exv10w03



 






Exhibit 10.03



SILICON IMAGE, INC.




1999 EQUITY INCENTIVE PLAN




Adopted July 20, 1999

As Amended March 29, 2001

As Amended and Restated May 20, 2003

As Amended and Restated April 5, 2005




     1.  PURPOSE. The purpose of this Plan is to provide incentives to attract, retain and
motivate eligible persons whose present and potential contributions are important to the success of
the Company, its Parent and Subsidiaries, by offering them an opportunity to participate in the
Company’s future performance through awards of Options, Restricted Stock and Stock Bonuses.
Capitalized terms not defined in the text are defined in Section 23.



     2.  SHARES SUBJECT TO THE PLAN.



          2.1  Number of Shares Available. Subject to Sections 2.2 and 18, the total number of
Shares reserved and available for grant and issuance pursuant to this Plan will be 2,000,000 Shares
plus Shares that are subject to: (a) issuance upon exercise of an Option but cease to be subject to
such Option for any reason other than exercise of such Option; (b) an Award granted hereunder but
are forfeited or are repurchased by the Company at the original issue price; and (c) an Award that
otherwise terminates without Shares being issued. In addition, any authorized shares not issued or
subject to outstanding grants under the Silicon Image, Inc. 1995 Equity Incentive Plan (the “Prior
Plan”) on the Effective Date (as defined below) and any shares issued under the Prior Plan that are
forfeited or repurchased by the Company or that are issuable upon exercise of options granted
pursuant to the Prior Plan that expire or become unexercisable for any reason without having been
exercised in full, will no longer be available for grant and issuance under the Prior Plan, but
will be available for grant and issuance under this Plan. In addition, on the first business day
of each calendar year of the Company during the term of the Plan, the aggregate number of Shares
reserved and available for grant and issuance pursuant to this Plan will be increased automatically
by a number of Shares equal to 5% of the total outstanding shares of the Company, provided,
that the Board or the Committee may in its sole discretion reduce the amount of the increase in any
particular year; and, provided further, that no more than 10,000,000 shares shall qualify
as ISOs (as defined in Section 5 below). At all times the Company shall reserve and keep available
a sufficient number of Shares as shall be required to satisfy the requirements of all outstanding
Options granted under this Plan and all other outstanding but unvested Awards granted under this
Plan.




          2.2  Adjustment of Shares. In the event that the number of outstanding shares is
changed by a stock dividend, recapitalization, stock split, reverse stock split, subdivision,
combination, reclassification or similar change in the capital structure of the Company without
consideration, then (a) the number of Shares reserved for issuance under this Plan, (b) the Share
amounts set forth in Section 3 below, (c) the number of Shares subject to each Annual Grant
described in Section 9 below, (d) the Exercise Prices of and number of Shares subject to
outstanding Options, and (e) the number of Shares subject to other outstanding Awards will be
proportionately adjusted, subject to any required action by the Board or the stockholders of the
Company and compliance with applicable securities laws; provided, however, that
fractions of a Share will not be issued but will either be replaced by a cash payment equal to the
Fair Market Value of such fraction of a Share or will be rounded up to the nearest whole Share, as
determined by the Committee.




     3.  ELIGIBILITY. ISOs (as defined in Section 5 below) may be granted only to employees
(including officers and directors who are also employees) of the Company or of a Parent or
Subsidiary of the Company. All other Awards may be granted to employees, officers, directors,
consultants, independent contractors and advisors of the Company or any Parent or Subsidiary of the
Company; provided such consultants, contractors and advisors render bona fide services not
in connection with the offer and sale of securities in a capital-raising transaction. No person
will be eligible to receive more than 500,000 Shares in any calendar year under this Plan pursuant
to the grant of Awards hereunder, other than new employees of the Company or of a Parent or



 









 





Silicon Image, Inc.

Amended and Restated

1999 Equity Incentive Plan




Subsidiary of the Company (including new employees who are also officers and directors of the Company or any
Parent or Subsidiary of the Company), who are eligible to receive up to a maximum of 750,000 Shares
in the calendar year in which they commence their employment. A person may be granted more than
one Award under this Plan.







     4.  ADMINISTRATION.



          4.1  Committee Authority. This Plan will be administered by the Committee or by the
Board acting as the Committee. Except for automatic grants to Eligible Directors pursuant to
Section 9 hereof, and subject to the general purposes, terms and conditions of this Plan, and to
the direction of the Board, the Committee will have full power to implement and carry out this
Plan. Except for automatic grants to Eligible Directors pursuant to Section 9 hereof, the
Committee will have the authority to:





	 	(a)	 	construe and interpret this Plan, any Award Agreement and any other
agreement or document executed pursuant to this Plan;






	 	(b)	 	prescribe, amend and rescind rules and regulations relating to this
Plan or any Award;






	 	(c)	 	select persons to receive Awards;






	 	(d)	 	determine the form and terms of Awards;






	 	(e)	 	determine the number of Shares or other consideration subject to
Awards;






	 	(f)	 	determine whether Awards will be granted singly, in combination
with, in tandem with, in replacement of, or as alternatives to, other Awards
under this Plan or any other incentive or compensation plan of the Company or any
Parent or Subsidiary of the Company;






	 	(g)	 	grant waivers of Plan or Award conditions;






	 	(h)	 	determine the vesting, exercisability and payment of Awards;






	 	(i)	 	correct any defect, supply any omission or reconcile any
inconsistency in this Plan, any Award or any Award Agreement;






	 	(j)	 	determine whether an Award has been earned; and






	 	(k)	 	make all other determinations necessary or advisable for the
administration of this Plan.





          4.2  Committee Discretion. Except for automatic grants to Eligible Directors pursuant
to Section 9 hereof, any determination made by the Committee with respect to any Award will be made
in its sole discretion at the time of grant of the Award or, unless in contravention of any express
term of this Plan or Award, at any later time, and such determination will be final and binding on
the Company and on all persons having an interest in any Award under this Plan. The Committee may
delegate to one or more officers of the Company the authority to grant an Award under this Plan to
Participants who are not Insiders of the Company.




     5.  OPTIONS. The Committee may grant Options to eligible persons and will determine
whether such Options will be Incentive Stock Options within the meaning of the Code (“ISO”) or
Nonqualified Stock Options (“NQSOs”), the number of Shares subject to the Option, the Exercise
Price of the Option, the period during which the Option may be exercised, and all other terms and
conditions of the Option, subject to the following:



          5.1  Form of Option Grant. Each Option granted under this Plan will be evidenced by an
Award Agreement which will expressly identify the Option as an ISO or an NQSO (“Stock Option
Agreement”), and, except as otherwise required by the terms of Section 9 hereof, will be in such
form and contain such provisions




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Silicon Image, Inc.

Amended and Restated

1999 Equity Incentive Plan




(which need not be the same for each Participant) as the Committee
may from time to time approve, and which will comply with and be subject to the terms and
conditions of this Plan.




          5.2  Date of Grant. The date of grant of an Option will be the date on which the
Committee makes the determination to grant such Option, unless otherwise specified by the
Committee. The Stock Option Agreement and a copy of this Plan will be delivered to the Participant
within a reasonable time after the granting of the Option.




          5.3  Exercise Period. Except for automatic grants to Eligible Directors pursuant to
Section 9 hereof, Options may be exercisable within the times or upon the events determined by the
Committee as set forth in the Stock Option Agreement governing such Option; provided,
however, that no Option will be exercisable after the expiration of ten (10) years from the
date the Option is granted; and provided further that no ISO granted to a person who directly or by
attribution owns more than ten percent (10%) of the total combined voting power of all classes of
stock of the Company or of any Parent or Subsidiary of the Company (“Ten Percent Stockholder”) will
be exercisable after the expiration of five (5) years from the date the ISO is granted. The
Committee also may provide for Options to become exercisable at one time or from time to time,
periodically or otherwise, in such number of Shares or percentage of Shares as the Committee
determines.




          5.4  Exercise Price. The Exercise Price of an Option will be determined by the
Committee when the Option is granted and may be not less than 85% of the Fair Market Value of the
Shares on the date of grant; provided that: (i) the Exercise Price of an ISO will be not less than
100% of the Fair Market Value of the Shares on the date of grant; and (ii) the Exercise Price of
any ISO granted to a Ten Percent Stockholder will not be less than 110% of the Fair Market Value of
the Shares on the date of grant. Payment for the Shares purchased may be made in accordance with
Section 8 of this Plan.




          5.5  Method of Exercise. Options may be exercised only by delivery to the Company of a
written stock option exercise agreement (the “Exercise Agreement”) in a form approved by the
Committee (which need not be the same for each Participant), stating the number of Shares being
purchased, the restrictions imposed on the Shares purchased under such Exercise Agreement, if any,
and such representations and agreements regarding Participant’s investment intent and access to
information and other matters, if any, as may be required or desirable by the Company to comply
with applicable securities laws, together with payment in full of the Exercise Price for the number
of Shares being purchased.




          5.6  Termination. Notwithstanding the exercise periods set forth in the Stock Option
Agreement, exercise of an Option will always be subject to the following:





	 	(a)	 	If the Participant is Terminated for any reason except death or
Disability, then the Participant may exercise such Participant’s Options only to
the extent that such Options would have been exercisable upon the Termination
Date no later than three (3) months after the Termination Date (or such shorter
or longer time period not exceeding five (5) years as may be determined by the
Committee, with any exercise beyond three (3) months after the Termination Date
deemed to be an NQSO), but in any event, no later than the expiration date of the
Options.






	 	(b)	 	If the Participant is Terminated because of Participant’s death or
Disability (or the Participant dies within three (3) months after a Termination
other than for Cause or because of Participant’s Disability), then Participant’s
Options may be exercised only to the extent that such Options would have been
exercisable by Participant on the Termination Date and must be exercised by
Participant (or Participant’s legal representative or authorized assignee) no later than twelve (12) months after the Termination Date (or such
shorter or longer time period not exceeding five (5) years as may be
determined by the Committee, with any such exercise beyond (a) three (3)
months after the Termination Date when the Termination





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Silicon Image, Inc.

Amended and Restated

1999 Equity Incentive Plan




	 	 	 	is for any reason other
than the Participant’s death or Disability, or (b) twelve (12) months after
the Termination Date when the Termination is for Participant’s death or
Disability, deemed to be an NQSO), but in any event no later than the
expiration date of the Options.





          5.7  Limitations on Exercise. The Committee may specify a reasonable minimum number of
Shares that may be purchased on any exercise of an Option, provided that such minimum number will
not prevent Participant from exercising the Option for the full number of Shares for which it is
then exercisable.




          5.8  Limitations on ISO. The aggregate Fair Market Value (determined as of the date of
grant) of Shares with respect to which ISO are exercisable for the first time by a Participant
during any calendar year (under this Plan or under any other incentive stock option plan of the
Company, Parent or Subsidiary of the Company) will not exceed $100,000. If the Fair Market Value
of Shares on the date of grant with respect to which ISO are exercisable for the first time by a
Participant during any calendar year exceeds $100,000, then the Options for the first $100,000
worth of Shares to become exercisable in such calendar year will be ISO and the Options for the
amount in excess of $100,000 that become exercisable in that calendar year will be NQSOs. In the
event that the Code or the regulations promulgated thereunder are amended after the Effective Date
of this Plan to provide for a different limit on the Fair Market Value of Shares permitted to be
subject to ISO, such different limit will be automatically incorporated herein and will apply to
any Options granted after the effective date of such amendment.




          5.9  Modification, Extension or Renewal. The Committee may modify, extend or renew
outstanding Options and authorize the grant of new Options in substitution therefor, provided that
any such action may not, without the written consent of a Participant, impair any of such
Participant’s rights under any Option previously granted. Any outstanding ISO that is modified,
extended, renewed or otherwise altered will be treated in accordance with Section 424(h) of the
Code. The Committee may reduce the Exercise Price of outstanding Options without the consent of
Participants affected by a written notice to them; provided, however, that the
Exercise Price may not be reduced below the minimum Exercise Price that would be permitted under
Section 5.4 of this Plan for Options granted on the date the action is taken to reduce the Exercise
Price.




          5.10  No Disqualification. Notwithstanding any other provision in this Plan, no term
of this Plan relating to ISO will be interpreted, amended or altered, nor will any discretion or
authority granted under this Plan be exercised, so as to disqualify this Plan under Section 422 of
the Code or, without the consent of the Participant affected, to disqualify any ISO under Section
422 of the Code.




     6.  RESTRICTED STOCK. A Restricted Stock Award is an offer by the Company to sell to
an eligible person Shares that are subject to restrictions. The Committee will determine to whom
an offer will be made, the number of Shares the person may purchase, the price to be paid (the
"Purchase Price”), the restrictions to which the Shares will be subject, and all other terms and
conditions of the Restricted Stock Award, subject to the following:



          6.1  Form of Restricted Stock Award. All purchases under a Restricted Stock Award made
pursuant to this Plan will be evidenced by an Award Agreement (“Restricted Stock Purchase
Agreement”) that will be in such form (which need not be the same for each Participant) as the
Committee will from time to time approve, and will comply with and be subject to the terms and
conditions of this Plan. The offer of Restricted Stock will be accepted by the Participant’s
execution and delivery of the Restricted Stock Purchase Agreement and full payment for the Shares
to the Company within thirty (30) days from the date the Restricted Stock Purchase Agreement is
delivered to the person. If such person does not execute and deliver the Restricted Stock Purchase
Agreement along with full payment for the Shares to the Company within thirty (30) days, then the
offer will terminate, unless otherwise determined by the Committee.




          6.2  Purchase Price. The Purchase Price of Shares sold pursuant to a Restricted Stock
Award will be determined by the Committee on the date the Restricted Stock Award is granted, except
in the case of




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Silicon Image, Inc.

Amended and Restated

1999 Equity Incentive Plan


a sale to a Ten Percent Stockholder, in which case the Purchase Price will be 100% of the Fair Market Value. Payment of the Purchase Price may be made in accordance with Section 8
of this Plan.




          6.3  Terms of Restricted Stock Awards. Restricted Stock Awards shall be subject to
such restrictions as the Committee may impose. These restrictions may be based upon completion of
a specified number of years of service with the Company or upon completion of the performance goals
as set out in advance in the Participant’s individual Restricted Stock Purchase Agreement.
Restricted Stock Awards may vary from Participant to Participant and between groups of
Participants. Prior to the grant of a Restricted Stock Award, the Committee shall: (a) determine
the nature, length and starting date of any Performance Period for the Restricted Stock Award; (b)
select from among the Performance Factors to be used to measure performance goals, if any; and (c)
determine the number of Shares that may be awarded to the Participant. Prior to the payment of any
Restricted Stock Award, the Committee shall determine the extent to which such Restricted Stock
Award has been earned. Performance Periods may overlap and Participants may participate
simultaneously with respect to Restricted Stock Awards that are subject to different Performance
Periods and having different performance goals and other criteria.




          6.4  Termination During Performance Period. If a Participant is Terminated during a
Performance Period for any reason, then such Participant will be entitled to payment (whether in
Shares, cash or otherwise) with respect to the Restricted Stock Award only to the extent earned as
of the date of Termination in accordance with the Restricted Stock Purchase Agreement, unless the
Committee will determine otherwise.




     7.  STOCK BONUSES.



          7.1  Awards of Stock Bonuses. A Stock Bonus is an award of Shares (which may consist
of Restricted Stock) for services rendered to the Company or any Parent or Subsidiary of the
Company. A Stock Bonus may be awarded for past services already rendered to the Company, or any
Parent or Subsidiary of the Company pursuant to an Award Agreement (the “Stock Bonus Agreement”)
that will be in such form (which need not be the same for each Participant) as the Committee will
from time to time approve, and will comply with and be subject to the terms and conditions of this
Plan. A Stock Bonus may be awarded upon satisfaction of such performance goals as are set out in
advance in the Participant’s individual Award Agreement (the “Performance Stock Bonus Agreement”)
that will be in such form (which need not be the same for each Participant) as the Committee will
from time to time approve, and will comply with and be subject to the terms and conditions of this
Plan. Stock Bonuses may vary from Participant to Participant and between groups of Participants,
and may be based upon the achievement of the Company, Parent or Subsidiary and/or individual
performance factors or upon such other criteria as the Committee may determine.




          7.2  Terms of Stock Bonuses. The Committee will determine the number of Shares to be
awarded to the Participant. If the Stock Bonus is being earned upon the satisfaction of
performance goals pursuant to a Performance Stock Bonus Agreement, then the Committee will: (a)
determine the nature, length and starting date of any Performance Period for each Stock Bonus; (b)
select from among the Performance Factors to be used to measure the performance, if any; and (c)
determine the number of Shares that may be awarded to the Participant. Prior to the payment of any
Stock Bonus, the Committee shall determine the extent to which such Stock Bonuses have been earned.
Performance Periods may overlap and Participants may participate simultaneously with respect to
Stock Bonuses that are subject to different Performance Periods and different performance goals and
other criteria. The number of Shares may be fixed or may vary in accordance with such performance
goals and criteria as may be determined by the Committee. The Committee may adjust the performance
goals applicable to the Stock Bonuses to take into account changes in law and accounting or tax
rules and to make such adjustments as the Committee deems necessary or appropriate to reflect the
impact of extraordinary or unusual items, events or circumstances to avoid windfalls or hardships.




          7.3  Form of Payment. The earned portion of a Stock Bonus may be paid currently or on
a deferred basis with such interest or dividend equivalent, if any, as the Committee may determine. Payment may




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Silicon Image, Inc.

Amended and Restated

1999 Equity Incentive Plan


be made in the form of cash or whole Shares or a combination thereof, either in a lump
sum payment or in installments, all as the Committee will determine.




     8.  PAYMENT FOR SHARE PURCHASES.



          8.1  Payment. Payment for Shares purchased pursuant to this Plan may be made in cash
(by check) or, where expressly approved for the Participant by the Committee and where permitted by
law:





	 	(a)	 	by cancellation of indebtedness of the Company to the Participant;






	 	(b)	 	by surrender of shares that either: (1) have been owned by
Participant for more than six (6) months and have been paid for within the
meaning of SEC Rule 144 (and, if such shares were purchased from the Company by
use of a promissory note, such note has been fully paid with respect to such shares); or (2) were obtained by Participant in the public market;






	 	(c)	 	by tender of a full recourse promissory note having such terms as
may be approved by the Committee and bearing interest at a rate sufficient to
avoid imputation of income under Sections 483 and 1274 of the Code;
provided, however, that Participants who are not employees or
directors of the Company will not be entitled to purchase Shares with a
promissory note unless the note is adequately secured by collateral other than
the Shares;






	 	(d)	 	by waiver of compensation due or accrued to the Participant for
services rendered;






	 	(e)	 	with respect only to purchases upon exercise of an Option, and
provided that a public market for the Company’s stock exists:






	 	(1)	 	through a “same day sale” commitment from the
Participant and a broker-dealer that is a member of the National
Association of Securities Dealers (an “NASD Dealer”) whereby the
Participant irrevocably elects to exercise the Option and to sell a
portion of the Shares so purchased to pay for the Exercise Price, and
whereby the NASD Dealer irrevocably commits upon receipt of such Shares
to forward the Exercise Price directly to the Company; or






	 	(2)	 	through a “margin” commitment from the Participant
and a NASD Dealer whereby the Participant irrevocably elects to exercise
the Option and to pledge the Shares so purchased to the NASD Dealer in a
margin account as security for a loan from the NASD Dealer in the amount
of the Exercise Price, and whereby the NASD Dealer irrevocably commits
upon receipt of such Shares to forward the Exercise Price directly to the
Company; or






	 	(f)	 	by any combination of the foregoing.





          8.2  Loan Guarantees. The Committee may help the Participant pay for Shares purchased
under this Plan by authorizing a guarantee by the Company of a third-party loan to the Participant.




     9.  AUTOMATIC GRANTS TO ELIGIBLE DIRECTORS.



          9.1  Types of Options and Shares. Options granted under this Plan and subject to this
Section 9 shall be NQSOs.




          9.2  Eligibility. Options subject to this Section 9 shall be granted only to Eligible
Directors.




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Silicon Image, Inc.

Amended and Restated

1999 Equity Incentive Plan



          9.3  Annual Grants. Immediately following each annual meeting of stockholders, (a) each
Eligible Director will automatically be granted an Option for 20,000 Shares, provided the Eligible
Director is a member of the Board on such date and has served continuously as a member of the Board
of Directors of the Company for a period of at least one year since the date when such Eligible
Director first became a member of the Board; (b) each Eligible Director who is a member of a
standing committee of the Board will automatically be granted an Option for an additional 5,000
Shares for each such committee on which such Eligible Director serves, provided such Eligible
Director is a member of such committee on such date and has served continuously as a member of such
committee of the Company for a period of at least one year since the date when such Eligible
Director first joined such committee; and (c) if the Chairperson of the Board is an Eligible
Director, the Chairperson of the Board will automatically be granted an Option for an additional
5,000 shares, provided he or she is serving as Chairperson of the Board on such date and has served
continuously as Chairperson of the Board of the Company for a period of at least one year since the
date when such Eligible Director first became Chairperson of the Board. The Options described in
this Section 9.3 are referred to as the “Annual Grants.”




          9.4  Exercise Price; Vesting; Exercise Period. The exercise price of an Annual Grant
shall be the Fair Market Value of the Shares at the time of grant. Provided the director continues
to provide services to the Company, an Annual Grant shall become vested and exercisable with
respect to one twenty-fourth (1/24) of the Shares each month following the date of grant until
fully vested; provided, however, that an Annual Grant shall become fully vested immediately prior
to the consummation of a Change in Control. The Exercise Period of an Annual Grant shall end five
(5) years after the date of grant.




     10.  WITHHOLDING TAXES.



          10.1  Withholding Generally. Whenever Shares are to be issued in satisfaction of
Awards granted under this Plan, the Company may require the Participant to remit to the Company an
amount sufficient to satisfy federal, state and local withholding tax requirements prior to the
delivery of any certificate or certificates for such Shares. Whenever, under this Plan, payments
in satisfaction of Awards are to be made in cash, such payment will be net of an amount sufficient
to satisfy federal, state, and local withholding tax requirements.




          10.2  Stock Withholding. When, under applicable tax laws, a Participant incurs tax
liability in connection with the exercise or vesting of any Award that is subject to tax
withholding and the Participant is obligated to pay the Company the amount required to be withheld,
the Committee may in its sole discretion allow the Participant to satisfy the minimum withholding
tax obligation by electing to have the Company withhold from the Shares to be issued that number of
Shares having a Fair Market Value equal to the minimum amount required to be withheld, determined
on the date that the amount of tax to be withheld is to be determined. All elections by a
Participant to have Shares withheld for this purpose will be made in accordance with the
requirements established by the Committee and be in writing in a form acceptable to the Committee




     11.  TRANSFERABILITY.



          11.1  Except as otherwise provided in this Section 11, Awards granted under this Plan, and
any interest therein, will not be transferable or assignable by Participant, and may not be
made subject to execution, attachment or similar process, otherwise than by will or by the laws
of descent and distribution or as determined by the Committee and set forth in the Award
Agreement with respect to Awards that are not ISOs.




          11.2  All Awards other than NQSO’s. All Awards other than NQSO’s shall be
exercisable: (i) during the Participant’s lifetime, only by (A) the Participant, or (B) the
Participant’s guardian or legal representative; and (ii) after Participant’s death, by the legal representative of
the Participant’s heirs or legatees.




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Amended and Restated

1999 Equity Incentive Plan



          11.3  NQSOs. Unless otherwise restricted by the Committee, an NQSO shall be
exercisable: (i) during the Participant’s lifetime only by (A) the Participant, (B) the
Participant’s guardian or legal representative, (C) a Family Member of the Participant who has
acquired the NQSO by “permitted transfer;” and (ii) after Participant’s death, by the legal
representative of the Participant’s heirs or legatees. “Permitted transfer” means, as
authorized by this Plan and the Committee in an NQSO, any transfer effected by the Participant
during the Participant’s lifetime of an interest in such NQSO but only such transfers which are
by gift or domestic relations order. A permitted transfer does not include any transfer for
value and neither of the following are transfers for value: (a) a transfer of under a domestic
relations order in settlement of marital property rights or (b) a transfer to an entity in
which more than fifty percent of the voting interests are owned by Family Members or the
Participant in exchange for an interest in that entity.




12.       PRIVILEGES OF STOCK OWNERSHIP; RESTRICTIONS ON SHARES..




          12.1  Voting and Dividends. No Participant will have any of the rights of a
stockholder with respect to any Shares until the Shares are issued to the Participant. After
Shares are issued to the Participant, the Participant will be a stockholder and have all the rights
of a stockholder with respect to such Shares, including the right to vote and receive all dividends
or other distributions made or paid with respect to such Shares; provided, that if such
Shares are Restricted Stock, then any new, additional or different securities the Participant may
become entitled to receive with respect to such Shares by virtue of a stock dividend, stock split
or any other change in the corporate or capital structure of the Company will be subject to the
same restrictions as the Restricted Stock; provided, further, that the Participant
will have no right to retain such stock dividends or stock distributions with respect to Shares
that are repurchased at the Participant’s Purchase Price or Exercise Price pursuant to Section 12.




          12.2  Financial Statements. The Company will provide financial statements to each
Participant prior to such Participant’s purchase of Shares under this Plan, and to each Participant
annually during the period such Participant has Awards outstanding; provided,
however, the Company will not be required to provide such financial statements to
Participants whose services in connection with the Company assure them access to equivalent
information.




          12.3  Restrictions on Shares. At the discretion of the Committee, the Company may
reserve to itself and/or its assignee(s) in the Award Agreement a right to repurchase a portion of
or all Unvested Shares held by a Participant following such Participant’s Termination at any time
within ninety (90) days after the later of Participant’s Termination Date and the date Participant
purchases Shares under this Plan, for cash and/or cancellation of purchase money indebtedness, at
the Participant’s Exercise Price or Purchase Price, as the case may be.




     13.  CERTIFICATES. All certificates for Shares or other securities delivered under
this Plan will be subject to such stock transfer orders, legends and other restrictions as the
Committee may deem necessary or advisable, including restrictions under any applicable federal,
state or foreign securities law, or any rules, regulations and other requirements of the SEC or any
stock exchange or automated quotation system upon which the Shares may be listed or quoted.



     14.  ESCROW; PLEDGE OF SHARES. To enforce any restrictions on a Participant’s Shares,
the Committee may require the Participant to deposit all certificates representing Shares, together
with stock powers or other instruments of transfer approved by the Committee, appropriately
endorsed in blank, with the Company or an agent designated by the Company to hold in escrow until
such restrictions have lapsed or terminated, and the Committee may cause a legend or legends
referencing such restrictions to be placed on the certificates. Any Participant who is permitted
to execute a promissory note as partial or full consideration for the purchase of Shares under this Plan will be required to pledge and deposit with the Company all or
part of the Shares so purchased as collateral to secure the payment of Participant’s obligation to
the Company under the promissory note; provided, however, that the Committee may
require or accept other or additional forms of collateral to secure the payment of such obligation
and, in any event, the Company will have full recourse against the Participant under the promissory



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Silicon Image, Inc.

Amended and Restated

1999 Equity Incentive Plan


note notwithstanding any pledge of the Participant’s Shares or other collateral. In connection
with any pledge of the Shares, Participant will be required to execute and deliver a written pledge
agreement in such form as the Committee will from time to time approve. The Shares purchased with
the promissory note may be released from the pledge on a pro rata basis as the promissory note is
paid.




     15.  EXCHANGE AND BUYOUT OF AWARDS. The Committee may, at any time or from time to
time, authorize the Company, with the consent of the respective Participants, to issue new Awards
in exchange for the surrender and cancellation of any or all outstanding Awards. The Committee may
at any time buy from a Participant an Award previously granted with payment in cash, Shares
(including Restricted Stock) or other consideration, based on such terms and conditions as the
Committee and the Participant may agree.



     16.  SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. An Award will not be effective
unless such Award is in compliance with all applicable federal and state securities laws, rules and
regulations of any governmental body, and the requirements of any stock exchange or automated
quotation system upon which the Shares may then be listed or quoted, as they are in effect on the
date of grant of the Award and also on the date of exercise or other issuance. Notwithstanding any
other provision in this Plan, the Company will have no obligation to issue or deliver certificates
for Shares under this Plan prior to: (a) obtaining any approvals from governmental agencies that
the Company determines are necessary or advisable; and/or (b) completion of any registration or
other qualification of such Shares under any state or federal law or ruling of any governmental
body that the Company determines to be necessary or advisable. The Company will be under no
obligation to register the Shares with the SEC or to effect compliance with the registration,
qualification or listing requirements of any state securities laws, stock exchange or automated
quotation system, and the Company will have no liability for any inability or failure to do so.



     17.  NO OBLIGATION TO EMPLOY. Nothing in this Plan or any Award granted under this
Plan will confer or be deemed to confer on any Participant any right to continue in the employ of,
or to continue any other relationship with, the Company or any Parent or Subsidiary of the Company
or limit in any way the right of the Company or any Parent or Subsidiary of the Company to
terminate Participant’s employment or other relationship at any time, with or without cause.



     18.  CORPORATE TRANSACTIONS.



          18.1  Assumption or Replacement of Awards by Successor. In the event of (a) a
dissolution or liquidation of the Company, (b) a merger or consolidation in which the Company is
not the surviving corporation (other than a merger or consolidation with a wholly-owned subsidiary,
a reincorporation of the Company in a different jurisdiction, or other transaction in which there
is no substantial change in the stockholders of the Company or their relative stock holdings and
the Awards granted under this Plan are assumed, converted or replaced by the successor corporation,
which assumption will be binding on all Participants), (c) a merger in which the Company is the
surviving corporation but after which the stockholders of the Company immediately prior to such
merger (other than any stockholder that merges, or which owns or controls another corporation that
merges, with the Company in such merger) cease to own their shares or other equity interest in the
Company, (d) the sale of substantially all of the assets of the Company, or (e) the acquisition,
sale, or transfer of more than 50% of the outstanding shares of the Company by tender offer or
similar transaction, any or all outstanding Awards (including without limitation Annual Grants
under Section 9) may be assumed, converted or replaced by the successor corporation (if any), which
assumption, conversion or replacement will be binding on all Participants. In the alternative, the
successor corporation may substitute equivalent Awards or provide substantially similar
consideration to Participants as was provided to stockholders (after taking into account the
existing provisions of the Awards). The successor corporation may also issue, in place of
outstanding Shares of the Company held by the Participant, substantially similar shares or other property subject to repurchase restrictions no
less favorable to the Participant. In the event such successor corporation (if any) refuses to
assume or substitute Awards, as provided above, pursuant to a transaction described in this
Subsection 18.1, such Awards (including without limitation Annual Grants under Section 9) will
expire on such transaction at such time and on such conditions as the Committee will




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Silicon Image, Inc.

Amended and Restated

1999 Equity Incentive Plan


determine.
Notwithstanding anything in this Plan to the contrary, the Committee may, in its sole discretion,
provide that the vesting of any or all Awards granted pursuant to this Plan will accelerate upon a
transaction described in this Section 18. If the Committee exercises such discretion with respect
to Options, such Options will become exercisable in full prior to the consummation of such event at
such time and on such conditions as the Committee determines, and if such Options are not exercised
prior to the consummation of the corporate transaction, they shall terminate at such time as
determined by the Committee.




          18.2  Other Treatment of Awards. Subject to any greater rights granted to Participants
under the foregoing provisions of this Section 18, in the event of the occurrence of any
transaction described in Section 18.1, any outstanding Awards (including without limitation Annual
Grants under Section 9) will be treated as provided in the applicable agreement or plan of merger,
consolidation, dissolution, liquidation, or sale of assets.




          18.3  Assumption of Awards by the Company. The Company, from time to time, also may
substitute or assume outstanding awards granted by another company, whether in connection with an
acquisition of such other company or otherwise, by either; (a) granting an Award under this Plan in
substitution of such other company’s award; or (b) assuming such award as if it had been granted
under this Plan if the terms of such assumed award could be applied to an Award granted under this
Plan. Such substitution or assumption will be permissible if the holder of the substituted or
assumed award would have been eligible to be granted an Award under this Plan if the other company
had applied the rules of this Plan to such grant. In the event the Company assumes an award
granted by another company, the terms and conditions of such award will remain unchanged
(except that the exercise price and the number and nature of Shares issuable upon exercise
of any such option will be adjusted appropriately pursuant to Section 424(a) of the Code). In the
event the Company elects to grant a new Option rather than assuming an existing option, such new
Option may be granted with a similarly adjusted Exercise Price.




     19.  ADOPTION AND STOCKHOLDER APPROVAL. This Plan will become effective on the date on
which the registration statement filed by the Company with the SEC under the Securities Act
registering the initial public offering of the Company’s Common Stock is declared effective by the
SEC (the “Effective Date”). This Plan shall be approved by the stockholders of the Company
(excluding Shares issued pursuant to this Plan), consistent with applicable laws, within twelve
(12) months before or after the date this Plan is adopted by the Board. Upon the Effective Date,
the Committee may grant Awards pursuant to this Plan; provided, however, that: (a)
no Option may be exercised prior to initial stockholder approval of this Plan; (b) no Option
granted pursuant to an increase in the number of Shares subject to this Plan approved by the Board
will be exercised prior to the time such increase has been approved by the stockholders of the
Company; (c) in the event that initial stockholder approval is not obtained within the time period
provided herein, all Awards granted hereunder shall be cancelled, any Shares issued pursuant to any
Awards shall be cancelled and any purchase of Shares issued hereunder shall be rescinded; and (d)
in the event that stockholder approval of such increase is not obtained within the time period
provided herein, all Awards granted pursuant to such increase will be cancelled, any Shares issued
pursuant to any Award granted pursuant to such increase will be cancelled, and any purchase of
Shares pursuant to such increase will be rescinded.



     20.  TERM OF PLAN/GOVERNING LAW. Unless earlier terminated as provided herein, this
Plan will terminate ten (10) years from the date this Plan is adopted by the Board or, if earlier,
the date of stockholder approval. This Plan and all agreements thereunder shall be governed by and
construed in accordance with the laws of the State of California.



     21.  AMENDMENT OR TERMINATION OF PLAN. The Board may at any time terminate or amend
this Plan in any respect, including without limitation amendment of any form of Award Agreement or
instrument to be executed pursuant to this Plan; provided, however, that the Board
will not, without the approval of the stockholders of the Company, amend this Plan in any manner
that requires such stockholder approval.



     22.  NONEXCLUSIVITY OF THE PLAN. Neither the adoption of this Plan by the Board, the
submission of this Plan to the stockholders of the Company for approval, nor any provision of this
Plan will be construed as creating any limitations on the power of the Board to adopt such
additional compensation arrangements



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Silicon Image, Inc.

Amended and Restated

1999 Equity Incentive Plan


as it may deem desirable, including, without limitation, the
granting of stock options and bonuses otherwise than under this Plan, and such arrangements may be
either generally applicable or applicable only in specific cases.




     23. DEFINITIONS. As used in this Plan, the following terms will have the following
meanings:



          "Award” means any award under this Plan, including any Option, Restricted Stock or Stock
Bonus.




          "Award Agreement” means, with respect to each Award, the signed written agreement between the
Company and the Participant setting forth the terms and conditions of the Award.




          "Board” means the Board of Directors of the Company.




          "Cause” means the commission of an act of theft, embezzlement, fraud, dishonesty or a breach
of fiduciary duty to the Company or a Parent or Subsidiary of the Company.




          "Change of Control” means the consummation of any transaction or series of related
transactions which results in all of the holders of record of the Company’s capital stock
immediately prior to the transaction or transactions holding less than fifty percent (50%) of the
voting power of the surviving entity in the transaction or transactions immediately after the
transaction or transactions, including the acquisition of the Company by another entity and any
reorganization, merger or consolidation, or which results in the sale of all or substantially all
of the assets of the Company; provided, however, if the surviving entity in the
transaction or transactions is wholly owned by another entity, then a Change of Control has
occurred only if the holders of record of the Company’s capital stock immediately prior to the
transaction or transactions hold less than fifty percent (50%) of the voting power of the other
entity immediately after the transaction or transactions.




          "Code” means the Internal Revenue Code of 1986, as amended.




          "Committee” means the Compensation Committee of the Board.




          "Company” means Silicon Image, Inc. or any successor corporation.




          "Disability” means a disability, whether temporary or permanent, partial or total, as
determined by the Committee. For ISO purposes, “Disability” means a disability within the meaning
of Code Section 22(e)(3).




          "Eligible Director” means a member of the Board (1) who is not an employee of the Company or
any Parent, Subsidiary or Affiliate of the Company, and (2) whose direct pecuniary interest (as
defined by the SEC in Rule 16a-1 promulgated under the Exchange Act) in the Company’s Common Stock
is less than five percent (5%) of total shares of Common Stock outstanding.




          "Exchange Act” means the Securities Exchange Act of 1934, as amended.




          "Exercise Price” means the price at which a holder of an Option may purchase the Shares
issuable upon exercise of the Option.




          "Fair Market Value” means, as of any date, the value of a share of the Company’s Common Stock
determined as follows:




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Silicon Image, Inc.

Amended and Restated

1999 Equity Incentive Plan




	 	(a)	 	if such Common Stock is then quoted on the Nasdaq National Market,
its closing price on the Nasdaq National Market on the date of determination as
reported in The Wall Street Journal;






	 	(b)	 	if such Common Stock is publicly traded and is then listed on a
national securities exchange, its closing price on the date of determination on
the principal national securities exchange on which the Common Stock is listed or
admitted to trading as reported in The Wall Street Journal;






	 	(c)	 	if such Common Stock is publicly traded but is not quoted on the
Nasdaq National Market nor listed or admitted to trading on a national securities
exchange, the average of the closing bid and asked prices on the date of
determination as reported in The Wall Street Journal;






	 	(d)	 	in the case of an Award made on the Effective Date, the price per
share at which shares of the Company’s Common Stock are initially offered for
sale to the public by the Company’s underwriters in the initial public offering
of the Company’s Common Stock pursuant to a registration statement filed with the
SEC under the Securities Act; or






	 	(e)	 	if none of the foregoing is applicable, by the Committee in good
faith.







	 	 	 	Family Member” includes any of the
following:








	 	(a)	 	child, stepchild, grandchild, parent, stepparent, grandparent,
spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law of the
Participant, including any such person with such relationship to the
Participant by adoption;






	 	(b)	 	any person (other than a tenant or employee) sharing the
Participant’s household;






	 	(c)	 	a trust in which the persons in (a) and (b) have more than
fifty percent of the beneficial interest;






	 	(d)	 	a foundation in which the persons in (a) and (b) or the
Participant control the management of assets; or






	 	(e)	 	any other entity in which the persons in (a) and (b) or the
Participant own more than fifty percent of the voting interest.







               "Insider” means an officer or director of the Company or any other person whose transactions
in the Company’s Common Stock are subject to Section 16 of the Exchange Act.




               "Option” means an award of an option to purchase Shares pursuant to Section 5.




               "Parent” means any corporation (other than the Company) in an unbroken chain of corporations
ending with the Company if each of such corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other
corporations in such chain.




               "Participant” means a person who receives an Award under this Plan.



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Silicon Image, Inc.

Amended and Restated

1999 Equity Incentive Plan




          Performance Factors” means the factors selected by the Committee from among the following
measures to determine whether the performance goals established by the Committee and applicable to
Awards have been satisfied:





	 	(a)	 	Net revenue and/or net revenue growth;






	 	(b)	 	Earnings before income taxes and amortization and/or earnings before income taxes and amortization growth;






	 	(c)	 	Operating income and/or operating income growth;






	 	(d)	 	Net income and/or net income growth;






	 	(e)	 	Earnings per share and/or earnings per share growth;






	 	(f)	 	Total stockholder return and/or total stockholder return growth;






	 	(g)	 	Return on equity;






	 	(h)	 	Operating cash flow return on income;






	 	(i)	 	Adjusted operating cash flow return on income;






	 	(j)	 	Economic value added; and






	 	(k)	 	Individual confidential business objectives.





          "Performance Period” means the period of service determined by the Committee, not to exceed
five years, during which years of service or performance is to be measured for Restricted Stock
Awards or Stock Bonuses.




          "Plan” means this Silicon Image, Inc. 1999 Equity Incentive Plan, as amended from time to
time.




          "Restricted Stock Award” means an award of Shares pursuant to Section 6.




          "SEC” means the Securities and Exchange Commission.




          "Securities Act” means the Securities Act of 1933, as amended.




          "Shares” means shares of the Company’s Common Stock reserved for issuance under this Plan, as
adjusted pursuant to Sections 2 and 18, and any successor security.




          "Stock Bonus” means an award of Shares, or cash in lieu of Shares, pursuant to Section 7.




          "Subsidiary” means any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company if each of the corporations other than the last corporation
in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.




          "Termination” or “Terminated” means, for purposes of this Plan with respect to a Participant,
that the Participant has for any reason ceased to provide services as an employee, officer, director,




13









 




Silicon Image, Inc.

Amended and Restated

1999 Equity Incentive Plan



consultant, independent contractor, or advisor to the Company or a Parent or Subsidiary
of the Company. An employee will not be deemed to have ceased to provide services in the case of
(i) sick leave, (ii) military leave, or (iii) any other leave of absence approved by the Committee,
provided, that such leave is for a period of not more than 90 days, unless reemployment upon the
expiration of such leave is guaranteed by contract or statute or unless provided otherwise pursuant
to formal policy adopted from time to time by the Company and issued and promulgated to employees
in writing. In the case of any employee on an approved leave of absence, the Committee may make
such provisions respecting suspension of vesting of the Award while on leave from the employ of the
Company or a Subsidiary as it may deem appropriate, except that in no event may an Option be
exercised after the expiration of the term set forth in the Option agreement. The Committee will
have sole discretion to determine whether a Participant has ceased to provide services and the
effective date on which the Participant ceased to provide services (the “Termination Date”).




"Unvested Shares” means “Unvested Shares” as defined in the Award Agreement.



"Vested Shares” means “Vested Shares” as defined in the Award Agreement.





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