**EXHIBIT 10.01**

 

**INDEMNITY AGREEMENT**

 

This IndemnityAgreement (this “***Agreement***”),dated as of              ,          , is made by andbetween Silicon Image, Inc., a Delaware corporation (the “***Company***”), and                                    ,a director and/or officer of the Company (the “***Indemnitee***”).

 

**RECITALS**

 

A.            The Company is aware that competentand experienced persons are increasingly reluctant to serve as directors orofficers of corporations unless they are protected by comprehensive liability insuranceand/or indemnification, due to increased exposure to litigation costs and risksresulting from their service to such corporations, and due to the fact that theexposure frequently bears no reasonable relationship to the compensation ofsuch directors and officers;

 

B.            Based on their experience asbusiness managers, the Board of Directors of the Company (the “***Board***”) has concludedthat, to retain and attract talented and experienced individuals to serve asofficers and directors of the Company, and to encourage such individuals totake the business risks necessary for the success of the Company, it isnecessary for the Company contractually to indemnify officers and directors andto assume for itself maximum liability for expenses and damages in connectionwith claims against such officers and directors in connection with theirservice to the Company;

 

C.            Section 145 of theGeneral Corporation Law of Delaware, under which the Company is organized (the“***Law***”),empowers the Company to indemnify by agreement its officers, directors,employees and agents, and persons who serve, at the request of the Company, asdirectors, officers, employees or agents of other corporations or enterprises,and expressly provides that the indemnification provided by the Law is notexclusive; and

 

D.            The Company desiresand has requested the Indemnitee to serve or continue to serve as a director orofficer of the Company free from undue concern for claims for damages arisingout of or related to such services to the Company.

 

**NOW, THEREFORE**, theparties hereto, intending to be legally bound, hereby agree as follows:

 

**1.             Definitions.**

 

1.1           Agent.  For the purposes of this Agreement, “***agent***” of the Companymeans any person who is or was a director or officer of the Company or a subsidiaryof the Company; or is or was serving at the request of, for the convenience of,or to represent the interest of the Company or a subsidiary of the Company as adirector or officer of another foreign or domestic corporation, partnership,joint venture, trust or other enterprise or an affiliate of the Company; or wasa director or officer of a foreign or domestic corporation which was apredecessor corporation of the Company, including, without limitation, SiliconImage, Inc., a California corporation, or was a director or officer of anotherenterprise or affiliate of the Company at the request of, for the convenienceof, or to represent the interests of such predecessor corporation.  The term “***enterprise***” includes any employeebenefit plan of the Company, its subsidiaries, affiliates and predecessorcorporations.

 

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1.2           Expenses.  For purposes of this Agreement, “***expenses***” includesall direct and indirect costs of any type or nature whatsoever (including,without limitation, all attorneys’ fees and related disbursements and otherout-of-pocket costs) actually and reasonably incurred by the Indemnitee inconnection with the investigation, defense or appeal of a proceeding orestablishing or enforcing a right to indemnification or advancement of expensesunder this Agreement, Section 145 or otherwise; provided, however,that expenses shall not include any judgments, fines, ERISA excise taxes orpenalties or amounts paid in settlement of a proceeding.

 

1.3           Proceeding.  For the purposes of this Agreement, “***proceeding***” means anythreatened, pending or completed action, suit or other proceeding, whethercivil, criminal, administrative, investigative or any other type whatsoever.

 

1.4           Subsidiary.  For purposes of this Agreement, “***subsidiary***” means anycorporation of which more than fifty percent (50%) of the outstanding votingsecurities is owned directly or indirectly by the Company, by the Company andone or more of its subsidiaries or by one or more of the Company’ssubsidiaries.

 

**2.             Agreementto Serve.** The Indemnitee agrees to serve and/or continue to serve as an agent ofthe Company, at the will of the Company (or under separate agreement, if suchagreement exists), in the capacity the Indemnitee currently serves as an agentof the Company, faithfully and to the best of his ability, so long as he isduly appointed or elected and qualified in accordance with the applicableprovisions of the charter documents of the Company or any subsidiary of theCompany; provided, however, that the Indemnitee may at any timeand for any reason resign from such position (subject to any contractualobligation that the Indemnitee may have assumed apart from this Agreement), andthe Company or any subsidiary shall have no obligation under this Agreement tocontinue the Indemnitee in any such position.

 

**3.             Directors’and Officers’ Insurance.**  The Company shall, to the extent that the Board determines it tobe economically reasonable, maintain a policy of directors’ and officers’ liabilityinsurance (“***D&OInsurance***”), on such terms and conditions as may be approved bythe Board.

 

**4.             MandatoryIndemnification.** Subject to Section 9 below, the Company shall indemnify the Indemnitee:

 

4.1           Third PartyActions.  If the Indemnitee is a personwho was or is a party or is threatened to be made a party to any proceeding(other than an action by or in the right of the Company) by reason of the factthat he is or was an agent of the Company, or by reason of anything done or notdone by him in any such capacity, against any and all expenses and liabilitiesof any type whatsoever (including, but not limited to, judgments, fines, ERISAexcise taxes or penalties and amounts paid in settlement) actually andreasonably incurred by him in connection with the investigation, defense,settlement or appeal of such proceeding if he acted in good faith and in amanner he reasonably believed to be in, or not opposed to, the best interestsof the Company and, with respect to any criminal action or proceeding, had noreasonable cause to believe his conduct was unlawful; and

 

4.2           DerivativeActions.  If the Indemnitee is aperson who was or is a party or is threatened to be made a party to anyproceeding by or in the right of the Company to procure a

 

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judgment in its favor by reasonof the fact that he is or was an agent of the Company, or by reason of anythingdone or not done by him in any such capacity, against any amounts paid insettlement of any such proceeding and all expenses actually and reasonablyincurred by him in connection with the investigation, defense, settlement orappeal of such proceeding if he acted in good faith and in a manner hereasonably believed to be in, or not opposed to, the best interests of theCompany; except that no indemnification under this subsection shall bemade in respect of any claim, issue or matter as to which such person shallhave been finally adjudged to be liable to the Company by a court of competentjurisdiction due to willful misconduct of a culpable nature in the performanceof his duty to the Company, unless and only to the extent that the Court ofChancery or the court in which such proceeding was brought shall determine uponapplication that, despite the adjudication of liability but in view of all thecircumstances of the case, such person is fairly and reasonably entitled toindemnity for such amounts which the Court of Chancery or such other courtshall deem proper; and

 

4.3           Exception forAmounts Covered by Insurance. Notwithstanding the foregoing, the Company shall not be obligated toindemnify the Indemnitee for expenses or liabilities of any type whatsoever(including, but not limited to, judgments, fines, ERISA excise taxes orpenalties and amounts paid in settlement) to the extent such have been paiddirectly to the Indemnitee by D&O Insurance.

 

**5.             PartialIndemnification and Contribution.**

 

5.1           PartialIndemnification.  If the Indemniteeis entitled under any provision of this Agreement to indemnification by theCompany for some or a portion of any expenses or liabilities of any typewhatsoever (including, but not limited to, judgments, fines, ERISA excise taxesor penalties and amounts paid in settlement) incurred by him in theinvestigation, defense, settlement or appeal of a proceeding but is notentitled, however, to indemnification for all of the total amount thereof, thenthe Company shall nevertheless indemnify the Indemnitee for such total amountexcept as to the portion thereof to which the Indemnitee is not entitled toindemnification.

 

5.2           Contribution.  If the Indemnitee is not entitled to theindemnification provided in Section 4 for any reason other than the statutorylimitations set forth in the Law, then in respect of any threatened, pending orcompleted proceeding in which the Company is jointly liable with the Indemnitee(or would be if joined in such proceeding), the Company shall contribute to theamount of expenses (including attorneys’ fees), judgments, fines and amountspaid in settlement actually and reasonably incurred and paid or payable by theIndemnitee in such proportion as is appropriate to reflect (i) the relativebenefits received by the Company on the one hand and the Indemnitee on theother hand from the transaction from which such proceeding arose and (ii) therelative fault of the Company on the one hand and of the Indemnitee on theother hand in connection with the events which resulted in such expenses,judgments, fines or settlement amounts, as well as any other relevant equitableconsiderations.  The relative fault ofthe Company on the one hand and of the Indemnitee on the other hand shall bedetermined by reference to, among other things, the parties’ relative intent,knowledge, access to information and opportunity to correct or prevent thecircumstances resulting in such expenses, judgments, fines or settlementamounts.  The Company agrees that itwould not be just and equitable if contribution pursuant to this Section 5 weredetermined by pro rata allocation or any other method of allocation which doesnot take account of the foregoing equitable considerations.

 

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**6.             MandatoryAdvancement of Expenses.**

 

6.1           Advancement.  Subject to Section 9 below, the Companyshall advance all expenses incurred by the Indemnitee in connection with theinvestigation, defense, settlement or appeal of any proceeding to which theIndemnitee is a party or is threatened to be made a party by reason of the factthat the Indemnitee is or was an agent of the Company or by reason of anythingdone or not done by him in any such capacity. The Indemnitee hereby undertakes to promptly repay such amounts advancedonly if, and to the extent that, it shall ultimately be determined that theIndemnitee is not entitled to be indemnified by the Company under theprovisions of this Agreement, the Certificate of Incorporation or Bylaws of theCompany, the Law or otherwise.  Theadvances to be made hereunder shall be paid by the Company to the Indemniteewithin thirty (30) days following delivery of a written request therefor by theIndemnitee to the Company.

 

6.2           Exception.  Notwithstanding the foregoing provisions ofthis Section 6, the Company shall not be obligated to advance any expenses tothe Indemnitee arising from a lawsuit filed directly by the Company against theIndemnitee if an absolute majority of the members of the Board reasonablydetermines in good faith, within thirty (30) days of the Indemnitee’s requestto be advanced expenses, that the facts known to them at the time suchdetermination is made demonstrate clearly and convincingly that the Indemniteeacted in bad faith.  If such adetermination is made, the Indemnitee may have such decision reviewed by anotherforum, in the manner set forth in Sections 8.3, 8.4 and 8.5 hereof, with allreferences therein to “indemnification” being deemed to refer to “advancementof expenses,” and the burden of proof shall be on the Company to demonstrateclearly and convincingly that, based on the facts known at the time, theIndemnitee acted in bad faith.  TheCompany may not avail itself of this Section 6.2 as to a given lawsuit if, atany time after the occurrence of the activities or omissions that are theprimary focus of the lawsuit, the Company has undergone a change incontrol.  For this purpose, a change incontrol shall mean a given person or group of affiliated persons or groupsincreasing their beneficial ownership interest in the Company by at leasttwenty (20) percentage points without advance Board approval.

 

**7.             Noticeand Other Indemnification Procedures.**

 

7.1           Promptly afterreceipt by the Indemnitee of notice of the commencement of or the threat ofcommencement of any proceeding, the Indemnitee shall, if the Indemniteebelieves that indemnification with respect thereto may be sought from theCompany under this Agreement, notify the Company of the commencement or threatof commencement thereof.

 

7.2           If, at the time ofthe receipt of a notice of the commencement of a proceeding pursuant to Section7.1 hereof, the Company has D&O Insurance in effect, the Company shall giveprompt notice of the commencement of such proceeding to the insurers inaccordance with the procedures set forth in the respective policies.  The Company shall thereafter take allnecessary or desirable action to cause such insurers to pay, on behalf of theIndemnitee, all amounts payable as a result of such proceeding in accordancewith the terms of such D&O Insurance policies.

 

7.3           In the event theCompany shall be obligated to advance the expenses for any proceeding againstthe Indemnitee, the Company, if appropriate, shall be entitled to assume

 

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the defense of such proceeding,with counsel approved by the Indemnitee (which approval shall not beunreasonably withheld), upon the delivery to the Indemnitee of written noticeof its election to do so.  Afterdelivery of such notice, approval of such counsel by the Indemnitee and theretention of such counsel by the Company, the Company will not be liable to theIndemnitee under this Agreement for any fees of counsel subsequently incurredby the Indemnitee with respect to the same proceeding, providedthat:  (a) the Indemnitee shall have theright to employ his own counsel in any such proceeding at the Indemnitee’sexpense; (b) the Indemnitee shall have the right to employ his own counsel inconnection with any such proceeding, at the expense of the Company, if suchcounsel serves in a review, observer, advice and counseling capacity and does nototherwise materially control or participate in the defense of such proceeding;and (c) if (i) the employment of counsel by the Indemnitee has been previouslyauthorized by the Company, (ii) the Indemnitee shall have reasonably concludedthat there may be a conflict of interest between the Company and the Indemniteein the conduct of any such defense or (iii) the Company shall not, in fact,have employed counsel to assume the defense of such proceeding, then the feesand expenses of the Indemnitee’s counsel shall be at the expense of theCompany.

 

**8.             Determinationof Right to Indemnification.**

 

8.1           To the extent theIndemnitee has been successful on the merits or otherwise in defense of anyproceeding referred to in Section 4.1 or 4.2 of this Agreement or in thedefense of any claim, issue or matter described therein, the Company shallindemnify the Indemnitee against expenses actually and reasonably incurred byhim in connection with the investigation, defense or appeal of such proceeding,or such claim, issue or matter, as the case may be.

 

8.2           In the event thatSection 8.1 is inapplicable, or does not apply to the entire proceeding, theCompany shall nonetheless indemnify the Indemnitee unless the Company shallprove by clear and convincing evidence to a forum listed in Section 8.3 belowthat the Indemnitee has not met the applicable standard of conduct required toentitle the Indemnitee to such indemnification.

 

8.3           The Indemnitee shallbe entitled to select the forum in which the validity of the Company’s claimunder Section 8.2 hereof that the Indemnitee is not entitled to indemnificationwill be heard from among the following, except that the Indemnitee canselect a forum consisting of the stockholders of the Company only with theapproval of the Company:

 

(a)           A quorum of theBoard consisting of directors who are not parties to the proceeding for whichindemnification is being sought;

 

(b)           The stockholders ofthe Company;

 

(c)           Legal counselmutually agreed upon by the Indemnitee and the Board, which counsel shall makesuch determination in a written opinion;

 

(d)           A panel of threearbitrators, one of whom is selected by the Company, another of whom isselected by the Indemnitee and the last of whom is selected by the first twoarbitrators so selected; or

 

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(e)           The Court ofChancery of Delaware or other court having jurisdiction of subject matter andthe parties.

 

8.4           As soon aspracticable, and in no event later than thirty (30) days after the forum hasbeen selected pursuant to Section 8.3 above, the Company shall, at its ownexpense, submit to the selected forum its claim that the Indemnitee is notentitled to indemnification, and the Company shall act in the utmost good faithto assure the Indemnitee a complete opportunity to defend against such claim.

 

8.5           If the forumselected in accordance with Section 8.3 hereof is not a court, then after thefinal decision of such forum is rendered, the Company or the Indemnitee shallhave the right to apply to the Court of Chancery of Delaware, the court inwhich the proceeding giving rise to the Indemnitee’s claim for indemnificationis or was pending or any other court of competent jurisdiction, for the purposeof appealing the decision of such forum, provided that such right isexecuted within sixty (60) days after the final decision of such forum isrendered.  If the forum selected inaccordance with Section 8.3 hereof is a court, then the rights of the Companyor the Indemnitee to appeal any decision of such court shall be governed by theapplicable laws and rules governing appeals of the decision of such court.

 

8.6           Notwithstanding anyother provision in this Agreement to the contrary, the Company shall indemnifythe Indemnitee against all expenses incurred by the Indemnitee in connectionwith any hearing or proceeding under this Section 8 involving the Indemniteeand against all expenses incurred by the Indemnitee in connection with anyother proceeding between the Company and the Indemnitee involving the interpretationor enforcement of the rights of the Indemnitee under this Agreement unless acourt of competent jurisdiction finds that each of the material claims and/ordefenses of the Indemnitee in any such proceeding was frivolous or not made ingood faith.

 

**9.             Exceptions.**  Any other provision herein to the contrarynotwithstanding, the Company shall not be obligated pursuant to the terms ofthis Agreement:

 

9.1           Claims Initiatedby Indemnitee.  To indemnify oradvance expenses to the Indemnitee with respect to proceedings or claimsinitiated or brought voluntarily by the Indemnitee and not by way of defense, exceptwith respect to proceedings specifically authorized by the Board or brought toestablish or enforce a right to indemnification and/or advancement of expensesarising under this Agreement, the charter documents of the Company or anysubsidiary or any statute or law or otherwise, but such indemnification oradvancement of expenses may be provided by the Company in specific cases if theBoard finds it to be appropriate; or

 

9.2           UnauthorizedSettlements.  To indemnify theIndemnitee hereunder for any amounts paid in settlement of a proceeding unlessthe Company consents in advance in writing to such settlement, which consentshall not be unreasonably withheld; or

 

9.3           Securities LawActions.  To indemnify theIndemnitee on account of any suit in which judgment is rendered against theIndemnitee for an accounting of profits made from the purchase or sale by theIndemnitee of securities of the Company pursuant to the provisions of Sectionl6(b) of the Securities Exchange Act of 1934 and amendments thereto or similarprovisions of any federal, state or local statutory law; or

 

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9.4           UnlawfulIndemnification.  To indemnify theIndemnitee if a final decision by a court having jurisdiction in the mattershall determine that such indemnification is not lawful.  In this respect, the Company and theIndemnitee have been advised that the Securities and Exchange Commission takesthe position that indemnification for liabilities arising under the federalsecurities laws is against public policy and is, therefore, unenforceable andthat claims for indemnification should be submitted to appropriate courts foradjudication.

 

**10.          Non-Exclusivity.**  The provisions for indemnification andadvancement of expenses set forth in this Agreement shall not be deemedexclusive of any other rights which the Indemnitee may have under any provisionof law, the Company’s Certificate of Incorporation or Bylaws, the vote of theCompany’s stockholders or disinterested directors, other agreements orotherwise, both as to action in the Indemnitee’s official capacity and toaction in another capacity while occupying his position as an agent of the Company,and the Indemnitee’s rights hereunder shall continue after the Indemnitee hasceased acting as an agent of the Company and shall inure to the benefit of theheirs, executors and administrators of the Indemnitee.

 

**11.          GeneralProvisions.**

 

11.1         Interpretation ofAgreement.  It is understood thatthe parties hereto intend this Agreement to be interpreted and enforced so asto provide indemnification and advancement of expenses to the Indemnitee to thefullest extent now or hereafter permitted by law, except as expressly limitedherein.

 

11.2         Severability.  If any provision or provisions of thisAgreement shall be held to be invalid, illegal or unenforceable for any reasonwhatsoever, then:  (a) the validity,legality and enforceability of the remaining provisions of this Agreement(including, without limitation, all portions of any paragraphs of thisAgreement containing any such provision held to be invalid, illegal orunenforceable that are not themselves invalid, illegal or unenforceable) shallnot in any way be affected or impaired thereby; and (b) to the fullest extentpossible, the provisions of this Agreement (including, without limitation, allportions of any paragraphs of this Agreement containing any such provision heldto be invalid, illegal or unenforceable, that are not themselves invalid,illegal or unenforceable) shall be construed so as to give effect to the intentmanifested by the provision held invalid, illegal or unenforceable and to giveeffect to Section 11.1 hereof.

 

11.3         Modification andWaiver.  No supplement, modificationor amendment of this Agreement shall be binding unless executed in writing byboth of the parties hereto.  No waiverof any of the provisions of this Agreement shall be deemed or shall constitutea waiver of any other provision hereof (whether or not similar), nor shall suchwaiver constitute a continuing waiver.

 

11.4         Subrogation.  In the event of full payment under thisAgreement, the Company shall be subrogated to the extent of such payment to allof the rights of recovery of the Indemnitee, who shall execute all documentsrequired and shall do all acts that may be necessary or desirable to securesuch rights and to enable the Company effectively to bring suit to enforce suchrights.

 

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11.5         Counterparts.  This Agreement may be executed in one ormore counter-parts, which shall together constitute one agreement.

 

11.6         Successors andAssigns.  The terms of thisAgreement shall bind, and shall inure to the benefit of, the successors andassigns of the parties hereto.

 

11.7         Notice.  All notices, requests, demands and othercommunications under this Agreement shall be in writing and shall be deemedduly given:  (a) if delivered by handand signed for by the party addressee; or (b) if mailed by certified orregistered mail, with postage prepaid, on the third business day after themailing date.  Addresses for notice toeither party are as shown on the signature page of this Agreement or assubsequently modified by written notice.

 

11.8         Governing Law.  This Agreement shall be governed exclusivelyby and construed according to the laws of the State of California, as appliedto contracts between California residents entered into and to be performedentirely within California.

 

11.9         Consent toJurisdiction.  The Company and theIndemnitee each hereby irrevocably consent to the jurisdiction of the courts ofthe State of California for all purposes in connection with any action orproceeding which arises out of or relates to this Agreement.

 

11.10       Attorneys’ Fees.  In the event Indemnitee is required to bringany action to enforce rights under this Agreement (including, withoutlimitation, the expenses of any Proceeding described in Section 3), theIndemnitee shall be entitled to all reasonable fees and expenses in bringingand pursuing such action, unless a court of competent jurisdiction finds eachof the material claims of the Indemnitee in any such action was frivolous andnot made in good faith.

 

 

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IN WITNESSWHEREOF, the parties hereto have entered into this Indemnity Agreementeffective as of the date first written above.

 
| **SILICON IMAGE, INC.** | **INDEMNITEE:** |
|-------------------------|-----------------|
|                    |            |
| By:                     |            |   | By: |   |
|                    |            |
| Name:                   |            |   | Name: |   |
|                    |            |
| Title:                  |            |   |   |
|                         |                 |  |  |  |  |  |  |  |  |

 

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