Document:

Prepared by MERRILL CORPORATION

QuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.34    
  

SILICON IMAGE, INC.

NON-PLAN STOCK OPTION AGREEMENT  

    This Non-Plan Stock Option Agreement (this "Agreement") is made and entered into as of the date of
grant set forth below (the "Date of Grant") by and between Silicon Image, Inc., a Delaware corporation (the
"Company"), and the optionee named below ("Optionee"). Capitalized terms not defined herein shall have
the meaning ascribed to them in Section 20. 

	Optionee:	 	Jaime Garcia-Meza

	

Social Security Number:	
 	

	

Optionee's Address:	
 	

	

 	
 	

	

Total Option Shares:	
 	

500,000

	

Exercise Price Per Share:	
 	

$3.4375

	

Date of Grant:	
 	

April 5, 2001

	

Vesting Start Date:	
 	

April 5, 2001

	

Expiration Date:	
 	

April 4, 2011

	

Type of Stock Option:	
 	

NQSO

    1.  Grant of Option.  The Company hereby grants to Optionee an option (this
"Option") to purchase up to the total number of shares of common stock of the Company, $0.001 par value ("Common
Stock"), set forth above (collectively, the "Shares") at the Exercise Price Per Share set forth above (the
"Exercise Price"), subject to all of the terms and conditions of this Agreement. 

    2.  Vesting; Exercise Period.  

    2.1  Exercise Period of Option.  This Option is immediately exercisable although the Shares issued upon
exercise of the Option will be subject to the Repurchase Option set forth in Section 2.3 below. Provided Optionee continues to provide services to the Company or to any Parent or Subsidiary of
the Company, the Shares issuable upon exercise of this Option will become vested with respect to one-eighth (1/8th) of the Shares (rounded to the nearest whole share) on
October 5, 2001 (the "First Vesting Date") and thereafter at the end of each full succeeding month after the First Vesting Date an additional one
forty-eighth (1/48th) of the Shares (rounded to the nearest whole share) will become vested until the Shares are vested with respect to one hundred percent (100%) of the Shares. The
Shares issuable upon exercise of this Option shall cease to vest upon Optionee's Termination and Optionee shall in no event be entitled under this Option to purchase a number of shares of the
Company's Common Stock greater
than the Total Option Shares. Notwithstanding the foregoing, in the event of a "Termination in Connection with a Change in Control" (as defined in the employment agreement between the Optionee and the
Company (the "Employment Agreement")), the Shares issuable upon exercise of this Option shall have a vesting rate of twice the vesting rate set forth
above (e.g., if immediately prior to a "Change of Control" (as defined in the Employment Agreement), forty percent (40%) of the Shares would have been vested, then upon the Change in Control, eighty
percent (80%) of the Shares will be vested), but in no event shall the minimum aggregate number of Shares vested be less than at least one-quarter (1/4th) of the Total Option
Shares. Should the Optionee's continue to provide services to the Company or to any Parent or Subsidiary of the Company following a 

 

Change of Control (as defined in the Employment Agreement), the Shares shall continue to vest according to the vesting schedule set forth above. 

    2.2  Vesting of Shares.  Shares that are vested pursuant to the schedule set forth in Section 2.1
are "Vested Shares." Shares that are not vested pursuant to the schedule set forth in Section 2.1 are  "Unvested
Shares." Unvested Shares may not be sold or otherwise transferred by Optionee without the Company's prior written
consent. 

    2.3  Repurchase Option.  The Company, or its assignee, shall have the option to repurchase Optionee's
Unvested Shares on the terms and conditions set forth below (the "Repurchase Option") if Optionee is Terminated for any reason, or no reason, including
without limitation Optionee's death, Disability, voluntary resignation or termination by the Company with or without Cause. Notwithstanding the foregoing, the Company shall retain the Repurchase
Option for Unvested Shares only as to that number of Unvested Shares (whether or not exercised) that exceeds the number of shares which remain unexercised. 

    (a)  Exercise of Repurchase Option.  At any time within ninety (90) days after the Optionee's
Termination Date (or, in the case of securities issued upon exercise of an Option after the Optionee's Termination Date, within ninety (90) days after the date of such exercise), the Company,
or its assignee, may elect to repurchase any or all the Optionee's Unvested Shares by giving Optionee written notice of exercise of the Repurchase Option. 

    (b)  Calculation of Repurchase Price for Unvested Shares.  The Company or its assignee shall have the
option to repurchase from Optionee (or from Optionee's personal representative as the case may be) the Unvested Shares at the Optionee's Exercise Price, proportionately adjusted for any stock split or
similar change in the capital structure of the Company (the "Repurchase Price"). 

    (c)  Payment of Repurchase Price.  The Repurchase Price shall be payable, at the option of the Company or
its assignee, by check or by cancellation of all or a portion of any outstanding indebtedness owed by
Optionee to the Company or such assignee, or by any combination thereof. The Repurchase Price shall be paid without interest within sixty (60) days after exercise of the Repurchase Option. 

    (d)  Right of Termination Unaffected.  Nothing in this Exercise Agreement shall be construed to limit or
otherwise affect in any manner whatsoever the right or power of the Company (or any Parent or Subsidiary of the Company) to terminate Optionee's employment or other relationship with Company (or the
Parent or Subsidiary of the Company) at any time, for any reason or no reason, with or without Cause. 

    2.4  Expiration.  This Option shall expire on the Expiration Date set forth above and must be exercised,
if at all, on or before the earlier of the Expiration Date or the date on which this Option is earlier terminated in accordance with the provisions of Section 3,  provided, however, that this Option
will be not be exercisable after the expiration of ten (10) years from the Date of Grant. 

    3.  Termination.  

    3.1  Termination for Any Reason Except Death, Disability or Cause.  If Optionee is Terminated for any
reason except Optionee's death, Disability or Cause, then this Option, to the extent (and only to the extent) that it is vested in accordance with the schedule set forth in Section 2.1 of this
Agreement on the date of Termination, may be exercised by Optionee no later than three (3) months after the date of Termination, but in any event no later than the Expiration Date. 

    3.2  Termination Because of Death or Disability.  If Optionee is Terminated because of death or
Disability of Optionee (or the Optionee dies within three (3) months after a Termination other 

2

 

than because of death, Disability or Cause), then this Option, to the extent that it is vested in accordance with the schedule set forth in Section 2.1 of this Agreement on the date of
Termination, may be exercised by Optionee (or Optionee's legal representative) no later than twelve (12) months after the date of Termination, but in any event no later than the Expiration
Date. 

    3.3  Termination for Cause.  If Optionee is Terminated for Cause, this Option will expire on the
Optionee's date of Termination. 

    3.4  No Obligation to Employ.  Nothing in this Agreement shall confer on Optionee any right to continue
in the employ of, or 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 Optionee's employment or other relationship at any time, with or without Cause. 

    4.  Manner of Exercise.  

    4.1  Stock Option Exercise Agreement.  To exercise this Option, Optionee (or in the case of exercise
after Optionee's death, Optionee's executor, administrator, heir or legatee, as the case may be) must deliver to the Company an executed stock option exercise agreement in the form attached hereto as  Exhibit A, or in such other form as may be approved by the Company from time to time (the "Exercise
Agreement"), which shall set forth, inter alia, Optionee's election to exercise this Option, the number of shares being
purchased, any restrictions imposed on the Shares and any representations, warranties and agreements regarding Optionee's investment intent and access to information as may be required by the Company
to comply with applicable securities laws. If someone other than Optionee exercises this Option, then such person must submit documentation reasonably acceptable to the Company that such person has
the right to exercise this Option. 

    4.2  Limitations on Exercise.  This Option may not be exercised unless such exercise is in compliance
with all applicable federal and state securities laws, as they are in effect on the date of exercise. This Option may not be exercised as to fewer than 100 Shares unless it is exercised as to all
Shares as to which this Option is then exercisable. 

    4.3  Payment.  The Exercise Agreement shall be accompanied by full payment of the Exercise Price for the
Shares being purchased in cash (by check), or where permitted by law: 

	(a)
	provided
that a public market for the Company's stock exists: (1) through a "same day sale" commitment from Optionee and a broker-dealer that is a member of the National
Association of Securities Dealers (an "NASD Dealer") whereby Optionee irrevocably elects to exercise this 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 Optionee and a NASD Dealer whereby Optionee irrevocably elects to exercise this 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

	(b)
	by
any combination of the foregoing. 

    4.4  Tax Withholding.  Prior to the issuance of the Shares upon exercise of this Option, Optionee must
pay or provide for any applicable federal or state withholding obligations of the Company. If the
Committee permits, Optionee may provide for payment of withholding taxes upon exercise of this Option by requesting that the Company retain Shares with a Fair Market Value 

3

 

equal to the minimum amount of taxes required to be withheld. In such case, the Company shall issue the net number of Shares to the Optionee by deducting the Shares retained from the Shares issuable
upon exercise. 

    4.5  Issuance of Shares.  Provided that the Exercise Agreement and payment are in form and substance
satisfactory to counsel for the Company, the Company shall issue the Shares registered in the name of Optionee, Optionee's authorized assignee, or Optionee's legal representative, and shall deliver
certificates representing the Shares with the appropriate legends affixed thereto. 

    5.  Compliance with Laws and Regulations.  The exercise of this Option and the issuance and transfer of
Shares shall be subject to compliance by the Company and Optionee with all applicable requirements of federal and state securities laws and with all applicable requirements of any stock exchange on
which the Company's Common Stock may be listed at the time of such issuance or transfer. Optionee understands that the Company is under no obligation to register or qualify the Shares with the
Securities and Exchange Commission, any state securities commission or any stock exchange to effect such compliance. 

    6.  Nontransferability of Option.  This Option may not be transferred in any manner other than by will or
by the laws of descent and distribution and may be exercised during the lifetime of Optionee only by Optionee. The terms of this Option shall be binding upon the executors, administrators, successors
and assigns of Optionee. 

    7.  Tax Consequences.  Set forth below is a brief summary of some of the federal and California tax
consequences of exercise of this Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE SHOULD CONSULT A TAX
ADVISOR BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES. IN PARTICULAR, IF UNVESTED SHARES ARE SUBJECT TO REPURCHASE BY THE COMPANY, OPTIONEE REPRESENTS THAT OPTIONEE HAS CONSULTED WITH
OPTIONEE'S OWN TAX ADVISER CONCERNING THE ADVISABILITY OF FILING AN 83(b) ELECTION WITH THE INTERNAL REVENUE SERVICE WHICH MUST BE FILED WITHIN THIRTY (30) DAYS OF THE PURCHASE OF SHARES TO BE
EFFECTIVE. 

    7.1  Exercise of Nonqualified Stock Option.  There may be a regular federal and California income tax
liability upon the exercise of this Option. Optionee will be treated as having received compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the fair market value
of the
Shares on the date of exercise over the Exercise Price. The Company will be required to withhold from Optionee's compensation or collect from Optionee and pay to the applicable taxing authorities an
amount equal to a percentage of this compensation income at the time of exercise. 

    7.2  Disposition of Shares.  If the Shares are held for more than twelve (12) months after the
date of the transfer of the Shares pursuant to the exercise of an NQSO, any gain realized on disposition of the Shares will be treated as long-term capital gain, as the case may be. 

    7.3  Section 83(b) Election for Unvested Shares.  With respect to Unvested Shares, which are
subject to the Repurchase Option, unless an election is filed by the Optionee with the Internal Revenue Service (and, if necessary, the proper state taxing authorities), within
30 days of the purchase of the Unvested Shares, electing pursuant to Section 83(b) of the Code (and similar state tax provisions, if applicable) to be taxed
currently on any difference between the Exercise Price of the Unvested Shares and their Fair Market Value on the date of purchase, there may be a recognition of taxable income (including, where
applicable, alternative minimum taxable income) to the Optionee, measured by the excess, if any, of the Fair Market Value of the Unvested Shares at the time they cease to be Unvested Shares, over the
Exercise Price of the Unvested Shares. 

4

 

    8.  Privileges of Stock Ownership.  Optionee shall not have any of the rights of a shareholder with
respect to any Shares until Optionee exercises this Option and pays the Exercise Price. 

    9.  Interpretation.  Any dispute regarding the interpretation of this Agreement shall be submitted by
Optionee or the Company to the Committee for review. The resolution of such a dispute by the Committee shall be final and binding on the Company and Optionee. 

    10.  Entire Agreement.  This Agreement and the Exercise Agreement constitute the entire agreement and
understanding of the parties hereto with respect to the subject matter hereof and supersede all prior understandings and agreements with respect to such subject matter. 

    11.  Notices.  Any notice required to be given or delivered to the Company under the terms of this
Agreement shall be in writing and addressed to the Corporate Secretary of the Company at its principal corporate offices. Any notice required to be given or delivered to Optionee shall be in writing
and addressed to Optionee at the address indicated above or to such other address as such party may designate in writing from time to time to the Company. All notices shall be deemed to have been
given or delivered upon: personal delivery; three (3) days after deposit in the United States mail by certified or registered mail (return receipt requested); one (1) business day after
deposit with any return receipt express courier (prepaid); or one (1) business day after transmission by rapifax or telecopier. 

    12.  Successors and Assigns.  The Company may assign any of its rights under this Agreement. This
Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement shall be binding upon
Optionee and Optionee's heirs, executors, administrators, legal representatives, successors and assigns. 

    13.  Governing Law.  This Agreement shall be governed by and construed in accordance with the internal
laws of the State of California, without regard to that body of law pertaining to choice of law or conflict of law. 

    14.  Acceptance.  Optionee hereby acknowledges receipt of a copy of this Agreement. Optionee has read and
understands the terms and provisions thereof, and accepts this Option subject to all the terms and conditions of this Agreement. Optionee acknowledges that there may be adverse tax consequences upon
exercise of this Option or disposition of the Shares and that the Company has advised Optionee to consult a tax advisor prior to such exercise or disposition. 

    15.  Modification, Extension or Renewal.  The Committee may modify, extend or renew this Option and
authorize the grant of new options in substitution therefor, provided that any such action may not, without the written consent of the Optionee, impair any of such Optionee's rights under this Option.
The Committee may reduce the Exercise Price of this Option without the consent of the Optionee affected by a written notice to them; provided, however,
that the Exercise Price may not be reduced below 85% of the Fair Market Value of the Shares on the date of grant. 

    16.  Certificates.  All certificates for Shares or other securities delivered upon exercise of this
Option 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. 

    17.  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 the
Exercise Price of and the number of Shares subject to this Option will be proportionately adjusted, subject to any required action by the Board or the Optionee 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 

5

 

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. 

    18.  Corporate Transactions.  

    18.1  Assumption or Replacement of Option 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 this
Option is assumed, converted or replaced by the successor corporation, which assumption will be binding on the Optionee), (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, this Option may be assumed, converted or replaced by the successor corporation (if any), which
assumption, conversion or replacement will be binding on the Optionee. In the alternative, the successor corporation may substitute equivalent options or provide substantially similar consideration to
the Optionee as was provided to other stockholders. The successor corporation may also issue, in place of outstanding Shares of the Company held by the Optionee, substantially similar shares or other
property subject to repurchase restrictions no less favorable to the Optionee. In the event such successor corporation (if any) refuses to assume or substitute this Option, as provided above, pursuant
to a transaction described in this subsection, this Option will expire on such transaction at such time and on such conditions as the Committee will determine; provided,
however, that the Committee may, in its sole discretion, provide that the vesting of the Shares issuable upon exercise of this Option will accelerate. If the Committee
exercises such discretion with respect to this Option, the Shares issuable upon exercise of this Option will become vested in full prior to the consummation of such event at such time and on such
conditions as the Committee determines, and if this Option is not exercised prior to the consummation of the corporate transaction, it shall terminate at such time as determined by the Committee. 

    18.2  Other Treatment of Option.  Subject to any greater rights granted to the Optionee under the
foregoing provisions of this section, in the event of the occurrence of any transaction described in Section 18.1, this Option will be treated as provided in the applicable agreement or plan of
merger, consolidation, dissolution, liquidation, or sale of assets. 

    19.  Amendment or Termination of the Agreement.  The Board may at any time terminate or amend this
Agreement in any respect; provided, however, that the Board will not, without the approval of the Optionee, amend this Agreement in any manner that
requires Optionee's approval. 

    20.  Definitions.  As used in this Agreement, the following terms will have the following meanings: 

     "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. 

    "Committee" means the Compensation Committee of the Board. 

     "Disability" means a disability, whether temporary or permanent, partial or total, within the meaning of Section 22(e)(3) of the Internal Revenue Code
of 1986, as amended, as determined by the Committee. 

6

 

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

	(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; or

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

    "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. 

     "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 Agreement with respect to the Optionee, that the
Optionee has for any reason ceased to provide services as an employee, officer, director, 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 the Optionee is on an approved leave of absence, the Committee may
make such provisions respecting suspension of vesting of this Option while on leave from the employ of the Company or a Subsidiary as it may deem appropriate, except that in no event may this Option
be exercised after the expiration of the term set forth in this Agreement. The Committee will have sole discretion to determine whether the Optionee has ceased to provide services and the effective
date on which the Optionee ceased to provide services (the "Termination Date"). 

7

 

    IN WITNESS WHEREOF, the Company has caused this Agreement to be executed in duplicate by its duly authorized representative and
Optionee has executed this Agreement in duplicate as of the Date of Grant. 

	SILICON IMAGE, INC.	 	OPTIONEE
	

By:	
 	

/s/ DANIEL K. ATLER   
	
 	

/s/ JAIME GARCIA-MEZA   
 (Signature)
	

Daniel K. Atler
 (Please print name)	
 	

Jaime Garcia-Meza
 (Please print name)
	

Chief Financial Officer
 (Please print title)	
 	

 

8

 
EXHIBIT A  

STOCK OPTION EXERCISE AGREEMENT  

9

 
Exhibit A  

SILICON IMAGE, INC.

Non-PLAN Stock Option Exercise Agreement  

    I hereby elect to purchase the number of shares of Common Stock of SILICON IMAGE, INC. (the "Company")
as set forth below: 

	

Optionee 
	
 	

Number of Shares Purchased: 

	

Social Security Number: 
	
 	

Purchase Price per Share: 

	

Address: 
	
 	

Aggregate Purchase Price: 

	

	
 	

Date of Option Agreement: 

	

Type of Option:	
 	

Nonqualified Stock Option
	
 	

Exact Name of Title to Shares: 

1.  Delivery of Purchase Price.  Optionee hereby delivers to the Company the Aggregate Purchase Price, to the extent
permitted in the Non-Plan Stock Option Agreement (the "Option Agreement") as follows (check as applicable and complete): 

	[  ]	 	in cash (by check) in the amount of $            , receipt of which is acknowledged by the Company;
	

[  ]	
 	

through a "same-day-sale" commitment, delivered herewith, from Optionee and the NASD Dealer named therein, in the amount of $            ; or
	

[  ]	
 	

through a "margin" commitment, delivered herewith from Optionee and the NASD Dealer named therein, in the amount of $            .

2.  Market Standoff Agreement  Optionee, if requested by the Company and an underwriter of Common Stock (or other
securities) of the Company, agrees not to sell or otherwise transfer or dispose of any Common Stock (or other securities) of the Company held by Optionee during the period requested by the managing
underwriter following the effective date of a registration statement of the Company filed
under the Securities Act, provided that all officers and directors of the Company are required to enter into similar agreements. Such agreement shall be in writing in a form satisfactory to the
Company and such underwriter. The Company may impose stop-transfer instructions with respect to the shares (or other securities) subject to the foregoing restriction until the end of such
period. 

3.  Tax Consequences.  OPTIONEE UNDERSTANDS THAT OPTIONEE MAY SUFFER ADVERSE TAX CONSEQUENCES AS A RESULT OF OPTIONEE'S
PURCHASE OR DISPOSITION OF THE SHARES. OPTIONEE REPRESENTS THAT OPTIONEE HAS CONSULTED WITH ANY TAX CONSULTANT(S) OPTIONEE DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR DISPOSITION OF THE SHARES
AND THAT OPTIONEE IS NOT RELYING ON THE COMPANY FOR ANY TAX ADVICE.

4.  Entire Agreement.  The Option Agreement is incorporated herein by reference. This Exercise Agreement and the Option
Agreement constitute the entire agreement and understanding of the parties and supersede in their entirety all prior understandings and agreements of the Company and Optionee with respect to the
subject matter hereof, and are governed by California law except for that body of law pertaining to choice of law or conflict of law. 

	Date: 
	 	 
	 	 	
Signature of Optionee

10

 
Spousal Consent  

    I acknowledge that I have read the foregoing Non-Plan Stock Option Exercise Agreement (the
"Agreement") and that I know its contents. I hereby consent to and approve all the provisions of the Agreement, and agree that the shares of the Common
Stock of Silicon Image, Inc. purchased thereunder (the "Shares") and any interest I may have in such Shares are subject to all the provisions of
the Agreement. I will take no action at any time to hinder operation of the Agreement on these Shares or any interest I may have in or to them. 

	 	 	Date: 

	
Signature of Optionee's Spouse	 	 
	

Spouse's Name—Typed or Printed	
 	

 
	

Optionee's Name—Typed or Printed	
 	

 

11

QuickLinks

Exhibit 10.34Prepared by MERRILL CORPORATION

QuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.35    
  

SILICON IMAGE, INC.

NON-PLAN STOCK OPTION AGREEMENT  

    This Stock Option Agreement (this "Agreement") is made and entered into as of the date of grant set forth below
(the "Date of Grant") by and between Silicon Image, Inc., a Delaware corporation (the "Company"),
and the optionee named below ("Optionee"). Capitalized terms not defined herein shall have the meaning ascribed to them in Section 20. 

	
Optionee:	
 	

Badar Baqai

	

Social Security Number:	
 	

	

Optionee's Address:	
 	

	

 	
 	

	

Total Option Shares:	
 	

350,000

	

Exercise Price Per Share:	
 	

$5.625

	

Date of Grant:	
 	

April 4, 2001

	

Vesting Start Date:	
 	

April 4, 2001

	

Expiration Date:	
 	

April 3, 2007

	

Type of Stock Option:	
 	

NQSO

    1.  Grant of Option.  The Company hereby grants to Optionee an option (this
"Option") to purchase up to the total number of shares of common stock of the Company, $0.001 par value ("Common
Stock"), set forth above (collectively, the "Shares") at the Exercise Price Per Share set forth above (the
"Exercise Price"), subject to all of the terms and conditions of this Agreement. 

    2.  Vesting; Exercise Period.  

    2.1  Vesting of Shares.  This Option shall be exercisable as it vests. Subject to the terms and
conditions of this Agreement, this Option shall vest and become exercisable as to portions of the Shares as follows: (a) this Option shall not be exercisable with respect to any of the Shares
until October 4, 2001 (the "First Vesting Date"); (b) if Optionee has continuously provided services to the Company, or any Parent or
Subsidiary of the Company, then on the First Vesting Date, this Option shall become exercisable as to one eighth (1/8th) of the Shares (rounded to the nearest whole share); and
(c) thereafter this Option shall become exercisable as to an additional one forty-eighth (1/48th) of the Shares (rounded to the nearest whole share) at the end of each full
succeeding month, provided that Optionee has continuously provided services to the Company, or any Parent or Subsidiary of the Company. This Option shall cease to vest upon Optionee's Termination and
Optionee shall in no event be entitled
under this Option to purchase a number of shares of the Company's Common Stock greater than the "Total Option Shares." 

    2.2  Expiration.  This Option shall expire on the Expiration Date set forth above and must be exercised,
if at all, on or before the earlier of the Expiration Date or the date on which this Option is earlier terminated in accordance with the provisions of Section 3,  provided, however, that this Option
will be not be exercisable after the expiration of ten (10) years from the Date of Grant. 

    3.  Termination.  

 

    3.1  Termination for Any Reason Except Death, Disability or Cause.  If Optionee is Terminated for any
reason except Optionee's death, Disability or Cause, then this Option, to the extent (and only to the extent) that it is vested in accordance with the schedule set forth in Section 2.1 of this
Agreement on the date of Termination, may be exercised by Optionee no later than three (3) months after the date of Termination, but in any event no later than the Expiration Date. 

    3.2  Termination Because of Death or Disability.  If Optionee is Terminated because of death or
Disability of Optionee (or the Optionee dies within three (3) months after a Termination other than because of death, Disability or Cause), then this Option, to the extent that it is vested in
accordance with the schedule set forth in Section 2.1 of this Agreement on the date of Termination, may be exercised by Optionee (or Optionee's legal representative) no later than twelve
(12) months after the date of Termination, but in any event no later than the Expiration Date. 

    3.3  Termination for Cause.  If Optionee is Terminated for Cause, this Option will expire on the
Optionee's date of Termination. 

    3.4  No Obligation to Employ.  Nothing in this Agreement shall confer on Optionee any right to continue
in the employ of, or 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 Optionee's employment or other relationship at any time, with or without Cause. 

    4.  Manner of Exercise.  

    4.1  Stock Option Exercise Agreement.  To exercise this Option, Optionee (or in the case of exercise
after Optionee's death, Optionee's executor, administrator, heir or legatee, as the case may be) must deliver to the Company an executed stock option exercise agreement in the form attached hereto as  Exhibit A, or in such other form as may be approved by the Company from time to time (the "Exercise
Agreement"), which shall set forth, inter alia, Optionee's election to exercise this Option, the number of shares being
purchased, any restrictions imposed on the Shares and any representations, warranties and agreements regarding Optionee's investment intent and access to information as may be required by the Company
to comply with applicable securities laws. If someone other than Optionee exercises this Option, then such person must submit documentation reasonably acceptable to the Company that such person has
the right to exercise this Option. 

    4.2  Limitations on Exercise.  This Option may not be exercised unless such exercise is in compliance
with all applicable federal and state securities laws, as they are in effect on the date of exercise. This Option may not be exercised as to fewer than 100 Shares unless it is exercised as to all
Shares as to which this Option is then exercisable. 

    4.3  Payment.  The Exercise Agreement shall be accompanied by full payment of the Exercise Price for the
Shares being purchased in cash (by check), or where permitted by law: 

	(a)
	provided
that a public market for the Company's stock exists: (1) through a "same day sale" commitment from Optionee and a broker-dealer that is a member of the National
Association of Securities Dealers (an "NASD Dealer") whereby Optionee irrevocably elects to exercise this 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 Optionee and a NASD Dealer whereby Optionee irrevocably elects to exercise this 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 

2

 

Dealer
irrevocably commits upon receipt of such Shares to forward the exercise price directly to the Company; or 

	(b)
	by
any combination of the foregoing. 

    4.4  Tax Withholding.  Prior to the issuance of the Shares upon exercise of this Option, Optionee must
pay or provide for any applicable federal or state withholding obligations of the Company. If the Committee permits, Optionee may provide for payment of withholding taxes upon exercise of this Option
by requesting that the Company retain Shares with a Fair Market Value equal to the minimum
amount of taxes required to be withheld. In such case, the Company shall issue the net number of Shares to the Optionee by deducting the Shares retained from the Shares issuable upon exercise. 

    4.5  Issuance of Shares.  Provided that the Exercise Agreement and payment are in form and substance
satisfactory to counsel for the Company, the Company shall issue the Shares registered in the name of Optionee, Optionee's authorized assignee, or Optionee's legal representative, and shall deliver
certificates representing the Shares with the appropriate legends affixed thereto. 

    5.  Compliance with Laws and Regulations.  The exercise of this Option and the issuance and transfer of
Shares shall be subject to compliance by the Company and Optionee with all applicable requirements of federal and state securities laws and with all applicable requirements of any stock exchange on
which the Company's Common Stock may be listed at the time of such issuance or transfer. Optionee understands that the Company is under no obligation to register or qualify the Shares with the
Securities and Exchange Commission, any state securities commission or any stock exchange to effect such compliance. 

    6.  Nontransferability of Option.  This Option may not be transferred in any manner other than by will or
by the laws of descent and distribution and may be exercised during the lifetime of Optionee only by Optionee. The terms of this Option shall be binding upon the executors, administrators, successors
and assigns of Optionee. 

    7.  Tax Consequences.  Set forth below is a brief summary of some of the federal and California tax
consequences of exercise of this Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE SHOULD CONSULT A TAX
ADVISOR BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES. 

    7.1  Exercise of Nonqualified Stock Option.  There may be a regular federal and California income tax
liability upon the exercise of this Option. Optionee will be treated as having received compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the fair market value
of the Shares on the date of exercise over the Exercise Price. The Company will be required to withhold from Optionee's compensation or collect from Optionee and pay to the applicable taxing
authorities an amount equal to a percentage of this compensation income at the time of exercise. 

    7.2  Disposition of Shares.  If the Shares are held for more than twelve (12) months after the
date of the transfer of the Shares pursuant to the exercise of an NQSO, any gain realized on disposition of the Shares will be treated as long-term capital gain, as the case may be. 

    8.  Privileges of Stock Ownership.  Optionee shall not have any of the rights of a shareholder with
respect to any Shares until Optionee exercises this Option and pays the Exercise Price. 

    9.  Interpretation.  Any dispute regarding the interpretation of this Agreement shall be submitted by
Optionee or the Company to the Committee for review. The resolution of such a dispute by the Committee shall be final and binding on the Company and Optionee. 

3

 

    10.  Entire Agreement.  This Agreement and the Exercise Agreement constitute the entire agreement and
understanding of the parties hereto with respect to the subject matter hereof and supersede all prior understandings and agreements with respect to such subject matter. 

    11.  Notices.  Any notice required to be given or delivered to the Company under the terms of this
Agreement shall be in writing and addressed to the Corporate Secretary of the Company at its principal corporate offices. Any notice required to be given or delivered to Optionee shall be in writing
and addressed to Optionee at the address indicated above or to such other address as such party may designate in writing from time to time to the Company. All notices shall be deemed to have been
given or delivered upon: personal delivery; three (3) days after deposit in the United States mail by certified or registered mail (return receipt requested); one (1) business day after
deposit with any return receipt express courier (prepaid); or one (1) business day after transmission by rapifax or telecopier. 

    12.  Successors and Assigns.  The Company may assign any of its rights under this Agreement. This
Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement shall be binding upon
Optionee and Optionee's heirs, executors, administrators, legal representatives, successors and assigns. 

    13.  Governing Law.  This Agreement shall be governed by and construed in accordance with the internal
laws of the State of California, without regard to that body of law pertaining to choice of law or conflict of law. 

    14.  Acceptance.  Optionee hereby acknowledges receipt of a copy of this Agreement. Optionee has read and
understands the terms and provisions thereof, and accepts this Option subject to all the terms and conditions of this Agreement. Optionee acknowledges that there may be adverse tax consequences upon
exercise of this Option or disposition of the Shares and that the Company has advised Optionee to consult a tax advisor prior to such exercise or disposition. 

    15.  Modification, Extension or Renewal.  The Committee may modify, extend or renew this Option and
authorize the grant of new options in substitution therefor, provided that any such action may not, without the written consent of the Optionee, impair any of such Optionee's rights under this Option.
The Committee may reduce the Exercise Price of this Option without the consent of the Optionee affected by a written notice to them; provided, however,
that the Exercise Price may not be reduced below 85% of the Fair Market Value of the Shares on the date of grant. 

    16.  Certificates.  All certificates for Shares or other securities delivered upon exercise of this
Option 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. 

    17.  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 the
Exercise Price of and the number of Shares subject to this Option will be proportionately adjusted, subject to any required action by the Board or the Optionee 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. 

    18.  Corporate Transactions.  

    18.1  Assumption or Replacement of Option 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 

4

 

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 this
Option is assumed, converted or replaced by the successor corporation, which assumption will be binding on the Optionee), (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, this Option may be assumed, converted or replaced by the successor corporation (if any), which
assumption, conversion or replacement will be binding on the Optionee. In the alternative, the successor corporation may substitute equivalent options or provide substantially similar consideration to
the Optionee as was provided to other stockholders. The successor corporation may also issue, in place of outstanding Shares of the Company held by the Optionee, substantially similar shares or other
property subject to repurchase restrictions no less favorable to the Optionee. In the event such successor corporation (if any) refuses to assume or substitute this Option, as provided above, pursuant
to a transaction described in this subsection, this
Option will expire on such transaction at such time and on such conditions as the Committee will determine; provided, however, that the Committee may,
in its sole discretion, provide that the vesting of this Option will accelerate. If the Committee exercises such discretion with respect to this Option, this Option 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 this Option is not exercised prior to the consummation of the corporate transaction, it
shall terminate at such time as determined by the Committee. 

    18.2  Other Treatment of Option.  Subject to any greater rights granted to the Optionee under the
foregoing provisions of this section, in the event of the occurrence of any transaction described in Section 18.1, this Option will be treated as provided in the applicable agreement or plan of
merger, consolidation, dissolution, liquidation, or sale of assets. 

    19.  Amendment or Termination of the Agreement.  The Board may at any time terminate or amend this
Agreement in any respect; provided, however, that the Board will not, without the approval of the Optionee, amend this Agreement in any manner that requires Optionee's approval. 

    20.  Definitions.  As used in this Agreement, the following terms will have the following meanings: 

    "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. 

     "Committee" means the Compensation Committee of the Board. 

    "Disability" means a disability, whether temporary or permanent, partial or total, within the meaning of Section 22(e)(3) of the Internal Revenue Code
of 1986, as amended, as determined by the Committee. 

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

	(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; 

5

 

	(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; or

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

     "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. 

     "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 Agreement with respect to the Optionee, that the
Optionee has for any reason ceased to provide services as an employee, officer, director, 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 the Optionee is on an approved leave of absence, the Committee may
make such provisions respecting suspension of vesting of this Option while on leave from the employ of the Company or a
Subsidiary as it may deem appropriate, except that in no event may this Option be exercised after the expiration of the term set forth in this Agreement. The Committee will have sole discretion to
determine whether the Optionee has ceased to provide services and the effective date on which the Optionee ceased to provide services (the "Termination
Date"). 

    IN WITNESS WHEREOF, the Company has caused this Agreement to be executed in duplicate by its duly authorized representative and
Optionee has executed this Agreement in duplicate as of the Date of Grant. 

	SILICON IMAGE, INC.	 	OPTIONEE
	

By:	
 	

/s/ DANIEL K. ATLER   
	
 	

/s/ BADAR BAQAI   
 (Signature)
	

Daniel K. Atler
 (Please print name)	
 	

Badar Baqai
 (Please print name)
	

Chief Financial Officer
 (Please print title)	
 	

 

6

 
EXHIBIT A  

STOCK OPTION EXERCISE AGREEMENT  

7

 
Exhibit A  

SILICON IMAGE, INC.

Non-PLAN Stock Option Exercise Agreement  

    I hereby elect to purchase the number of shares of Common Stock of SILICON IMAGE, INC. (the "Company")
as set forth below: 

	Optionee 
	 	Number of Shares Purchased: 

	Social Security Number: 
	 	Purchase Price per Share: 

	Address: 
	 	Aggregate Purchase Price: 

	
	 	Date of Option Agreement: 

	Type of Option: Nonqualified Stock Option 
	 	Exact Name of Title to Shares: 

1.  Delivery of Purchase Price.  Optionee hereby delivers to the Company the Aggregate Purchase Price, to the extent
permitted in the Non-Plan Stock Option Agreement (the "Option Agreement") as follows (check as applicable and complete): 

	[  ]	 	in cash (by check) in the amount of $            , receipt of which is acknowledged by the Company;
	[  ]	 	through a "same-day-sale" commitment, delivered herewith, from Optionee and the NASD Dealer named therein, in the amount of $            ; or
	[  ]	 	through a "margin" commitment, delivered herewith from Optionee and the NASD Dealer named therein, in the amount of $            .

2.  Market Standoff Agreement.  Optionee, if requested by the Company and an underwriter of Common Stock (or other
securities) of the Company, agrees not to sell or otherwise transfer or dispose of any Common Stock (or other securities) of the Company held by Optionee during the period requested by the managing
underwriter following the effective date of a registration statement of the Company filed under the Securities Act, provided that all officers and directors of the Company are required to enter into
similar agreements. Such agreement shall be in writing in a form satisfactory to the Company and such underwriter. The Company may impose stop-transfer instructions with respect to the
shares (or other securities) subject to the foregoing restriction until the end of such period. 

3.  Tax Consequences.  OPTIONEE UNDERSTANDS THAT OPTIONEE MAY SUFFER ADVERSE TAX CONSEQUENCES AS A RESULT OF OPTIONEE'S
PURCHASE OR DISPOSITION OF THE SHARES. OPTIONEE REPRESENTS THAT OPTIONEE HAS CONSULTED WITH ANY TAX CONSULTANT(S) OPTIONEE DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR DISPOSITION OF THE SHARES
AND THAT OPTIONEE IS NOT RELYING ON THE COMPANY FOR ANY TAX ADVICE.

4.  Entire Agreement.  The Option Agreement is incorporated herein by reference. This Exercise Agreement and the Option
Agreement constitute the entire agreement and understanding of the parties and supersede in their entirety all prior understandings and agreements of the Company and Optionee with respect to the
subject matter hereof, and are governed by California law except for that body of law pertaining to choice of law or conflict of law. 

	Date:	 	 
	
	 	

	 	 	Signature of Optionee

8

 
Spousal Consent  

    I acknowledge that I have read the foregoing Stock Option Exercise Agreement (the "Agreement") and that I know
its contents. I hereby consent to and approve all the provisions of the Agreement, and agree that the shares of the Common Stock of Silicon Image, Inc. purchased thereunder (the
"Shares") and any interest I may have in such Shares are subject to all the provisions of the Agreement. I will take no action at any time to hinder
operation of the Agreement on these Shares or any interest I may have in or to them. 

	 	 	Date:
	
	 	

	Signature of Optionee's Spouse	 	 
	

Spouse's Name—Typed or Printed	
 	

 
	

Optionee's Name—Typed or Printed	
 	

 

9

QuickLinks

Exhibit 10.35

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00025-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00025-of-00352.parquet"}]]