EXHIBIT 10.01


 


INDEMNITY AGREEMENT


 


This Indemnity
Agreement (this “Agreement”),
dated as of
              ,
          , is made by and
between 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 competent
and experienced persons are increasingly reluctant to serve as directors or
officers of corporations unless they are protected by comprehensive liability insurance
and/or indemnification, due to increased exposure to litigation costs and risks
resulting from their service to such corporations, and due to the fact that the
exposure frequently bears no reasonable relationship to the compensation of
such directors and officers;


 


B.            Based on their experience as
business managers, the Board of Directors of the Company (the “Board”) has concluded
that, to retain and attract talented and experienced individuals to serve as
officers and directors of the Company, and to encourage such individuals to
take the business risks necessary for the success of the Company, it is
necessary for the Company contractually to indemnify officers and directors and
to assume for itself maximum liability for expenses and damages in connection
with claims against such officers and directors in connection with their
service to the Company;


 


C.            Section 145 of the
General 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, as
directors, officers, employees or agents of other corporations or enterprises,
and expressly provides that the indemnification provided by the Law is not
exclusive; and


 


D.            The Company desires
and has requested the Indemnitee to serve or continue to serve as a director or
officer of the Company free from undue concern for claims for damages arising
out of or related to such services to the Company.


 


NOW, THEREFORE, the
parties hereto, intending to be legally bound, hereby agree as follows:


 


1.             Definitions.


 


1.1           Agent.  For the purposes of this Agreement, “agent” of the Company
means any person who is or was a director or officer of the Company or a subsidiary
of 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 a
director or officer of another foreign or domestic corporation, partnership,
joint venture, trust or other enterprise or an affiliate of the Company; or was
a director or officer of a foreign or domestic corporation which was a
predecessor corporation of the Company, including, without limitation, Silicon
Image, Inc., a California corporation, or was a director or officer of another
enterprise or affiliate of the Company at the request of, for the convenience
of, or to represent the interests of such predecessor corporation.  The term “enterprise” includes any employee
benefit plan of the Company, its subsidiaries, affiliates and predecessor
corporations.


 


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


 


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


 


1.4           Subsidiary.  For purposes of this Agreement, “subsidiary” means any
corporation of which more than fifty percent (50%) of the outstanding voting
securities is owned directly or indirectly by the Company, by the Company and
one or more of its subsidiaries or by one or more of the Company’s
subsidiaries.


 


2.             Agreement
to Serve. 
The Indemnitee agrees to serve and/or continue to serve as an agent of
the Company, at the will of the Company (or under separate agreement, if such
agreement exists), in the capacity the Indemnitee currently serves as an agent
of the Company, faithfully and to the best of his ability, so long as he is
duly appointed or elected and qualified in accordance with the applicable
provisions of the charter documents of the Company or any subsidiary of the
Company; provided, however, that the Indemnitee may at any time
and for any reason resign from such position (subject to any contractual
obligation that the Indemnitee may have assumed apart from this Agreement), and
the Company or any subsidiary shall have no obligation under this Agreement to
continue the Indemnitee in any such position.


 


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


 


4.             Mandatory
Indemnification. 
Subject to Section 9 below, the Company shall indemnify the Indemnitee:


 


4.1           Third Party
Actions.  If the Indemnitee is a person
who 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 fact
that he is or was an agent of the Company, or by reason of anything done or not
done by him in any such capacity, against any and all expenses and liabilities
of any type whatsoever (including, but not limited to, judgments, fines, ERISA
excise taxes or penalties and amounts paid in settlement) actually and
reasonably incurred by him in connection with the investigation, defense,
settlement or appeal of such proceeding if he acted in good faith and in a
manner he reasonably believed to be in, or not opposed to, the best interests
of the Company and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful; and


 


4.2           Derivative
Actions.  If the Indemnitee is a
person who was or is a party or is threatened to be made a party to any
proceeding by or in the right of the Company to procure a


 


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judgment in its favor by reason
of the fact that he is or was an agent of the Company, or by reason of anything
done or not done by him in any such capacity, against any amounts paid in
settlement of any such proceeding and all expenses actually and reasonably
incurred by him in connection with the investigation, defense, settlement or
appeal of such proceeding if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
Company; except that no indemnification under this subsection shall be
made in respect of any claim, issue or matter as to which such person shall
have been finally adjudged to be liable to the Company by a court of competent
jurisdiction due to willful misconduct of a culpable nature in the performance
of his duty to the Company, unless and only to the extent that the Court of
Chancery or the court in which such proceeding was brought shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such amounts which the Court of Chancery or such other court
shall deem proper; and


 


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


 


5.             Partial
Indemnification and Contribution.


 


5.1           Partial
Indemnification.  If the Indemnitee
is entitled under any provision of this Agreement to indemnification by the
Company for some or a portion of any expenses or liabilities of any type
whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes
or penalties and amounts paid in settlement) incurred by him in the
investigation, defense, settlement or appeal of a proceeding but is not
entitled, however, to indemnification for all of the total amount thereof, then
the Company shall nevertheless indemnify the Indemnitee for such total amount
except as to the portion thereof to which the Indemnitee is not entitled to
indemnification.


 


5.2           Contribution.  If the Indemnitee is not entitled to the
indemnification provided in Section 4 for any reason other than the statutory
limitations set forth in the Law, then in respect of any threatened, pending or
completed proceeding in which the Company is jointly liable with the Indemnitee
(or would be if joined in such proceeding), the Company shall contribute to the
amount of expenses (including attorneys’ fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred and paid or payable by the
Indemnitee in such proportion as is appropriate to reflect (i) the relative
benefits received by the Company on the one hand and the Indemnitee on the
other hand from the transaction from which such proceeding arose and (ii) the
relative fault of the Company on the one hand and of the Indemnitee on the
other hand in connection with the events which resulted in such expenses,
judgments, fines or settlement amounts, as well as any other relevant equitable
considerations.  The relative fault of
the Company on the one hand and of the Indemnitee on the other hand shall be
determined by reference to, among other things, the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent the
circumstances resulting in such expenses, judgments, fines or settlement
amounts.  The Company agrees that it
would not be just and equitable if contribution pursuant to this Section 5 were
determined by pro rata allocation or any other method of allocation which does
not take account of the foregoing equitable considerations.


 


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6.             Mandatory
Advancement of Expenses.


 


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


 


6.2           Exception.  Notwithstanding the foregoing provisions of
this Section 6, the Company shall not be obligated to advance any expenses to
the Indemnitee arising from a lawsuit filed directly by the Company against the
Indemnitee if an absolute majority of the members of the Board reasonably
determines in good faith, within thirty (30) days of the Indemnitee’s request
to be advanced expenses, that the facts known to them at the time such
determination is made demonstrate clearly and convincingly that the Indemnitee
acted in bad faith.  If such a
determination is made, the Indemnitee may have such decision reviewed by another
forum, in the manner set forth in Sections 8.3, 8.4 and 8.5 hereof, with all
references therein to “indemnification” being deemed to refer to “advancement
of expenses,” and the burden of proof shall be on the Company to demonstrate
clearly and convincingly that, based on the facts known at the time, the
Indemnitee acted in bad faith.  The
Company may not avail itself of this Section 6.2 as to a given lawsuit if, at
any time after the occurrence of the activities or omissions that are the
primary focus of the lawsuit, the Company has undergone a change in
control.  For this purpose, a change in
control shall mean a given person or group of affiliated persons or groups
increasing their beneficial ownership interest in the Company by at least
twenty (20) percentage points without advance Board approval.


 


7.             Notice
and Other Indemnification Procedures.


 


7.1           Promptly after
receipt by the Indemnitee of notice of the commencement of or the threat of
commencement of any proceeding, the Indemnitee shall, if the Indemnitee
believes that indemnification with respect thereto may be sought from the
Company under this Agreement, notify the Company of the commencement or threat
of commencement thereof.


 


7.2           If, at the time of
the receipt of a notice of the commencement of a proceeding pursuant to Section
7.1 hereof, the Company has D&O Insurance in effect, the Company shall give
prompt notice of the commencement of such proceeding to the insurers in
accordance with the procedures set forth in the respective policies.  The Company shall thereafter take all
necessary or desirable action to cause such insurers to pay, on behalf of the
Indemnitee, all amounts payable as a result of such proceeding in accordance
with the terms of such D&O Insurance policies.


 


7.3           In the event the
Company shall be obligated to advance the expenses for any proceeding against
the 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 be
unreasonably withheld), upon the delivery to the Indemnitee of written notice
of its election to do so.  After
delivery of such notice, approval of such counsel by the Indemnitee and the
retention of such counsel by the Company, the Company will not be liable to the
Indemnitee under this Agreement for any fees of counsel subsequently incurred
by the Indemnitee with respect to the same proceeding, provided
that:  (a) the Indemnitee shall have the
right to employ his own counsel in any such proceeding at the Indemnitee’s
expense; (b) the Indemnitee shall have the right to employ his own counsel in
connection with any such proceeding, at the expense of the Company, if such
counsel serves in a review, observer, advice and counseling capacity and does not
otherwise materially control or participate in the defense of such proceeding;
and (c) if (i) the employment of counsel by the Indemnitee has been previously
authorized by the Company, (ii) the Indemnitee shall have reasonably concluded
that there may be a conflict of interest between the Company and the Indemnitee
in 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 fees
and expenses of the Indemnitee’s counsel shall be at the expense of the
Company.


 


8.             Determination
of Right to Indemnification.


 


8.1           To the extent the
Indemnitee has been successful on the merits or otherwise in defense of any
proceeding referred to in Section 4.1 or 4.2 of this Agreement or in the
defense of any claim, issue or matter described therein, the Company shall
indemnify the Indemnitee against expenses actually and reasonably incurred by
him 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 that
Section 8.1 is inapplicable, or does not apply to the entire proceeding, the
Company shall nonetheless indemnify the Indemnitee unless the Company shall
prove by clear and convincing evidence to a forum listed in Section 8.3 below
that the Indemnitee has not met the applicable standard of conduct required to
entitle the Indemnitee to such indemnification.


 


8.3           The Indemnitee shall
be entitled to select the forum in which the validity of the Company’s claim
under Section 8.2 hereof that the Indemnitee is not entitled to indemnification
will be heard from among the following, except that the Indemnitee can
select a forum consisting of the stockholders of the Company only with the
approval of the Company:


 


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


 


(b)           The stockholders of
the Company;


 


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


 


(d)           A panel of three
arbitrators, one of whom is selected by the Company, another of whom is
selected by the Indemnitee and the last of whom is selected by the first two
arbitrators so selected; or


 


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(e)           The Court of
Chancery of Delaware or other court having jurisdiction of subject matter and
the parties.


 


8.4           As soon as
practicable, and in no event later than thirty (30) days after the forum has
been selected pursuant to Section 8.3 above, the Company shall, at its own
expense, submit to the selected forum its claim that the Indemnitee is not
entitled to indemnification, and the Company shall act in the utmost good faith
to assure the Indemnitee a complete opportunity to defend against such claim.


 


8.5           If the forum
selected in accordance with Section 8.3 hereof is not a court, then after the
final decision of such forum is rendered, the Company or the Indemnitee shall
have the right to apply to the Court of Chancery of Delaware, the court in
which the proceeding giving rise to the Indemnitee’s claim for indemnification
is or was pending or any other court of competent jurisdiction, for the purpose
of appealing the decision of such forum, provided that such right is
executed within sixty (60) days after the final decision of such forum is
rendered.  If the forum selected in
accordance with Section 8.3 hereof is a court, then the rights of the Company
or the Indemnitee to appeal any decision of such court shall be governed by the
applicable laws and rules governing appeals of the decision of such court.


 


8.6           Notwithstanding any
other provision in this Agreement to the contrary, the Company shall indemnify
the Indemnitee against all expenses incurred by the Indemnitee in connection
with any hearing or proceeding under this Section 8 involving the Indemnitee
and against all expenses incurred by the Indemnitee in connection with any
other proceeding between the Company and the Indemnitee involving the interpretation
or enforcement of the rights of the Indemnitee under this Agreement unless a
court of competent jurisdiction finds that each of the material claims and/or
defenses of the Indemnitee in any such proceeding was frivolous or not made in
good faith.


 


9.             Exceptions.  Any other provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:


 


9.1           Claims Initiated
by Indemnitee.  To indemnify or
advance expenses to the Indemnitee with respect to proceedings or claims
initiated or brought voluntarily by the Indemnitee and not by way of defense, except
with respect to proceedings specifically authorized by the Board or brought to
establish or enforce a right to indemnification and/or advancement of expenses
arising under this Agreement, the charter documents of the Company or any
subsidiary or any statute or law or otherwise, but such indemnification or
advancement of expenses may be provided by the Company in specific cases if the
Board finds it to be appropriate; or


 


9.2           Unauthorized
Settlements.  To indemnify the
Indemnitee hereunder for any amounts paid in settlement of a proceeding unless
the Company consents in advance in writing to such settlement, which consent
shall not be unreasonably withheld; or


 


9.3           Securities Law
Actions.  To indemnify the
Indemnitee on account of any suit in which judgment is rendered against the
Indemnitee for an accounting of profits made from the purchase or sale by the
Indemnitee of securities of the Company pursuant to the provisions of Section
l6(b) of the Securities Exchange Act of 1934 and amendments thereto or similar
provisions of any federal, state or local statutory law; or


 


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9.4           Unlawful
Indemnification.  To indemnify the
Indemnitee if a final decision by a court having jurisdiction in the matter
shall determine that such indemnification is not lawful.  In this respect, the Company and the
Indemnitee have been advised that the Securities and Exchange Commission takes
the position that indemnification for liabilities arising under the federal
securities laws is against public policy and is, therefore, unenforceable and
that claims for indemnification should be submitted to appropriate courts for
adjudication.


 


10.          Non-Exclusivity.  The provisions for indemnification and
advancement of expenses set forth in this Agreement shall not be deemed
exclusive of any other rights which the Indemnitee may have under any provision
of law, the Company’s Certificate of Incorporation or Bylaws, the vote of the
Company’s stockholders or disinterested directors, other agreements or
otherwise, both as to action in the Indemnitee’s official capacity and to
action in another capacity while occupying his position as an agent of the Company,
and the Indemnitee’s rights hereunder shall continue after the Indemnitee has
ceased acting as an agent of the Company and shall inure to the benefit of the
heirs, executors and administrators of the Indemnitee.


 


11.          General
Provisions.


 


11.1         Interpretation of
Agreement.  It is understood that
the parties hereto intend this Agreement to be interpreted and enforced so as
to provide indemnification and advancement of expenses to the Indemnitee to the
fullest extent now or hereafter permitted by law, except as expressly limited
herein.


 


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


 


11.3         Modification and
Waiver.  No supplement, modification
or amendment of this Agreement shall be binding unless executed in writing by
both of the parties hereto.  No waiver
of any of the provisions of this Agreement shall be deemed or shall constitute
a waiver of any other provision hereof (whether or not similar), nor shall such
waiver constitute a continuing waiver.


 


11.4         Subrogation.  In the event of full payment under this
Agreement, the Company shall be subrogated to the extent of such payment to all
of the rights of recovery of the Indemnitee, who shall execute all documents
required and shall do all acts that may be necessary or desirable to secure
such rights and to enable the Company effectively to bring suit to enforce such
rights.


 


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


 


11.6         Successors and
Assigns.  The terms of this
Agreement shall bind, and shall inure to the benefit of, the successors and
assigns of the parties hereto.


 


11.7         Notice.  All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed
duly given:  (a) if delivered by hand
and signed for by the party addressee; or (b) if mailed by certified or
registered mail, with postage prepaid, on the third business day after the
mailing date.  Addresses for notice to
either party are as shown on the signature page of this Agreement or as
subsequently modified by written notice.


 


11.8         Governing Law.  This Agreement shall be governed exclusively
by and construed according to the laws of the State of California, as applied
to contracts between California residents entered into and to be performed
entirely within California.


 


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


 


11.10       Attorneys’ Fees.  In the event Indemnitee is required to bring
any action to enforce rights under this Agreement (including, without
limitation, the expenses of any Proceeding described in Section 3), the
Indemnitee shall be entitled to all reasonable fees and expenses in bringing
and pursuing such action, unless a court of competent jurisdiction finds each
of the material claims of the Indemnitee in any such action was frivolous and
not made in good faith.


 


 


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IN WITNESS
WHEREOF, the parties hereto have entered into this Indemnity Agreement
effective as of the date first written above.


 


	
  SILICON IMAGE, INC.

  	
  INDEMNITEE:

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
										



 


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