**Exhibit 10.1**

 

 
|   | 1060 East. Arques Ave.    |
|--------|---------------------------|
|   | Sunnyvale CA 94085        |
|   | Ph:  (408)  616-4000 |
|   | Fax: (408) 830-9525       |

 

April 1, 2004

 

Steve Tirado

18052 CenterStreet

Castro Valley, CA94546

 

Dear Steve:

 

Silicon Image, Inc. (the “Company”) is pleased to confirm our offer ofcontinued employment to you. The terms of our offer and the benefits providedby the Company are as follows:

 

1.     You will report to the Chief Executive Officer in theposition of Division President of Storage Group of the Company.  By your signature below, you herebyconcurrently resign from your positions as President and Chief OperatingOfficer of the Company.

 

2.     Your annual base salary will be $300,000 per year andwill be subject to annual review.

 

3.     You will be eligible to participate in the employeebenefit plans and executive compensation programs maintained by the Companyapplicable to other employees and key executives of the Company, including,without limitation, retirement plans, savings or profit-sharing plans, deferredcompensation plans, supplemental retirement or excess-benefit plans, stockoption, 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.     If your employment with the Company terminates for anyreason other than a termination by the Company for “Cause” (as definedfollowing), then you will be entitled to the separation compensation describedin this Section 4, on the terms and conditions set forth herein.  As used herein, “Cause” means willful grossmisconduct, conviction of a felony or an act of material personal dishonesty.

 

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A.    You will entitled to cash severance and accelerationof unvested stock options and restricted stock according to the followingchart:

 
| **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                             |

 

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(1)   Payable in alump-sum upon termination at the then-current salary rate, net of applicabletaxes.

(2)   The specifiedportion of unvested stock options and restricted stock will accelerateimmediately upon termination with respect to the number of months stated in thechart.  No acceleration of vesting willbe deemed to extend beyond the number of then-unvested options or shares undera particular award at the time of acceleration. No additional vesting shall occur following termination.  Options will be exercisable for 3 monthsfollowing 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 youa lump sum upon termination equal to the amount needed to fund COBRA insurancepremiums for a number of months equal to the number of months of cash severanceyou are entitled to receive according to the chart above.

 

C.    In consideration of and as a condition to receivingthe separation compensation set forth in this Section 4, concurrently withyour termination of employment, you will execute an agreement in form acceptableto the Company providing for (i) a full unilateral release in favor of theCompany and its directors, officers and other related persons and (ii) anagreement not to solicit employees of the Company for a period of 1 yearfollowing termination.  However, you willnot be required to release any right to indemnification that you may have underapplicable law, the Company’s bylaws or the Indemnity Agreement between you andthe Company.

 

5.     Should you decide to accept our offer, you will remainan at-will employee of the Company, which means the employment relationship canbe terminated by either of

 

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us for any reasonat any time.  Any statements orrepresentations to the contrary (and, indeed, any statements contradicting anyprovision in this letter) should be regarded by you as ineffective.  Further, your participation in any stockoption or benefit program is not to be regarded as assuring you of continuingemployment for any particular period of time.

 

6.     This letter agreement constitutes the entireunderstanding and agreement of the parties hereto with respect to the subjectmatter hereof and supersedes all prior and contemporaneous agreements orunderstandings, inducements or conditions, express or implied, written or oral,between the parties with respect to such subject matter, including withoutlimitation 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 youwill, please sign the enclosed copy of this letter agreement in the spaceindicated 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 wishto 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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