EXHIBIT 10.06
EMPLOYMENT AGREEMENT
This Employment Agreement (the "AGREEMENT") is entered into as of June
10, 1999 (the "EFFECTIVE DATE") by and between Silicon Image, Inc., a
California corporation (the "COMPANY"), and Xxxxxx Xxxxx ("EXECUTIVE").
In consideration of the promises and the terms and conditions set forth
in this Agreement, the parties agree as follows:
1. POSITION. Executive's position Vice President, Worldwide Sales.
2. SALARY. Executive's salary is $143,838 per year for 1999.
Executive's salary will be subject to annual review.
3. COMMISSION. Executive will be paid a quarterly commission, as
set forth in a separate commission plan.
4. BENEFITS. Executive shall be eligible to participate in the
employee benefit plans and executive compensation programs maintained by the
Company applicable to other employees and key executives of the Company,
other than the Company's cash bonus plan for executive officers. The plans
in which Executive may participate include retirement plans, savings or
profit-sharing plans, deferred compensation plans, supplemental retirement or
excess-benefit plans, stock option, stock purchase or other incentive plans,
life, disability, health, accident and other insurance programs, paid
vacations, and similar plans or programs.
5. EQUITY COMPENSATION. Executive shall be eligible for stock
option grants and other awards under the Company's 1995 Equity Incentive Plan
from time to time in the discretion of the Company's Board of Directors. In
addition, as of the Effective Date, Executive will be eligible to purchase
shares of the Company's common stock having an aggregate purchase price of
$20,000 at the price of $1.00 per share, which the Company's Board of
Directors determined to be the fair market value of common stock as
determined by the Board of Directors at its meeting on May 20, 1999. With
respect each of the next six following fiscal quarters (i.e., the quarters
ending June 30, 1999, September 30, 1999, December 31, 1999, March 31, 2000,
June 30, 2000 and September 30, 2000), Executive will be eligible to purchase
shares of the Company's common stock having an aggregate purchase price of
$10,000 at the fair market value of the Company's common stock as determined
by the Board of Directors at its first meeting following the close of each
such quarter. Each purchase opportunity will be represented by the grant of
an option under the Company's 1995 Equity Incentive Plan that is fully vested
and immediately exercisable by delivery of a full recourse promissory note in
the Company's customary form. This paragraph 5 shall expire and be of no
further force or effect upon the earlier of (i) termination of Executive's
employment, (ii) the closing of the initial public offering of the Company's
common stock, or (iii) a Change of Control (as defined in Section 6 below)
that results in the Company's common stock, or securities issued in exchange
for the Company's common stock, becoming publicly traded.
6. SEVERANCE.
(a) DEFINITIONS. As used in this Agreement:
"CAUSE" shall mean willful gross misconduct, conviction of a felony or
an act of material dishonesty.
"CHANGE IN CONTROL" shall mean the occurrence of any of the following
events:
(i) any "person" (as such term is used in Section 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended) becoming the "beneficial
owner" (as defined in Rule 13d-3 under said Act), directly or indirectly, of
securities of the Company representing fifty percent (50%) or more of the
total voting power represented by the Company's then outstanding voting
securities, other than in a private financing where securities are acquired
directly from the Company; or
(ii) the closing of any transaction or series of related transactions,
including the acquisition of the Company by another entity and any
reorganization, merger or consolidation, which results in the holders of the
Company's capital stock prior to the transaction or transactions holding less
than fifty percent (50%) of the outstanding voting power of the Company after
the transaction or transactions, or which results in the sale of all or
substantially all of the assets of the Company.
"DISABILITY" shall mean a physical or mental illness or injury which, as
determined by the Company, has continuously prevented Executive from
performing his duties with the Company for a period of six months prior to
termination.
"GOOD REASON" shall mean any of the following grounds for termination of
employment by Executive based upon prior constructive termination by the
Company:
(i) without Executive's express written consent, a change in his titles
or offices from those that he holds as of the Effective Date such
that he no longer is an officer of the Company, except either (I)
in connection with the termination of his employment for Cause or
Disability or as a result of his death, or (II) in connection with
an acquisition the Company, whether by purchase, merger,
consolidation or otherwise, in which Executive is offered
employment with the successor corporation in a position where
Executive's duties and responsibilities with respect to the
Company's former business are substantially comparable to
Executive's duties and responsibilities in his position with the
Company on the Effective Date and where Executive's base salary and
any bonus compensation formula applicable to him are comparable to
Executive's base salary, commission and any bonus compensation
formula applicable to him as in effect on the Effective Date;
PROVIDED, that whether or not Executive is an officer of the
successor corporation after the consummation of such acquisition
shall not be considered a factor in determining whether, in
Executive's position with the successor corporation, Executive's
duties and responsibilities with respect to the Company's
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former business are comparable to Executive's duties and
responsibilities in his position with the Company on the Effective
Date;
(ii) a material reduction by the Company in Executive's base salary or
commission formula applicable to him on the Effective Date;
(iii) the Company's requiring any purported termination of Executive's
employment by the Company other that for Cause, Disability or
death; or
(iv) the failure of the Company to obtain the assumption of this
Agreement by any successor as contemplated by Section 11 hereof.
(b) PAYMENT. If (i) there is a Change in Control, and (ii) the
Company terminates Executive's employment other than for Cause, Disability or
death, or Executive terminates his employment for Good Reason, then, for six
months following Executive's termination, (1) the Company shall continue to
pay to Executive his then-current salary, less applicable withholding taxes,
on the Company's normal payroll dates during that period, and (2) the Company
shall pay Executive his commission on the terms in effect at the time of
Executive's termination, less applicable withholding taxes, on the dates on
which commission would be payable during that period.
7. AT-WILL EMPLOYMENT. Executive's employment by the Company is "at
will," which means that either Executive or the Company can terminate the
employment at any time, with or without reason.
8. ARBITRATION. Executive and the Company shall submit to mandatory
binding arbitration in any controversy or claim arising out of, or relating
to, this Agreement or any breach hereof. Such arbitration shall be conducted
in accordance with the commercial arbitration rules of the American
Arbitration Association in effect at that time, and judgment upon the
determination or award rendered by the arbitrator may be entered in any court
having jurisdiction thereof.
9. ATTORNEYS' FEES. If any dispute under this Agreement is finally
determined in Executive's or Company's favor, the other party shall pay all
reasonable fees and expenses, including attorneys' and consultants' fees,
incurred by the prevailing party in good faith in connection therewith.
10. TERM OF AGREEMENT. This Agreement shall continue in effect until
the date of termination of Executive's employment with the Company, PROVIDED,
that if at the time of such termination Company is making payments to
Executive pursuant to Section 6(b), Company shall continue to make payments
for so long as required by that section.
11. SUCCESSORS. The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all
or substantially all of the business or assets of the Company, to expressly
assume and agree to perform the obligations under this Agreement in the same
manner and to the same extent that the Company would be required to perform
if no such succession had taken place. As used in this Agreement, "Company"
includes
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any successor to its business or assets which executes and delivers this
Agreement or which otherwise becomes bound by all the terms and provisions of
this Agreement by operation of law. This Agreement shall inure to the
benefit of and be enforceable by the Executive's personal and legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.
12. NOTICE. Notices and all other communications provided for in
this Agreement shall be in writing and shall be deemed to have been duly
given when delivered by United States registered mail, return receipt
requested, postage prepaid, addressed to the respective addresses set forth
on the last page of this Agreement, or to such other address as either party
may have furnished to the other in writing in accordance herewith, except
that notices of change of address shall be effective only upon receipt.
13. AMENDMENT OR WAIVER. No provision of this Agreement may be
amended, modified, waived or discharged unless such amendment, waiver,
modification or discharge is agreed to in a writing signed by the Executive
and the Company. No waiver by either party hereto at any time of any breach
by the other party hereto of, or compliance with, any condition or provision
of this Agreement to be performed by such other party shall be deemed a
waiver of similar or dissimilar provisions or conditions at the same or at
any prior or subsequent time.
14. VALIDITY. This invalidity or unenforceabiltiy of any provision
of this Agreement shall not affect the validity or enforceability of any
other provisions of this Agreement, which shall remain in full force and
effect.
15. APPLICABLE LAW. This Agreement shall be interpreted and enforced
in accordance with the internal laws of the State of California.
16. CONFIDENTIALITY. Executive will not disclose the terms of this
Agreement to anyone except as follows: (1) to accountants, attorneys, or
other advisors for the purpose of consulting with them, (2) as required by
law.
17. ENTIRE AGREEMENT. This Agreement represents the entire agreement
between the Company and the Executive with respect to the matters set forth
herein and supersedes all prior undertakings and agreements with respect to
the subject matter hereof.
IN WITNESS WHEREOF, this Agreement is executed as of the Effective Date.
Silicon Image, Inc. Executive
By: /s/ Xxxxx Xxx /s/ Xxxxxx Xxxxx
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Xxxxx Xxx Xxxxxx Xxxxx
00000 Xxxx Xxxx
Xxxxxxxxx, XX 00000-0000
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