Document:

EXHIBIT 10.79

 

Description
of Supplemental Compensation Arrangement with Philip A. Vachon

 

On November 4,
2004, the Compensation Committee of Liberate Technologies approved a
supplemental compensation arrangement for Philip A. Vachon, an executive
officer of Liberate, in connection with his foreign assignment.  The arrangement is composed of: (1) a
one-time payment of approximately $84,000 for relocation and certain other
foreign living and related expenses incurred through October 31, 2004
(including a tax gross-up); and (2) ongoing monthly payments of $12,000, in
addition to his salary, to cover foreign living and related expenses (including
a tax gross-up).  The monthly payments
will continue so long as Mr. Vachon remains on his foreign assignment or until
the Compensation Committee approves a change to the arrangement.EXHIBIT
10.80

 

Addendum
No. 1 to the

April 11, 2003 Employment Letter

 

TAX EQUALIZATION

 

January 5, 2005

 

This Addendum No. 1 (the “Addendum”) to the Employment Letter dated April 11,
2003 (the “Letter”) between Philip A. Vachon (“you”) and Liberate Technologies
(“Liberate) confirms our mutual understanding and agreement regarding the tax
equalization policy that applies to your international assignment with
Liberate, in London, Ontario, Canada.  The effective start date of your
international assignment was July 2003.

 

Except for the tax equalization provisions set forth herein, this
Addendum does not modify or amend the terms and conditions of the Letter.  In particular, nothing in this Addendum will
affect the at-will nature of your employment with Liberate.  The terms and conditions outlined in this
addendum will be in effect only for the period of your international
assignment.

 

Subject to the terms and conditions of this Addendum, the parties agree
as follows:

 

1.  The
personal income tax obligation for which you are responsible for each tax year
of your international assignment will be the tax burden that you would have
been responsible for had you remained in the United States domestic service.
 In general, your income tax liability will be limited to the theoretical
tax amount you would have paid had you worked in the United States (State of
Washington) at your salary level and personal income level for that year,
exclusive of international assignment expense reimbursements.

 

2. 
Liberate will provide tax equalization equal to the difference between
your actual income tax obligation and the income tax obligation you would have
been responsible for had you worked in the United States.

 

3. 
Notwithstanding the foregoing, you will be solely responsible for income
taxes for any tax year (and Liberate will not provide tax equalization) with
respect to income in excess of $1,000,000.00 in the aggregate from sources
other than Liberate.

 

4. 
Liberate will select the accounting firm that will determine the amount
of tax equalization.

 

In witness whereof, the parties have executed this Addendum as of the
date first set forth above.

 

	
  LIBERATE TECHNOLOGIES

  	
  PHILIP A. VACHON

  
	
   

  	
   

  
	
  By:

  	
  /s/ David Lockwood

  	
   

  	
  /s/ Philip A. Vachon

  	
   

  
	
   

  	
   

  
	
  Print Name:

  	
  David Lockwood

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
  Chief Executive OfficerExhibit 10.1

 

	
   

  	
  Silicon Image, Inc.

  
	
  Notice of Grant of Stock Options

  	
  1060 E. Arques Ave.

  
	
   

  	
  Sunnyvale, CA 94086

  
	
   

  	
   

  	
   

  
	
  Optionee

  	
  Option Number:

  	
  «Number»

  
	
  «Name»

  	
  Plan:

  	
  1999

  
	
   

  	
  ID:

  	
  «ID»

  

 

You have been granted an option to buy Silicon Image, Inc. (the “Company”)
Common Stock.  The pertinent details of
your stock option grant are outlined below:

 

	
  Date of Grant:

  	
  «Date»

  
	
   

  	
   

  
	
  Total Option Shares:

  	
  «Shares»

  
	
   

  	
   

  
	
  Exercise Price Per Share:

  	
  «Price»

  
	
   

  	
   

  
	
  First Vest Date:

  	
  «M_1st_vest»

  
	
   

  	
   

  
	
  Expiration Date:

  	
  Option will expire immediately on termination for cause, 3 months
  following termination for any reason
  except death or disability, but in no event later than «Expire».

  (refer to Section 3 of the Stock Option Agreement)

  
	
   

  	
   

  
	
  Type of Stock Option:

  	
  [Incentive Stock Option/Nonqualified Stock Option]

  

 

Vesting and Exercise Period:

 

Provided that you have
continuously provided services to the Company, or any Parent or Subsidiary (as
those terms are defined in the Silicon Image, Inc. 1999 Equity Incentive Plan),
this Option shall vest and become exercisable as follows: [Vesting Schedule to be provided here.]

 

Acceptance:

 

Optionee hereby acknowledges
receipt of a copy of the Silicon Image, Inc. 1999 Equity Incentive Plan (the “Plan”),
Plan Prospectus and the Stock Option Agreement (the “Agreement”).  Please refer to the Plan and Plan Prospectus
on our intranet website at: http://woodside/Finance/stock_page.htm.
The Agreement is the contract that
fixes the terms of your option, including the purchase price and period over
which your option can be exercised (purchased). Optionee has read and
understands the terms and provisions thereof, and accepts this Option subject
to all terms and conditions of the Plan and the 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.

 

Please sign this Notice of Grant of Stock Options and return it to stock
administration.  Please retain for your
files the copy of this notice stapled to the stock option agreement. You are
not obligated to purchase these shares; stock administration requires that this
document be on file prior to purchase of the shares.

 

	
  _______________________________________

  	
   

  
	
   

  	
   

  
	
  Silicon Image, Inc.

  	
   

  
	
   

  	
   

  
	
  _______________________________________

  	
   

  
	
   

  	
   

  
	
  Print Name and Title

  	
   

  
	
   

  	
   

  
	
  _______________________________________

  	
   

  
	
   

  	
   

  
	
  «Name»

  	
   

  

 

 

SILICON IMAGE, INC.

 

1999 EQUITY INCENTIVE PLAN

 

STOCK OPTION AGREEMENT

 

This Stock Option Agreement (this “Agreement”) is made and entered into
as of the Date of Grant set forth in the Notice of Grant of Stock Options (the “Notice”) by and between Silicon
Image, Inc., a Delaware corporation (the “Company”),
and the Optionee.  Capitalized terms not
defined herein shall have the meanings ascribed to them in the Company’s 1999
Equity Incentive Plan (the “Plan”).

 

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 set forth in the
Notice as Total Option Shares (collectively, the “Shares”)
at the Exercise Price Per Share (the “Exercise Price”)
set forth in the Notice, subject to the terms and conditions of this Agreement
and the Plan.

 

2.             Vesting;
Exercise Period.

 

2.1              Vesting of Shares.  This Option shall be exercisable as it vests,
unless otherwise indicated in the Notice. 
Subject to the terms and conditions of the Plan and this Agreement, this
Option shall vest and become exercisable pursuant to the vesting schedule
specified in the Notice.   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              Vesting of
Options.  Shares that are vested
pursuant to the schedule set forth in the Notice are “Vested Shares.”  Shares that are not vested pursuant to the
schedule set forth in the Notice are “Unvested Shares.”

 

2.3              Expiration.  This Option shall expire on the Expiration
Date set forth in the Notice and must be exercised, if at all, on or before the
earlier of the Expiration Date or the date on which this Option is terminated
in accordance with the provisions of Section 3 hereof.

 

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 on the
Termination Date, may be exercised by Optionee no later than three (3) months
after the Termination Date, but in no event 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
Termination other than for Disability or Cause), then this Option, to the
extent that it is vested on the Termination Date, may be exercised by Optionee
(or Optionee’s legal

 

 

representative or authorized assignee) no
later than twelve (12) months after the Termination Date, but in no event 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 the Plan or 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 legal representative or
authorized assignee) 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 in effect on the date of exercise. 
This Option may not be exercised for less than 100 Shares, unless it is
exercised as to all Shares then exercisable.

 

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

 

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

 

(b)                       by surrender of shares of the
Company’s Common Stock that either: (1) have been owned by Optionee 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 Optionee in the open public market; and (3) are clear
of all liens, claims, encumbrances or security interests;

 

(c)        by
waiver of compensation due or accrued to Optionee for services rendered;

 

(d)                       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 an 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

 

(f)         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. 
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.

 

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 under the terms and conditions of the Plan or 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 legal representative or authorized
assignee of Optionee.

 

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

 

7.1              Exercise of Nonqualified Stock Option.  To the extent this Option does not qualify as
an Incentive Stock Option, there may be a regular federal income tax liability
upon the exercise of this Option. 
Optionee will be treated as having received compensation

 

 

(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 may 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 at the time of exercise.

 

7.2              Disposition of Shares.  The following tax consequences may apply upon
disposition of the Shares.

 

Nonqualified Stock Options.  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 a Non-Qualified Stock Option, any gain realized on disposition of
the Shares will be treated as a long-term capital gain.

 

8.             Privileges of Stock Ownership.  Optionee shall not have any of the rights of
a stockholder with respect to any Shares until the Shares are issued to
Optionee.

 

9.             Interpretation.  Any dispute regarding the interpretation of
this Agreement shall be submitted by Optionee or the Company to the
Compensation 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.  The Plan is incorporated herein by
reference.  This Agreement, the Notice,
the Plan 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 on the Notice 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 facsimile.

 

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 legal representatives or authorized assignee.

 

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.

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