary will be $300,000 per year and will be subject to
annual review.

 

3.     You will be eligible to participate in the employee benefit plans and
executive compensation programs maintained by the Company applicable to other
employees and key executives of the Company, including, without limitation,
retirement plans, savings or profit-sharing plans, deferred compensation plans,
supplemental retirement or excess-benefit plans, stock option, stock purchase,
incentive or other bonus plans, life, disability, health, accident and other
insurance programs, and similar plans or programs.  You will be eligible for the
applicable number of days of paid PTO per year, per the PTO policy.

 

4.     If your employment with the Company terminates for any reason other than
a termination by the Company for “Cause” (as defined following), then you will
be entitled to the separation compensation described in this Section 4, on the
terms and conditions set forth herein.  As used herein, “Cause” means willful
gross misconduct, conviction of a felony or an act of material personal
dishonesty.

 

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A.    You will entitled to cash severance and acceleration of unvested stock
options and restricted stock according to the following chart:

 

Date/Milestone

 

Severance
Payment(1)

 

Acceleration of
Options/Stock(2)

Termination following the date hereof and failure to timely achieve Milestones 1
and 2

 

6 months

 

6 months

Termination following the date hereof and failure to timely achieve Milestone 1,
but timely achievement of Milestone 2

 

9 months

 

9 months

Termination following the date hereof and timely achievement of Milestone 1, but
failure to timely achieve Milestone 2

 

9 months

 

9 months

Termination following the date hereof and timely achievement of Milestones 1 and
2

 

12 months

 

12 months

 

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(1)   Payable in a lump-sum upon termination at the then-current salary rate,
net of applicable taxes.

(2)   The specified portion of unvested stock options and restricted stock will
accelerate immediately upon termination with respect to the number of months
stated in the chart.  No acceleration of vesting will be deemed to extend beyond
the number of then-unvested options or shares under a particular award at the
time of acceleration.  No additional vesting shall occur following termination. 
Options will be exercisable for 3 months following the termination date.

 

Milestone 1

Within 6 months of the date hereof, as Division President of Storage Group
develop a comprehensive business plan for Storage Group, that includes a new
Polaris (small to medium business RAID storage controller and system) product
launch and a plan for Aurora (large-scale multi-petabytes storage array) storage
systems product, each reasonably acceptable to the Board of Directors based on
its consultation with the CEO and management.

 

 

Milestone 2

Within 12 months of the date hereof, there is a first customer shipment of
Aurora products.

 

B.    If you elect COBRA coverage, the Company will pay you a lump sum upon
termination equal to the amount needed to fund COBRA insurance premiums for a
number of months equal to the number of months of cash severance you are
entitled to receive according to the chart above.

 

C.    In consideration of and as a condition to receiving the separation
compensation set forth in this Section 4, concurrently with your termination of
employment, you will execute an agreement in form acceptable to the Company
providing for (i) a full unilateral release in favor of the Company and its
directors, officers and other related persons and (ii) an agreement not to
solicit employees of the Company for a period of 1 year following termination. 
However, you will not be required to release any right to indemnification that
you may have under applicable law, the Company’s bylaws or the Indemnity
Agreement between you and the Company.

 

5.     Should you decide to accept our offer, you will remain an at-will
employee of the Company, which means the employment relationship can be
terminated by either of

 

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us for any reason at any time.  Any statements or representations to the
contrary (and, indeed, any statements contradicting any provision in this
letter) should be regarded by you as ineffective.  Further, your participation
in any stock option or benefit program is not to be regarded as assuring you of
continuing employment for any particular period of time.

 

6.     This letter agreement constitutes the entire understanding and agreement
of the parties hereto with respect to the subject matter hereof and supersedes
all prior and contemporaneous agreements or understandings, inducements or
conditions, express or implied, written or oral, between the parties with
respect to such subject matter, including without limitation the letter
agreements between you and the Company dated June 16, 1999 and November 18,
1999.

 

7.     If you decide to accept our offer, and I hope you will, please sign the
enclosed copy of this letter agreement in the space indicated below and return
it to me.  Your signature will acknowledge that you have read and understood and
agreed to the terms and conditions of this offer.  Should you have anything else
that you wish to discuss, please do not hesitate to call me.

 

We look forward to the opportunity to continue working together.

 

 

Very truly yours,

 

Silicon Image, Inc.

 

 

By:

/s/ David D. Lee

 

David D. Lee, CEO

 

 

 

Acknowledged, Accepted and Agreed

 

 

/s/ Steve Tirado

 

Steve Tirado

 

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