exv10w03



 





Exhibit 10.3




SILICON IMAGE, INC.

1999 EMPLOYEE STOCK PURCHASE PLAN




As Amended and Restated on June 12, 2007




     1. Establishment of Plan. Silicon Image, Inc. (the “Company”) proposes to grant options for
purchase of the Company’s Common Stock to eligible employees of the Company and its Participating
Subsidiaries (as hereinafter defined) pursuant to this Employee Stock Purchase Plan (this “Plan”).
For purposes of this Plan, “Parent Corporation” and “Subsidiary” shall have the same meanings as
“parent corporation” and “subsidiary corporation” in Sections 424(e) and 424(f), respectively, of
the Internal Revenue Code of 1986, as amended (the “Code”). “Participating Subsidiaries” are
Parent Corporations or Subsidiaries that the Board of Directors of the Company (the “Board”)
designates from time to time as corporations that shall participate in this Plan. The Company
intends this Plan to qualify as an “employee stock purchase plan” under Section 423 of the Code
(including any amendments to or replacements of such Section (“Section 423”)), and this Plan shall
be so construed. Any term not expressly defined in this Plan but defined for purposes of Section
423 shall have the same definition herein. A total of 500,000 shares of the Company’s Common Stock
is initially reserved for issuance under this Plan (after giving effect to the 2:1 stock split of
August 18, 2000). In addition, on each January 1, the aggregate number of shares of the Company’s
Common Stock reserved for issuance under the Plan shall be increased automatically by a number of
shares equal to 1% of the total number of outstanding shares of the Company Common Stock on the
immediately preceding December 31; provided, that the Board or the Committee may in its
sole discretion reduce the amount of the increase in any particular year; and, provided
further, that the aggregate number of shares issued over the term of this Plan shall not exceed
8,000,000 shares (after giving effect to the 2:1 stock split of August 18, 2000). Such number
shall be subject to adjustments effected in accordance with Section 14 of this Plan.



     2. Purpose. The purpose of this Plan is to provide eligible employees of the Company and
Participating Subsidiaries with a convenient means of acquiring an equity interest in the Company
through payroll deductions, to enhance such employees’ sense of participation in the affairs of the
Company and Participating Subsidiaries, and to provide an incentive for continued employment.



     3. Administration. This Plan shall be administered by the Compensation Committee of the
Board (the “Committee”). Subject to the provisions of this Plan and the limitations of Section 423
or any successor provision in the Code, all questions of interpretation or application of this Plan
shall be determined by the Committee and its decisions shall be final and binding upon all
participants. Members of the Committee shall receive no compensation for their services in
connection with the administration of this Plan, other than standard fees as established from time
to time by the Board for services rendered by Board members serving on Board committees. All
expenses incurred in connection with the administration of this Plan shall be paid by the Company.



     4. Eligibility. Any employee of the Company or the Participating Subsidiaries is eligible to
participate in an Offering Period (as hereinafter defined) under this Plan except the following:



          (a) employees who are not employed by the Company or a Participating Subsidiary (10) days
before the beginning of such Offering Period;



          (b) employees who are customarily employed for twenty (20) hours or less per week;



          (c) employees who are customarily employed for five (5) months or less in a calendar year;



          (d) employees who, together with any other person whose stock would be attributed to such
employee pursuant to Section 424(d) of the Code, own stock or hold options to purchase stock
possessing five percent (5%) or more of the total combined voting power or value of all classes of
stock of the Company or any of its Participating Subsidiaries or who, as a result of being granted
an option under this Plan with respect to such Offering Period, would own stock or hold options to
purchase stock possessing five percent (5%) or more of the total combined voting power or value of
all classes of stock of the Company or any of its Participating Subsidiaries; and



 









 




 Silicon Image, Inc.

1999 Employee Stock Purchase Plan




          (e) individuals who provide services to the Company or any of its Participating Subsidiaries
as independent contractors who are reclassified as common law employees for any reason
except for federal income and employment tax purposes.



     5. Offering Dates. The offering periods of this Plan (each, an “Offering Period”) shall be
of approximately six (6) months duration. The first such Offering Period shall commence on August
1, 2007, and end on the last business day to occur on or before February 15, 2008, and subsequent
Offering Periods shall commence on each February 16 and August 16 thereafter. Each Offering Period
shall consist of a single purchase period (a “Purchase Period”) during which payroll deductions of
the participants are accumulated under this Plan. The first business day of each Offering Period
is referred to as the “Offering Date”. The last business day of each Offering Period is referred
to as the “Purchase Date” and is the end of the Purchase Period. The Committee shall have the
power to change the duration of Offering Periods with respect to offerings without stockholder
approval if such change is announced at least fifteen (15) days prior to the scheduled beginning of
the first Offering Period to be affected.



     6. Participation in this Plan. Eligible employees may become participants in an Offering
Period under this Plan on the first Offering Date after satisfying the eligibility requirements by
delivering a subscription agreement to the Company not later than five (5) days before such
Offering Date. Notwithstanding the foregoing, the Committee may set a later time for filing the
subscription agreement authorizing payroll deductions for all eligible employees with respect to a
given Offering Period. An eligible employee who does not deliver a subscription agreement to the
Company by such date after becoming eligible to participate in such Offering Period shall not
participate in that Offering Period or any subsequent Offering Period unless such employee enrolls
in this Plan by filing a subscription agreement with the Company not later than five (5) days
preceding a subsequent Offering Date. Once an employee becomes a participant in an Offering
Period, such employee will automatically participate in the Offering Period commencing immediately
following the last day of the prior Offering Period and is not required to file another
subscription agreement to continue participation in this Plan other than following a withdrawal
from participation as set forth in Section 11 below.



     7. Grant of Option on Enrollment. Enrollment by an eligible employee in this Plan with
respect to an Offering Period will constitute the grant (as of the Offering Date) by the Company to
such employee of an option to purchase on the Purchase Date up to that number of shares of Common
Stock of the Company determined by dividing (a) the amount accumulated in such employee’s payroll
deduction account during such Offering Period by (b) the lower of (i) eighty-five percent (85%) of
the fair market value of a share of the Company’s Common Stock on the Offering Date (but in no
event less than the par value of a share of the Company’s Common Stock), or (ii) eighty-five
percent (85%) of the fair market value of a share of the Company’s Common Stock on the Purchase
Date (but in no event less than the par value of a share of the Company’s Common Stock), provided,
however, that the number of shares of the Company’s Common Stock subject to any option granted
pursuant to this Plan shall not exceed the lesser of (x) the maximum number of shares set by the
Committee pursuant to Section 10(c) below with respect to the applicable Purchase Date, or (y) the
maximum number of shares which may be purchased pursuant to Section 10(b) below with respect to the
applicable Purchase Date. The fair market value of a share of the Company’s Common Stock shall be
determined as provided in Section 8 below.



     8. Purchase Price. The purchase price per share at which a share of Common Stock will be
sold in any Offering Period shall be eighty-five percent (85%) of the lesser of:



          (a) The fair market value on the Offering Date; or



          (b) The fair market value on the Purchase Date.



          For purposes of this Plan, the term “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 publicly traded and is then listed on a
national securities exchange, its closing price on the date of determination on
the principal national securities




 









 





Silicon Image, Inc.

1999 Employee Stock Purchase Plan




	 	 	 	exchange on which the Common Stock is listed
or admitted to trading as reported by The Wall Street Journal or other
source designated by the Board or Committee;
	 
	 	(b)	 	if such Common Stock is publicly traded but is not 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 other source designated by the Board or Committee; or
	 
	 	(c)	 	if none of the foregoing is applicable, by the Board or Committee
in good faith.





     9. Payment Of Purchase Price; Changes In Payroll Deductions; Issuance Of Shares.



          (a) The purchase price of the shares is accumulated by regular payroll deductions made during
each Offering Period. The deductions are made as a percentage of the participant’s compensation in
one percent (1%) increments not less than one percent (1%), nor greater than fifteen percent (15%)
or such lower limit set by the Committee. Compensation shall mean all W-2 cash compensation,
including, but not limited to, base salary, wages, commissions, overtime, shift premiums and
bonuses, plus draws against commissions, provided, however, that for purposes of
determining a participant’s compensation, any election by such participant to reduce his or her
regular cash remuneration under Sections 125 or 401(k) of the Code shall be treated as if the
participant did not make such election. Payroll deductions shall commence on the first payday of
the Offering Period and shall continue to the end of the Offering Period unless sooner altered or
terminated as provided in this Plan.



          (b) A participant may prospectively increase or decrease the rate of payroll deductions for
any upcoming Offering Period by filing with the Company a new authorization for payroll deductions
not later than fifteen (15) days before the beginning of such Offering Period.



          (c) A participant may decrease, but not increase, his or her payroll deduction percentage
(including to zero) during a Purchase Period by filing with the Company a new authorization
regarding upcoming payroll deductions. Such decrease shall be effective beginning with the next
payroll period commencing more than fifteen (15) days after the Company’s receipt of the request.
Only one such change may be made effective during any Purchase Period.



          (d) All payroll deductions made for a participant are credited to his or her account under
this Plan and are deposited with the general funds of the Company. No interest accrues on the
payroll deductions. All payroll deductions received or held by the Company may be used by the
Company for any corporate purpose, and the Company shall not be obligated to segregate such payroll
deductions.



          (e) On each Purchase Date, so long as this Plan remains in effect, and provided that the
participant has not timely submitted a signed and completed withdrawal form before that date as
provided in Section 11 below, the Company shall apply the funds then in the participant’s account
to the purchase of whole shares of Common Stock reserved under the option granted to such
participant with respect to the Offering Period to the extent that such option is exercisable on
the Purchase Date. The purchase price per share shall be as specified in Section 8 of this Plan.
Any cash remaining in a participant’s account after such purchase of shares shall be refunded to
such participant in cash, without interest; provided, however that any amount remaining in such
participant’s account on a Purchase Date which is less than the amount necessary to purchase a full
share of Common Stock of the Company shall be carried forward, without interest, into the next
Offering Period. In the event that this Plan has been oversubscribed, all funds not used to
purchase shares on the Purchase Date shall be returned to the participant, without interest. No
Common Stock shall be purchased on a Purchase Date on behalf of any employee whose participation in
this Plan has terminated prior to such Purchase Date.



          (f) As promptly as practicable after the Purchase Date, the Company shall issue shares for
the participant’s benefit representing the shares purchased upon exercise of his or her option.



 









 




 Silicon Image, Inc.

1999 Employee Stock Purchase Plan




          (g) A participant’s option to purchase shares hereunder is exercisable only by him or her.
The participant will have no interest or voting right in shares covered by his or her option until
such option has been exercised.



     10. Limitations on Shares to be Purchased.



          (a) No participant shall be entitled to purchase stock under this Plan at a rate which, when
aggregated with his or her rights to purchase stock under all other employee stock purchase plans
of the Company or any Subsidiary, exceeds $25,000 in fair market value, determined as of the
Offering Date (or such other limit as may be imposed by the Code) for each calendar year in which
the employee participates in this Plan. The Company shall automatically suspend the payroll
deductions of any participant as necessary to enforce such limit provided that when the Company
automatically resumes such payroll deductions, the Company must apply the rate in effect
immediately prior to such suspension.



          (b) No more than two hundred percent (200%) of the number of shares determined by using
eighty-five percent (85%) of the fair market value of a share of the Company’s Common Stock on the
Offering Date as the denominator may be purchased by a participant on any single Purchase Date.



          (c) No participant shall be entitled to purchase more than the Maximum Share Amount (as
defined below) on any single Purchase Date. Not less than thirty (30) days prior to the
commencement of any Offering Period, the Committee may, in its sole discretion, set a maximum
number of shares which may be purchased by any employee at any single Purchase Date (hereinafter
the “Maximum Share Amount”). Until otherwise determined by the Committee, there shall be no
Maximum Share Amount. In no event shall the Maximum Share Amount exceed the amounts permitted
under Section 10(b) above. If a new Maximum Share Amount is set, then all participants must be
notified of such Maximum Share Amount prior to the commencement of the next Offering Period. The
Maximum Share Amount shall continue to apply with respect to all succeeding Purchase Dates and
Offering Periods unless revised by the Committee as set forth above.



          (d) If the number of shares to be purchased on a Purchase Date by all employees participating
in this Plan exceeds the number of shares then available for issuance under this Plan, then the
Company will make a pro rata allocation of the remaining shares in as uniform a manner as shall be
reasonably practicable and as the Committee shall determine to be equitable. In such event, the
Company shall give written notice of such reduction of the number of shares to be purchased under a
participant’s option to each participant affected.



          (e) Any payroll deductions accumulated in a participant’s account which are not used to
purchase stock due to the limitations in this Section 10 shall be returned to the participant as
soon as practicable after the end of the applicable Offering Period, without interest.



     11. Withdrawal.



          (a) Each participant may withdraw from an Offering Period under this Plan by signing and
delivering to the Company a written notice to that effect on a form provided for such purpose.
Such withdrawal may be elected at any time at least fifteen (15) days prior to the end of an
Offering Period.



          (b) Upon withdrawal from this Plan, the accumulated payroll deductions shall be returned to
the withdrawn participant, without interest, and his or her interest in this Plan shall terminate.
In the event a participant voluntarily elects to withdraw from this Plan, he or she may not resume
his or her participation in this Plan during the same Offering Period, but he or she may
participate in any Offering Period under this Plan which commences on a date subsequent to such
withdrawal by filing a new authorization for payroll deductions in the same manner as set forth in
Section 6 above for initial participation in this Plan.



     12. Termination of Employment. Termination of a participant’s employment for any reason,
including retirement, death or the failure of a participant to remain an eligible employee of the
Company or of a Participating Subsidiary, immediately terminates his or her participation in this
Plan. In such event, the payroll deductions credited to the participant’s account will be returned
to him or her or, in the case of his or her death, to his or her



 









 




Silicon Image, Inc.

1999 Employee Stock Purchase Plan






legal representative, without
interest. For purposes of this Section 12, an employee will not be deemed to have terminated
employment or failed to remain in the continuous employ of the Company or of a Participating
Subsidiary in the case of sick leave, military leave, or any other leave of absence approved by the
Board; provided that such leave is for a period of not more than ninety (90) days or
reemployment upon the expiration of such leave is guaranteed by contract or statute.



     13. Return of Payroll Deductions. In the event a participant’s interest in this Plan is
terminated by withdrawal, termination of employment or otherwise, or in the event this Plan is
terminated by the Board, the Company shall deliver to the participant all payroll deductions
credited to such participant’s account. No interest shall accrue on the payroll deductions of a
participant in this Plan.



     14. Capital Changes. Subject to any required action by the stockholders of the Company, the
number of shares of Common Stock covered by each option under this Plan which has not yet been
exercised and the number of shares of Common Stock which have been authorized for issuance under
this Plan but have not yet been placed under option (collectively, the “Reserves”), as well as the
price per share of Common Stock covered by each option under this Plan which has not yet been
exercised, shall be proportionately adjusted for any increase or decrease in the number of issued
and outstanding shares of Common Stock of the Company resulting from a stock split or the payment
of a stock dividend (but only on the Common Stock) or any other increase or decrease in the number
of issued and outstanding shares of Common Stock effected without receipt of any consideration by
the Company; provided, however, that conversion of any convertible securities of the Company shall
not be deemed to have been “effected without receipt of consideration”. Such adjustment shall be
made by the Committee, whose determination shall be final, binding and conclusive. Except as
expressly provided herein, no issue by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof
shall be made with respect to, the number or price of shares of Common Stock subject to an option.



     In the event of the proposed dissolution or liquidation of the Company, the Offering Period
will terminate immediately prior to the consummation of such proposed action, unless otherwise
provided by the Committee. The Committee may, in the exercise of its sole discretion in such
instances, declare that this Plan shall terminate as of a date fixed by the Committee and give each
participant the right to purchase shares under this Plan prior to such termination or return each
participant’s funds on deposit without interest. In the event of (i) 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 the options under this Plan are assumed, converted or replaced by the
successor corporation, which assumption will be binding on all participants), (ii) 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, (iii) the sale of all or substantially all of the assets of
the Company or (iv) the acquisition, sale, or transfer of more than 50% of the outstanding shares
of the Company by tender offer or similar transaction, the Plan shall terminate as of a date fixed
by the Committee and the date of such termination shall be the final Purchase Date for all Offering
Periods then in effect.



     The Committee may, if it so determines in the exercise of its sole discretion, also make
provision for adjusting the Reserves, as well as the price per share of Common Stock covered by
each outstanding option, in the event that the Company effects one or more reorganizations,
recapitalizations, rights offerings or other increases or reductions of shares of its outstanding
Common Stock, or in the event of the Company being consolidated with or merged into any other
corporation.



     15. Nonassignability. Neither payroll deductions credited to a participant’s account nor any
rights with regard to the exercise of an option or to receive shares under this Plan may be
assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of
descent and distribution or as provided in Section 22 below) by the participant. Any such attempt
at assignment, transfer, pledge or other disposition shall be void and without effect.



 









 




 Silicon Image, Inc.

1999 Employee Stock Purchase Plan




     16. Reports. Individual accounts will be maintained for each participant in this Plan. Each
participant shall receive promptly after the end of each Offering Period a report of his or her
account setting forth the total payroll deductions accumulated, the number of shares purchased, the
per share price thereof and the remaining cash balance, if any, carried forward to the next
Offering Period.



     17. Notice of Disposition. Each participant shall notify the Company in writing if the
participant disposes of any of the shares purchased in any Offering Period pursuant to this Plan if
such disposition occurs within two (2) years from the Offering Date (the “Notice Period”). The
Company may, at any time during the Notice Period, place
a legend or legends on any certificate representing shares acquired pursuant to this Plan
requesting the Company’s transfer agent to notify the Company of any transfer of the shares. The
obligation of the participant to provide such notice shall continue notwithstanding the placement
of any such legend on the certificates.



     18. No Rights to Continued Employment. Neither this Plan nor the grant of any option
hereunder shall confer any right on any employee to remain in the employ of the Company or any
Participating Subsidiary, or restrict the right of the Company or any Participating Subsidiary to
terminate such employee’s employment.



     19. Equal Rights And Privileges. All eligible employees shall have equal rights and
privileges with respect to this Plan so that this Plan qualifies as an “employee stock purchase
plan” within the meaning of Section 423 or any successor provision of the Code and the related
regulations. Any provision of this Plan which is inconsistent with Section 423 or any successor
provision of the Code shall, without further act or amendment by the Company, the Committee or the
Board, be reformed to comply with the requirements of Section 423. This Section 19 shall take
precedence over all other provisions in this Plan.



     20. Notices. All notices or other communications by a participant to the Company under or in
connection with this Plan shall be deemed to have been duly given when received in the form
specified by the Company at the location, or by the person, designated by the Company for the
receipt thereof.



     21. Term; Stockholder Approval. This Plan was first adopted by the Board on July 20, 1999
and was last amended by the Board as of the date shown above. When required by applicable law or
Section 423, this Plan shall be submitted for approval by the stockholders of the Company, in any
manner required, or permitted, by applicable law. No purchase of shares that are subject to such
approval before becoming available under this Plan shall occur prior to stockholder approval of
such shares and the Board or Committee may delay any Purchase Date and postpone the commencement of
any Offering Period subsequent to such Purchase Date as deemed necessary or desirable to obtain
such approval (provided that if a Purchase Date would occur more than twenty-seven (27) months
after commencement of the Offering Period to which it relates, then such Purchase Date shall not
occur and instead such Offering Period shall terminate without the purchase of shares and
participants in such Offering Period shall be refunded their contributions without interest). This
Plan shall continue until the earlier to occur of (a) termination of this Plan by the Board (which
termination may be effected by the Board at any time), (b) issuance of all of the shares of Common
Stock reserved for issuance under this Plan, or (c) ten (10) years from the adoption of this Plan
by the Board.



     22. Designation of Beneficiary.



          (a) A participant may file a written designation of a beneficiary who is to receive any
shares and cash, if any, from the participant’s account under this Plan in the event of such
participant’s death subsequent to the end of a Purchase Period but prior to delivery to him of such
shares and cash. In addition, a participant may file a written designation of a beneficiary who is
to receive any cash from the participant’s account under this Plan in the event of such
participant’s death prior to a Purchase Date.



          (b) Such designation of beneficiary may be changed by the participant at any time by written
notice. In the event of the death of a participant and in the absence of a beneficiary validly
designated under this Plan who is living at the time of such participant’s death, the Company shall
deliver such shares or cash to the executor or administrator of the estate of the participant, or
if no such executor or administrator has been appointed (to the knowledge of the Company), the
Company, in its discretion, may deliver such shares or cash to the spouse or



 









 






 Silicon Image, Inc.

1999 Employee Stock Purchase Plan




to any one or more
dependents or relatives of the participant, or if no spouse, dependent or relative is known to the
Company, then to such other person as the Company may designate.



     23. Conditions Upon Issuance of Shares; Limitation on Sale of Shares. Shares shall not be
issued with respect to an option unless the exercise of such option and the issuance and delivery
of such shares pursuant thereto shall comply with all applicable provisions of law, domestic or
foreign, including, without limitation, the Securities Act of 1933, as amended, the Securities
Exchange Act of 1934, as amended, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange or automated quotation system upon which the shares may then be
listed, and shall be further subject to the approval of counsel for the Company with respect to
such compliance.



     24. Applicable Law. The Plan shall be governed by the substantive laws (excluding the
conflict of laws rules) of the State of California.



     25. Amendment or Termination of this Plan. The Board may at any time amend, terminate or
extend the term of this Plan, except that any such termination cannot affect options previously
granted under this Plan, nor may any amendment make any change in an option previously granted
which would adversely affect the right of any participant, nor may any amendment be made without
approval of the stockholders of the Company obtained in accordance with Section 21 above within
twelve (12) months of the adoption of such amendment (or earlier if required by Section 21) if such
amendment would:



     (a) increase the number of shares that may be issued under this Plan; or



     (b) change the designation of the employees (or class of employees) eligible for participation
in this Plan.



     Notwithstanding the foregoing, the Board may make such amendments to the Plan as the Board
determines to be advisable, if the continuation of the Plan or any Offering Period would result in
financial accounting treatment for the Plan that is different from the financial accounting
treatment in effect on the date this Plan was adopted by the Board.



 









 





THE SILICON IMAGE, INC.




1999 EMPLOYEE STOCK PURCHASE PLAN




SUB-PLAN FOR UK EMPLOYEES





	1.	 	The purpose of this Sub-Plan is to provide incentive for present and future employees in the
United Kingdom of Silicon Image’s Subsidiaries through the grant of options over Common Stock.
	 
	2.	 	This Sub-Plan is governed by the Silicon Image, Inc. 1999 Employee Stock Purchase Plan (the
“Plan”) and all its provisions shall be identical to those of the Plan SAVE THAT Section 4
shall be as stated in this Sub-Plan in order to accommodate the specific requirements of UK
law.





Section 4 for purposes of this Sub-Plan reads:




     4. Eligibility. Any employee of the Participating Subsidiaries is eligible to participate in
an Offering Period (as hereinafter defined) under this Plan except the following:



          (a) employees who are not employed by the Company or a Participating Subsidiary (10) days
before the beginning of such Offering Period;




          (b) employees who are customarily employed for five (5) months or less in a calendar year;




          (c) employees who, together with any other person whose stock would be attributed to such
employee pursuant to Section 424(d) of the Code, own stock or hold options to purchase stock
possessing five percent (5%) or more of the total combined voting power or value of all classes of
stock of the Company or any of its Participating Subsidiaries or who, as a result of being granted
an option under this Plan with respect to such Offering Period, would own stock or hold options to
purchase stock possessing five percent (5%) or more of the total combined voting power or value of
all classes of stock of the Company or any of its Participating Subsidiaries; and




          (d) individuals who provide services to the Company or any of its Participating Subsidiaries
as independent contractors who are reclassified as common law employees for any reason except
for federal income and employment tax purposes.