Exhibit 10.01


 





 


1060 East Arques Ave.


Sunnyvale, California
94085


Ph:   (408) 616-4000


 


August
17, 2004


 


Robert G. Gargus


 


Re:                               Amended
and Restated Employment Agreement


 


Dear Bob:


 


Silicon Image,
Inc. (the “Company”) is pleased to
confirm our offer of continued employment to you. This Amended and Restated
Employment Agreement (this “Agreement”)
supersedes the employment letter agreement between you and the Company, dated
October 31, 2001 (“Letter Agreement”)
and sets forth the current terms of your employment with the Company.


 


1.                                       Position:  You will
continue in the position of Chief Financial Officer and Vice President of
Finance and Administration of the Company with the same duties,
responsibilities and reporting requirements that are currently existing with
this position. Your duties are to be performed in substantially the same manner
as they have been performed to date including, but not limited to, your
diligence in efforts and the amount of time you spend completing tasks related
to the position.


 


2.                                       Salary:  Your annual
base salary will continue to be $250,000.08 per year and will be subject to
annual review.


 


3.                                       Employment
Benefits. You will continue to 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 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. In addition, you will
continue to be eligible to participate in each bonus plan (“Bonus Plan”) that is in effect, if any,
while you hold the position set forth in paragraph 1 above (the “Position”). 
Notwithstanding any provision in any Bonus Plan that requires that you
be in the Position at the time that Payments (“Payments”) are made in order to be eligible for Payments, you
will be eligible to receive any Payment that accrues under any Bonus Plan while
you remain in the Position even if you are not in the Position at the time that
payments are made; provided,


 
















 


however,
that any such Payments will be paid to you at the same time as Payments are
made to other participants in such Bonus Plan and that such Payments will be
prorated in relation to the amount of time that you are in the Position.


 


4.                                       Separation
Date.  Subject to the Company’s
ability to and your ability to terminate your employment relationship with the
Company for any reason at any time, your employment will be terminated
effective as of the earlier of occurrence of either of the following (a) the
commencement of employment with the Company of a new Chief Executive Officer
and new Chief Financial Officer or (b) your voluntary termination of
employment any time after June 30, 2005.  “Separation
Date” shall mean the earlier occurrence of either (a) or (b) in the
sentence immediately prior.


 


5.                                       Separation
Compensation.  In exchange for your
signing the severance agreement and release of claims attached hereto as
Addendum A (the “Release”) and the
Consulting Agreement (as defined below), the Company agrees that:  (a) the
Company will retain you as a consultant pursuant to the Consulting Agreement
(as defined below) during the six month period following the Separation
Date (the “Separation Period”); (b) during the Separation Period the Company will pay you monthly severance equal to your
current salary level of $20,833.34 per month (the “Monthly Severance”), less applicable withholding taxes provided however,
that the Company has no duty to continue to pay you the Monthly Severance in
the event that you engage in New Employment (as defined below), provided the
Company will pay you a prorated portion of any Monthly Severance up to the date
of commencement of New Employment; and (c) on the Separation Date, the Company
will accelerate the vesting of your outstanding options to purchase shares of
the Company’s common stock such that you will become immediately vested in the
number of shares that would have vested in the six months following the last
date of the month in which the Separation Date occurs (“Accelerated Vesting”), but in no event for
more than the number of shares subject to a particular option grant provided however,
that you will not be entitled to further vesting or acceleration of your
options to purchase shares of the Company’s common stock after the Accelerated
Vesting on the Separation Date.  You may
exercise your options to purchase shares of the Company’s common stock that may
have vested as of the Separation Date at any time before the ninetieth day
following the Separation Date. For purposes of this Agreement “New Employment” shall mean being paid to work by an
employer or firm other than the Company (whether as an employee or consultant)
for 20 or more hours per week.


 


In exchange,
by signing below, you agree:  (a) to,
upon your termination, execute and not to revoke the Release; (b) to provide
consulting services to the Company during the Separation Period pursuant to the
Consulting Agreement dated August 17, 2004 by and between you and the Company (the “Consulting Agreement”); and (c)
that, at any point in time following the end of your obligation to provide
consulting services under the Consulting Agreement, you will assist the Company
as reasonably necessary 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; and (d) acknowledge
that you are receiving the separation compensation outlined in this section in
consideration for waiving your right to claims referred to in this Agreement
and in the Letter Agreement.  In
addition, except as expressly set forth in this paragraph and except your
receipt of Payments described under the paragraph 3, following the Separation
Date, you will no longer be eligible to participate in benefit plans and
programs for the Company’s employees (including without limitation paid
vacation, retirement plans, bonus plans, the employee stock purchase plan and
other compensation plans).


 
















 


6.                                       Voluntary Termination Prior to Separation
Date.  In the event of your voluntary termination
prior to the Separation Date, you will not be entitled to receive any cash
severance benefits, nor any acceleration of vesting of your options to purchase
the Company’s shares nor other separation compensation (including that set
forth in Paragraph 5 hereof).


 


7.                                       Involuntary Termination Prior to Separation
Date.  In the event of your termination by the
Company without Cause prior to the Separation Date, you will be entitled to the
separation compensation set forth in Paragraph 5 hereof as the sole remedy for
such termination. In the event of your termination by the Company for Cause (as
defined below) prior to the Separation Date, you will not be entitled to any
cash severance benefits, nor any acceleration of vesting of your options to
purchase the Company’s shares nor any other separation compensation (including
that set forth is Paragraph 5 hereof).  “Cause” means (a) any material breach by you
of this Agreement or the Confidentiality Agreement (as defined below) or any
other written agreement between you and the Company, if such breach causes harm
to the Company; (b) any negligence or willful misconduct by you in your
performance of duties to the Company that causes harm to the Company, including
(without limitation) repeated failure to follow the directions of the  Board of Directors; (c) your repeated failure
to diligently follow the lawful directions of the Board of Directors of the
Company or your repeated failure to diligently perform your duties in a
reasonable manner pursuant to this agreement; (d) your commission of a felony
under the laws of the United States or and by state thereof; (e) your
commission of any act of fraud, embezzlement or dishonesty or breach of
fiduciary duties; (f) your abuse of alcohol or controlled substances that has a
detrimental effect upon your performance of your duties under this agreement;
or (g) a good faith determination by the Company’s Board of Directors that your
performance is unsatisfactory; provided however, that in the case of (b), (c)
and (g), the Company must provide you with written notice and give you fifteen
(15) days to cure your performance, behavior or conduct.  A termination without Cause shall mean a
termination for any reason other than those listed in clauses (a)-(g) of the
preceding sentence or death or disability.


 


8.                                       At-will
Employment.  You will continue to
serve as an at-will employee of the Company, which means that your employment
relationship with the Company can be terminated by you or the Company for any
reason at any time.  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.


 


9.                                       Non-Solicitation. 
For twelve months following your termination of employment with the
Company, you agree that you shall not, directly or indirectly, either for your
own benefit or for the benefit of any company, entity, or other person,
solicit, recruit, encourage or induce any employees, directors, consultants,
contractors or subcontractors of the Company to leave the employ of, cease
performing work for, or perform work that competes with, the Company.  “Employees”
are those who were employees of the Company within twelve months preceding your
termination of employment with the Company.


 


10.                                 Attorneys’
Fees.  If any action is brought to
enforce the terms of this Agreement, the prevailing party will be entitled to
recover its reasonable attorneys’ fees, costs and expenses from the other
party, in addition to any other relief to which the prevailing party may be
entitled.


 


11.                                 Confidentiality.  You acknowledge that as an executive employee
of the Company you had access to Company confidential and proprietary
information, and that you are bound by


 
















 


law and the terms of your
Employee Invention Assignment and Confidentiality Agreement (“Confidentiality Agreement”) with the
Company to maintain the confidentiality of that information even after the
termination of your employment, and may not use it, divulge it to others or
allow others to use it.  Any breach of
this provision shall be deemed a material breach of this Agreement.


 


12.                                 Entire
Agreement.  This Agreement, the
Release, the Consulting Agreement and the Confidentiality Agreement and any
stock option agreements or stock option grant documents that currently exist
between you and the Company constitute the entire understanding and agreement
of the parties hereto with respect to the subject matter hereof and supersede
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
Agreement. You acknowledge that neither the Company nor its agents or attorneys
have made any promise, representation or warranty whatsoever, either express or
implied, written or oral, which is not contained in this Agreement for the
purpose of inducing you to execute the Agreement, and you acknowledge that you
have executed this Agreement in reliance only upon such promises,
representations and warranties as are contained herein.


 


13.                                 Modification.  It is expressly agreed that this Agreement
may not be altered, amended, modified, or otherwise changed in any respect
except by another written agreement that specifically refers to this Agreement,
executed by authorized representatives of each of the parties to this
Agreement.


 


14.                                 Time
to Consider and Voluntary Execution of this Agreement.  We hereby advise you to consult with your own
attorney concerning the terms of this Agreement and the Release.  You agree that you are voluntarily entering
into this Agreement and it will be effective upon your signing this
document.  The Release will be effective
upon the execution of the Release and the expiration of the seven (7) day
revocation period following such execution. You acknowledge that the separation
compensation provided for in Section 5 of this Agreement will be paid only
after the Release is effective.


 


15.                                 General.  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.  Any legal action or proceeding arising under
this Agreement will be brought exclusively in the federal or state courts
located in the Northern District of California and the parties hereby consent
to the personal jurisdiction and venue therein. 
If any provision of this Agreement is determined by any court of
competent jurisdiction to be invalid, illegal or unenforceable in any respect,
such provision will be enforced to the maximum extent possible given the intent
of the parties hereto.  If such provision
cannot be so enforced, such provision shall be stricken from this Agreement and
the remainder of this Agreement shall be enforced as if such invalid, illegal
or unenforceable provision had (to the extent not enforceable) never been
contained in the Agreement.


 
















 


If you agree to abide by the terms outlined in this Agreement, please
sign the attached copy and return it to me. 
We look forward to the opportunity to continue working together.


 


	
   

  	
  Sincerely,

  
	
   

  
	
   

  
	
   

  	
  /s/ David Lee

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  David Lee

  
	
   

  	
  CEO and Chairman of the Board

  Silicon Image, Inc.

  
	
   

  



 


 


I have read, understand and
agree to the terms set forth above:


 


	
  /s/  Robert G. Gargus

  	
   

  	
  Date: 

  	
  August 17,
  2004

  	
   

  
	
  Robert G. Gargus

  	
   

  



 
















 


ADDENDUM A


 


THIS SEVERANCE
AGREEMENT AND RELEASE OF CLAIMS (this ”Release”)
is between Robert G. Gargus (“Employee”)
and Silicon Image, Inc. (the “Company”),
a Delaware corporation.  As used in this
Release, the Company refers to Silicon Image, Inc. and all parents,
subsidiaries, divisions, predecessors, and successors of Silicon Image, Inc.


 


1.                                       Payment
of Severance Benefits.  The Company
has agreed that if Employee signs this Release, it will provide Employee the
benefits (the “Severance Benefits”)
set forth in Section 5 of the Amended and Restated Employment Agreement, dated
August 17, 2004 (the “Restated Employment
Agreement”).  Employee understands
that he is not entitled to those Severance Benefits unless he signs this
Release.  Employee understands that in
addition to the Severance Benefits to be paid to him in accordance with the
Restated Employment Agreement, upon (i) the Separation Date (as defined in
Restated Employment Agreement Section 4 of the Restated Employment Agreement)
or (ii) Employee’s voluntary or involuntary termination from the Company, the
Company will pay him all of his accrued salary and vacation payments, to which
Employee is entitled by law.


 


2.                                       Release.
In exchange for the Severance Benefits set forth in Section 1 hereof, Employee
hereby agrees as follows:


 


(a)                                  Employee,
on behalf of himself and his respective heirs, executors, successors and
assigns, hereby fully and forever releases the Company and its respective
heirs, executors, successors, agents, officers and directors, from and agrees
not to sue concerning, any and all claims, actions, obligations, duties, causes
of action, whether now known or unknown, suspected or unsuspected, that
Employee may possess based upon or arising out of any matter, cause, fact,
thing, act, or omission whatsoever occurring or existing at any time prior to
and including the date hereof (collectively, the “Released Matters”), including without limitation,


 


(1)                                  any
and all claims relating to or arising from Employee’s employment with the
Company and the termination of such relationship;


 


(2)                                  any
and all claims relating to, or arising from, Employee’s right to purchase, or
actual purchase of, shares of stock of the Company, including, without
limitation, any claims of fraud, misrepresentation, breach of fiduciary duty,
breach of duty under applicable state corporate law, and securities fraud under
any state or federal law;


 


(3)                                  any
and all claims for wrongful discharge of employment; termination in violation
of public policy; discrimination; breach of contract, both express and implied;
breach of a covenant of good faith and fair dealing, both express and implied;
promissory estoppel; negligent or intentional infliction of emotional distress;
negligent or intentional misrepresentation; negligent or intentional
interference with contract or prospective economic advantage; unfair business
practices; defamation; libel; slander; negligence; personal injury; assault;
battery; invasion of privacy; false imprisonment; and conversion;


 


(4)                                  any
and all claims for violation of any federal, state or municipal statute,
including, but not limited to, Title VII of the Civil Rights Act of 1964, the
Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the
Americans with Disabilities Act of 1990, the Fair Labor Standards Act, the
Employee Retirement Income Security Act of 1974, the Worker Adjustment and
Retraining Notification Act, Older Workers


 
















 


Benefit Protection Act, the
California Fair Employment and Housing Act, and the California Labor Code
section 201, et. seq.;


 


(5)                                  any
and all claims for violation of the federal, or any state, constitution;


 


(6)                                  any
and all claims arising out of any other laws and regulations relating to
employment or employment discrimination;


 


(7)                                  any
and all claims for attorneys’ fees and costs; provided
however, that nothing in this clause shall supersede rights that
Employee has under Section 5 hereof; and


 


(8)                                  any
and all claims Employee may have against the Company for any acts occurring at
any time prior to the execution of this Release.


 


Employee agrees that the
foregoing enumeration of claims released is illustrative, and the claims hereby
released are in no way limited by the above recitation of specific claims, it
being Employee’s intent to fully and completely release all claims whatsoever
in any way relating to Employee’s employment with the Company and to the
termination of such employment.


 


(b)                                 Except
as already known by the Company, Employee represents that Employee has no
lawsuits, claims or actions pending in Employee’s name, or on behalf of any
other person or entity, against the Company or any other person or entity
referred to herein.  Employee also
represents that Employee does not intend to bring any claims on Employee’s own
behalf against the Company or any other person or entity referred to herein.


 


(c)                                  Employee
acknowledges that he has been advised by legal counsel and is familiar with
Section 1542 of the Civil Code of the State of California, which states:


 


A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR.


 


Employee expressly waives any
right or benefit that he has or may have under Section 1542 of the California
Civil Code or any similar provision of the statutory or non-statutory law of
any other jurisdiction, including Delaware. 
Employee acknowledges that in the future he may discover claims or facts
in addition to or different from those that he now knows or believes to exist
with respect to the subject matter of this Release, and that Employee intends
to fully, finally, and forever settle all of the Released Matters in exchange
for the Severance Benefits.  This Release
will remain in effect as a full and complete release notwithstanding the
discovery or existence of any additional claims or facts.


 


3.                                       Acknowledgment
of Waiver of Claims under ADEA. 
Employee acknowledges that Employee is waiving and releasing any rights
Employee may have under the Age Discrimination in Employment Act of 1967
(“ADEA”) and that this waiver and release is knowing and voluntary.  Employee further acknowledges that Employee
has been advised by this writing that:


 
















 


(a)                                  Employee
should consult with an attorney prior to
executing this Release;


 


(b)                                 Employee
has had at least twenty-one (21) days within which to consider this Release, although
Employee may accept the terms of this Release at any time within those 21 days;
and


 


(c)                                  Employee
has seven (7) days following the execution of this Release by the parties to
revoke this Release.


 


4.                                       Voluntary
Execution of Release.  This Release
is executed voluntarily and without any duress or undue influence on the part
or behalf of the parties hereto, with the full intent of releasing all
claims.  Employee acknowledges that:


 


(a)                                  Employee
has read this Release;


 


(b)                                 Employee
has been represented in the preparation, negotiation, and execution of this
Release by legal counsel of his own choice or that he has voluntarily declined
to seek such counsel;


 


(c)                                  Employee
understands the terms and consequences of this Release and of the releases it
contains;


 


(d)                                 Employee
is fully aware of the legal and binding effect of this Release.


 


EMPLOYEE HAS CONSULTED WITH AN
ATTORNEY BEFORE SIGNING THIS RELEASE AND UNDERSTANDS THAT, BY SIGNING THIS
RELEASE, EMPLOYEE IS GIVING UP ANY LEGAL CLAIMS EMPLOYEE HAS AGAINST THE
COMPANY.  EMPLOYEE FURTHER ACKNOWLEDGES
THAT EMPLOYEE DOES SO KNOWINGLY, WILLINGLY, AND VOLUNTARILY IN EXCHANGE FOR THE
BENEFITS DESCRIBED IN THE RESTATED EMPLOYMENT AGREEMENT.


 


5.                                       Indemnification.  This Release shall not apply with respect to
any claims (including coverage of attorneys’ fees and costs for Employee’s
individual representation) arising under Employee’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 Employee’s rights of insurance
under any director and officer liability policy in effect covering the
Company’s directors and officers or Employee’s rights under California Labor
Code section 2802.


 


6.                                       Non-Disparagement. 
Employee agrees to refrain from disparagement, criticism, defamation or
slander of the Company or any of its employees, officers, directors, agents,
products or services to anyone, including but not limited to other employees
and any past, present or prospective customers. 
Nothing in this paragraph shall prohibit Employee from providing
truthful testimony in response to a subpoena or other compulsory legal process
or from participating in any governmental agency proceedings.  The Company agrees to maintain its neutral
reference policy in regard to Employee and refrain from disparagement,
criticism, defamation and slander of Employee.


 


7.                                       No Admission of Liability. 
Employee understands that this Release shall not be construed as an
admission of liability or wrongdoing of any kind by the Company.


 
















 


8.                                       No Representations. 
The Employee has not relied upon any representations or statements made
by the other party hereto which are not specifically set forth in this Release.


 


9.                                       Severability. 
In the event that any provision hereof becomes or is declared by a court
of competent jurisdiction to be illegal, unenforceable or void, this Release
shall continue in full force and effect without said provision.


 


10.                                 No Verbal Modification. 
This Release may only be amended in writing signed by Employee and the
Company.


 


11.                                 Arbitration. 
Any claim, dispute, or controversy arising out of or in any way relating
to this Release or the alleged breach of this Release will be submitted by
parties hereto to binding arbitration in Santa Clara County, California by JAMS
or by a judge to be mutually agreed upon; provided
however, that this Section 11 will not prevent either party from
seeking injunctive relief (or any other provisional remedy) from any court
having jurisdiction over the obligations under Section 6 hereof.


 


12.                                 Attorneys’ Fees. 
The prevailing party will be entitled to recover from the losing party
its attorneys’ fees and costs (including expert witness fees) incurred in any
arbitration, lawsuit or other proceeding brought to enforce any right arising
out of this Release.


 


13.                                 Governing Law. 
This Release shall be governed by the laws of California, excluding its
choice of law provisions.


 


14.                                 Counterparts. 
This Release may be executed in counterparts, and each counterpart shall
have the same force and effect as an original and shall constitute an
effective, binding agreement on the part of each of the undersigned.


 


15.                                 Effective
Date.  This Release shall become
effective on the 8th day after the date on which the Release is
executed by Employee, provided that he has not previously revoked the Release
and the Release has been executed by the Company.


 


 


	
  EMPLOYEE

  	
  SILICON
  IMAGE, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Signature

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  	
   

  
								



 


 [Signature Page for Robert G. Gargus’
Severance Agreement and Release of Claims.]