Exhibit 10.1


 





 


	
   

  	
  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

  



 










(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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