exv10w31



 





Exhibit 10.31



Consulting Agreement




     This Consulting Agreement (this “Agreement”) is being entered into on August 17, 2004 by and
between Silicon Image, Inc., a Delaware corporation with its principal place of business at 1060
East Arques Avenue, Sunnyvale, California 94085 (“Company”) and Robert G. Gargus (“Consultant”) and
in connection with that certain Amended and Restated Employment Agreement, dated August 17, 2004 by
and between the Company and the Consultant (“Restated Employment Agreement”). This Agreement will
become effective as of the Separation Date, as defined in the Restated Employment Agreement (the
“Effective Date”). As used herein, “Party” or “Parties” will refer to Company, Consultant or both,
as the case may be and Consultant includes the Consultant, and all employees and agents of the
Consultant.



RECITALS



Whereas, Consultant and Company have entered into the Restated Employment Agreement,
pursuant to which Consultant has agreed to provide the Company with certain consulting services as
of the Effective Date; and



Whereas, Consultant desires to perform, and Company desires to have Consultant perform,
consulting services as an independent contractor to Company.



NOW, THEREFORE, the Parties agree as follows:




1. Services




     1.1 Performance. Consultant will perform the following consulting “Services”: (a)
provide transition assistance to the Company’s Chief Executive Officer and Chief Financial Officer
and (b) at any point in time following the Separation Date, to assist as reasonably necessary the
Company with any reviews, investigations or examinations of the Company’s financial and accounting
results, policies, practices and other matters during your period of employment with the Company.
In addition, Consultant agrees to use all diligent and reasonable efforts to perform the Services
during the Period of Consultancy.



     1.2 Period of Consultancy. The “Period of Consultancy” will commence on the Effective
Date and will terminate six (6) months following the Effective Date.



     1.3 Payment. The Company will, as sole compensation for the Consultant’s performance
of the Services grant Consultant the Accelerated Vesting (as defined in the Restated Employment
Agreement) upon the Separation Date (as defined in the Restated Employment Agreement). Company will
also reimburse Consultant for his reasonable out-of-pocket expenses incurred in performing the
Services that are approved in advance by Company’s Chief Executive Officer or Chief Financial
Officer. Consultant will invoice Company on a monthly basis for such out-of-pocket expenses and
Company will pay each such invoice no later than thirty (30) days after its receipt. Consultant
will receive no other



1









 





compensation or remuneration in connection with or based upon the Services.




2. Relationship of the Parties




     2.1 Independent Contractor. Consultant is an independent contractor and is not an
agent or employee of, and has no authority to bind, Company by contract or otherwise. Consultant
will perform the Services under the general direction of Company, but Consultant will determine, in
Consultant’s sole discretion, the manner and means by which the Services are accomplished, subject
to the requirement that Consultant shall at all times comply with applicable law.



     2.2 Employment Benefits. Except as set forth in paragraph 3 of the Restated Employment
Agreement, Consultant will not be entitled to receive any vacation or illness payments, or to
participate in any plans, arrangements, or distributions by the Company pertaining to any bonus,
stock option, profit sharing, insurance or similar benefits for Company’s employees.


3. Confidential Information Consultant acknowledges that Consultant will acquire information and
materials from Company and knowledge about the business, products, customers, clients and suppliers
of Company and that all such knowledge, information and materials acquired, and the existence,
terms and conditions of this Agreement, are and will be the trade secrets and confidential and
proprietary information of Company (collectively “Confidential Information”). Confidential
Information will not include, however, any information that is or becomes part of the public domain
through no fault of Consultant or that Company regularly gives to third parties without restriction
on use or disclosure. Consultant agrees to hold all such Confidential Information in strict
confidence, not to disclose it to others or use it in any way, commercially or otherwise, except in
performing the Services, and not to allow any unauthorized person access to it, either before or
after expiration or termination of this Agreement. Consultant further agrees to take all action
reasonably necessary and satisfactory to protect the confidentiality of the Confidential
Information including, without limitation, implementing and enforcing operating procedures to
minimize the possibility of unauthorized use or copying of the Confidential Information.



4. Termination and Expiration




     4.1 Termination. Either party may terminate this Agreement in the event of a breach by
the other party if such breach continues uncured for a period of ten (10) days after written
notice.



     4.2 Expiration. Unless terminated earlier, this Agreement will expire at the end of
the Period of Consultancy.



     4.3 No Election of Remedies. The election by Company to terminate this Agreement in
accordance with its terms shall not be deemed an election of remedies, and all other remedies
provided by this Agreement or available at law or in equity shall survive any termination.



2









 





5. Effect of Expiration or Termination




Upon the expiration or termination of this Agreement for any reason:





	 	a)  	each party will be released from all obligations to the other
arising after the date of expiration or termination, except that expiration or
termination of this Agreement for any reason will not relieve Company of its
obligations under Sections 1.3, 6 and 8 nor will this release indemnification
obligations with respect to any claims (including coverage of attorneys’ fees
and costs for Employee’s individual representation) arising under Consultant’s
existing rights to indemnification and defense pursuant to the articles and
bylaws of the Company for acts as a director and/or officer or to Consultant’s
rights of insurance under any director and officer liability policy in effect
covering the Company’s directors and officers or Consultant’s rights under
California Labor Code section 2802 or Consultant of its obligations under
Sections 2.2, 3, 6 and 8 nor will expiration or termination relieve Consultant
or Company from any liability arising from any breach of this Agreement; and
	 
	 	b)  	upon the Company’s reasonable request, Consultant will promptly
notify Company of all Confidential Information in Consultant’s possession and,
at the expense of Consultant and in accordance with Company’s instruction, will
promptly deliver to Company all such Confidential Information.





6. Limitation of Liability





IN NO EVENT
SHALL COMPANY OR CONSULTANT BE LIABLE FOR ANY SPECIAL, INCIDENTAL,
INDIRECT OR CONSEQUENTIAL DAMAGES OF ANY KIND IN CONNECTION WITH THIS
AGREEMENT, EVEN IF COMPANY OR CONSULTANT HAS BEEN INFORMED IN ADVANCE OF THE
POSSIBILITY OF SUCH DAMAGES.



7. Competitive Activities



Consultant will not during the term of this Agreement, directly or indirectly, in any individual or
representative capacity, engage or participate in or provide services to any business whose primary
business is directly competitive with Company.




8. General




     8.1 Assignment. Consultant may not assign Consultant’s rights or delegate Consultant’s
duties under this Agreement either in whole or in part without the prior written consent of
Company. Any attempted assignment or delegation without such consent will be void.



3









 





     8.2 Attorneys’ Fees. If any action is necessary to enforce the terms of this
Agreement, the substantially prevailing party will be entitled to reasonable attorney’s fees, costs
and expenses in addition to any other relief to which such prevailing party may be entitled.



     8.3 Governing Law Severability. This Agreement will be governed by and construed in
accordance with the laws of the State of California excluding that body of law pertaining to
conflict of laws. If any provision of this Agreement is for any reason found to be unenforceable,
the remainder of this Agreement will continue in full force and effect.



     8.4 Notices. Any notices under this Agreement will be sent by certified or registered
mail, return receipt requested, to the address specified below or such other address as the party
specifies in writing. Such notice will be effective upon its mailing as specified.



     8.5 Complete Understanding; Modifications. This Agreement, together with the Restated
Employment Agreement between the parties of even date herewith, constitutes the complete and
exclusive understanding and agreement of the parties and supersedes all prior understandings and
agreements, whether written or oral, with respect to the subject matter hereof and thereof. Any
waiver, modification or amendment of any provision of this Agreement will be effective only if in
writing and signed by the parties hereto.



IN WITNESS WHEREOF, the parties have executed this Agreement as of August 17, 2004.




	 	 	 	 	 	 	 
	COMPANY	 	 	 	CONSULTANT
	 
	 	 	 	 	 	 
	By:

	 	/s/ David D. Lee
	 	 	 	/s/ Robert G. Gargus
	

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Name:

	 	David D. Lee
	 	 	 	Robert G. Gargus
	

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Title:

	 	CEO and Chairman of the Board	 	 	 	 
	

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Date:

	 	8/17/04
	 	 	 	8/17/04
	

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Address:
	 	 	 	 	 	 
	

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 






4