**Exhibit10.01**

 

 

1060East. Arques Ave.

SunnyvaleCA 94085

Ph:   (408) 616-4000

Fax:(408) 830-9525

 

April 17, 2004

 

Robert Valiton

[address]

 

Dear Rob:

 

Silicon Image, Inc. (the“Company”) is pleased to confirm our offer of continued employment to you. Theterms of our offer and the benefits provided by the Company are as follows:

 

1.                                       You will report to the Chief ExecutiveOfficer in the position of Vice President, Worldwide Sales of the Company.  By your signature below, you herebyconcurrently resign from your other sales positions at the Company.

 

2.                                       Your annual base salary will be $240,000per year, effective as of April 1, 2004. You will be eligible to receive a cash incentive bonus of $60,000 forachievement of on-target IC product revenues for the 2004 fiscal year.  Any additional cash incentive bonus forover-achievement beyond on-target IC product revenues for the 2004 fiscal yearwill be memorialized in an addendum to this letter.  You will receive a one-time relocation incentive payment of $60,000and reimbursement of your actual relocation costs, up to $40,000.  We will also recommend that the CompensationCommittee grant you a stock option for 300,000 shares with an exercise priceequal to the closing price of our stock on the date of grant which will vestmonthly over four years provided you continue to be employed by us.

 

3.                                       You will be eligible to participate inthe employee benefit plans and executive compensation programs maintained bythe Company applicable to other employees and key executives of the Company,including, without limitation, retirement plans, savings or profit-sharingplans, deferred compensation plans, supplemental retirement or excess-benefitplans, stock option, stock purchase, incentive or other bonus plans, life, disability,health, accident and other insurance programs, and similar plans orprograms.  You will be eligible for theapplicable number of days of paid PTO per year, per the PTO policy.

 

4.                                       Upon termination of your employment withthe Company for any reason, you will receive payment for all unpaid salary andPTO accrued to the date of your termination of employment and your benefitswill be continued under the Company’s then

 

1

----

 

existing benefit plansand policies for so long as provided under the terms of such plans and policiesand as required by applicable law.  Youwill not otherwise be entitled to any other compensation, award or damages withrespect to your employment or termination, except that in the event that youremployment is terminated by the Company without “Cause” (as defined following)you will also be entitled to receive cash severance in an amount equal to sixmonths of your then-applicable annual base salary, net of applicable taxes(which may be paid in the Company’s discretion in a lump sum or according toits normal payroll cycle).

 

As used herein, “Cause”means (i) any breach of this agreement, the employee inventions andconfidentiality agreement between you and the Company, or any other writtenagreement between you and the Company, if such breach causes harm to theCompany; (ii) any negligence or willful misconduct by you in your performanceof duties to the Company that causes harm to the Company; (iii) your repeatedfailure to diligently follow the lawful directions of the Board of Directors ofthe Company or the person to whom you report or your repeated failure todiligently perform your duties in a reasonable manner pursuant to thisagreement; (iv) commission of a felony under the laws of the United States orany state thereof; (v) commission of any act of fraud, embezzlement ordishonesty or breach of fiduciary duties; (vi) the abuse of alcohol orcontrolled substances that has a detrimental effect upon your performance ofyour duties under this agreement; or (vii) a good faith determination by theCompany’s Board of Directors or the person to whom you report that yourperformance is unsatisfactory.

 

In consideration of andas a condition to receiving the severance set forth in this Section 4,concurrently with your termination of employment, you will execute an agreementin form acceptable to the Company providing for a full unilateral release infavor of the Company and its directors, officers and other related persons.  However, you will not be required to releaseany right to indemnification that you may have under applicable law, theCompany’s bylaws or the Indemnity Agreement between you and the Company.

 

5.                                       During the term of your employment withthe Company and for one year thereafter, you will not, on behalf of yourself orany third party, solicit or attempt to induce any employee of the Company toterminate his or her employment with the Company.

 

6.                                       Should you decide to accept our offer,you will remain an at-will employee of the Company, which means the employmentrelationship can be terminated by either of us for any reason at any time.  Any statements or representations to thecontrary (and, indeed, any statements contradicting any provision in thisletter) should be regarded by you as ineffective.  Further, your participation in any stock option or benefitprogram is not to be regarded as assuring you of continuing employment for anyparticular period of time.

 

7.                                       This letter agreement constitutes theentire understanding and agreement of the parties hereto with respect to thesubject matter hereof and supersedes all prior and contemporaneous agreementsor understandings, inducements or conditions, express or implied, written ororal, between the parties with respect to such subject matter, includingwithout limitation the letter agreement between you and the Company datedJuly 16, 1999.  This agreement willbe governed by the laws of the State of California

 

2

----

 

without reference toconflict of laws provisions.  Theparties agree that any dispute regarding the interpretation or enforcement ofthis agreement shall be decided by confidential, final and binding arbitrationconducted by Judicial Arbitration and Mediation Services (“JAMS”) under thethen existing JAMS rules rather than by litigation in court, trial by jury,administrative proceeding or in any other forum.

 

8.                                       If you decide to accept our offer, and Ihope you will, please sign the enclosed copy of this letter agreement in thespace indicated below and return it to me. Your signature will acknowledge that you have read and understood andagreed to the terms and conditions of this offer.  Should you have anything else that you wish to discuss, please donot hesitate to call me.

 

We look forward to theopportunity to continue working together.

 

[Remainder of PageIntentionally Left Blank]

 

3

----

 

Very truly yours,

 

Silicon Image, Inc.

 

 
| By:    | /s/  David D. Lee  |   |
|--------|--------------------|--------|
|   | David  D. Lee, CEO |

 

 
| Acknowledged, Accepted  and Agreed |
|------------------------------------|
|                               |
|                               |
| /s/ Robert Valiton                 |   |
| Robert Valiton                     |

 

4

----

 

**ADDENDUM**

 

**2004 VP Worldwide Sales Bonus Plan**

 
| **Performance  to Plan (PTP)** |   | **Base** |    | **Revenue-based  Incentive** |   | **Percent of  PTP@100%** |   | **Total Cash  Compensation** |   |
|--------------------------------|--------|----------|---------|------------------------------|--------|--------------------------|--------|------------------------------|--------|
| 70                             | %      | $        | 240,000 |                         | $      | 21,000                   |   | 35.0                         | %      | $ | 261,000 |   |
| 75                             | %      | $        | 240,000 |                         | $      | 22,500                   |   | 37.5                         | %      | $ | 262,500 |   |
| 80                             | %      | $        | 240,000 |                         | $      | 30,000                   |   | 50.0                         | %      | $ | 270,000 |   |
| 85                             | %      | $        | 240,000 |                         | $      | 37,500                   |   | 62.5                         | %      | $ | 277,500 |   |
| 90                             | %      | $        | 240,000 |                         | $      | 45,000                   |   | 75.0                         | %      | $ | 285,000 |   |
| 95                             | %      | $        | 240,000 |                         | $      | 52,500                   |   | 87.5                         | %      | $ | 292,500 |   |
| 100                            | %      | $        | 240,000 |                         | $      | 60,000                   |   | 100.0                        | %      | $ | 300,000 |   |
| 105                            | %      | $        | 240,000 |                         | $      | 86,400                   |   | 144.0                        | %      | $ | 326,400 |   |
| 110                            | %      | $        | 240,000 |                         | $      | 112,800                  |   | 188.0                        | %      | $ | 352,800 |   |
| 115                            | %      | $        | 240,000 |                         | $      | 139,200                  |   | 232.0                        | %      | $ | 379,200 |   |
| 120                            | %      | $        | 240,000 |                         | $      | 165,600                  |   | 276.0                        | %      | $ | 405,600 |   |
| 125                            | %      | $        | 240,000 |                         | $      | 192,000                  |   | 320.0                        | %      | $ | 432,000 |   |
| 130                            | %      | $        | 240,000 |                         | $      | 224,400                  |   | 374.0                        | %      | $ | 464,400 |   |
| 135                            | %      | $        | 240,000 |                         | $      | 256,800                  |   | 428.0                        | %      | $ | 496,800 |   |
| 140                            | %      | $        | 240,000 |                         | $      | 289,200                  |   | 482.0                        | %      | $ | 529,200 |   |
| 145                            | %      | $        | 240,000 |                         | $      | 321,600                  |   | 536.0                        | %      | $ | 561,600 |   |
| 150                            | %      | $        | 240,000 |                         | $      | 354,000                  |   | 590.0                        | %      | $ | 594,000 |   |

 
| **Accelerator  Ramp**          |   |
|--------------------------------|--------|
| **Percent of  Quota Achieved** |   | **Accelerator** |   | **Annual  Payout  per%** |   |
| 0%                             |   | 75 | % | 50 | % | $ | 300 |   |
| 76%                            |   | 100 | % | 163 | % | $ | 1,500 |   |
| 101%                           |   | 125 | % | 320 | % | $ | 5,280 |   |
| 126%                           |   | 150 | % | 370 | % | $ | 6,480 |   |
|                                |        |  |  |  |  |  |  |  |  |

 

5

----