SILICON IMAGE, INC. NON-PLAN STOCK OPTION AGREEMENT (INDUCEMENT STOCK OPTION AWARD)
Exhibit
4.07
SILICON
IMAGE, INC.
(INDUCEMENT
STOCK OPTION AWARD)
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 the
Company’s 2008 Equity Incentive Plan (the “Plan”). This
Option (as defined below) is granted pursuant to Nasdaq Marketplace Rule
5635(c)(4).
Optionee: ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Total Option
Shares: 1,000,000
Exercise Price Per
Share:
$2.79
Date of
Grant:
January 15,
2010
First Vesting
Date:
January 1,
2011
Expiration
Date:
January 14,
2020
Type of Stock
Option:
Non-Qualified Stock Option
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
(“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 and shall not be exercisable with respect to any of
the Shares until the First Vesting Date. Subject to the terms and
conditions of this Agreement, provided that Optionee has continuously provided
services to the Company, or any Parent or Subsidiary of the Company from the
Date of Grant through and including the applicable vesting date, then this
Option shall vest and become exercisable as follows: (a) as to ten
percent (10%) of the Shares on the First Vesting Date; (b) as to an
additional twenty percent (20%) of the Shares on the first anniversary of the
First Vesting Date; (c) as to an additional thirty percent (30%) of the Shares
on the second anniversary of the First Vesting Date; and (d) as to an additional
forty percent (40%) of the Shares on the third anniversary of the First Vesting
Date, such that this Option will be fully vested and exercisable on January 1,
2014. 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.
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 (as such term is defined in the
Offer Letter of employment between the Company and Optionee dated December 23,
2009), 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 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 in accordance with the schedule set forth in Section 2.1 of
this Agreement 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 Termination Date.
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 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 they are 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: (A) either (1) 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 (B) 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 Financial Industry Regulatory Authority (a “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
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 Dealer, whereby Optionee irrevocably elects to exercise this
Option and to pledge the Shares so purchased to the Dealer in a margin account
as security for a loan from the Dealer in the amount of the Exercise Price, and
whereby the 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 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.
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 (“SEC”), 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 or Optionee’s legal representative and after Optionee’s death by the
legal representative of Optionee’s heirs or legatees. 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 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 THIS
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 (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 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 stockholder with respect to any Shares until the
Shares are issued to Optionee. After Shares are issued to Optionee,
Optionee will be a stockholder and have all the rights of a stockholder with
respect to such Shares, including the right to vote and receive all dividends or
other distributions made or paid with respect to such Shares.
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
via electronic means.
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.
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 the
Optionee; provided, however, that the
Exercise Price may not be reduced below the Fair Market Value of the Shares on
the date the action is taken to reduce the exercise price.
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. If 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 shall
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.
18. Corporate
Transactions. In the event of a
Corporate Transaction, this Option may be assumed or replaced by the successor
corporation, which assumption or replacement shall be binding on the
Optionee. In the alternative, the successor corporation may
substitute an equivalent award or provide substantially similar consideration to
the Optionee as was provided to stockholders (after taking into account the
existing provisions of this Option). In the event such successor or
acquiring corporation (if any) refuses to assume, convert, replace or substitute
this Option, as provided above, pursuant to a Corporate Transaction, then
notwithstanding any other provision in this Agreement to the contrary, this
Option will expire on such transaction at such time and on such conditions as
the Board will determine; the Board (or, the Committee, if so designated by the
Board) may, in its sole discretion, accelerate the vesting of this Option in
connection with a Corporate Transaction. In addition, in the event
such successor or acquiring corporation (if any) refuses to assume, convert,
replace or substitute this Option, as provided above, pursuant to a Corporate
Transaction, the Committee will notify the Optionee in writing or electronically
that this Option will be exercisable for a period of time determined by the
Committee in its sole discretion, and this Option will terminate upon the
expiration of such period. This Option need not be treated similarly
to other Awards in a Corporate Transaction.
19. REPRICING;
EXCHANGE AND BUYOUT OF OPTION. Except in connection with a (i)
Corporate Transaction or (ii) a stock dividend, recapitalization, stock split,
reverse stock split, subdivision, combination, reclassification or
similar change in the capital structure of the Company without consideration,
the terms of this Option may not be amended to reduce the Exercise Price or
cancel this Option in exchange for cash or other Awards (including Options or
SARs) with an exercise price that is less than the Exercise Price without prior
stockholder approval.
20. 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.
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/ ▇▇▇▇▇▇
▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
Chief Legal Officer
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EXHIBIT A
SILICON
IMAGE, INC.
NON-PLAN STOCK OPTION
EXERCISE AGREEMENT
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You
must submit this form to Stock Administration prior to contacting your
broker.
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I am
exercising my vested Silicon Image, Inc. Non-Qualified stock options as
follows:
(A) Total
# of Shares to
Exercise:
(B) Cost
per
Share: $
(C) Total
Exercise Cost (A) X
(B): $
(D) Tax
Amount Due for Non-Qualified stock options:
$
Please
leave tax amount blank – Stock Administration will calculate.
(E)
Exercise
Date:
Please leave exercise date
blank – Stock
Administration will complete.
Please
indicate the transaction method below. See reverse side of this form
for a brief explanation of each method.
Method
1 SAME DAY
SALE You must contact a Silicon Image designated broker to
place this trade.
Please
indicate which broker you have selected below.
Method
2 SELL TO
COVER I am
exercising
shares, but want to sell only
shares.
The
balance will be deposited in the account I’ve designated below. You
must contact a Silicon
Image
designated broker to place this trade. Please indicate which broker
you have selected
below.
Method
3 EXERCISE
& HOLD Please attach a personal check, made payable to
Silicon Image for the
amounts
indicated in items (D) and (F) above. Please indicate below where you
would like your
stock
certificate to be mailed.
Broker
Name
Broker
Address
Account
#
E*Trade/OptionsLink Account
# (Executive
Services)
Deutsche
Bank ▇▇▇▇
▇▇▇▇▇ Account
#
I authorize
the broker to remit funds to Silicon Image to pay for this exercise and any
applicable taxes and I understand that the shares will be sent directly to the
broker address I have indicated above. I acknowledge receipt of the
prospectus covering shares of common stock offered to me under this Non-Plan
Stock Option. The Non-Plan Stock Option Agreement is incorporated
herein by reference. The Exercise Agreement and the Non-Plan Stock
Option Agreement constitute the entire agreement and understanding of the
parties and supercede in their entirety all prior understandings and agreements
of the Company and Optionee with respect to the subject matter
hereof. I UNDERSTAND
THAT I MAY SUFFER ADVERSE TAX CONSEQUENCES AS A RESULT OF THE PURCHASE OR
DISPOSITION OF THESE SHARES. I HAVE CONSULTED WITH ANY TAX
CONSULTANT(S) I DEEM ADVISABLE IN CONNECTION WITH THE PURCHASE OR DISPOSITION OF
THE SHARES AND CERTIFY THAT I AM NOT RELYING ON THE COMPANY FOR TAX
ADVICE. __________ (Initial here)
First
Name Middle
Initial Last
Name Signature
Social
Security
# Employee
ID
# Phone
Number
Current
Address
NOTE FOR NON-QUALIFIED (NQ) OPTIONS
ONLY – Tax is required to be withheld or collected upon exercise of all
non-qualified stock options. The tax is based on the spread between
the sale price (closing fair market value if not same day sale) and the exercise
price multiplied by 36.68% (25% federal; 10.23% CA state; 1.45%
medicare). In addition, Social Security and California SDI tax may be
withheld or collected depending on what you have paid year to date.
Method 1
– SAME DAY SALE
You are
selling all vested shares as indicated on the Exhibit A.
Method 2 – SELL TO
COVER
You want
to exercise vested shares and sell a portion of these shares to cover the cost
and applicable taxes of all the exercised shares. The balance of
unsold shares will be deposited into your brokerage account for future
sale.
Method 3 - EXERCISE &
HOLD
You only
want to exercise (purchase) the shares in order to sell them at a later
date.
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Silicon
Image Designated Brokers
|
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E*Trade/OptionsLink
|
Deutsche
Bank
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P.O. Box
989032 101
California Street, ▇▇▇▇
▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇.▇▇▇▇▇▇.▇▇▇ Fax
– (▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇)
▇▇▇-▇▇▇▇ (press “#0” for service
representative)
(▇▇▇)
▇▇▇-▇▇▇▇ (from outside the United States)
(▇▇▇)
▇▇▇-▇▇▇▇ (for Executive Services)
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