Exhibit 10.01
INDEMNITY AGREEMENT
This Indemnity Agreement (this "AGREEMENT"), dated as of __________,
1999, is made by and between Silicon Image, Inc., a Delaware corporation (the
"COMPANY"), and _________________________, a director and/or officer of the
Company (the "INDEMNITEE").
RECITALS
A. The Company is aware that competent and experienced persons are
increasingly reluctant to serve as directors or officers of corporations
unless they are protected by comprehensive liability insurance and/or
indemnification, due to increased exposure to litigation costs and risks
resulting from their service to such corporations, and due to the fact that
the exposure frequently bears no reasonable relationship to the compensation
of such directors and officers;
B. Based on their experience as business managers, the Board of
Directors of the Company (the "BOARD") has concluded that, to retain and
attract talented and experienced individuals to serve as officers and
directors of the Company, and to encourage such individuals to take the
business risks necessary for the success of the Company, it is necessary for
the Company contractually to indemnify officers and directors and to assume
for itself maximum liability for expenses and damages in connection with
claims against such officers and directors in connection with their service
to the Company;
C. Section 145 of the General Corporation Law of Delaware, under
which the Company is organized (the "LAW"), empowers the Company to indemnify
by agreement its officers, directors, employees and agents, and persons who
serve, at the request of the Company, as directors, officers, employees or
agents of other corporations or enterprises, and expressly provides that the
indemnification provided by the Law is not exclusive; and
D. The Company desires and has requested the Indemnitee to serve or
continue to serve as a director or officer of the Company free from undue
concern for claims for damages arising out of or related to such services to
the Company.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. DEFINITIONS.
1.1 AGENT. For the purposes of this Agreement, "AGENT" of the
Company means any person who is or was a director or officer of the Company
or a subsidiary of the Company; or is or was serving at the request of, for
the convenience of, or to represent the interest of the Company or a
subsidiary of the Company as a director or officer of another foreign or
domestic corporation, partnership, joint venture, trust or other enterprise
or an affiliate of the Company; or was a director or officer of a foreign or
domestic corporation which was a predecessor corporation of the Company,
including, without limitation, Silicon Image, Inc., a California corporation,
or was a director or officer of another enterprise or affiliate of the
Company at the request of, for the convenience of, or to represent the
interests of such
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predecessor corporation. The term "ENTERPRISE" includes any employee benefit
plan of the Company, its subsidiaries, affiliates and predecessor
corporations.
1.2 EXPENSES. For purposes of this Agreement, "EXPENSES"
includes all direct and indirect costs of any type or nature whatsoever
(including, without limitation, all attorneys' fees and related disbursements
and other out-of-pocket costs) actually and reasonably incurred by the
Indemnitee in connection with the investigation, defense or appeal of a
proceeding or establishing or enforcing a right to indemnification or
advancement of expenses under this Agreement, Section 145 or otherwise;
PROVIDED, HOWEVER, that expenses shall not include any judgments, fines,
ERISA excise taxes or penalties or amounts paid in settlement of a proceeding.
1.3 PROCEEDING. For the purposes of this Agreement,
"PROCEEDING" means any threatened, pending or completed action, suit or other
proceeding, whether civil, criminal, administrative, investigative or any
other type whatsoever.
1.4 SUBSIDIARY. For purposes of this Agreement, "SUBSIDIARY"
means any corporation of which more than fifty percent (50%) of the
outstanding voting securities is owned directly or indirectly by the Company,
by the Company and one or more of its subsidiaries or by one or more of the
Company's subsidiaries.
2. AGREEMENT TO SERVE. The Indemnitee agrees to serve and/or
continue to serve as an agent of the Company, at the will of the Company (or
under separate agreement, if such agreement exists), in the capacity the
Indemnitee currently serves as an agent of the Company, faithfully and to the
best of his ability, so long as he is duly appointed or elected and qualified
in accordance with the applicable provisions of the charter documents of the
Company or any subsidiary of the Company; PROVIDED, HOWEVER, that the
Indemnitee may at any time and for any reason resign from such position
(subject to any contractual obligation that the Indemnitee may have assumed
apart from this Agreement), and the Company or any subsidiary shall have no
obligation under this Agreement to continue the Indemnitee in any such
position.
3. DIRECTORS' AND OFFICERS' INSURANCE. The Company shall, to the
extent that the Board determines it to be economically reasonable, maintain a
policy of directors' and officers' liability insurance ("D&O INSURANCE"), on
such terms and conditions as may be approved by the Board.
4. MANDATORY INDEMNIFICATION. Subject to Section 9 below, the
Company shall indemnify the Indemnitee:
4.1 THIRD PARTY ACTIONS. If the Indemnitee is a person who was
or is a party or is threatened to be made a party to any proceeding (other
than an action by or in the right of the Company) by reason of the fact that
he is or was an agent of the Company, or by reason of anything done or not
done by him in any such capacity, against any and all expenses and
liabilities of any type whatsoever (including, but not limited to, judgments,
fines, ERISA excise taxes or penalties and amounts paid in settlement)
actually and reasonably incurred by him in connection with the investigation,
defense, settlement or appeal of such proceeding if he acted in good faith
and in a manner he reasonably believed to be in, or not opposed to, the best
interests of the Company and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful; and
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4.2 DERIVATIVE ACTIONS. If the Indemnitee is a person who was
or is a party or is threatened to be made a party to any proceeding by or in
the right of the Company to procure a judgment in its favor by reason of the
fact that he is or was an agent of the Company, or by reason of anything done
or not done by him in any such capacity, against any amounts paid in
settlement of any such proceeding and all expenses actually and reasonably
incurred by him in connection with the investigation, defense, settlement or
appeal of such proceeding if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
Company; EXCEPT that no indemnification under this subsection shall be made
in respect of any claim, issue or matter as to which such person shall have
been finally adjudged to be liable to the Company by a court of competent
jurisdiction due to willful misconduct of a culpable nature in the
performance of his duty to the Company, unless and only to the extent that
the Court of Chancery or the court in which such proceeding was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such amounts which the Court of Chancery
or such other court shall deem proper; and
4.3 EXCEPTION FOR AMOUNTS COVERED BY INSURANCE. Notwithstanding
the foregoing, the Company shall not be obligated to indemnify the Indemnitee
for expenses or liabilities of any type whatsoever (including, but not
limited to, judgments, fines, ERISA excise taxes or penalties and amounts
paid in settlement) to the extent such have been paid directly to the
Indemnitee by D&O Insurance.
5. PARTIAL INDEMNIFICATION AND CONTRIBUTION.
5.1 PARTIAL INDEMNIFICATION. If the Indemnitee is entitled
under any provision of this Agreement to indemnification by the Company for
some or a portion of any expenses or liabilities of any type whatsoever
(including, but not limited to, judgments, fines, ERISA excise taxes or
penalties and amounts paid in settlement) incurred by him in the
investigation, defense, settlement or appeal of a proceeding but is not
entitled, however, to indemnification for all of the total amount thereof,
then the Company shall nevertheless indemnify the Indemnitee for such total
amount except as to the portion thereof to which the Indemnitee is not
entitled to indemnification.
5.2 CONTRIBUTION. If the Indemnitee is not entitled to the
indemnification provided in Section 4 for any reason other than the statutory
limitations set forth in the Law, then in respect of any threatened, pending
or completed proceeding in which the Company is jointly liable with the
Indemnitee (or would be if joined in such proceeding), the Company shall
contribute to the amount of expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred and
paid or payable by the Indemnitee in such proportion as is appropriate to
reflect (i) the relative benefits received by the Company on the one hand and
the Indemnitee on the other hand from the transaction from which such
proceeding arose and (ii) the relative fault of the Company on the one hand
and of the Indemnitee on the other hand in connection with the events which
resulted in such expenses, judgments, fines or settlement amounts, as well as
any other relevant equitable considerations. The relative fault of the
Company on the one hand and of the Indemnitee on the other hand shall be
determined by reference to, among other things, the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent the
circumstances resulting in such expenses,
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judgments, fines or settlement amounts. The Company agrees that it would not
be just and equitable if contribution pursuant to this Section 5 were
determined by pro rata allocation or any other method of allocation which
does not take account of the foregoing equitable considerations.
6. MANDATORY ADVANCEMENT OF EXPENSES.
6.1 ADVANCEMENT. Subject to Section 9 below, the Company shall
advance all expenses incurred by the Indemnitee in connection with the
investigation, defense, settlement or appeal of any proceeding to which the
Indemnitee is a party or is threatened to be made a party by reason of the
fact that the Indemnitee is or was an agent of the Company or by reason of
anything done or not done by him in any such capacity. The Indemnitee hereby
undertakes to promptly repay such amounts advanced only if, and to the extent
that, it shall ultimately be determined that the Indemnitee is not entitled
to be indemnified by the Company under the provisions of this Agreement, the
Certificate of Incorporation or Bylaws of the Company, the Law or otherwise.
The advances to be made hereunder shall be paid by the Company to the
Indemnitee within thirty (30) days following delivery of a written request
therefor by the Indemnitee to the Company.
6.2 EXCEPTION. Notwithstanding the foregoing provisions of this
Section 6, the Company shall not be obligated to advance any expenses to the
Indemnitee arising from a lawsuit filed directly by the Company against the
Indemnitee if an absolute majority of the members of the Board reasonably
determines in good faith, within thirty (30) days of the Indemnitee's request
to be advanced expenses, that the facts known to them at the time such
determination is made demonstrate clearly and convincingly that the
Indemnitee acted in bad faith. If such a determination is made, the
Indemnitee may have such decision reviewed by another forum, in the manner
set forth in Sections 8.3, 8.4 and 8.5 hereof, with all references therein to
"indemnification" being deemed to refer to "advancement of expenses," and the
burden of proof shall be on the Company to demonstrate clearly and
convincingly that, based on the facts known at the time, the Indemnitee acted
in bad faith. The Company may not avail itself of this Section 6.2 as to a
given lawsuit if, at any time after the occurrence of the activities or
omissions that are the primary focus of the lawsuit, the Company has
undergone a change in control. For this purpose, a change in control shall
mean a given person or group of affiliated persons or groups increasing their
beneficial ownership interest in the Company by at least twenty (20)
percentage points without advance Board approval.
7. NOTICE AND OTHER INDEMNIFICATION PROCEDURES.
7.1 Promptly after receipt by the Indemnitee of notice of the
commencement of or the threat of commencement of any proceeding, the
Indemnitee shall, if the Indemnitee believes that indemnification with
respect thereto may be sought from the Company under this Agreement, notify
the Company of the commencement or threat of commencement thereof.
7.2 If, at the time of the receipt of a notice of the
commencement of a proceeding pursuant to Section 7.1 hereof, the Company has
D&O Insurance in effect, the Company shall give prompt notice of the
commencement of such proceeding to the insurers in accordance with the
procedures set forth in the respective policies. The Company shall thereafter
take all necessary or desirable action to cause such insurers to pay, on
behalf of the Indemnitee,
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all amounts payable as a result of such proceeding in accordance with the
terms of such D&O Insurance policies.
7.3 In the event the Company shall be obligated to advance the
expenses for any proceeding against the Indemnitee, the Company, if
appropriate, shall be entitled to assume the defense of such proceeding, with
counsel approved by the Indemnitee (which approval shall not be unreasonably
withheld), upon the delivery to the Indemnitee of written notice of its
election to do so. After delivery of such notice, approval of such counsel by
the Indemnitee and the retention of such counsel by the Company, the Company
will not be liable to the Indemnitee under this Agreement for any fees of
counsel subsequently incurred by the Indemnitee with respect to the same
proceeding, PROVIDED that: (a) the Indemnitee shall have the right to employ
his own counsel in any such proceeding at the Indemnitee's expense; (b) the
Indemnitee shall have the right to employ his own counsel in connection with
any such proceeding, at the expense of the Company, if such counsel serves in
a review, observer, advice and counseling capacity and does not otherwise
materially control or participate in the defense of such proceeding; and (c)
if (i) the employment of counsel by the Indemnitee has been previously
authorized by the Company, (ii) the Indemnitee shall have reasonably
concluded that there may be a conflict of interest between the Company and
the Indemnitee in the conduct of any such defense or (iii) the Company shall
not, in fact, have employed counsel to assume the defense of such proceeding,
then the fees and expenses of the Indemnitee's counsel shall be at the
expense of the Company.
8. DETERMINATION OF RIGHT TO INDEMNIFICATION.
8.1 To the extent the Indemnitee has been successful on the
merits or otherwise in defense of any proceeding referred to in Section 4.1
or 4.2 of this Agreement or in the defense of any claim, issue or matter
described therein, the Company shall indemnify the Indemnitee against
expenses actually and reasonably incurred by him in connection with the
investigation, defense or appeal of such proceeding, or such claim, issue or
matter, as the case may be.
8.2 In the event that Section 8.1 is inapplicable, or does not
apply to the entire proceeding, the Company shall nonetheless indemnify the
Indemnitee unless the Company shall prove by clear and convincing evidence to
a forum listed in Section 8.3 below that the Indemnitee has not met the
applicable standard of conduct required to entitle the Indemnitee to such
indemnification.
8.3 The Indemnitee shall be entitled to select the forum in
which the validity of the Company's claim under Section 8.2 hereof that the
Indemnitee is not entitled to indemnification will be heard from among the
following, EXCEPT that the Indemnitee can select a forum consisting of the
stockholders of the Company only with the approval of the Company:
(a) A quorum of the Board consisting of directors who are
not parties to the proceeding for which indemnification is being sought;
(b) The stockholders of the Company;
(c) Legal counsel mutually agreed upon by the Indemnitee
and the Board, which counsel shall make such determination in a written
opinion;
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(d) A panel of three arbitrators, one of whom is selected
by the Company, another of whom is selected by the Indemnitee and the last of
whom is selected by the first two arbitrators so selected; or
(e) The Court of Chancery of Delaware or other court
having jurisdiction of subject matter and the parties.
8.4 As soon as practicable, and in no event later than thirty
(30) days after the forum has been selected pursuant to Section 8.3 above,
the Company shall, at its own expense, submit to the selected forum its claim
that the Indemnitee is not entitled to indemnification, and the Company shall
act in the utmost good faith to assure the Indemnitee a complete opportunity
to defend against such claim.
8.5 If the forum selected in accordance with Section 8.3 hereof
is not a court, then after the final decision of such forum is rendered, the
Company or the Indemnitee shall have the right to apply to the Court of
Chancery of Delaware, the court in which the proceeding giving rise to the
Indemnitee's claim for indemnification is or was pending or any other court
of competent jurisdiction, for the purpose of appealing the decision of such
forum, PROVIDED that such right is executed within sixty (60) days after the
final decision of such forum is rendered. If the forum selected in accordance
with Section 8.3 hereof is a court, then the rights of the Company or the
Indemnitee to appeal any decision of such court shall be governed by the
applicable laws and rules governing appeals of the decision of such court.
8.6 Notwithstanding any other provision in this Agreement to
the contrary, the Company shall indemnify the Indemnitee against all expenses
incurred by the Indemnitee in connection with any hearing or proceeding under
this Section 8 involving the Indemnitee and against all expenses incurred by
the Indemnitee in connection with any other proceeding between the Company
and the Indemnitee involving the interpretation or enforcement of the rights
of the Indemnitee under this Agreement unless a court of competent
jurisdiction finds that each of the material claims and/or defenses of the
Indemnitee in any such proceeding was frivolous or not made in good faith.
9. EXCEPTIONS. Any other provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:
9.1 CLAIMS INITIATED BY INDEMNITEE. To indemnify or advance
expenses to the Indemnitee with respect to proceedings or claims initiated or
brought voluntarily by the Indemnitee and not by way of defense, EXCEPT with
respect to proceedings specifically authorized by the Board or brought to
establish or enforce a right to indemnification and/or advancement of
expenses arising under this Agreement, the charter documents of the Company
or any subsidiary or any statute or law or otherwise, but such
indemnification or advancement of expenses may be provided by the Company in
specific cases if the Board finds it to be appropriate; or
9.2 UNAUTHORIZED SETTLEMENTS. To indemnify the Indemnitee
hereunder for any amounts paid in settlement of a proceeding unless the
Company consents in advance in writing to such settlement, which consent
shall not be unreasonably withheld; or
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9.3 SECURITIES LAW ACTIONS. To indemnify the Indemnitee on
account of any suit in which judgment is rendered against the Indemnitee for
an accounting of profits made from the purchase or sale by the Indemnitee of
securities of the Company pursuant to the provisions of Section l6(b) of the
Securities Exchange Act of 1934 and amendments thereto or similar provisions
of any federal, state or local statutory law; or
9.4 UNLAWFUL INDEMNIFICATION. To indemnify the Indemnitee if a
final decision by a court having jurisdiction in the matter shall determine
that such indemnification is not lawful. In this respect, the Company and the
Indemnitee have been advised that the Securities and Exchange Commission
takes the position that indemnification for liabilities arising under the
federal securities laws is against public policy and is, therefore,
unenforceable and that claims for indemnification should be submitted to
appropriate courts for adjudication.
10. NON-EXCLUSIVITY. The provisions for indemnification and
advancement of expenses set forth in this Agreement shall not be deemed
exclusive of any other rights which the Indemnitee may have under any
provision of law, the Company's Certificate of Incorporation or Bylaws, the
vote of the Company's stockholders or disinterested directors, other
agreements or otherwise, both as to action in the Indemnitee's official
capacity and to action in another capacity while occupying his position as an
agent of the Company, and the Indemnitee's rights hereunder shall continue
after the Indemnitee has ceased acting as an agent of the Company and shall
inure to the benefit of the heirs, executors and administrators of the
Indemnitee.
11. GENERAL PROVISIONS.
11.1 INTERPRETATION OF AGREEMENT. It is understood that the
parties hereto intend this Agreement to be interpreted and enforced so as to
provide indemnification and advancement of expenses to the Indemnitee to the
fullest extent now or hereafter permitted by law, except as expressly limited
herein.
11.2 SEVERABILITY. If any provision or provisions of this
Agreement shall be held to be invalid, illegal or unenforceable for any
reason whatsoever, then: (a) the validity, legality and enforceability of the
remaining provisions of this Agreement (including, without limitation, all
portions of any paragraphs of this Agreement containing any such provision
held to be invalid, illegal or unenforceable that are not themselves invalid,
illegal or unenforceable) shall not in any way be affected or impaired
thereby; and (b) to the fullest extent possible, the provisions of this
Agreement (including, without limitation, all portions of any paragraphs of
this Agreement containing any such provision held to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or unenforceable)
shall be construed so as to give effect to the intent manifested by the
provision held invalid, illegal or unenforceable and to give effect to
Section 11.1 hereof.
11.3 MODIFICATION AND WAIVER. No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by
both of the parties hereto. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provision
hereof (whether or not similar), nor shall such waiver constitute a
continuing waiver.
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11.4 SUBROGATION. In the event of full payment under this
Agreement, the Company shall be subrogated to the extent of such payment to
all of the rights of recovery of the Indemnitee, who shall execute all
documents required and shall do all acts that may be necessary or desirable
to secure such rights and to enable the Company effectively to bring suit to
enforce such rights.
11.5 COUNTERPARTS. This Agreement may be executed in one or more
counter-parts, which shall together constitute one agreement.
11.6 SUCCESSORS AND ASSIGNS. The terms of this Agreement shall
bind, and shall inure to the benefit of, the successors and assigns of the
parties hereto.
11.7 NOTICE. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed
duly given: (a) if delivered by hand and signed for by the party addressee;
or (b) if mailed by certified or registered mail, with postage prepaid, on
the third business day after the mailing date. Addresses for notice to either
party are as shown on the signature page of this Agreement or as subsequently
modified by written notice.
11.8 GOVERNING LAW. This Agreement shall be governed exclusively
by and construed according to the laws of the State of California, as applied
to contracts between California residents entered into and to be performed
entirely within California.
11.9 CONSENT TO JURISDICTION. The Company and the Indemnitee
each hereby irrevocably consent to the jurisdiction of the courts of the
State of California for all purposes in connection with any action or
proceeding which arises out of or relates to this Agreement.
11.10 ATTORNEYS' FEES. In the event Indemnitee is required to
bring any action to enforce rights under this Agreement (including, without
limitation, the expenses of any Proceeding described in Section 3), the
Indemnitee shall be entitled to all reasonable fees and expenses in bringing
and pursuing such action, unless a court of competent jurisdiction finds each
of the material claims of the Indemnitee in any such action was frivolous and
not made in good faith.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have entered into this
Indemnity Agreement effective as of the date first written above.
SILICON IMAGE, INC. INDEMNITEE:
By:__________________________________ By:__________________________________
Name:________________________________ Name:________________________________
Title:_______________________________
Address:_____________________________ Address:_____________________________
_____________________________________ _____________________________________
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