exv10w34



 






Exhibit 10.34







1060 East. Arques Ave.



November 11, 2004




Steve Laub


Dear Steve:




     On behalf of the Board of Directors (the “Board”) of Silicon Image, Inc. (the “Company”), it
is my pleasure to offer you the position of Chief Executive Officer and President of the Company.
The terms of our offer and the benefits provided by the Company are as follows:



     1. You will report to the Board, which will nominate and elect you to the Board as a Class I
director following the date you start your employment with the Company (the “Start Date”). Your
Start Date will be November 11, 2004. While you are employed at the Company, you will abide by
your duty of loyalty to the Company, will perform your duties and follow the lawful directions of
the Board in a diligent manner, and will devote your full time, energy and attention to the
interests of the Company, subject to your devotion of time to manage your personal assets and
investments, to participate in charitable, professional and community activities and to serve on
boards of directors of other companies, provided such devotion of time does not materially
interfere with your service to the Company and such service on boards of other companies is
permissible as not representing a conflict of interest under the Company’s Code of Conduct as
determined by the Board. You will receive an indemnification agreement for your service as an
officer and director of the Company consistent with indemnification agreements in place with other
members of the Board.



     2. Your annual base salary will be $425,000 per year. For the 2004 fiscal year, you will be
eligible to receive a cash bonus equal to a prorated portion of the calculated amount (if any)
payable to the current Chief Executive Officer under the executive bonus program of the Company for
the 2004 fiscal year (it being acknowledged that the current Chief Executive Officer’s target bonus
is $200,000). In addition, for the 2005 fiscal year and each fiscal year thereafter, you will be
eligible to receive a cash bonus under an executive bonus program for the year to be proposed by
you and approved by the Compensation Committee of the Board. Such executive bonus program will
provide for a potential cash bonus to you of at least 50% of your annual base salary, provided that
the actual bonus amount (which may be less than 50% of your annual base salary) will be determined
by Company performance and whatever other factors the executive bonus program considers. Your cash
compensation will be subject to annual review by the Compensation Committee.



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     3. You will be granted an option (the “Option”) for 1,500,000 shares of common stock (as of
October 29, 2004, there were approximately 76,648,000 shares outstanding). The Option will have an
exercise price equal to the closing price of our common stock on the Nasdaq Stock Market on the
Start Date and will vest and become exercisable with respect to one-fourth of the shares on the
first anniversary of the Start Date and an additional one-forty-eighth of the shares each month
thereafter so long as you remain continuously employed by the Company, subject to the vesting
acceleration provisions set forth in Section 5 of this letter agreement.



     4. You will be eligible to participate in the other employee benefit plans and executive
compensation programs maintained by the Company applicable to other employees and key executives of
the Company, including without limitation stock option, stock purchase, incentive or other bonus
plans, life, disability, health, accident and other insurance programs, and similar plans or
programs. You will receive not less than three weeks of paid vacation each year.



     5. Upon termination of your employment with the Company for any reason, you will receive
payment for all unpaid salary and vacation accrued to the date of your termination of employment,
you will receive reimbursement for expenses per existing Company policies and your benefits will be
continued under the Company’s then existing benefit plans and policies as provided under the terms
of such plans and policies and as required by applicable law; such payments and benefits are not
included within the separation benefits described below (but likewise will not operate to duplicate
such separation benefits either). Under certain circumstances, you will also be entitled to
receive separation benefits as set forth below, but you will not be entitled to any other
compensation, award or damages with respect to your employment or termination. A full unilateral
release (including a waiver of unknown claims and covenant not to sue) in favor of the Company and
its directors, officers and other related persons and an agreement not to solicit employees of the
Company for a period of one year following termination, each in the form then used by the Company
for departing executives (but in all events containing no terms inconsistent with, or additional
to, the terms hereof unless mutually and reasonably agreed at the time), must be executed by you in
order to receive any separation benefits; provided, however, you will not be required to release
any right to indemnification that you may have under applicable law, the Company’s Certificate of
Incorporation, the Company’s bylaws or any indemnity agreement between you and the Company nor any
rights related to your then existing equity ownership in the Company; provided further, that in the
event that the Company subsequently commences litigation or arbitration proceedings against you
(excluding derivative suits brought by stockholders of the Company unaffiliated with members of the
Board), upon written notice to the Company from you within 30 days of the initiation of any such
proceeding, such release shall be considered null and void.



          A. In the event of your voluntary termination (other than for Good Reason) or termination for
Cause (as defined following), you will not be entitled to any cash separation benefits or
additional vesting of shares of restricted stock or options.



          B. In the event of your termination without Cause, termination by you for Good Reason or your
termination due to death or disability, you shall be entitled to (i) cash severance (at the rate of
your then current annual base salary) paid pro rata in accordance with normal payroll dates and
reimbursement of COBRA insurance premiums (if you elect COBRA coverage), each for twelve months
following your termination, and (ii) the calculated amount (if any) payable to the Chief Executive
Officer under the executive bonus program of the Company for the entire year in which such
termination occurs and pro rated for a sufficient portion of the following year so as to constitute
participation in such executive bonus program effective through the date that is one year after
such termination, in each case less



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applicable deductions and withholdings and in accordance with
the Company’s normal payroll practices. Your right to receive COBRA insurance premiums shall
terminate upon your commencement of full-time employment with another company (which you shall
promptly notify the Company of).




          C. In the event of your termination without Cause, termination by you for Good Reason or your
termination due to death or disability, you shall be entitled to twelve months of accelerated
vesting under your Company stock options and restricted stock awards (whether referred to above or
otherwise granted in the future).



          D. In the event (i) there is a Change of Control (as defined following), (ii) you are not
offered (or continued in, as the case may be) the position of chief executive officer of the
Successor Company (as defined following) for at least the one year period after the Change of
Control with annual base salary and potential cash bonus at least as favorable to you as those
referred to herein and principal office location located within 25 miles from the current location
of the Company’s principal place of business at 1060 East Arques Avenue, Sunnyvale, California, and
(iii) if so requested by the Successor Company, you continue to serve the Successor Company (unless
prevented by death or disability) on a full-time basis (the Successor Company to continue to
provide cash compensation (at the rate of your then current annual base salary), continued
eligibility for bonus, health benefits and equity vesting as provided herein) to provide reasonable
and appropriate transition assistance commensurate with your experience and reporting to the chief
executive officer for such transition period as is requested by the Successor Company, not to
exceed six months (unless you agree in writing to a longer transition period), then upon your
termination from the Company or Successor Company (as the case may be) in connection with the
Change of Control or completion of such transition period, in addition to the separation benefits
described in paragraph B above, but in lieu of the separation benefits described in paragraph C
above, you shall be entitled to accelerated vesting under your Company stock options and restricted
stock awards (whether referred to above or otherwise granted in the future), or equity securities
of the Successor Company received in exchange therefor, based on the number of options and/or
shares that would have vested had you remained employed with continued vesting for three years
after the later of the closing of the Change of Control or the completion of such transition
period.



          E. “Cause” means (i) conviction of, or plea of guilty or no contest to, a felony under the
laws of the United States or any state thereof or any act of fraud, embezzlement or dishonesty,
(ii) breach of fiduciary duties not remedied within thirty days of written notice, or (iii)
material breach of this agreement or any other written agreement with the Company not remedied
within thirty days of written notice.



          F. “Good Reason” means (i) any material reduction in your job duties and responsibilities (it
being acknowledged and agreed that your position as Chief Executive Officer and President will
entail your having such oversight and authority over Company operations as is customary for a chief
executive officer of a typical public company, subject to such oversight of the Board of Directors
and its Committees as is customary for a typical public company, satisfaction of legal requirements
and the implementation of appropriate checks, balances and procedures associated with the Company’s
accounting and financial matters, internal controls and public securities disclosures as approved
or established by the Board or the Committee responsible for the matter in question) not approved
in writing by you and not restored within thirty days of written notice to the Board, (ii) your
failure to be elected at any time as a member of the Board, (iii) any demoting change in your job
title as Chief Executive Officer and President, reduction in annual base salary or potential cash
bonus, or requirement that your principal place of business be located more than 25 miles from the
current location of the Company’s principal place of business at 1060 East Arques Avenue,
Sunnyvale, California not rescinded



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within thirty days of written notice to the Board, or (iv) any
material breach by the Company of any written obligation to you not remedied within thirty days of
written notice to the Board.




          G. “Change of Control” means (i) the consummation of any transaction or series of related
transactions which results in all of the holders of record of the Company’s capital stock
immediately prior to the transaction or transactions holding less than fifty percent of the voting
power of the surviving entity in the transaction or transactions immediately after the transaction
or transactions, including the acquisition of the Company by another entity and any reorganization,
merger or consolidation, or which results in the sale of all or substantially all of the assets of
the Company; provided, however, if the surviving entity in the transaction or transactions is
wholly owned by another (the “Parent”), then a Change of Control has occurred only if the holders
of record of the Company’s capital stock immediately prior to the transaction or transactions hold
less than fifty percent of the voting power of the Parent immediately after the transaction or
transactions, or (ii) change in composition of the Board such that a majority of the authorized
directors consist of individuals whose nomination to the Board was not approved or ratified by a
majority of the directors in office immediately prior to such nomination (but excluding from such
vote any directors previously not so approved or ratified).



          H. “Successor Company” means (i) the combined company resulting from a Change of Control
involving any kind of business combination, (ii) the acquiror of all or substantially all of the
assets of the Company in such a transaction, or (iii) the Company in all other cases.



          I. 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 of service. Vested options (including replacement options in a
Successor Company) will be exercisable for (i) fifteen months following the termination date in the
case of your termination without Cause, termination by you for Good Reason, or your termination
from the Company or Successor Company (as the case may be) in connection with a Change of Control
or completion of transition services period associated with a Change of Control (provided the
conditions set forth in clauses (i)-(iii) of paragraph D are satisfied), (ii) twelve months
following the termination date in the case of termination due to death or disability, or (iii)
three months following the termination date in the case of your voluntary termination or
termination for Cause, but in no event later than the expiration date of the options.



     6. As an employee of the Company you will have access to certain Company confidential
information and you may, during the course of your employment, develop certain information or
inventions which will be the property of the Company. To protect the interests of the Company, you
will need to sign the Company’s standard employee invention assignment and confidentiality
agreement as a condition of your employment. We wish to impress upon you that we do not wish you
to bring with you any confidential or proprietary material of any former employer or to violate any
other obligations you may have to your former employers.



     7. This offer of employment is made to you in confidence, and its terms must not be disclosed
by you to anyone outside your immediate family and professional advisors. If you do disclose any
of its terms to such a family member or advisor, you must caution him or her that such information
is confidential and must not be disclosed to anyone else.



     8. While we look forward to a long and profitable relationship, should you decide to accept
our offer, you will be an at-will employee of the Company, which means the employment relationship
can be terminated by either of us for any reason at any time. Any statements or



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representations to
the contrary (and 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.




     9. 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.



     10. This offer will remain open until November 12, 2004. 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 welcome you to the Company.



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Very truly yours,




Silicon Image, Inc.




	 	 	 	 	 
	By:

	 	/s/ David Hodges	 	 
	
	 	 
	

	 	     David Hodges, Director	 	 






Acknowledged, Accepted and Agreed




/s/ Steve Laub






Steve Laub





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