Exhibit 10.35


Silicon Image, Inc.


Bonus Plan for Fiscal Year 2004


1.              Purpose


The purpose of this Bonus
Plan (this “Plan”) is to provide
financial incentives for certain executive1 and non-executive2 employees (“Executives” and “Non-Executives”,
respectively) of Silicon Image, Inc. (the “Company”)
to meet and exceed the Company’s annual financial goals.


2.              Eligibility


Executives and
Non-Executives of the Company selected by the Committee (the “Participants” and each a “Participant”) shall be eligible to participate
in this Plan.  Participation in this
Plan is on a fiscal year basis and in the sole discretion of the Compensation
Committee of the Company’s Board of Directors (the “Committee”).


3.              Administration


a.             This Plan shall be administered by the Committee which
may delegate specific administrative tasks to others as appropriate for
administration of this Plan.


b.             Subject to the provisions of this Plan, the Committee
shall have exclusive authority to designate Participants, the amount of each
Participant’s award under this Plan (the “Award”),
the date when any performance goals are measured, and the date when Awards (if
any) will be paid.


c.             The Committee shall have all discretion and authority
necessary or appropriate to administer this Plan, including, but not limited
to, the power to interpret this Plan, to prescribe, amend and rescind rules and
regulations relating to it, and to make all other determinations necessary or
advisable in the administration of this Plan, and such determination shall be
final and binding upon all persons having an interest in this Plan.


d.             A
majority of the Committee shall constitute a quorum, and the acts of a majority
of the members present at a meeting at which a quorum is present or any action
taken without a meeting by a writing executed by all of the members of the
Committee shall constitute the act of the Committee.


e.             All
expenses and liabilities incurred by the Committee in the administration of
this Plan shall be borne by the Company. 
The Committee may employ attorneys, consultants, accountants, or other
persons.  The Committee and the Company
and its officers and directors shall be entitled to rely upon the advice,
opinion, or valuations of any such persons. 
No member of the Committee shall be personally liable for any action,
determination, or interpretation taken or made with respect to this Plan,
unless such action, determination, or interpretation constitutes criminal
misconduct or willful negligence or demonstrates bad faith, and all members of
the Committee shall be fully protected by the Company in respect of any such
action, determination or interpretation.


4.              Bonus Pool Establishment


Subject to the terms and
conditions of this Plan, the Company will establish a cash bonus pool if actual
earnings per share (calculated on a pro forma3 basis) for the fiscal year ended
December 31, 2004 












1 “Executive” means an
employee of the Company at the level of Vice President or above employed by the
Company or any affiliated Company as determined by the Committee.


2 “Non-Executive” means an
employee of the Company, other than an Executive, employed by the Company or
any affiliated Company as determined by the Committee.


3 Excludes stock compensation expense, amortization of intangible assets,
patent defense costs, acquisition integration costs, restructuring costs, and
gains on escrow settlement, as well as any other items required to be excluded
under applicable laws, rules and regulations.


 


1

















 


(“Actual EPS”) exceeds the baseline earnings
per share for the fiscal year established by the Committee (“Bonus EPS”).  If Actual EPS does not exceed Bonus EPS, then no cash bonus pool
will be established.  The amount of the
cash bonus pool will be based on the amount by which Actual EPS exceeds Bonus
EPS, with the level of such pool equal to an increasing percentage (starting at
10% and capped at 50%) of each $0.01 of incremental Actual EPS above Bonus
EPS.  The maximum amount of the cash
bonus pool shall be $3,200,000.  The
foregoing is illustrated by the following table.




	
  Actual EPS

  	
   

  	
  Incremental
  

  Pool Percentage

  	
   

  	
  Incremental
  

  Pool Dollars

  	
   

  	
  Cumulative
  

  Pool Dollars

  	
   

  
	
  Bonus EPS +
  $0.000

  	
   

  	
  N/A

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  0

  	
   

  
	
  Bonus EPS +
  $0.010

  	
   

  	
  N/A

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  0

  	
   

  
	
  Bonus EPS +
  $0.021

  	
   

  	
  10

  	
  %

  	
  $

  	
  80,000

  	
   

  	
  $

  	
  80,000

  	
   

  
	
  Bonus EPS +
  $0.033

  	
   

  	
  20

  	
  %

  	
  $

  	
  160,000

  	
   

  	
  $

  	
  240,000

  	
   

  
	
  Bonus EPS +
  $0.046

  	
   

  	
  30

  	
  %

  	
  $

  	
  240,000

  	
   

  	
  $

  	
  480,000

  	
   

  
	
  Bonus EPS +
  $0.060

  	
   

  	
  40

  	
  %

  	
  $

  	
  320,000

  	
   

  	
  $

  	
  800,000

  	
   

  
	
  Bonus EPS +
  $0.075

  	
   

  	
  50

  	
  %

  	
  $

  	
  400,000

  	
   

  	
  $

  	
  1,200,000

  	
   

  
	
  Bonus EPS +
  $0.090

  	
   

  	
  50

  	
  %

  	
  $

  	
  400,000

  	
   

  	
  $

  	
  1,600,000

  	
   

  
	
  Bonus EPS +
  $0.105

  	
   

  	
  50

  	
  %

  	
  $

  	
  400,000

  	
   

  	
  $

  	
  2,000,000

  	
   

  
	
  Bonus EPS +
  $0.120

  	
   

  	
  50

  	
  %

  	
  $

  	
  400,000

  	
   

  	
  $

  	
  2,400,000

  	
   

  
	
  Bonus EPS +
  $0.135

  	
   

  	
  50

  	
  %

  	
  $

  	
  400,000

  	
   

  	
  $

  	
  2,800,000

  	
   

  
	
  Bonus EPS +
  $0.150

  	
   

  	
  50

  	
  %

  	
  $

  	
  400,000

  	
   

  	
  $

  	
  3,200,000

  	
   

  
	
  Bonus EPS +
  $0.160

  	
   

  	
  0

  	
  %

  	
  $

  	
  0

  	
   

  	
  $

  	
  3,200,000

  	
   

  
	
  Bonus EPS +
  $0.170

  	
   

  	
  0

  	
  %

  	
  $

  	
  0

  	
   

  	
  $

  	
  3,200,000

  	
   

  
















Table values assume, for purposes of this example,
80,000,000 common shares outstanding. 
Figures will adjust according to changes in Bonus EPS and common shares
outstanding.


5.              Bonus Pool Allocation


Any cash bonus pool
established pursuant to this Plan will be allocated between the Executive
Participants and Non-Executive Participants. 
The respective percentages of the cash bonus pool allocated between the
Executive Participants and Non-Executive Participants will be based on the
amount by which Actual EPS exceeds Bonus EPS, with the percentage allocated to
Executive Participants increasing with each $0.01 of incremental Actual EPS
above Bonus EPS.  The percentage split between
the Executive Participants and Non-Executive Participants will start at 0/100
and become fixed at 30/70 at the maximum bonus pool level.  The amounts of Awards, if any, allocable to
individual Executive Participants will be determined by the Committee in its
sole discretion.  The maximum Award
allocable to individual Executive Participants, expressed as a percentage of
base salary, shall be 50% for the Chief Executive Officer, 40% for the
President, 35% for the Division President of Storage Group, Chief Financial
Officer and Chief Technical Officer, and 30% for the Executive Vice Presidents
and Vice Presidents.  The amounts of
Awards, if any, allocable to individual Non-Executive Participants will be
determined by Company management and submitted to the Committee for
approval.  The maximum Award allocable
to individual Non-Executive Participants, expressed as a percentage of base
salary, shall be 20% for directors, 10% for managers and 5.5% for individual
contributors.  For any individual who
occupies more than one office or position, the maximum percentage corresponding
to the most senior office or position shall be the applicable maximum
percentage.  The Committee will set the
maximum 


2

















 


percentage applicable to
any offices or positions not listed above. 
The foregoing is illustrated by the following table.


	
  Actual EPS

  	
   

  	
  Cumulative
  Pool Dollars

  	
   

  	
  Executive
  Percentage

  	
   

  	
  Non-Executive
  Percentage

  	
   

  	
  Executive
  Allocation

  	
   

  	
  Non-Executive
  Allocation

  	
   

  
	
  Bonus EPS +
  $0.000

  	
   

  	
  $

  	
  0

  	
   

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  $

  	
  0

  	
   

  	
  $

  	
  0

  	
   

  
	
  Bonus EPS +
  $0.010

  	
   

  	
  $

  	
  0

  	
   

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  $

  	
  0

  	
   

  	
  $

  	
  0

  	
   

  
	
  Bonus EPS +
  $0.021

  	
   

  	
  $

  	
  80,000

  	
   

  	
  0.0

  	
  %

  	
  100.0

  	
  %

  	
  $

  	
  0

  	
   

  	
  $

  	
  80,000

  	
   

  
	
  Bonus EPS +
  $0.033

  	
   

  	
  $

  	
  240,000

  	
   

  	
  0.0

  	
  %

  	
  100.0

  	
  %

  	
  $

  	
  0

  	
   

  	
  $

  	
  240,000

  	
   

  
	
  Bonus EPS +
  $0.046

  	
   

  	
  $

  	
  480,000

  	
   

  	
  0.0

  	
  %

  	
  100.0

  	
  %

  	
  $

  	
  0

  	
   

  	
  $

  	
  480,000

  	
   

  
	
  Bonus EPS + $0.060

  	
   

  	
  $

  	
  800,000

  	
   

  	
  0.0

  	
  %

  	
  100.0

  	
  %

  	
  $

  	
  0

  	
   

  	
  $

  	
  800,000

  	
   

  
	
  Bonus EPS +
  $0.075

  	
   

  	
  $

  	
  1,200,000

  	
   

  	
  5.0

  	
  %

  	
  95.0

  	
  %

  	
  $

  	
  60,000

  	
   

  	
  $

  	
  1,140,000

  	
   

  
	
  Bonus EPS +
  $0.090

  	
   

  	
  $

  	
  1,600,000

  	
   

  	
  10.0

  	
  %

  	
  90.0

  	
  %

  	
  $

  	
  160,000

  	
   

  	
  $

  	
  1,440,000

  	
   

  
	
  Bonus EPS +
  $0.105

  	
   

  	
  $

  	
  2,000,000

  	
   

  	
  15.0

  	
  %

  	
  85.0

  	
  %

  	
  $

  	
  300,000

  	
   

  	
  $

  	
  1,700,000

  	
   

  
	
  Bonus EPS +
  $0.120

  	
   

  	
  $

  	
  2,400,000

  	
   

  	
  20.0

  	
  %

  	
  80.0

  	
  %

  	
  $

  	
  480,000

  	
   

  	
  $

  	
  1,920,000

  	
   

  
	
  Bonus EPS +
  $0.135

  	
   

  	
  $

  	
  2,800,000

  	
   

  	
  25.0

  	
  %

  	
  75.0

  	
  %

  	
  $

  	
  700,000

  	
   

  	
  $

  	
  2,100,000

  	
   

  
	
  Bonus EPS +
  $0.150

  	
   

  	
  $

  	
  3,200,000

  	
   

  	
  30.0

  	
  %

  	
  70.0

  	
  %

  	
  $

  	
  960,000

  	
   

  	
  $

  	
  2,240,000

  	
   

  
	
  Bonus EPS + $0.160

  	
   

  	
  $

  	
  3,200,000

  	
   

  	
  30.0

  	
  %

  	
  70.0

  	
  %

  	
  $

  	
  960,000

  	
   

  	
  $

  	
  2,240,000

  	
   

  
	
  Bonus EPS +
  $0.170

  	
   

  	
  $

  	
  3,200,000

  	
   

  	
  30.0

  	
  %

  	
  70.0

  	
  %

  	
  $

  	
  960,000

  	
   

  	
  $

  	
  2,240,000

  	
   

  













Table values assume, for purposes of this example, 80,000,000 common
shares outstanding.  Figures will adjust
according to changes in Bonus EPS and common shares outstanding.


6.              Payment


Awards under this Plan
will distributed as soon as reasonably practicable following (i) public
disclosure of the Company’s financial results for the fiscal year ended
December 31, 2004, (ii) calculation of Actual EPS and (iii) any determination
of the amounts of the bonus pool allocable to individual Executive Participants
and Non-Executive Participants. 
Participants must be employed by the Company as employees at the time of
distribution in order to be eligible to receive payment of Awards, unless
otherwise determined by the Committee in its sole discretion.  The Committee may impose additional
eligibility requirements on payment of any Awards in its sole discretion.


7.              General Provisions


a.             No
Prior Funding


No amounts payable under
this Plan shall be funded, set aside or otherwise segregated prior to
payment.  The obligation to pay the
Awards shall at all times be an unfunded and unsecured obligation of the
Company and the Company shall not be required to incur indebtedness to fund the
bonus pool unless otherwise directed to do so by the Committee.  Participants shall have the status of
general creditors.  This Plan is not
qualified under Section 401(a) of the Internal Revenue Code of 1986, as
amended, and is not subject to any provisions of the Employee Retirement Income
Security Act of 1974.


b.             No
Obligation to Employ


Eligibility for
participation in this Plan is not evidence of, nor does it constitute, a
contract of employment between the Company and any individual.  Nothing in this Plan will confer or be
deemed to confer on any individual any right to continue in the employ of the
Company or limit in any way the right 


3

















 


of the Company to terminate
an individual’s employment at any time, with or without cause.  This Plan is not intended to and does not
create any legal rights for any employee.


c.             Amendment or Termination of Plan


This Plan may be amended
or terminated by the Board or the Committee at any time prior to payment of
Awards hereunder.


d.             Headings


The headings of the
sections hereof are inserted for convenience only and shall not be deemed to
constitute a part hereof nor to affect the meaning thereof.


e.             Withholding
of Taxes


To the extent that the
Company is required to withhold federal, state, local or foreign taxes in
connection with any benefit realized by a Participant under this Plan, and the
amounts available to the Company for such withholding are insufficient, it will
be a condition to the realization of such benefit that the Participant make
arrangements satisfactory to the Company for payment of the balance of such
taxes required or requested to be withheld.


f.              Choice of Law


All questions concerning
the construction, validity and interpretation of this Plan will be governed by
the law of the State of California.  Any
Award will not be effective unless such Award is made in compliance with all
applicable laws, rules and regulations.


 


4