TRANSITIONAL EMPLOYMENT AND
SEPARATION AGREEMENT
This Transitional
Employment and Separation Agreement (“ Agreement
” ) is entered into as of April 5, 2007, by and
between Robert Freeman (“ Employee ”) and
Silicon Image, Inc. (“ Company ”)
(collectively referred to as the “ Parties
”).
WHEREAS ,
Employee has been employed by the Company as its Chief Financial
Officer pursuant to the offer letter by and between Employee and
the Company dated November 8, 2005 (the “ Offer
Letter ”);
WHEREAS ,
Employee wishes to retire from employment with the Company
following a transitional period of employment, and the Parties wish
to agree upon the terms and conditions applicable to such
transitional period of employment and upon Employee’s
termination of employment with the Company;
NOW
THEREFORE , in consideration of the promises made herein, the
Parties hereby agree as follows:
1.
Transitional Employment . Employee shall continue in active
full-time employment with the Company for the “
Transitional Period ”, which shall commence on
April 5, 2007 (the “ Transitional Date
”) and which shall continue until September 30, 2007,
unless earlier terminated for “Cause” (as hereinafter
defined) or extended by the mutual agreement of the Parties (in any
case, the “ Termination Date
”).
2.
Resignation of Titles and Positions . Effective as of the
Termination Date, Employee will retire from employment with the
Company, and, if requested earlier by the Company during the
Transitional Period, relinquish all titles and positions then held
by Employee with the Company or any subsidiary of the
Company.
3.
Compensation and Benefits During Transitional Period .
During the Transitional Period, Employee will continue to receive
payment of his current base salary and will continue to participate
in applicable Company employee benefit plans to the extent of his
participation and on the terms and conditions in effect immediately
prior to the commencement of the Transitional Period. During the
Transitional Period, Employee’s stock options will continue
to vest in accordance with their terms, provided, however, that
Employee shall not receive any additional options or other rights
to purchase shares of the Company’s common stock (except for
shares acquired in connection with participation under the
Company’s Employee Stock Purchase Plan) following the
Transitional Date.
4.
Payments and Benefits .
(a)
Accrued Payments and Benefits . Upon the termination of
Employee’s employment with the Company for any reason, the
Company shall pay to Employee all amounts and benefits that have
accrued or were earned but remain unpaid through the Termination
Date in respect of salary and unreimbursed expenses, including
accrued and unused vacation.
(b)
Separation Payments . Upon the conclusion of the
Transitional Period, and subject to Employee’s delivery to
the Company of a signed general release of claims in favor of the
Company, in a form acceptable to the Company, which shall be
substantially in the form attached hereto as Exhibit 1 (the
“ Release ”), following expiration of the
statutory rescission period without any rescission of the Release
the Company will provide Employee with the Severance Payments (as
defined in the Offer Letter), on the terms and conditions set forth
in the Offer Letter.
Notwithstanding
the foregoing, Employee acknowledges and agrees that in the event
that the Company terminates Employee’s employment for Cause
(as defined in the Offer Letter and as determined in its sole
discretion by the Board acting in good faith) or Employee resigns
for any reason, Employee will not be entitled to the Severance
Payments.
(c)
Company Stock Options .
(i)
Vested Options . Employee shall have that period of time
following the Termination Date specified in the governing written
stock option agreement to exercise any options to purchase shares
of the Company’s common stock (“ Options
”) which are vested, outstanding and not exercised as of the
Termination Date, including any Options the vesting of which is
accelerated as part of the Severance Payments on the terms and
conditions set forth in the Offer Letter.
(ii)
Unvested Options . Any Options which remain unvested as of
the Termination Date (excluding any Options the vesting of which is
accelerated as part of the Severance Payments) shall expire
effective as of the Termination Date.
(d)
Benefits . Employee’s health insurance benefits will
cease on the Termination Date, subject to Employee’s
eligibility and timely election to continue group health coverage
under COBRA, in which case Employee will be responsible for the
payment of all further COBRA premiums (except as provided under
Section 4(b) above). The Parties acknowledge and agree that, as
part of the Severance Payments and on the terms and conditions set
forth herein and in the Offer Letter, the Company shall pay
Employee’s COBRA insurance premiums should Employee timely
elect to continue group health coverage under COBRA, for up to six
(6) months following the Termination Date to the extent that
covered persons remaining eligible for such coverage.
Employee’s participation in all other employee benefits and
incidents of employment will cease on the Termination Date.
Employee will cease accruing employee benefits, including, but not
limited to, vacation time and paid time off, as of the Termination
Date.
5. No
Mitigation Required . The parties agree that some of the
payments and benefits provided to Employee under the Offer Letter,
as referenced in Section 4, are over and above anything owed
to Employee by law and, pursuant to the terms of the Offer Letter,
are offered in exchange for and conditioned upon Employee’s
execution of the Release. Employee shall not be
required to
seek other employment or to attempt in any way to reduce amounts
payable to him pursuant to this Agreement. Further, the amount of
benefits provided under this Agreement shall not be reduced by any
compensation earned by or other benefits provided to Employee as a
result of employment by another employer following the Termination
Date.
6.
Confidential Information . During the Transitional Period
and following the Termination Date, Employee shall continue to
maintain the confidentiality of all confidential and proprietary
information of the Company and shall continue to comply with the
terms and conditions of the Employee Inventions and Confidentiality
Agreement between Employee and the Company. Employee shall return
all of the Company’s property and confidential and
proprietary information in his/her possession to the Company on the
Termination Date.
7. No
Cooperation . Employee agrees that he will not counsel or
assist any attorneys or their clients in the presentation or
prosecution of any disputes, differences, grievances, claims,
charges, or complaints by any third party against the Company
and/or any officer, director, employee, agent, representative,
shareholder or attorney of the Company, unless under a subpoena or
other court order to do so. Employee further agrees both to
immediately notify the Company upon receipt of any court order,
subpoena, or any legal discovery device that seeks or might require
the disclosure or production of the existence or terms of this
Agreement, and to furnish, within three (3) business days of
its receipt, a copy of such subpoena or legal discovery device to
the Company.
8.
Non-Solicitation . Employee agrees that for a period of
eighteen (18) months immediately following the Termination
Date, Employee shall not either directly or indirectly solicit,
induce, recruit or encourage any of the Company’s employees
to leave their employment, or take away such employees, or attempt
to solicit, induce, recruit, encourage, or take away employees of
the Company, either for him/herself or any other person or entity.
Employee further agrees not to otherwise interfere with the
relationship of the Company or any of its subsidiaries or
affiliates with any person who, to the knowledge of Employee, is
employed by or otherwise engaged to perform services for the
Company or its subsidiaries or affiliates (including, but not
limited to, any independent sales representatives or organizations)
or who is, or was within the then most recent prior twelve-month
period, a customer or client of the Company, or any of its
subsidiaries.
9.
Costs . The Parties shall each bear their own costs, expert
fees, attorneys’ fees and other fees incurred in connection
with this Agreement except as specifically set forth
herein.
10.
Post-Termination Assistance . Following the Termination
Date, and upon reasonable notice, Employee shall provide such
information and assistance to the Company as may reasonably be
requested by the Company in connection with any audit, governmental
investigation or litigation in which it or any of its subsidiaries
is or may become a party; provided that (i) the
Company agrees to reimburse Employee for any related out-of-pocket
expenses, including travel expenses, and (ii) any such
assistance may not unreasonably interfere with Employee’s
then-current employment.
11. Tax
Consequences . The Company makes no representations or
warranties with respect to the tax consequences of the payment of
any sums to Employee under the terms of this Agreement or the Offer
Letter. Employee agrees and understands that he is responsible for
payment, if any, of local, state and/or federal taxes on the sums
paid hereunder by the Company and any penalties or assessments
thereon and that all such sums shall be paid less all applicable
withholdings and
deductions.
Employee further agrees to indemnify and hold the Company harmless
from any claims, demands, deficiencies, penalties, assessments,
executions, judgments, or recoveries by any government agency
against the Company for any amounts claimed due on account of
Employee’s failure to pay federal or state taxes or damages
sustained by the Company by reason of any such claims, including
reasonable attorneys’ fees.
12.
Arbitration . The parties agree that any controversy or
claim arising out of or relating to this Agreement, or the breach
thereof, shall be submitted to the American Arbitration Association
(“ AAA ”) and that a neutral arbitrator
will be selected in a manner consistent with its National Rules for
the Resolution of Employment Disputes. The arbitration proceedings
will allow for discovery according to the rules set forth in the
National Rules for the Resolution of Employment Disputes (the
“ Rules ”). All arbitration proceedings
shall be conducted in Santa Clara County, California.
Except as provided
by the Rules, arbitration shall be the sole, exclusive and final
remedy for any dispute between Employee and the Company.
Accordingly, except
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