Exhibit 10.47

 

SILICON IMAGE, INC.

NON-PLAN STOCK OPTION AGREEMENT

 

                This Stock Option Agreement (this “Agreement”) is made and
entered into as of the date of grant set forth below (the “Date of Grant”) by
and between Silicon Image, Inc., a Delaware corporation (the “Company”), and the
optionee named below (“Optionee”).  Capitalized terms not defined herein shall
have the meaning ascribed to them in Section 20.

 

Optionee:

Robert H. Bagheri

 

Social Security Number:

###-##-####

 

Total Option Shares:

300,000

 

Exercise Price Per Share:

$5.90

 

Date of Grant:

February 20, 2003

 

First Vesting Date:

February 20, 2004

 

Expiration Date:

Option will expire 3 months following termination for any reason except

death, disability or cause, but in no event later than 02/20/13.  (refer to

Sec. 3 of this Stock Option Agreement)

Type of Stock Option:

NQSO

 

 

                             1.             Grant of Option.  The Company hereby
grants to Optionee an option (this “Option”) to purchase up to the total number
of shares of common stock of the Company, $0.001 par value (“Common Stock”), set
forth above (collectively, the “Shares”) at the Exercise Price Per Share set
forth above (the “Exercise Price”), subject to all of the terms and conditions
of this Agreement.

 

                             2.             Vesting; Exercise Period.

 

                                             2.1           Vesting of Shares.
 This Option shall be exercisable as it vests.  Subject to the terms and
conditions of this Agreement, this Option shall vest and become exercisable as
to portions of the Shares as follows:  (a) this Option shall not be exercisable
with respect to any of the Shares until February 20, 2004 (the “First Vesting
Date”); (b) if Optionee has continuously provided services to the Company, or
any Parent or Subsidiary of the Company, then on the First Vesting Date, this
Option shall become exercisable as to one fourth (1/4th) of the Shares (rounded
to the nearest whole share); and (c) thereafter this Option shall become
exercisable as to an additional one forty-eighth (1/48th) of the Shares (rounded
to the nearest whole share) at the end of each full succeeding month, provided
that Optionee has continuously provided services to the Company, or any Parent
or Subsidiary of the Company.   This Option shall cease to vest upon Optionee’s
Termination and Optionee shall in no event be entitled under this Option to
purchase a number of shares of the Company’s Common Stock greater than the
“Total Option Shares.”

 

 

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                             2.2           Expiration.  This Option shall expire
on the Expiration Date set forth above and must be exercised, if at all, on or
before the earlier of the Expiration Date or the date on which this Option is
earlier terminated in accordance with the provisions of Section 3, provided,
however, that this Option will be not be exercisable after the expiration of ten
(10) years from the Date of Grant.

 

                             3.             Termination.

 

                                             3.1          
Termination for Any Reason Except Death, Disability or Cause.  If Optionee is
Terminated for any reason except Optionee’s death, Disability or Cause, then
this Option, to the extent (and only to the extent) that it is vested in
accordance with the schedule set forth in Section 2.1 of this Agreement on the
date of Termination, may be exercised by Optionee no later than three (3) months
after the date of Termination, but in any event no later than the Expiration
Date.

 

                                             3.2          
Termination Because of Death or Disability.  If Optionee is Terminated because
of death or Disability of Optionee (or the Optionee dies within three (3) months
after a Termination other than because of death, Disability or Cause), then this
Option, to the extent that it is vested in accordance with the schedule set
forth in Section 2.1 of this Agreement on the date of Termination, may be
exercised by Optionee (or Optionee’s legal representative) no later than twelve
(12) months after the date of Termination, but in any event no later than the
Expiration Date.

 

                                             3.3           Termination for
Cause.  If Optionee is Terminated for Cause, this Option will expire on the
Optionee’s date of Termination.

 

                                             3.4          
No Obligation to Employ.  Nothing in this Agreement shall confer on Optionee any
right to continue in the employ of, or other relationship with, the Company or
any Parent or Subsidiary of the Company, or limit in any way the right of the
Company or any Parent or Subsidiary of the Company to terminate Optionee’s
employment or other relationship at any time, with or without Cause.

 

                             4.             Manner of Exercise.

 

                                             4.1          
Stock Option Exercise Agreement.  To exercise this Option, Optionee (or in the
case of exercise after Optionee’s death, Optionee’s executor, administrator,
heir or legatee, as the case may be) must deliver to the Company an executed
stock option exercise agreement in the form attached hereto as Exhibit A, or in
such other form as may be approved by the Company from time to time (the
“Exercise Agreement”), which shall set forth, inter alia, Optionee’s election to
exercise this Option, the number of shares being purchased, any restrictions
imposed on the Shares and any representations, warranties and agreements
regarding Optionee’s investment intent and access to information as may be
required by the Company to comply with applicable securities laws.  If someone
other than Optionee exercises this Option,

 

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then such person must submit documentation reasonably acceptable to the Company
that such person has the right to exercise this Option.

 

                                             4.2          
Limitations on Exercise.  This Option may not be exercised unless such exercise
is in compliance with all applicable federal and state securities laws, as they
are in effect on the date of exercise.  This Option may not be exercised as to
fewer than 100 Shares unless it is exercised as to all Shares as to which this
Option is then exercisable.

 

                                             4.3           Payment.  The
Exercise Agreement shall be accompanied by full payment of the Exercise Price
for the Shares being purchased in cash (by check), or where permitted by law:

 

                                      (a)           provided that a public
market for the Company’s stock exists:  (1) through a “same day sale” commitment
from Optionee and a broker-dealer that is a member of the National Association
of Securities Dealers (an “NASD Dealer”) whereby Optionee irrevocably elects to
exercise this Option and to sell a portion of the Shares so purchased to pay for
the exercise price and whereby the NASD Dealer irrevocably commits upon receipt
of such Shares to forward the exercise price directly to the Company; or (2)
through a “margin” commitment from Optionee and a NASD Dealer whereby Optionee
irrevocably elects to exercise this Option and to pledge the Shares so purchased
to the NASD Dealer in a margin account as security for a loan from the NASD
Dealer in the amount of the exercise price, and whereby the NASD Dealer
irrevocably commits upon receipt of such Shares to forward the exercise price
directly to the Company; or

 

                                      (b)           by any combination of the
foregoing.

 

                                             4.4           Tax Withholding. 
Prior to the issuance of the Shares upon exercise of this Option, Optionee must
pay or provide for any applicable federal or state withholding obligations of
the Company.  If the Committee permits, Optionee may provide for payment of
withholding taxes upon exercise of this Option by requesting that the Company
retain Shares with a Fair Market Value equal to the minimum amount of taxes
required to be withheld.  In such case, the Company shall issue the net number
of Shares to the Optionee by deducting the Shares retained from the Shares
issuable upon exercise.

 

                                             4.5           Issuance of Shares. 
Provided that the Exercise Agreement and payment are in form and substance
satisfactory to counsel for the Company, the Company shall issue the Shares
registered in the name of Optionee, Optionee’s authorized assignee, or
Optionee’s legal representative, and shall deliver certificates representing the
Shares with the appropriate legends affixed thereto.

 

                             5.            
Compliance with Laws and Regulations.  The exercise of this Option and the
issuance and transfer of Shares shall be subject to compliance by the Company
and Optionee

 

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with all applicable requirements of federal and state securities laws and with
all applicable requirements of any stock exchange on which the Company’s Common
Stock may be listed at the time of such issuance or transfer.  Optionee
understands that the Company is under no obligation to register or qualify the
Shares with the Securities and Exchange Commission, any state securities
commission or any stock exchange to effect such compliance.

 

                             6.             Nontransferability of Option.  This
Option may not be transferred in any manner other than by will or by the laws of
descent and distribution and may be exercised during the lifetime of Optionee
only by Optionee.  The terms of this Option shall be binding upon the executors,
administrators, successors and assigns of Optionee.

 

                             7.             Tax Consequences.  Set forth below
is a brief summary of some of the federal and California tax consequences of
exercise of this Option and disposition of the Shares.  THIS SUMMARY IS
NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. 
OPTIONEE SHOULD CONSULT A TAX ADVISOR BEFORE EXERCISING THE OPTION OR DISPOSING
OF THE SHARES.

 

                                             7.1          
Exercise of Nonqualified Stock Option.  There may be a regular federal and
California income tax liability upon the exercise of this Option.  Optionee will
be treated as having received compensation income (taxable at ordinary income
tax rates) equal to the excess, if any, of the fair market value of the Shares
on the date of exercise over the Exercise Price.  The Company will be required
to withhold from Optionee’s compensation or collect from Optionee and pay to the
applicable taxing authorities an amount equal to a percentage of this
compensation income at the time of exercise.

 

                                             7.2          
Disposition of Shares.  If the Shares are held for more than twelve (12) months
after the date of the transfer of the Shares pursuant to the exercise of an
NQSO, any gain realized on disposition of the Shares will be treated as
long-term capital gain, as the case may be.

 

                             8.             Privileges of Stock Ownership. 
Optionee shall not have any of the rights of a shareholder with respect to any
Shares until Optionee exercises this Option and pays the Exercise Price.

 

                             9.             Interpretation.  Any dispute
regarding the interpretation of this Agreement shall be submitted by Optionee or
the Company to the Committee for review.  The resolution of such a dispute by
the Committee shall be final and binding on the Company and Optionee.

 

                             10.          Entire Agreement.  This Agreement and
the Exercise Agreement constitute the entire agreement and understanding of the
parties hereto with respect to the subject matter hereof and supersede all prior
understandings and agreements with respect to such subject matter.

 

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                             11.          Notices.  Any notice required to be
given or delivered to the Company under the terms of this Agreement shall be in
writing and addressed to the Corporate Secretary of the Company at its principal
corporate offices.  Any notice required to be given or delivered to Optionee
shall be in writing and addressed to Optionee at the address indicated above or
to such other address as such party may designate in writing from time to time
to the Company.  All notices shall be deemed to have been given or delivered
upon:  personal delivery; three (3) days after deposit in the United States mail
by certified or registered mail (return receipt requested); one (1) business day
after deposit with any return receipt express courier (prepaid); or one (1)
business day after transmission by rapifax or telecopier.

 

                             12.          Successors and Assigns.  The Company
may assign any of its rights under this Agreement.  This Agreement shall be
binding upon and inure to the benefit of the successors and assigns of the
Company.  Subject to the restrictions on transfer set forth herein, this
Agreement shall be binding upon Optionee and Optionee’s heirs, executors,
administrators, legal representatives, successors and assigns.

 

                             13.          Governing Law.  This Agreement shall
be governed by and construed in accordance with the internal laws of the State
of California, without regard to that body of law pertaining to choice of law or
conflict of law.

 

                             14.          Acceptance.  Optionee hereby
acknowledges receipt of a copy of this Agreement.  Optionee has read and
understands the terms and provisions thereof, and accepts this Option subject to
all the terms and conditions of this Agreement.  Optionee acknowledges that
there may be adverse tax consequences upon exercise of this Option or
disposition of the Shares and that the Company has advised Optionee to consult a
tax advisor prior to such exercise or disposition.

 

                             15.          Modification, Extension or Renewal. 
The Committee may modify, extend or renew this Option and authorize the grant of
new options in substitution therefor, provided that any such action may not,
without the written consent of the Optionee, impair any of such Optionee’s
rights under this Option.  The Committee may reduce the Exercise Price of this
Option without the consent of the Optionee affected by a written notice to them;
provided, however, that the Exercise Price may not be reduced below 85% of the
Fair Market Value of the Shares on the date of grant.

 

                             16.          Certificates.  All certificates for
Shares or other securities delivered upon exercise of this Option will be
subject to such stock transfer orders, legends and other restrictions as the
Committee may deem necessary or advisable, including restrictions under any
applicable federal, state or foreign securities law, or any rules, regulations
and other requirements of the SEC or any stock exchange or automated quotation
system upon which the Shares may be listed or quoted.

 

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                             17.          Adjustment of Shares.  In the event
that the number of outstanding shares is changed by a stock dividend,
recapitalization, stock split, reverse stock split, subdivision, combination,
reclassification or similar change in the capital structure of the Company
without consideration, then the Exercise Price of and the number of Shares
subject to this Option will be proportionately adjusted, subject to any required
action by the Board or the Optionee and compliance with applicable securities
laws; provided, however, that fractions of a Share will not be issued but will
either be replaced by a cash payment equal to the Fair Market Value of such
fraction of a Share or will be rounded up to the nearest whole Share, as
determined by the Committee.

 

                             18.          Corporate Transactions.

 

                                             18.1           
Assumption or Replacement of Option by Successor.  In the event of (a) a
dissolution or liquidation of the Company, (b) a merger or consolidation in
which the Company is not the surviving corporation (other than a merger or
consolidation with a wholly-owned subsidiary, a reincorporation of the Company
in a different jurisdiction, or other transaction in which there is no
substantial change in the stockholders of the Company or their relative stock
holdings and this Option is assumed, converted or replaced by the successor
corporation, which assumption will be binding on the Optionee), (c) a merger in
which the Company is the surviving corporation but after which the stockholders
of the Company immediately prior to such merger (other than any stockholder that
merges, or which owns or controls another corporation that merges, with the
Company in such merger) cease to own their shares or other equity interest in
the Company, (d) the sale of substantially all of the assets of the Company, or
(e) the acquisition, sale, or transfer of more than 50% of the outstanding
shares of the Company by tender offer or similar transaction, this Option may be
assumed, converted or replaced by the successor corporation (if any), which
assumption, conversion or replacement will be binding on the Optionee.  In the
alternative, the successor corporation may substitute equivalent options or
provide substantially similar consideration to the Optionee as was provided to
other stockholders.  The successor corporation may also issue, in place of
outstanding Shares of the Company held by the Optionee, substantially similar
shares or other property subject to repurchase restrictions no less favorable to
the Optionee.  In the event such successor corporation (if any) refuses to
assume or substitute this Option, as provided above, pursuant to a transaction
described in this subsection, this Option will expire on such transaction at
such time and on such conditions as the Committee will determine; provided,
however, that the Committee may, in its sole discretion, provide that the
vesting of this Option will accelerate.  If the Committee exercises such
discretion with respect to this Option, this Option will become exercisable in
full prior to the consummation of such event at such time and on such conditions
as the Committee determines, and if this Option is not exercised prior to the
consummation of the corporate transaction, it shall terminate at such time as
determined by the Committee.

 

                                             18.2        
Other Treatment of Option.  Subject to any greater rights granted to the
Optionee under the foregoing provisions of this section, in the event of the
occurrence of any

 

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transaction described in Section 18.1, this Option will be treated as provided
in the applicable agreement or plan of merger, consolidation, dissolution,
liquidation, or sale of assets.

 

                             19.          Amendment or Termination of the
Agreement.  The Board may at any time terminate or amend this Agreement in any
respect; provided, however, that the Board will not, without the approval of the
Optionee, amend this Agreement in any manner that requires Optionee’s approval.

 

                             20.          Definitions.   As used in this
Agreement, the following terms will have the following meanings:

 

                                             “Board” means the Board of
Directors of the Company.

 

                                             “Cause” means the commission of an
act of theft, embezzlement, fraud, dishonesty or a breach of fiduciary duty to
the Company or a Parent or Subsidiary of the Company.

 

                                             “Committee” means the Compensation
Committee of the Board.

 

                                             “Disability” means a disability,
whether temporary or permanent, partial or total, within the meaning of Section
22(e)(3) of the Internal Revenue Code of 1986, as amended, as determined by the
Committee.

 

                                             “Fair Market Value” means, as of
any date, the value of a share of the Company’s Common Stock determined as
follows:

 

                                                                                     
(a)           if such Common Stock is then quoted on the Nasdaq National Market,
its closing price on the Nasdaq National Market on the date of determination as
reported in The Wall Street Journal;

 

                                                                                     
(b)           if such Common Stock is publicly traded and is then listed on a
national securities exchange, its closing price on the date of determination on
the principal national securities exchange on which the Common Stock is listed
or admitted to trading as reported in The Wall Street Journal;

 

                                                                                     
(c)           if such Common Stock is publicly traded but is not quoted on the
Nasdaq National Market nor listed or admitted to trading on a national
securities exchange, the average of the closing bid and asked prices on the date
of determination as reported in The Wall Street Journal;  or

 

                                                                                     
(d)           if none of the foregoing is applicable, by the Committee in good
faith.

 

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                                             “Parent” means any corporation
(other than the Company) in an unbroken chain of corporations ending with the
Company if each of such corporations other than the Company owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.

 

                                             “Subsidiary” means any corporation
(other than the Company) in an unbroken chain of corporations beginning with the
Company if each of the corporations other than the last corporation in the
unbroken chain owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain.

 

                                             “Termination” or “Terminated”
means, for purposes of this Agreement with respect to the Optionee, that the
Optionee has for any reason ceased to provide services as an employee, officer,
director, consultant, independent contractor, or advisor to the Company or a
Parent or Subsidiary of the Company.  An employee will not be deemed to have
ceased to provide services in the case of (i) sick leave, (ii) military leave,
or (iii) any other leave of absence approved by the Committee, provided, that
such leave is for a period of not more than 90 days, unless reemployment upon
the expiration of such leave is guaranteed by contract or statute or unless
provided otherwise pursuant to formal policy adopted from time to time by the
Company and issued and promulgated to employees in writing.  In the case of the
Optionee is on an approved leave of absence, the Committee may make such
provisions respecting suspension of vesting of this Option while on leave from
the employ of the Company or a Subsidiary as it may deem appropriate, except
that in no event may this Option be exercised after the expiration of the term
set forth in this Agreement.  The Committee will have sole discretion to
determine whether the Optionee has ceased to provide services and the effective
date on which the Optionee ceased to provide services (the “Termination Date”).

 

                          IN WITNESS WHEREOF, the Company has caused this
Agreement to be executed in duplicate by its duly authorized representative and
Optionee has executed this Agreement in duplicate as of the Date of Grant.

 

SILICON IMAGE, INC.

 

OPTIONEE

 

 

 

 

 

 

 

 

 

Robert Gargus

 

Robert H. Bagheri

Chief Financial Officer

 

 

 

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