Exhibit 10.20
RESTRICTED STOCK PURCHASE AGREEMENT
This Agreement is made and entered into as of _____________ (the
"EFFECTIVE DATE") between Silicon Image, Inc. (the "COMPANY"), a California
corporation, and ______________ ("PURCHASER").
1. PURCHASE OF SHARES. On the Effective Date and subject to the
terms and conditions of this Agreement, Purchaser hereby purchases from the
Company, and Company hereby sells to Purchaser, an aggregate of __________
shares of the Company's common stock (the "SHARES") at an aggregate purchase
price of $__________ (the "PURCHASE PRICE") or $______ per Share (the
"PURCHASE PRICE PER SHARE"). As used in this Agreement, the term "Shares"
refers to the Shares purchased under this Agreement and includes all
securities received (a) in replacement of the Shares, (b) as a result of
stock dividends or stock splits in respect of the Shares, and (c) in
replacement of the Shares in a recapitalization, merger, reorganization or
the like.
2. PAYMENT OF PURCHASE PRICE; CLOSING.
(a) DELIVERIES BY PURCHASER. Purchaser hereby delivers to the
Company the full Purchase Price by delivery to the Company of a Secured Full
Recourse Promissory Note of Purchaser in the principal amount of
$____________ in the form of EXHIBIT 1, duly executed by Purchaser (the
"NOTE"). Purchaser also hereby delivers to the Company: (i) two (2) copies of
a blank Stock Power and Assignment Separate from Stock Certificate in the
form of EXHIBIT 2 attached hereto (the "STOCK POWERS"), both executed by
Purchaser (and Purchaser's spouse, if any), (ii) if Purchaser is married, a
Consent of Spouse in the form of EXHIBIT 3 attached hereto (the "SPOUSE
CONSENT") duly executed by Purchaser's spouse; and (iii) a Stock Pledge
Agreement in the form of EXHIBIT 4, duly executed by Purchaser (the "PLEDGE
AGREEMENT").
(b) DELIVERIES BY THE COMPANY. Upon its receipt of the entire
Purchase Price and all the documents to be executed and delivered by
Purchaser to the Company under Section 2(a), the Company will issue a duly
executed stock certificate evidencing the Shares in the name of Purchaser
registered in Purchaser's name in accordance with Section 19, with such
certificate to be placed in escrow as provided in Section 8 until expiration
or termination of both the Company's Repurchase Option and Right of First
Refusal described in Sections 5 and 6 and payment in full to the Company of
all sums due under the Note.
3. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser
represents and warrants to the Company that:
(a) PURCHASE FOR OWN ACCOUNT FOR INVESTMENT. Purchaser is
purchasing the Shares for Purchaser's own account for investment purposes
only and not with a view to, or for sale in connection with, a distribution
of the Shares within the meaning of the Securities Act of 1933, as amended
(the "1933 ACT"). Purchaser has no present intention of selling or otherwise
disposing of all or any portion of the Shares and no one other than Purchaser
has any beneficial ownership of any of the Shares.
(b) ACCESS TO INFORMATION. Purchaser has had access to all
information regarding the Company and its present and prospective business,
assets, liabilities and financial condition that Purchaser reasonably
considers important in making the decision to purchase the Shares, and
Purchaser has had ample opportunity to ask questions of the Company's
representatives concerning such matters and this investment.
(c) UNDERSTANDING OF RISKS. Purchaser is fully aware of: (i)
the highly speculative nature of the investment in the Shares; (ii) the
financial hazards involved; (iii) the lack of liquidity of the Shares and the
restrictions on transferability of the Shares (E.G., that Purchaser may not
be able to sell or dispose of the Shares or use them as collateral for
loans); (iv) the qualifications and backgrounds of the management of the
Company; and (v) the tax consequences of investment in the Shares.
(d) PURCHASER'S QUALIFICATIONS. Purchaser has a preexisting
personal or business relationship with the Company and/or certain of its
officers and/or directors of a nature and duration sufficient to make
Purchaser aware of the character, business acumen and general business and
financial circumstances of the Company and/or such officers and directors. By
reason of Purchaser's business or financial experience, Purchaser is capable
of evaluating the merits and risks of this investment, has the ability to
protect Purchaser's own interests in this transaction and is financially
capable of bearing a total loss of this investment.
(e) NO GENERAL SOLICITATION. At no time was Purchaser
presented with or solicited by any publicly issued or circulated newspaper,
mail, radio, television or other form of general advertising or solicitation
in connection with the offer, sale and purchase of the Shares.
(f) COMPLIANCE WITH SECURITIES LAWS. Purchaser understands and
acknowledges that, in reliance upon the representations and warranties made
by Purchaser herein, the Shares are not being registered with the Securities
and Exchange Commission ("SEC") under the 1933 Act or being qualified under
the California Corporate Securities Law of 1968, as amended (the "LAW"), but
instead are being issued under an exemption or exemptions from the
registration and qualification requirements of the 1933 Act and the Law.
(g) RESTRICTIONS ON TRANSFER. Purchaser understands that
Purchaser may not transfer any Shares unless such Shares are registered under
the 1933 Act or qualified under the Law or unless, in the opinion of counsel
to the Company, exemptions from such registration and qualification
requirements are available. Purchaser understands that only the Company may
file a registration statement with the SEC or the California Commissioner of
Corporations and that the Company is under no obligation to do so with
respect to the Shares. Purchaser has also been advised that exemptions from
registration and qualification may not be available or may not permit
Purchaser to transfer all or any of the Shares in the amounts or at the times
proposed by Purchaser.
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(h) RULE 144. In addition, Purchaser has been advised that SEC
Rule 144 promulgated under the 1933 Act, which permits certain limited sales
of unregistered securities, is not presently available with respect to the
Shares and, in any event, requires that the Shares be held for a minimum of
one year, and in certain cases two years, after they have been purchased AND
PAID FOR (within the meaning of Rule 144), before they may be resold under
Rule 144.
Purchaser understands that Shares paid for with a Note may not be
deemed to be fully "paid for" within the meaning of Rule 144 unless certain
conditions are met and that, accordingly, the Rule 144 holding period of such
Shares may not begin to run until such Shares are fully paid for within the
meaning of Rule 144. Purchaser understands that Rule 144 may indefinitely
restrict transfer of the Shares so long as Purchaser remains an "affiliate"
of the Company and "current public information" about the Company (as defined
in Rule 144) is not publicly available.
4. COMPLIANCE WITH CALIFORNIA SECURITIES LAWS. THE SALE OF THE
SECURITIES THAT ARE THE SUBJECT OF THIS AGREEMENT, IF NOT YET QUALIFIED WITH
THE CALIFORNIA COMMISSIONER OF CORPORATIONS AND NOT EXEMPT FROM SUCH
QUALIFICATION, IS SUBJECT TO SUCH QUALIFICATION, AND THE ISSUANCE OF SUCH
SECURITIES, AND THE RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR
TO SUCH QUALIFICATION IS UNLAWFUL UNLESS THE SALE IS EXEMPT. THE RIGHTS OF
THE PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH
QUALIFICATION BEING OBTAINED OR AN EXEMPTION BEING AVAILABLE.
5. COMPANY'S REPURCHASE OPTION. The Company has the option to
repurchase all or a portion of the Unvested Shares (as defined below) on the
terms and conditions set forth in this Section (the "REPURCHASE OPTION") if
Purchaser ceases to be employed by the Company (as defined herein) for any
reason, or no reason, including without limitation Purchaser's death,
disability, voluntary resignation or termination by the Company with or
without cause.
(a) DEFINITION OF "EMPLOYED BY THE COMPANY"; "TERMINATION
DATE". For purposes of this Agreement, Purchaser will be considered to be
"EMPLOYED BY THE COMPANY" if the Board of Directors of the Company determines
that Purchaser is rendering substantial services as an officer, employee,
consultant or independent contractor to the Company or to any parent,
subsidiary or affiliate of the Company. In case of any dispute as to whether
Purchaser is employed by the Company, the Board of Directors of the Company
will have discretion to determine whether Purchaser has ceased to be employed
by the Company or any parent, subsidiary or affiliate of the Company and the
effective date on which Purchaser's employment terminated (the "TERMINATION
DATE").
(b) UNVESTED AND VESTED SHARES. Shares that are not Vested
Shares (as defined in this Section) are "UNVESTED SHARES". On the Effective
Date all of the Shares will be Unvested Shares. If Purchaser has been
continuously employed by the Company at all times
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from the Effective Date until _____________- (the "FIRST VESTING DATE"), then
on the First Vesting Date twenty-five percent (25%) of the Shares will become
Vested Shares; and thereafter, for so long (and only for so long) as
Purchaser remains continuously employed by the Company at all times after the
First Vesting Date, an additional two and eighty-three thousandths percent
(2.083%) of the Shares will become Vested Shares upon the expiration of each
full calendar month elapsed after the First Vesting Date. No Shares will
become Vested Shares after the Termination Date.
(c) ADJUSTMENTS. The number of Shares that are Vested Shares
or Unvested Shares will be proportionally adjusted to reflect any stock
dividend, stock split, reverse stock split or recapitalization of the common
stock of the Company occurring after the Effective Date.
(d) EXERCISE OF REPURCHASE OPTION AT ORIGINAL PRICE. At any
time within thirty (30) days after the Termination Date, the Company may
elect to repurchase any or all of the Unvested Shares by giving Purchaser
written notice of exercise of the Repurchase Option. The Company and/or its
assignee(s) will then have the option to repurchase from Purchaser (or from
Purchaser's personal representative as the case may be) any or all of the
Unvested Shares at the Purchaser's original Purchase Price Per Share (as
adjusted to reflect any stock dividend, stock split, reverse stock split or
recapitalization of the common stock of the Company occurring after the
Effective Date).
(e) PAYMENT OF REPURCHASE PRICE. The repurchase price payable
to purchase Unvested Shares upon exercise of the Repurchase Option will be
payable, at the option of the Company or its assignee(s), by check or by
cancellation of all or a portion of any outstanding indebtedness of Purchaser
to the Company (or to such assignee) or by any combination thereof. The
repurchase price will be paid without interest within sixty (60) days after
the Termination Date.
(f) RIGHT OF TERMINATION UNAFFECTED. Nothing in this Agreement
will be construed to limit or otherwise affect in any manner whatsoever the
right or power of the Company (or any parent, subsidiary or affiliate of the
Company) to terminate Purchaser's employment at any time for any reason or no
reason, with or without cause.
6. RIGHT OF FIRST REFUSAL. Unvested Shares may not be sold or
otherwise transferred by Purchaser without the Company's prior written
consent. Before any Vested Shares held by Purchaser or any transferee of such
Shares (either being sometimes referred to herein as the "HOLDER") may be
sold or otherwise transferred (including without limitation a transfer by
gift or operation of law), the Company and/or its assignee(s) will have a
right of first refusal to purchase the Shares to be sold or transferred (the
"OFFERED SHARES") on the terms and conditions set forth in this Section (the
"RIGHT OF FIRST REFUSAL").
(a) NOTICE OF PROPOSED TRANSFER. The Holder of the Shares will
deliver to the Company a written notice (the "NOTICE") stating: (i) the
Holder's bona fide intention to sell or otherwise transfer the Offered
Shares; (ii) the name of each proposed purchaser or other transferee
("PROPOSED TRANSFEREE"); (iii) the number of Offered Shares to be transferred
to each Proposed Transferee; (iv) the bona fide cash price or other
consideration for which the Holder
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proposes to transfer the Offered Shares (the "OFFERED PRICE"); and (v) that
the Holder will offer to sell the Offered Shares to the Company and/or its
assignee(s) at the Offered Price as provided in this Section.
(b) EXERCISE OF RIGHT OF FIRST REFUSAL. At any time within
thirty (30) days after the date of the Notice, the Company and/or its
assignee(s) may, by giving written notice to the Holder, elect to purchase
all (but not less than all) of the Offered Shares proposed to be transferred
to any one or more of the Proposed Transferees named in the Notice, at the
purchase price determined in accordance with subsection (c) below.
(c) PURCHASE PRICE. The purchase price for the Offered Shares
purchased under this Section will be the Offered Price. If the Offered Price
includes consideration other than cash, then the value of the non-cash
consideration as determined in good faith by the Company's Board of Directors
will conclusively be deemed to be the cash equivalent value of such non-cash
consideration.
(d) PAYMENT. Payment of the purchase price for Offered Shares
will be payable, at the option of the Company and/or its assignee(s) (as
applicable), by check or by cancellation of all or a portion of any
outstanding indebtedness of the Holder to the Company (or to such assignee,
in the case of a purchase of Offered Shares by such assignee) or by any
combination thereof. The purchase price will be paid without interest within
sixty (60) days after the Company's receipt of the Notice, or, at the option
of the Company and/or its assignee(s), in the manner and at the time(s) set
forth in the Notice.
(e) HOLDER'S RIGHT TO TRANSFER. If all of the Offered Shares
proposed in the Notice to be transferred to a given Proposed Transferee are
not purchased by the Company and/or its assignee(s) as provided in this
Section, then the Holder may sell or otherwise transfer such Offered Shares
to that Proposed Transferee at the Offered Price or at a higher price,
PROVIDED that such sale or other transfer is consummated within 120 days
after the date of the Notice, and PROVIDED FURTHER, that: (i) any such sale
or other transfer is effected in compliance with all applicable securities
laws; and (ii) the Proposed Transferee agrees in writing that the provisions
of this Section will continue to apply to the Offered Shares in the hands of
such Proposed Transferee. If the Offered Shares described in the Notice are
not transferred to the Proposed Transferee within such 120 day period, then a
new Notice must be given to the Company, and the Company will again be
offered the Right of First Refusal before any Shares held by the Holder may
be sold or otherwise transferred.
(f) EXEMPT TRANSFERS. Notwithstanding anything to the contrary
in this Section, the following transfers of Shares will be exempt from the
Right of First Refusal: (i) the transfer of any or all of the Shares during
Purchaser's lifetime by gift or on Purchaser's death by will or intestacy to
Purchaser's "immediate family" (as defined below) or to a trust for the
benefit of Purchaser or Purchaser's immediate family, provided that each
transferee or other recipient agrees in a writing satisfactory to the Company
that the provisions of this Section will continue to apply to the transferred
Shares in the hands of such transferee or other recipient; (ii) any transfer
of Shares made pursuant to a statutory merger or statutory consolidation of
the Company
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with or into another corporation or corporations (except that the Right of
First Refusal will continue to apply thereafter to such Shares, in which case
the surviving corporation of such merger or consolidation shall succeed to
the rights or the Company under this Section unless the agreement of merger
or consolidation expressly otherwise provides); or (iii) any transfer of
Shares pursuant to the winding up and dissolution of the Company. As used
herein, the term "IMMEDIATE FAMILY" will mean Purchaser's spouse, lineal
descendant or antecedent, father, mother, brother or sister, adopted child or
grandchild, or the spouse of any child, adopted child, grandchild or adopted
grandchild of Purchaser.
(g) TERMINATION OF RIGHT OF FIRST REFUSAL. The Right of First
Refusal will terminate as to all Shares on the effective date of the first
sale of common stock of the Company to the general public pursuant to a
registration statement filed with and declared effective by the SEC under the
1933 Act (other than a registration statement relating solely to the issuance
of common stock pursuant to a business combination or an employee incentive
or benefit plan).
(h) ENCUMBRANCES ON VESTED SHARES. Purchaser may ▇▇▇▇▇ ▇ ▇▇▇▇
or security interest in, or pledge, hypothecate or encumber Vested Shares
only if each party to whom such lien or security interest is granted, or to
whom such pledge, hypothecation or other encumbrance is made, agrees in a
writing satisfactory to the Company that: (i) such lien, security interest,
pledge, hypothecation or encumbrance will not apply to such Vested Shares
after they are acquired by the Company and/or its assignees) under this
Section; and (ii) the provisions of this Section will continue to apply to
such Vested Shares in the hands of such party and any transferee of such
party. Purchaser may not ▇▇▇▇▇ ▇ ▇▇▇▇ or security interest in, or pledge,
hypothecate or encumber, any Unvested Shares.
7. RIGHTS AS SHAREHOLDER. Subject to the terms and conditions of
this Agreement, Purchaser will have all of the rights of a shareholder of the
Company with respect to the Shares from and after the date that Purchaser
delivers payment of the Purchase Price until such time as Purchaser disposes
of the Shares or the Company and/or its assignee(s) exercise(s) the
Repurchase Option or Right of First Refusal. Upon an exercise of the
Repurchase Option or the Right of First Refusal, Purchaser will have no
further rights as a holder of the Shares so purchased upon such exercise,
except the right to receive payment for the Shares so purchased in accordance
with the provisions of this Agreement, and Purchaser will promptly surrender
the stock certificate(s) evidencing the Shares so purchased to the Company
for transfer or cancellation.
8. ESCROW. As security for Purchaser's faithful performance of
this Agreement, Purchaser agrees, immediately upon receipt of the stock
certificate(s) evidencing the Shares, to deliver such certificate(s),
together with the Stock Powers executed by Purchaser and by Purchaser's
spouse, if any (with the date and number of Shares left blank), to the
Secretary of the Company or other designee of the Company ("ESCROW HOLDER"),
who is hereby appointed to hold such certificate(s) and Stock Powers in
escrow and to take all such actions and to effectuate all such transfers
and/or releases of such Shares as are in accordance with the terms of this
Agreement. Escrow Holder will act solely for the Company as its agent and not
as a fiduciary. Purchaser and the Company agree that Escrow Holder will not
be liable to any party to this
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Agreement (or to any other party) for any actions or omissions unless Escrow
Holder is grossly negligent or intentionally fraudulent in carrying out the
duties of Escrow Holder under this Section. Escrow Holder may rely upon any
letter, notice or other document executed by any signature purported to be
genuine and may rely on the advice of counsel and obey any order of any court
with respect to the transactions contemplated by this Agreement. The Shares
will be released from escrow upon termination of both the Repurchase Option
and the Right of First Refusal PROVIDED, HOWEVER, that the Shares will be
retained in escrow so long as they are subject to the Pledge Agreement.
9. TAX CONSEQUENCES. Purchaser hereby acknowledges that Purchaser
has been informed that, unless an election is filed by the Purchaser with the
Internal Revenue Service (and, if necessary, the proper state taxing
authorities), WITHIN 30 DAYS of the purchase of the Shares, electing pursuant
to Section 83(b) of the Internal Revenue Code (and similar state tax
provisions, if applicable) to be taxed currently on any difference between
the Purchase Price of the Shares and their fair market value on the date of
purchase, there will be a recognition of taxable income to the Purchaser,
measured by the excess, if any, of the fair market value of the Vested
Shares, at the time they cease to be Unvested Shares, over the purchase price
for such Shares. Purchaser represents that Purchaser has consulted any tax
consultant(s) Purchaser deems advisable in connection with Purchaser's
purchase of the Shares and the filing of the election under Section 83(b) and
similar tax provisions. A form of Election under Section 83(b) is attached
hereto as EXHIBIT 5 for reference. PURCHASER HEREBY ASSUMES ALL
RESPONSIBILITY FOR FILING SUCH ELECTION AND PAYING ANY TAXES RESULTING FROM
SUCH ELECTION OR FOR FAILING TO FILE THE ELECTION AND PAYING TAXES RESULTING
FROM THE LAPSE OF THE REPURCHASE RESTRICTIONS ON THE UNVESTED SHARES.
10. RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS.
(a) LEGENDS. Purchaser understands and agrees that the Company
will place the legends set forth below or similar legends on any stock
certificate(s) evidencing the Shares, together with any other legends that
may be required by state or federal securities laws, the Company's Articles
of Incorporation or Bylaws, any other agreement between Purchaser and the
Company or any agreement between Purchaser and any third party:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR UNDER THE SECURITIES LAWS OF CERTAIN
STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR
RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE
STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR
EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE
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THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF
THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE
ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF
COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER
TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN
COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS ON PUBLIC RESALE, TRANSFER, RIGHT OF
REPURCHASE AND RIGHT OF FIRST REFUSAL OPTIONS HELD BY THE
ISSUER AND/OR ITS ASSIGNEE(S) AS SET FORTH IN A
RESTRICTED STOCK PURCHASE AGREEMENT BETWEEN THE ISSUER
AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH
MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER.
SUCH PUBLIC SALE AND TRANSFER RESTRICTIONS AND THE RIGHT
OF REPURCHASE AND RIGHT OF FIRST REFUSAL ARE BINDING ON
TRANSFEREES OF THESE SHARES.
(b) STOP-TRANSFER INSTRUCTIONS. Purchaser agrees that, in
order to ensure compliance with the restrictions imposed by this Agreement,
the Company may issue appropriate "stop-transfer" instructions to its
transfer agent, if any, and if the Company transfers its own securities, it
may make appropriate notations to the same effect in its own records.
(c) REFUSAL TO TRANSFER. The Company will not be required (i)
to transfer on its books any Shares that have been sold or otherwise
transferred in violation of any of the provisions of this Agreement or (ii)
to treat as owner of such Shares, or to accord the right to vote or pay
dividends, to any purchaser or other transferee to whom such Shares have been
so transferred.
11. MARKET STANDOFF AGREEMENT. Purchaser agrees in connection with
any registration of the Company's securities under the 1933 Act that, upon
the request of the Company or the underwriters managing any registered public
offering of the Company's securities, Purchaser will not sell or otherwise
dispose of any Shares without the prior written consent of the Company or
such managing underwriters, as the case may be, for a period of time (not to
exceed 180 days) after the effective date of such registration requested by
such managing underwriters and subject to all restrictions as the Company or
the managing underwriters may specify for employee-shareholders generally.
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12. COMPLIANCE WITH LAWS AND REGULATIONS. The issuance and transfer
of the Shares will be subject to and conditioned upon compliance by the
Company and Purchaser with all applicable state and federal laws and
regulations and with all applicable requirements of any stock exchange or
automated quotation system on which the Company's common stock may be listed
or quoted at the time of such issuance or transfer.
13. SUCCESSORS AND ASSIGNS. The Company may assign any of its
rights under this Agreement, including its rights to repurchase Shares under
the Repurchase Option and the Right of First Refusal. This Agreement will be
binding upon and inure to the benefit of the successors and assigns of the
Company. Subject to the restrictions on transfer herein set forth, this
Agreement will be binding upon Purchaser and Purchaser's heirs, executors,
administrators, successors and assigns.
14. GOVERNING LAW; SEVERABILITY. This Agreement will be governed by
and construed in accordance with the internal laws of the State of
California, excluding that body of laws pertaining to conflict of laws. If
any provision of this Agreement is determined by a court of law to be illegal
or unenforceable, then such provision will be enforced to the maximum extent
possible and the other provisions will remain fully effective and enforceable.
15. NOTICES. Any notice required or permitted hereunder will be
given in writing and will be deemed effectively given 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 its
deposit with any return receipt express courier (prepaid), or one (1)
business day after transmission by telecopier, addressed to the other party
at its address (or facsimile number, in the case of transmission by
telecopier) as shown below its signature to this Agreement, or to such other
address as such party may designate in writing from time to time to the other
party.
16. FURTHER INSTRUMENTS. The parties agree to execute such further
instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent of this Agreement.
17. HEADINGS. The captions and headings of this Agreement are
included for ease of reference only and will be disregarded in interpreting
or construing this Agreement. All references herein to Sections will refer to
Sections of this Agreement.
18. ENTIRE AGREEMENT. This Agreement, together with all its
Exhibits, constitutes the entire agreement and understanding of the parties
with respect to the subject matter of this Agreement, and supersedes all
prior understandings and agreements, whether oral or written, between the
parties hereto with respect to the specific subject matter hereof.
19. TITLE TO SHARES. The exact spelling of the name(s) under which
Purchaser will take title to the Shares is:
_______________________________________________________
_______________________________________________________
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Purchaser desires to take title to the Shares as follows:
/ / Individual, as separate property
/ / Husband and wife, as community property
/ / Joint Tenants
/ / Alone or with spouse as trustee(s) of the
following trust (including date):___________________________________
____________________________________________________________________
____________________________________________________________________
/ / Other; please specify:______________________________________________
____________________________________________________________________
Purchaser's social security number is:_________________________________________
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed in duplicate by its duly authorized representative and Purchaser has
executed this Agreement in duplicate, as of the Effective Date.
COMPANY PURCHASER
By:__________________________________ ______________________________________
Name:________________________________
Title:_______________________________ Name:_________________________________
Address:_____________________________ Address:______________________________
_____________________________________ ______________________________________
Fax: (____)_________________________ Fax: (____)__________________________
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LIST OF EXHIBITS
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Exhibit 1: Secured Full Recourse Promissory Note
Exhibit 2: Stock Power and Assignment Separate from Stock Certificate
Exhibit 3: Spousal Consent
Exhibit 4: Stock Pledge Agreement
Exhibit 5: Election Under Section 83(b) of the Internal Revenue Code
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EXHIBIT 1
SECURED FULL RECOURSE PROMISSORY NOTE
Cupertino, California
$__________________ ___________________, ____
1. OBLIGATION. In exchange for the issuance to the undersigned
("PURCHASER") of __________ shares (the "SHARES") of the Common Stock of
Silicon Image, Inc., a California corporation (the "COMPANY"), receipt of
which is hereby acknowledged, Purchaser hereby promises to pay to the order
of the Company on or before ____________, at the Company's principal place of
business at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, or at such
other place as the Company may direct, the principal sum of
____________________________________ Dollars ($__________) together with
interest compounded semi-annually on the unpaid principal at the rate of
___________________ percent (_____%), which rate is not less than the minimum
rate established pursuant to Section 1274(d) of the Internal Revenue Code of
1986, as amended, on the earliest date on which there was a binding contract
in writing for the purchase of the Shares; PROVIDED, HOWEVER, that the rate
at which interest will accrue on unpaid principal under this Note will not
exceed the highest rate permitted by applicable law.
2. SECURITY. Payment of this Note is secured by a security
interest in the Shares granted to the Company by Purchaser under a Stock
Pledge Agreement dated of even date herewith between the Company and
Purchaser (the "PLEDGE AGREEMENT"). This Note is being tendered by Purchaser
to the Company as the purchase price of the Shares pursuant to that certain
Restricted Stock Purchase Agreement between Purchaser and the Company dated
of even date with this Note (the "PURCHASE AGREEMENT").
3. DEFAULT; ACCELERATION OF OBLIGATION. Purchaser will be deemed
to be in default under this Note and the principal sum of this Note, together
with all interest accrued thereon, will immediately become due and payable in
full: (a) upon Purchaser's failure to make any payment of principal and/or
interest when due under this Note; (b) in the event Purchaser ceases to be
employed by the Company (as defined in the Purchase Agreement) for any reason
and the Company exercises its Repurchase Option to repurchase all or some of
the Shares under the Purchase Agreement; (c) upon the filing by or against
Purchaser of any voluntary or involuntary petition in bankruptcy or any
petition for relief under the federal bankruptcy code or any other state or
federal law for the relief of debtors; or (d) upon the execution by Purchaser
of an assignment for the benefit of creditors or the appointment of a
receiver, custodian, trustee or similar party to take possession of
Purchaser's assets or property.
4. REMEDIES ON DEFAULT. Upon any default of Purchaser under this
Note, the Company will have, in addition to its rights and remedies under
this Note and the Pledge
Agreement, full recourse against any real, personal, tangible or intangible
assets of Purchaser, and may pursue any legal or equitable remedies that are
available to it.
5. RULE 144 HOLDING PERIOD. PURCHASER UNDERSTANDS THAT THE HOLDING
PERIOD SPECIFIED UNDER RULE 144(d) OF THE SECURITIES AND EXCHANGE COMMISSION
WILL NOT BEGIN TO RUN WITH RESPECT TO SHARES PURCHASED WITH THIS NOTE UNTIL
EITHER (A) THE PURCHASE PRICE OF SUCH SHARES IS PAID IN FULL IN CASH OR BY
OTHER PROPERTY ACCEPTED BY THE COMPANY, OR (B) THIS NOTE IS SECURED BY
COLLATERAL, OTHER THAN THE SHARES THAT HAVE NOT BEEN FULLY PAID FOR IN CASH,
HAVING A FAIR MARKET VALUE AT LEAST EQUAL TO THE AMOUNT OF PURCHASER'S THEN
OUTSTANDING OBLIGATION UNDER THIS NOTE (INCLUDING ACCRUED INTEREST).
6. PREPAYMENT. Prepayment of principal and/or interest due under
this Note may be made at any time without penalty. Unless otherwise agreed in
writing by the Company, all payments will be made in lawful tender of the
United States and will be applied first to the payment of accrued interest,
and the remaining balance of such payment, if any, will then be applied to
the payment of principal. If Purchaser prepays all or a portion of the
principal amount of this Note, Purchaser intends that the Shares paid for by
the portion of principal so paid will continue to be held in pledge under the
Pledge Agreement to serve as independent collateral for the outstanding
portion of this Note for the purpose of commencing the holding period under
Rule 144(d) of the Securities and Exchange Commission with respect to other
Shares purchased with this Note.
7. GOVERNING LAW; WAIVER. The validity, construction and
performance of this Note will be governed by the internal laws of the State
of California, excluding that body of law pertaining to conflicts of law.
Purchaser hereby waives presentment, notice of non-payment, notice of
dishonor, protest, demand and diligence.
8. ATTORNEYS' FEES. If suit is brought for collection of this
Note, Purchaser agrees to pay all reasonable expenses, including attorneys'
fees, incurred by the holder in connection therewith whether or not such suit
is prosecuted to judgment.
IN WITNESS WHEREOF, Purchaser has executed this Note as of the date
and year first above written.
PURCHASER
______________________________________
[SIGNATURE PAGE TO SECURED FULL RECOURSE PROMISSORY NOTE]
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EXHIBIT 2
STOCK POWER AND ASSIGNMENT
SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED and pursuant to that certain Restricted Stock
Purchase Agreement dated as of June __, 1999, (the "AGREEMENT"), the
undersigned hereby sells, assigns and transfers unto _____________________,
__________ shares of the common stock of Silicon Image, Inc., a California
corporation (the "COMPANY"), standing in the undersigned's name on the books
of the Company represented by Certificate No(s). ____ delivered herewith, and
does hereby irrevocably constitute and appoint the Secretary of the Company
as the undersigned's attorney-in-fact, with full power of substitution, to
transfer said stock on the books of the Company. THIS ASSIGNMENT MAY ONLY BE
USED AS AUTHORIZED BY THE AGREEMENT AND THE EXHIBITS THERETO.
Dated: ______________, _____
PURCHASER
______________________________________
(Signature)
______________________________________
(Please Print Name)
______________________________________
(Spouse's Signature, if any)
______________________________________
(Please Print Spouse's Name)
INSTRUCTION: Please do NOT fill in any blanks other than the signature line.
The purpose of this Stock Power and Assignment is to enable the Company
and/or its assignee(s) to acquire the shares upon a default under Purchaser's
Note and to exercise of its "Repurchase Option" and/or "Right of First
Refusal" set forth in the Agreement without requiring additional signatures
on the part of the Purchaser or Purchaser's Spouse.
EXHIBIT 3
CONSENT OF SPOUSE
I, the undersigned, am the spouse of
_______________________-("PURCHASER"). I have read and hereby consent to and
approve all the terms and conditions of the Restricted Stock Purchase
Agreement (the "AGREEMENT") dated __________________ between Purchaser and
Silicon Image, Inc., a California corporation (the "COMPANY"), pursuant to
which Purchaser has purchased _________ shares of the Company's common stock
(the "SHARES") and that certain Secured Full Recourse Promissory Note (the
"NOTE") and Stock Pledge Agreement ("PLEDGE AGREEMENT") executed by Purchaser
in connection with the Agreement.
In consideration of the Company granting my spouse the right to
purchase the Shares under the Agreement, I hereby agree to be irrevocably
bound by all the terms and conditions of the Agreement (including but not
limited to the Company's Repurchase Option, the Right of First Refusal and
the market standoff agreements contained therein) and of the Note and the
Pledge Agreement and further agree that any community property interest I may
have in the Shares will be similarly bound by the Agreement, the Note and the
Pledge Agreement.
I hereby appoint Purchaser as my attorney-in-fact, to act in my
name, place and stead with respect to any amendment of the Agreement, the
Note and the Pledge Agreement, and with respect to the making and filing of
an election under Internal Revenue Code Section 83(b) in connection with the
purchase of the Shares.
Dated: ________________
______________________________________
Signature of Spouse [Sign Here]
______________________________________
Name of Spouse [Please Print]
/ / Check this box if you do not have a spouse.
EXHIBIT 4
STOCK PLEDGE AGREEMENT
This Agreement is made and entered into as of _____________- between
Silicon Image, Inc., a California corporation (the "COMPANY"), and
_____________________________ ("PLEDGOR").
R E C I T A L S
A. In exchange for Pledgor's Secured Full Recourse Promissory Note
to the Company of even date herewith (the "NOTE"), the Company has issued and
sold to Pledgor ____________________________________ (______) shares of its
common stock (the "SHARES") pursuant to the terms and conditions of that
certain Restricted Stock Purchase Agreement between the Company and Pledgor
of even date herewith (the "PURCHASE AGREEMENT").
B. Pledgor has agreed that repayment of the Note will be secured
by the pledge of the Shares pursuant to this Agreement.
NOW, THEREFORE, the parties agree as follows:
1. CREATION OF SECURITY INTEREST. Pursuant to the provisions
of the California Commercial Code, Pledgor hereby grants to the Company, and
the Company hereby accepts, a first and present security interest in the
Shares and the shares of Common Stock of the Company set forth on EXHIBIT A
(the "ADDITIONAL SHARES") as collateral to secure the payment of Pledgor's
obligation to the Company under the Note. Pledgor herewith delivers to the
Company common stock certificate(s) No(s). ________, representing all the
Shares, and common stock certificate(s) No(s). ___, representing all the
Additional Shares, together with one stock power for each certificate in the
form attached as an Exhibit to the Purchase Agreement, duly executed (with
the date and number of shares left blank) by Pledgor and Pledgor's spouse, if
any. For purposes of this Agreement, the Shares and Additional Shares pledged
to the Company hereby, together with any additional collateral pledged
pursuant to Section 5 hereof, will hereinafter be collectively referred to as
the "COLLATERAL." Pledgor agrees that the Collateral pledged to the Company
will be deposited with and held by the Escrow Holder (as defined in the
Purchase Agreement) and that, notwithstanding anything to the contrary in the
Purchase Agreement, for purposes of carrying out the provisions of this
Agreement, Escrow Holder will act solely for the Company as its agent and not
as a fiduciary.
2. REPRESENTATIONS AND WARRANTIES. Pledgor hereby represents
and warrants to the Company that Pledgor has good title (both record and
beneficial) to the Collateral, free and clear of all claims, pledges,
security interests, liens or encumbrances of every nature whatsoever, and
that Pledgor has the right to pledge and grant the Company the security
interest in the Collateral granted under this Agreement. Pledgor further
agrees that, until the entire principal
sum and all accrued interest due under the Note has been paid in full,
Purchaser will not, without the Company's prior written consent, (i) sell,
assign or transfer, or attempt to sell, assign or transfer, any of the
Collateral, or (ii) grant or create, or attempt to grant or create, any
security interest, lien, pledge, claim or other encumbrance with respect to
any of the Collateral.
3. RIGHTS ON DEFAULT. In the event of default (as defined in
the Note) by Pledgor under the Note, the Company will have full power to
sell, assign and deliver the whole or any part of the Collateral at any
broker's exchange or elsewhere, at public or private sale, at the option of
the Company, in order to satisfy any part of the obligations of Pledgor now
existing or hereinafter arising under the Note. On any such sale, the Company
or its assigns may purchase all or any part of the Collateral. In addition,
at its sole option, the Company may elect to retain all the Collateral in
full satisfaction of Pledgor's obligation under the Note, in accordance with
the provisions and procedures set forth in the California Commercial Code.
4. ADDITIONAL REMEDIES. The rights and remedies granted to
the Company herein upon default under the Note will be in addition to all the
rights, powers and remedies of the Company under the California Commercial
Code and applicable law and such rights, powers and remedies will be
exercisable by the Company with respect to all of the Collateral. Pledgor
agrees that the Company's reasonable expenses of holding the Collateral,
preparing it for resale or other disposition, and selling or otherwise
disposing of the Collateral, including attorneys' fees and other legal
expenses, will be deducted from the proceeds of any sale or other disposition
and will be included in the amounts Pledgor must tender to redeem the
Collateral. All rights, powers and remedies of the Company will be cumulative
and not alternative. Any forbearance or failure or delay by the Company in
exercising any right, power or remedy hereunder will not be deemed to be a
waiver of any such right, power or remedy and any single or partial exercise
of any such right, power or remedy hereunder will not preclude the further
exercise thereof.
5. DIVIDENDS; VOTING. All dividends hereinafter declared on
or payable with respect to the Collateral during the term of this pledge
(excluding only ordinary cash dividends, which will be payable to Pledgor so
long as Pledgor is not in default under the Note) will be immediately
delivered to the Company to be held in pledge under this Agreement.
Notwithstanding this Agreement, so long as Pledgor owns the Shares and
Additional Shares and is not in default under the Note, Pledgor will be
entitled to vote any shares comprising the Collateral, subject to any proxies
granted by Pledgor.
6. ADJUSTMENTS. In the event that during the term of this
pledge, any stock dividend, reclassification, readjustment, stock split or
other change is declared or made with respect to the Collateral, or if
warrants or any other rights, options or securities are issued in respect of
the Collateral, then all new, substituted and/or additional shares or other
securities issued by reason of such change or by reason of the exercise of
such warrants, rights, options or securities, will be immediately pledged to
the Company to be held under the terms of this Agreement in the same manner
as the Collateral is held hereunder.
-2-
7. RIGHTS UNDER PURCHASE AGREEMENT. Pledgor understands and
agrees that the Company's rights to repurchase the Shares under the Purchase
Agreement will continue for the periods and on the terms and conditions
specified in the Purchase Agreement, whether or not the Note has been paid
during such period of time, and that to the extent that the Note is not paid
during such period of time, the repurchase by the Company of the Shares may
be made by way of cancellation of all or any part of Pledgor's indebtedness
under the Note.
8. REDELIVERY OF COLLATERAL. Upon payment in full of the
entire principal sum and all accrued interest due under the Note, and subject
to the terms and conditions of the Purchase Agreement, the Company will
immediately redeliver the Collateral to Pledgor and this Agreement will
terminate; PROVIDED, however, that all rights of the Company to retain
possession of the Shares pursuant to the Purchase Agreement will survive
termination of this Agreement.
9. SUCCESSORS AND ASSIGNS. This Agreement will inure to the
benefit of the respective heirs, personal representatives, successors and
assigns of the parties hereto.
10. GOVERNING LAW; SEVERABILITY. This Agreement will be
governed by and construed in accordance with the internal laws of the State
of California, excluding that body of law relating to conflicts of law.
Should one or more of the provisions of this Agreement be determined by a
court of law to be illegal or unenforceable, the other provisions
nevertheless will remain effective and will be enforceable.
11. MODIFICATION; ENTIRE AGREEMENT. This Agreement will not be
amended without the written consent of both parties hereto. This Agreement
and Section 8 of the Purchase Agreement constitute the entire agreement of
the parties hereto with respect to the subject matter hereof and supersede
all prior agreements and understandings related to such subject matter.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date and year first above written.
COMPANY PLEDGOR
By:__________________________________ ____________________________________
Name:________________________________
Its:_________________________________
-3-
EXHIBIT A
ADDITIONAL SHARES
Silicon Image, Inc. Common Stock Number of Shares
[Certificate No. ___]
-4-
EXHIBIT 5
ELECTION UNDER SECTION 83(b) OF THE
INTERNAL REVENUE CODE
The undersigned Taxpayer hereby elects, pursuant to Section 83(b) of the
Internal Revenue Code, to include in gross income for the Taxpayer's current
taxable year the excess, if any, of the fair market value of the property
described below at the time of transfer over the amount paid for such
property, as compensation for services.
1. TAXPAYER'S NAME: _________________________________
TAXPAYER'S ADDRESS: _________________________________
SOCIAL SECURITY NUMBER: _________________________________
2. The property with respect to which the election is made is described as
follows: _________ shares of Common Stock of Silicon Image, Inc., a
California corporation (the "COMPANY"), which is Taxpayer's employer or
the corporation for whom the Taxpayer performs services.
3. The date on which the shares were transferred was _____________ and
this election is made for calendar year _____.
4. The shares are subject to the following restrictions: The Company may
repurchase all or a portion of the shares at the Taxpayer's original
purchase price under certain conditions at the time of Taxpayer's
termination of employment or services.
5. The fair market value of the shares (without regard to restrictions other
than restrictions which by their terms will never lapse) was $_____ per
share at the time of transfer.
6. The amount paid for such shares was $______ per share.
7. The Taxpayer has submitted a copy of this statement to the Company.
THIS ELECTION MUST BE FILED WITH THE INTERNAL REVENUE SERVICE ("IRS"), AT THE
OFFICE WHERE THE TAXPAYER FILES ANNUAL INCOME TAX RETURNS, WITHIN 30 DAYS
AFTER THE DATE OF TRANSFER OF THE PROPERTY, AND MUST ALSO BE FILED WITH THE
TAXPAYER'S INCOME TAX RETURNS FOR THE CALENDAR YEAR. THE ELECTION CANNOT BE
REVOKED WITHOUT THE CONSENT OF THE IRS.
Dated: ___________ __, ______ ____________________________________
Taxpayer's Signature