1 Consolidated Amended Complaint 07/27/2005

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MERRICK SCOTT RAYLE (S .B.N. 139478)LOVELL STEWART HALEBIAN LL P212 Wood StreetPacific Grove, CA 93950Telephone : (831) 333-0309Facsimile : (831) 333-0325nzrayle(allshllp .com

CHRISTOPHER LOVELLLOVELL STEWART HALEBIAN LLP500 Fifth AvenueNew York, New York 10110Telephone: (212) 608-1900Facsimile : (212) 719-4677clovell(ctlshllp .com.

RICHARD A. SPEIRSPAUL KLEIDMANZWERLING, SCHACHTER & ZWERLING, LLP41 Madison AvenueNew York, NY 10010Telephone: (212) 223-3900Facsimile: (212) 371-5969rspeirs(c~zsz .compkleid nan(a)zsz .com

Co-Lead Counsel for Plaintiffs

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN FRANCISCO DIVISIO N

In re SILICON IMAGE, INC .SECURITIES LITIGATIO N

This Document Relates To :All Actions

Master File No . C 05-00456 MM C

CLASS ACTION

CONSOLIDATED AMENDEDCOMPLAINT

JURY TRIAL DEMANDEDHon. Maxine M. Chesney

CONSOLIDATED AMENDED COMPLAINTMaster File No. C 05-00456 MMC

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The Court-appointed Lead Plaintiffs in this action, William S . Hayman and John Herlih

(collectively, the "Lead Plaintiffs" or "Plaintiffs"), individually and on behalf of all othe r

similarly situated, by their undersigned attorneys, for their complaint against defendants ,

the following based upon personal knowledge as to themselves and their own acts ,

information and belief as to all other matters, based upon, inter alia, the investigation

by and through their attorneys, which included, among other things, a review of the defendants'

public documents, conference calls and announcements, United States Securities and Exchange

Commission ("SEC") filings, wire and press releases published by and regarding Silicon Image,

Inc . (collectively, "Silicon Image" or the "Company"), securities analysts' reports and advisories

about the Company, news articles, and other information readily obtainable . Plaintiffs believe

that additional evidentiary support will exist for the allegations set forth herein after a reasonable

opportunity for discovery .

NATURE OF THE ACTION

1 . This is a securities fraud class action on behalf of shareholders who bought

common stock of Silicon Image Inc. ("Silicon Image" or "the Company") between June 25, 200

and April 22, 2005, inclusive (the "Class Period") . Plaintiffs bring this action pursuant to §

10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act"), and SEC Rul

I Ob-5 promulgated thereunder.

SUMMARY OF ALLEGATION S

2. A public company' s management and its Board of Directors control its destiny.

To investors and the market for a public company's stock, material facts about a company

include facts relating to that company's management, Board of Directors, their cohesiveness and

trust, and the resulting confidence investors can or cannot place in the focus, execution and

direction of the company. A lack of confidence in management adversely impacts a company's

ability to do business with customers and convince them of the company's ability to deliver .

CONSOLIDATED AMENDED COMPLAINT 1

Master File No . C 05-00456 MMC

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3 . On May 10, 2004, Silicon Image filed its Form 10-Q with the Securities an

Exchange Commission for the quarter ended March 31, 2004 . In its Form 10-Q, the Compan

represented that its independent auditor, PricewaterhouseCoopers LLP ("PwC"), identified

reportable condition relating to the Company's internal controls . Specifically, the Compan

acknowledged that its auditor identified "deficiencies in the Company's internal control structur

design related to the overall internal control environment regarding our Chief

Officer's communication and operating style and his periodic involvement in

recognition discussions . "

4 . As a result of the condition identified by PwC and the Company's own intern

evaluation, Silicon Image stated in the Form 10-Q that it is "in the process of implementing

series of internal measures designed to enhance the Company' s overall internal c

environment ." Among other things, these measures were to include "restructuring

reporting relationships among management and clarifying management roles

responsibilities" and "improving communication within the management team and between

management team and the Board of Directors, including the Audit Committee ." In sum, Sil i

Image informed the investing public that it was implementing improved internal controls

management reporting structures, and that it was dedicated to good corporate gover n

practices .

5 . In an apparent attempt to address the Company's internal control problems,

June 24, 2004, defendants Silicon Image and Dr . David Lee ("Lee"), the Company's Four

and, at that time, the Chairman and Chief Executive Officer, announced that the Company ,

attempting "to recruit a world-class executive," and that the Company was "committe d

exemplifying excellence in corporate governance, and therefore believe it is important

separate the roles of the CEO and chairman." Due, in part, to those representations, the pric e

CONSOLIDATED AMENDED COMPLAINT 2Master File No. C 05-00456 MMC

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Silicon Image common stock increased over 19% by the end of the trading session on June 2 5

112004 .

6. However, defendants failed to disclose the following material fact s

rendered the foregoing representations misleading. Beginning at least as early as June 2004

continuing until the end of the Class Period, the management and Board of Directors of Sil i

Image were divided into two factions that clashed over numerous issues, made decisive

difficult, and made regular and necessary action, like hiring and assigning duties to a

Executive, impossible . This inability of the Board and management to act led to a serie s

management and director resignations, and crippled the Company's ability to correct its int

control problems, enact good corporate governance standards, or develop standards

guidelines apportioning responsibilities amongst top Company officers and directors .

7. In one faction there were defendants Steve Tirado ("Tirado"), David Le e

others in upper management . Tirado has worked with Lee at Silicon Image since 1999, an d

previously worked together at Sun Microsystems, Inc . The other faction was comprised of

Company's outside directors and, for a time, its former Chief Executive Officer and Preside

Steven Laub ("Laub" )

8 . As a result of the material undisclosed facts alleged in ¶ 6 :

(a) On August 18, 2004, Robert Gargus ("Gargus"), the former Chief Finar

Officer and Vice President of Finance and Administration, announced his retirement fro m

Company, claiming that his reason for retiring was to spend more time with his famil y

However, according to a former employee, Gargus did not agree with defendants Lee and Tir

on many issues and was often on the opposite side of the issues . Thus, unsurprisingly, only 1

months after his official retirement from the Company on April 20, 2005, defendant Gar

joined another company as its Chief Financial Officer .



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(b) On November 16, 2004, Andrew Rappaport and Douglas Spreng resigned

members of the Board of Directors within a week of Laub's appointment . Both Spreng

Rappaport were members of the compensation committee .

(c) On January 20, 2005, Laub resigned as Chief Executive Officer, stating that ,

inception, November 11, 2004, an agreement on his duties and responsibilities could not

reached. Following the announcement of Laub's resignation on January 25, 2005, Sil

iImage's stock dropped in value by over 13%, falling from $14.14 to $12.26 on a trading

of 16,485,000 shares .

(d) Following Laub's resignation, the Board of Directors attempted to rein in Le e

limit his control by appointing Christopher Paisley as Chairman and by not supporting Lee's

appointment to the Board . Lee and Tirado, however, in defiance of the Board of Direct

threatened to resign if Lee was not re-nominated .

(e) On April 24, 2005, four members of the Board of Directors resigned . These

individuals were Christopher Paisley, David Courtney, Keith McAuliffe and Richard Sanquini

Mr. Paisley was Chairman of the Board and a member of the audit, compensation,

governance and nominating committees . Mr. Courtney was the Chairman of the audit comn

and a member of the governance and nominating committee . Mr. McAuliffe was the Chai

of the compensation committee and a member of the audit and governance and nomin

committees . Mr. Sanquini was a member of the compensation and governance and nomin

committees .

(f) Following the four board resignations on April 24, 2005, the price of Sili

Image stock fell further by over 17% on April 25, 2005, going from $11 .49 to $9.50 on voh

of 13,899,000 shares . Additionally, as a result of the Board resignations, Silicon Image fel l

of compliance with Nasdaq Market (the "Nasdaq") listing rules because the majority of it s


Master File No. C 05-00456 MMC

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I was no longer comprised of independent members, it did not have enough independent me m

I on its Audit Committee, and it did not have enough members with requisite financial expertise .

(g) On June 7, 2005, the Company's auditor, PwC, resigned "effective immediately."

(h) The Company made errors in SEC filings .

9. Additionally, on January 25, 2005, the Company was informed that it was the

subject of an investigation by the SEC Division of Enforcement relating to the "trading of th e

Company's securities by unidentified persons ." A main reason for the Board dispute was tl

concern of a majority of the Board that Dr . Lee was improperly influencing financial reporting .

10. Although investors were not aware of the material undisclosed facts alleged in

6, the named defendants were . Defendant Tirado, who was well-informed, acted on this insi ~

information during the Class Period by selling 732,000 shares of his personally-held commoi

stock to the unsuspecting public at inflated prices for over $10,000,000 in proceeds . See If 65

particularizing defendant Tirado's sales .

11 . Investors' losses from purchases of Silicon Image common stock between J

25, 2004 and April. 22, 2005 were proximately caused by the disclosures of the true facts and

resulting drop in the price of Silicon Image common stock . Investors' losses were dire

caused by their justifiable reliance on defendants' fraudulent and materia l

misrepresentations and omissions .

JURISDICTION AND VENUE

12 . The claims asserted herein arise under and pursuant to Sections 10(b) and 20(a )

the Exchange Act [15 U.S .C. §§ 78j (b) and 78t(a )] and Rule 1Ob -5 promulgated thereunder

the SEC [17 C .F.R. § 240 .1Ob-5] .

13 . This Court has jurisdiction over the subject matter of this action pursuant to 2

U.S.C. §§ 1331 and 1337 and Section 27 of the Exchange Act [1 .5 U.S .C. § 78aa] .



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14. Venue is proper in this District pursuant to Section 27 of the Exchange Act, a]

28 U.S.C. § 1391(b) . Silicon Image maintains its principal place of business in this District ai

many of the acts and practices complained of herein occurred in substantial part in this District .

15 . In connection with the acts alleged in this complaint, defendants, directly

indirectly, used the means and instrumentalities of interstate commerce, including, bu t

limited to, the mails, interstate telephone communications and the facilities of the

securities markets .

PARTIES

16 . Lead Plaintiffs, William S . Hayman and John Herlihy, purchased th e

stock of Silicon Image at artificially inflated prices during the Class Period and have

damaged thereby, as evidenced, in part, by their certifications pursuant to Local Civil

3 .7(c), dated, respectively April 1, 2005 and April 4, 2005, and submitted along with

Motion for Appointment as Co-Lead Plaintiffs, dated April 4, 2005 .

17 . Defendant Silicon Image is a Delaware corporation with its principal place

business at 1060 East Arques Avenue, Sunnyvale, CA 94085 . Silicon Image has approximat

337 full-time employees . At all relevant times up to May 4, 2005 and since June 10, 2005

Silicon Image's stock was actively traded on the Nasdaq under the symbol SIMG . At all relevan

times from May 4, 2005 to June 9, 2005, Silicon Image's stock was actively traded on

Nasdaq composite under the symbol SIMGE .

18. Defendant Steve Tirado has served as a director, President and Chie f

Officer since January 24, 2005 . Prior to his recent appointments, defendant Tirado served a s

President of Silicon Image's Storage Group between April 2004 and January 2005 ,

Company's President from January 2003 to March 2004, the Chief Operating Officer

November 2000 to March 2004, and the Executive Vice President of Marketing and B u

Development from August 1999 to November 2000.



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19. Defendant David Lee has served as Chairman Emeritus of Silicon Image s i

April 2005 and has served as Chairman of PanelLink Cinema LLC, a wholly-owned subsidia

of Silicon Image, since January 2005 . Lee is the founder of the Company and served as

director of Silicon Image between January 1, 1995 and June 15, 2005 . He previously served

Chairman of the Board until January 2005, Chief Executive Officer until November 2004, an d

President until October 1996 and from June 1999 until January 2003 .

20 . The defendants referenced above in ¶¶ 18-19 are referred to herein a s

I "Individual Defendants . "

21 . Because of the Individual Defendants' positions with the Company, they

access to the adverse undisclosed information about its business , operations, prod

operational trends, financial statements, markets and present and future business prospects

access to internal corporate documents (including the Company's operating plans, budgets

forecasts and reports of actual operations compared thereto), conversations and connection s

other corporate officers and employees, attendance at management and Board of Director

meetings and committees thereof and via reports and other information provided to them i

connection therewith . Additionally, Individual Defendants knew of the Company' s

I control problems and of the divisive atmosphere between the Board of Directors an d

Lee .

22. It is appropriate to treat the Individual Defendants as a group for pleat

purposes and to presume that the false, misleading and incomplete information conveyed in

Company's public filings, press releases and other publications as alleged herein ar e

collective actions of the narrowly defined group of defendants identified above . Each of

above officers of Silicon Image, by virtue of their high-level positions with the Compan y

directly participated in the management of the Company, was directly involved in the day-

operations of the Company at the highest levels and was privy to confidential propri


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information concerning the Company and its business, operations, products, growth, fin,

statements, and financial condition, as alleged herein . Said defendants were involved in dra

producing, reviewing and/or disseminating the false and misleading statements and inform

alleged herein. The individual defendants were aware, or recklessly disregarded, that the

and misleading statements were being issued regarding the Company, and approved or r a

these statements , in violation of the federal securities laws .

23 . As officers and controlling persons of a publicly-held company, whos e

stock was, and is, registered with the SEC pursuant to the Exchange Act, and was traded on the

Nasdaq, and governed by the provisions of the federal securities laws, the Individual Defendant!

each had a duty to disseminate promptly, accurate and truthful information with respect to thf

Company's financial condition and performance, growth, operations, financial statements

business, products, markets, management, earnings and present and future business prospects

and to correct any previously-issued statements that had become materially misleading or untrue

so that the market price of the Company's publicly-traded securities would be based upon

truthful and accurate information. The Individual Defendants' misrepresentations and omission

during the Class Period violated these specific requirements and obligations .

24. The Individual Defendants participated in the drafting, preparation, and/

approval of the various public and shareholder and investor reports and other communication ;

complained of herein and were aware of, or recklessly disregarded, the misstatements container

therein and omissions therefrom, and were aware of their materially false and misleading nature

Because of their Board membership and/or executive and managerial positions with Silicon

Image, each of the Individual Defendants had access to the adverse undisclosed information

about Silicon Image's internal control deficiencies, including the serious disputes amongs

members of its Board of Directors and management, the inability to define roles an(

responsibilities for Laub and other top officers and directors, the failure to enact and enforc (



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good corporate governance standards, and the ensuing lack of confidence in Lee's role o n

Board, as particularized herein and knew (or recklessly disregarded) that these adverse fa

rendered the positive representations made, by or about Silicon Image and its business, issued

adopted by the Company materially false and misleading .

25 . The Individual Defendants, because of their positions of control and authority

officers and/or directors of the Company, were able to and did control the content of the vari c

SEC filings, press releases and other public statements pertaining to the Company during

Class Period . Each Individual Defendant was provided with copies of the documents all c

herein to be misleading prior to or shortly after their issuance and/or had the abilit y

opportunity to prevent their issuance or cause them to be corrected . Accordingly, each of th

Individual Defendants are responsible for the accuracy of the public reports and releases detail e

herein and are therefore primarily liable for the representations contained therein .

26. Each of the defendants is liable as a participant in a fraudulent scheme

course of business that operated as a fraud or deceit on purchasers of Silicon Image co m

stock by disseminating materially false and misleading statements and/or concealin g

adverse facts . The scheme: (i) deceived the investing public regarding Silicon Image's business

operations, management and the intrinsic value of Silicon Image common stock ; (ii) enable (

defendant Tirado to sell over $10,000,000 of his personally-held common stock to

unsuspecting public ; and (iii) caused Plaintiffs and other members of the Class to pure

Silicon Image common stock at artificially inflated prices .

PLAINTIFFS' CLASS ACTION ALLEGATIONS

27 . Plaintiffs bring this action as a class action pursuant to Federal Rule of Civi l

Procedure 23(a) and (b)(3) on behalf of a Class, consisting of all those who purchased o :

otherwise acquired the securities of Silicon Image between June 25, 2004 and April 22, 200 5

inclusive (the "Class Period") and who were damaged thereby . Excluded from the Class

CONSOLIDATED AMENDED COMPLAINT 9Master File No . C 05-00456 MMC

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defendants, the officers and directors of the Company, at all relevant times, members of thei

immediate families and their legal representatives, heirs, successors or assigns and any entity ii

which defendants have or had a controlling interest .

28. The members of the Class are so numerous that joinder of all members i

impracticable . Throughout the Class Period, Silicon Image common shares were actively trade(

on the Nasdaq. The average daily trading volume in Silicon Image common stock during the

Class Period was 1,286,313 shares per day . Record owners and other members of the Class ma .

be identified from records maintained by Silicon Image or its transfer agent and may be notifie(

of the pendency of this action by mail, using the form of notice similar to that customarily use(

in securities class actions .

29 . Plaintiffs' claims are typical of the claims of the members of the Class as

members of the Class are similarly affected by defendants' wrongful conduct in violatio n

federal law that is complained of herein .

30. Plaintiffs will fairly and adequately protect the interests of the members of

Class and have retained counsel competent and experienced in class and securities litigati

Plaintiffs have no interests antagonistic to or in conflict with those of the Class .

31 . Common questions of law and fact exist as to all members of the Clas s

predominate over any questions solely affecting individual members of the Class . Among

questions of law and fact common to the Class are :

(a) whether the federal securities laws were violated by defendants' acts as all e

herein ;

(b) whether statements made by defendants to the investing public during the

Period misrepresented or omitted material facts about the business, operations and manag

of Silicon Image ;



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(c) defendants acted with knowledge or recklessness when issuing false

misleading statements during the Class Period ;

(d) the market prices of the Company's securities during the Class Period

artificially inflated because of the defendants' conduct complained of herein ; and

(e) to what extent the members of the Class have sustained damages and the p

measure of damages .

32. A class action is superior to all other available methods for the fair and efficier

adjudication of this controversy since joinder of all members is impracticable . Furthermore, a

the damages suffered by individual Class members may be relatively small, the expense any

burden of individual litigation make it impossible for members of the Class to individuall

redress the wrongs done to them . There will be no difficulty in the management of this action a

a class action .

SUBSTANTIVE ALLEGATIONS

Background Facts

A. The Business of Silicon Imag e

33 . Silicon Image manufactures and sells multi-gigabit semiconductor solutions fc

the secure transmission, storage and display of rich digital media . Silicon Image design!

develops and markets semiconductor solutions for communications applications . The Compan

offers a variety of products including transmitters, receivers, controllers, video processor :

storage semiconductors and a series of redundant array of independent disks, controller board

and storage subsystems . The Company's products are sold to distributors and original equipmer

manufacturers throughout the world through a direct sales force with field offices located is

North America, Taiwan and Europe, and indirectly through a network of distributors an

manufacturer representatives located throughout North America, Asia and Europe .



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34. In addition, the Company licenses Internet protocol (IP) cores to compani e

providing advanced system-on-a-chip solutions to accelerate the adoption of the digital

interface (DVI), high-definition multimedia interface (HDMI) and serial advanced technol o

attachment (SATA) interfaces .

35 . The Company is comprised of three main divisions : Consumer Electronics, P C

and Displays and Storage. Defendant Tirado was President of the Storage Division prior t o

recent appointment as the Company's Chief Executive Officer and President .

B . Stated Principles of Corporate Governance

36 . On January 9, 2003, the Commission on Public Trust and Private Enterprise of

Conference Board (the "Commission") issued its findings and recommendation s

corporate governance . The Commission recommended the following to companies in regards

the roles of the Chairman and CEO :

a. The roles of Chairman and CEO would be performed by twoseparate individuals, and the Chairman would be one of theindependent directors ;

b. The roles of Chairman and CEO would be performed by twoseparate individuals . However, if the Chairman is not anindependent director, he or she should not be a member of themanagement team and should not report to the CEO . In this case, aLead Independent Director should also be established ; or

c. Where a board does not choose to separate the Chairman andCEO position, or when such boards are in transition to a structurewhere the positions will be separated, a Presiding Directorposition should be established .

37 . On July 17, 2003, the governance and nominating committee of the Boar d

Directors of Silicon Image (the "Governance and Nominating Committee") adopted its charte r

The Governance and Nominating Committee's principal governance functions are as follows :

1 . The Committee will ensure that charters are written for each ofthe standing committees of the Board .



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2. The Committee will develop, recommend and review a set ofcorporate governance principles (the "Corporate GovernancePrinciples") and a code of business conduct and ethics (the "Codeof Business Conduct and Ethics") applicable to the Company,each of which will be approved by the full Board andcommunicated to all relevant constituents . The Committee willreview and assess on at least an annual basis the adequacy of thisCharter, the Corporate Governance Principles and the Code ofBusiness Conduct and Ethics and recommend any changes forapproval by the Board .

3 . The Committee will oversee implementation of orientation fornew directors and see that all directors are regularly educated inthe matters of the Company's business and have appropriateaccess to important Company information in order to fullyexercise their fiduciary responsibilities .

4 . The Committee will ensure that the independent directors have anopportunity to meet at least twice annually and establish a processto provide objective feedback to the Chairman of the Board onhow Board meetings might be improved .

5 . The Committee will advise the full Board on corporate

governance matters .

6 . The Committee will periodically review the Company's InsiderTrading Policy and recommend any changes for approval by theBoard .

7. The Committee will periodically review the business interests andbusiness activities of members of the board and management,including any interests and activities which may constitute aconflict of interest .

38. By document appearing on its website, dated October 14, 2003 and

"Corporate Governance Principles," Silicon Image adopted certain principles for the

of the Company. Silicon Image represented the following in its Corporate Governance

Principles as to the responsibilities of management :

1 . Generally. The Board has delegated to the CEO, working with theother executive officers of the Company, the authority andresponsibility for managing the business of the Company in amanner consistent with the standards and practices of theCompany, and in accordance with any specific plans, instruction s


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or directions of the Board. The CEO and other executive officersare responsible for running the Company's day-to-day operationsand appropriately informing the Board of the status of suchoperations. The CEO and other executive officers are responsiblefor seeking the advice and, in appropriate situations, the approvalof the Board with respect to extraordinary actions to beundertaken by the Company .

2 . Financial Reporting, Legal Compliance and Ethical Conduct . The

Board's governance and oversight functions do not relieve the

Company's executive management of it's the primary

responsibility for preparing financial statements which accuratelyand fairly present the Company's financial results and condition .

Executive management shall maintain systems, procedures and a

corporate culture that promote compliance with legal and

regulatory requirements and the ethical conduct of the Company's

business .

3 . Corporate Communications . The Board believes that theCompany's executive management has the primary responsibilityto communicate with investors, the press, employees and otherconstituencies that are involved with the Company, and to setpolicies for those communications . Individual Board membersmay, from time to time, meet or otherwise communicate withvarious constituencies that are involved with the Company, but itis expected that Board members would do this with the knowledgeof Company management and, in most instances, at the request ofCompany management.

39. On October 14, 2003, the audit committee of the Board of Directors of S

Image (the "Audit Committee") published its charter . Generally, "the purpose of the A

Committee . . . is to assist the Board in fulfilling its oversight responsibilities relating to

Company's financial accounting, reporting, and controls . The Committee's principal funct

are as follows :

• Oversee the Company's relationship with its independent auditors,including selecting, evaluating and setting the compensation ofthe independent auditors and overseeing the qualifications,independence and performance of the independent auditors .

• Oversee the accounting and financial reporting processes of theCompany and the audits of the financial statements of theCompany .



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• Monitor the performance of the Company's internal audit function(if any) . "

40. As to the Audit Committee' s responsibilities relating to the internal control of

Company:

• The Committee shall annually review the Company's internalcontrols, including the proposed internal control plans for thecoming year .

• The Committee shall evaluate whether management is setting theappropriate tone at the top by communicating to all individuals theimportance of internal controls as well as their roles andresponsibilities .

• The Committee shall evaluate whether internal controlrecommendations made by independent accountants have beenimplemented by management .

41 . Silicon Image's Restated Bylaws, as amended through January 31, 2005, stat e

"[t]he Chairperson of the Board of Directors shall have the power to preside at all meetings

the Board of Directors and shall have such other powers and duties as provided in these B y

and as the Board of Directors from time to time prescribe . "

42 . The Restated Bylaws also provide that, "[ s]ubject to the control of the Board

Directors and such supervisory powers, if any, as may be given by the Board of Directors ,

powers and duties of the Chief Executive Officer of the Corporation are :

(a) To act as the general manager and, subject to the control of theBoard of Directors, to have general supervision, direction andcontrol of the business and affairs of the Corporation ;

(b) To preside at all meetings of the stockholders ;

(c) To call meetings of the stockholders to be held at such times and,subject to the limitations prescribed by law or by these Bylaws, atsuch places as he or she shall deem proper ; and

(d) To affix the signature of the Corporation to all deeds,conveyances , mo rtgages, guarantees , leases, obligations,bonds, certificates and other papers and instruments in writingwhich have been authorized by the Board of Directors or which,

CONSOLIDATED AMENDED COMPLAINT 1 5Master File No. C 05-00456 MMC

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in the judgment of the Chief Executive Officer, should beexecuted on behalf of the Corporation ; to sign certificates forshares of stock of the Corporation; and, subject to the direction ofthe Board of Directors, to have general charge of the property ofthe Corporation and to supervise and control all officers, agentsand employees of the Corporation .

The President shall be the Chief Executive Officer of the Corporationunless the Board of Directors shall designate another officer to be theChief Executive Officer .

43 . Pursuant to ¶ 404 of the Sarbanes-Oxley Act of 2002, on June 5, 2003, th e

issued a final rule relating to a company's corporate governance and amended Item 307

Regulations S-K and S-B . See Management's Report on Internal Control Over Financi

Reporting and Certification of Disclosure in Exchange Act Periodic Reports, 2003 V\

21294970, at * 11 (S .E.C. Release No. 8238) (June 5, 2003). Specifically, as part of

company's corporate governance, the management is required "to include an internal contr

report of management that contains" the following in its annual report :

a. A statement of management's responsibility for establishing andmaintaining adequate internal control over financial reporting for thecompany;

b. A statement identifying the framework used by management toconduct the required evaluation of the effectiveness of the company'sinternal control over financial reporting ;

c . Management's assessment of the effectiveness of the company'sinternal control over financial reporting as of the end of the company'smost recent fiscal year, including a statement as to whether or not thecompany's internal control over financial reporting is effective . Theassessment must include disclosure of any `material weaknesses' in thecompany's internal control over financial reporting identified bymanagement . Management is not permitted to conclude that thecompany's internal control over financial reporting is effective if thereare one or more material weaknesses in the company's internal controlover financial reporting; and

d. A statement that the registered public accounting firm that auditedthe financial statements included in the annual report has issued anattestation repo rt on management 's assessment of the registrant'sinternal control over financial reporting .


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Id .

44. The Public Company Accounting Oversight Board ("PCAOB") maintains that z

company has a control deficiency "when the design or operation of a control does not allo'"

management or employees, in the normal course of performing their assigned functions, t c

prevent or detect misstatements on a timely basis ." Notice of Filing of Proposed Rule or

Auditing Standard No . 2, An Audit of Internal Control Over Financial Reporting Performed Jr

Conjunction With an Audit of Financial Statements, File No . PCAOB-2004-03 (Apr. 8, 2004)

Further, the PCAOB believes that a "deficiency in operation exists when a properly designee

control does not operate as designed, or when the person performing the control does not posses

the necessary authority or qualifications to perform the control effectively ." Id .

Identification of Internal Control Weaknesse s

45 . Between February 17, 2004 and May 10, 2004, Silicon Image gradually discl o

to the market that it identified material weaknesses in its internal control environment r e

in large part, from the conduct of its Founder, Chairman and Chief Executive Officer, David Le e

46. On February 17, 2004, the Company filed its Form 10-Q with the Securities

Exchange Commission for the quarter ended September 30, 2003 . In the 10-Q, it detailed i

Audit Committee's ongoing examination into the Company's recognition of revenue associat e

with certain licensing transactions in 2002 and 2003 . Specifically, the 10-Q stated in

part :

As previously disclosed, the Company announced that it would delaythe filing of its quarterly report on Form 10-Q for the quarter endedSeptember 30, 2003 because an examination had been commenced byits Audit Committee . The Company's Audit Committee, with theassistance of independent outside counsel and independent outsideconsultants, was examining certain matters, principally the Company'srecognition of revenue associated with its licensing transactions in2002 and 2003 .


During the course of its examination, the Audit Committee identified

certain areas in which the Company 's control environment should beimproved. As a result, the Company , under the direction of the Audit

Committee and the Board of Directors, is taking steps to strengthen

the Company 's controls. In connection with these steps, the Company

is in the process ofrestructuring reporting relationships as they relateto licensing revenue ; adopting a policy requiring additionaldocumentation of items necessary for licensing revenue recognitiondecisions ; increasing the standardization of licensing deliverables andpost-contract customer support for revenue recognition purposes ; and

formalizing its licensing deal review process. The Company only beganto report revenues from licensing transactions in 2002 . Theenhancements to the Company's controls are in part designed to helpthe Company adapt to the growing complexity and importance of thisadditional component of its business strategy .

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The Company is also in the process of adopting internal proceduresdesigned to enhance the Company's overall internal controlenvironment and to increase the level of communication within themanagement team and between the management team and the Boardof Directors, including the Audit Committee. The Company expects toreceive and consider additional recommendations designed toenhance its overall internal control environment. The Companybelieves that the steps it is taking and its continued monitoring andimprovement of its internal controls are and will remain sufficient toensure continued compliance with law.

Item 4. Controls and Procedures

(a) Evaluation of Controls and Procedures . We have carried out anevaluation, under the supervision and with the participation of ourmanagement, including our Chief Executive Officer and Chief FinancialOfficer, of the effectiveness of the design and operation of ourdisclosure controls and procedures (as defined in Exchange Act Rule13a-15 and 15(d)-15) . The evaluation took into account the conduct ofand results of the Audit Committee examination completed inFebruary 2004, and the receipt of notice from the Company'sindependent auditors that, in connection with the 2003 year-end audit,they have identified a reportable condition relating to internalcontrols. Based upon that evaluation, our Chief Executive Officer andChief Financial Officer concluded that our controls and procedures as ofthe end of the period covered by this report were effective, except that asthe number and complexity of licensing transactions increase, the


Company's control environment could and should be enhanced, asdiscussed below.

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(b) Changes in Internal Controls . The Company is in the process ofrestructuring reporting relationships as they relate to licensing revenue ;adopting a policy requiring additional documentation of items necessaryfor licensing revenue recognition decisions ; increasing thestandardization of licensing deliverables and post-contract customersupport for revenue recognition purposes ; and formalizing its licensingdeal review process . The Company is also in the process of adopting

internal procedures designed to enhance the Company 's overallinternal control environment and to increase the level ofcommunication within the management team and between themanagement team and the Board of Directors, including the Audit

Committee.

[Emphasis supplied . ]

47 . On March 15, 2004, the Company filed its 10-K for the year ended December 3 1

2003 . The 10-K read in relevant part :

The Company is in the process of adopting a policy requiringadditional documentation of items necessary for licensing revenuerecognition decisions ; increasing the standardization of licensingdeliverables and post-contract customer support for revenuerecognition purposes ; and formalizing its licensing deal review process .

The Company is also in the process of adopting and implementinginternal measures designed to enhance the Company's overallinternal control environment and to increase the level ofcommunication within the management team and between themanagement team and the Board of Directors, including the AuditCommittee. These measures include restructuring some reportingrelationships among management, and evaluating and redefiningmanagement roles and responsibilities.


48. On April 19, 2004, the Company filed its Proxy Statement Pursuant t o

14(a) of the Securities Exchange Act of 1934 . In its Proxy Statement, the Audit Committe

represented, in part, the following in its "Report of the Audit Committee" :

During the course of its examination, the committee identified certainareas in which Silicon Image's control enviromnent should beimproved. As a result, Silicon Image, under the direction of th e



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committee and the Board, is taking steps to strengthen Silicon Image's

controls. In connection with these steps, Silicon Image is adopting a

policy requiring additional documentation of items necessary for

licensing revenue recognition decisions ; increasing the standardization

of licensing deliverables and post-contract customer support for

revenue recognition purposes; and formalizing its licensing deal review

process . Silicon Image only began to report revenues from licensing

transactions in 2002 . These enhancements to Silicon Image's controls

are in part designed to help Silicon Image adapt to the growing

complexity and importance of this additional component of its business

strategy .

Under the oversight of the committee, Silicon Image is also in theprocess of adopting and implementing internal measures designed toenhance Silicon Image's overall internal control environment and toincrease the level of communication within the management teamand between the management team and the Board, including thecommittee . These measures include restructuring some reportingrelationships among management and evaluating and redefiningmanagement roles and responsibilities.

[Emphasis supplied. ]

49. On May 10, 2004, the Company filed its Form 10-Q with the Securitie s

Exchange Commission for the quarter ended March 31, 2004 . In its 10-Q, the

represented, in part, the following :

As required by Rule 13a-15(b) and 15d-15(b) under the Exchange Act,

we carried out an evaluation, under the supervision and with the

participation of our management, including our Chief Executive

Officer and Chief Financial Officer, of the effectiveness of our

disclosure controls and procedures at the end of the fiscal quartercovered by this report . The evaluation took into account the conduct of

and results of the Audit Committee examination completed in February

2004, and the receipt of notice from the Company's independent

auditors that, in connection with the 2003 year-end audit, they had

identified a reportable condition relating to internal controls . The

evaluation also took into account a written confirmation of thereportable condition recently provided by our auditors stating theywere aware of deficiencies in the Company 's internal controlstructure design related to the overall internal control environmentregarding our Chief Executive Officer's communication andoperating style and his periodic involvement in revenue recognitiondiscussions. Based upon that evaluation, our Chief Executive Officer

and Chief Financial Officer concluded that our controls and procedure s


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as of the end of the period covered by this report were effective, except

that with respect to the reportable condition and as the number and

complexity of licensing transactions increase , the Company's control

environment could and should be enhanced, as discussed below :

(b) Changes in Internal Controls . As a result of our own evaluation, aswell as recommendations provided by the Audit Committee we are inthe process of implementing a series of internal measures designed toenhance the Company's overall internal control environment . These

measures include (i) restructuring some reporting relationshipsamong management and clarifying management roles andresponsibilities, (ii) improving communication within themanagement team and between the management team and the Boardof Directors, including the Audit Committee, (iii) formalizinglicensing review processes by requiring additional documentation ofitems necessary for licensing revenue recognition decisions andincreasing the standardization of licensing deliverables and post-contract customer support for revenue recognition purposes, (iv)adding additional resources and personnel to key control functionsand (v) implementing training and compliance programs.Implementation of the measures is underway, but will by its nature bean ongoing effort, subject to the review of our Board of Directors,Audit Committee and auditors .

[Emphasis supplied .]

Materially False and MisleadingStatements Issued During The Class Perio d

50. Throughout the Class Period, defendants made representations to the effec t

Silicon Image was dedicated to good corporate governance, to establishing appropriate

of corporate reporting, and to the designation and segregation of management responsibilities .

51 . On June 24, 2004, after the markets closed, defendants Silicon Image an d

represented that they were committed to good corporate governance and, in order to exem p

good corporate governance, were going to bring in a "world-class" Chief Executiv e

while defendant Lee remained Chairman :

"My decision to relinquish the CEO role is driven by two primary

factors. First I and the rest of the board of directors believe that SiliconImage's leadership in standards-based, high-bandwidth ICs and IP for

the consumer electronics, storage and PC display market, place it in an

excellent position to benefit from explosive demand for secure digitalCONSOLIDATED AMENDED COMPLAINT 2 1Master File No . C 05-00456 MMC

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content distribution solutions . We are confident that the magnitude andnature of this opportunity will enable us to recruit a world-classexecutive who will partner with me to build Silicon Image to greaterheights," said Lee. "And second, the board and I are committed toexemplifying excellence in corporate governance, and therefore believeit is important to separate the roles of the CEO and chairman ."

"After nearly a decade as CEO," continued Lee, "I look forward tobeing able to focus my energy on strategic opportunities as we preparefor the continued challenges associated with growing into a larger andmore complex global organization. Just as we have excelled atdeveloping and driving innovative industry standards, products andbusiness models, we must now focus on applying these corecompetencies to elevating strategy, management and corporategovernance to new levels . "

52 . On this news, the Company's common stock closed at $12 .23 on June 25, 2004

over a 19% increase from the previous day's closing price of $10.24 .

53 . However, the press release was false and misleading because defendants faile d

disclose that, beginning at least as early as June 2004 and continuing until the end of the Ch

Period, the Company's management and Board of Directors were divided into two factions tl

clashed over numerous issues, made decisive action difficult, and made regular and necess~

action, like hiring and assigning duties to a Chief Executive, impossible . The Company a]

failed to disclose that, contrary to its public representations, it had failed to implement changes

its overall internal control environment, such as restructuring reporting relationships amo

management, clarifying management roles and responsibilities, and improving communicati

within the management team and between the management team and the Board of Directo

including the Audit Committee .

54. Further, contrary to the press release, the Company failed to disclos e

Silicon Image's Founder and former Chairman and Chief Executive Officer, David Lee : (1)

never committed to good corporate governance ; (2) refused to relinquish control over

Company; (3) continued to possess excessive control over Silicon Image, even after both I

and Tirado had been named CEO ; and (4) was flouting normal forms of corporate govern ,



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by, among other things, limiting the financial information available to the Board of Directors

frustrating the Board's attempts to limit his control . There was no clear division of roles

responsibilities between the CEO, Chairman of the Board and other executive manager

positions .

55 . Nevertheless , in its Form 10-Q for the quarter ended September 30, 2004 ,

Company falsely represented that :

(b) Changes in Internal Controls . As a result of our own

evaluation , as well as recommendations provided by the AuditCommittee we have implemented a series of internal measuresdesigned to enhance the Company 's overall internal controlenvironment. These measures included (i) restructuring somereporting relationships among management and clarifyingmanagement roles and responsibilities, (ii) improving communicationwithin the management team and between the management team andthe Board of Directors, including the Audit Committee, (iv) addingadditional resources and personnel to key control functions and (v)implementing training and compliance programs . Many of thesemeasures by their nature represent an ongoing process that will besubject to continuing evaluation and evolution based upon changingbusiness conditions and subject to review by our Board of Directors,Audit Committee and auditors . In addition, the Company hasannounced plans to recruit a new chiefexecutive officer and separatethe roles of Chairman and chief executive officer, and has madesignificant progress towards this goal during the third quarter offiscal 2004.


56. On August 18, 2004, Silicon Image's Chief Financial Officer, Robert G .

announced his resignation . Defendants represented in a press release, entitled "

of Chief Accountant and Planned CFO Retirement," the following statement from Gargus :

The decision to retire was based on my desire to spend more time with

my family . Nevertheless, I want to assure everyone, that I plan to stay

on until a new CFO is hired and an orderly transition has taken place .

Given that the company has a CEO search underway, it makes sense tocomplete that search and then include the new CEO in the hiring of myreplacement . Therefore, the exact timing of my departure can only beapproximated as sometime in early 2005 . This timing is consistent with

my desire to continue with undiminished commitment in my role an d



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responsibilities through the end of our fiscal year, and with thecompletion of Sarbanes-Oxley 404 requirements and our 2004 10-K .

57 . As it was later revealed by a former employee, however, Gargus did not se e

to-eye with defendants Tirado and Lee on many important issues, and in fact, Gargus was o

on the opposite side of the issues . Further, Gargus joined another company as its Chief

Officer in June 2005, just two months after his official retirement from Silicon Image .

58. On November 11, 2004, defendants stated that they had executed their

corporate governance "exemplification" by hiring a new Chief Executive Officer and

Steven Laub .

Mr. Laub will be responsible for driving the company's businessstrategy, execution and overall company performance . Commenting onLaub's appointment, David Lee, Silicon Image founder and chairmanof the board, noted, `We are excited to have someone of Steve's caliberand executive management experience joining the company . Steve hasa successful track record in growing company profitability in roleswhere he had senior management responsibility for a broad range ofproducts, services and partnerships in the semiconductor arena . I'mdelighted to have Steve on broad and am eager to work together withhim to lead Silicon Image's digital content delivery strategy . '

59. Following this announcement, the price of Silicon Image stock increased near

7%, rising to $ 15 .20 from its previous closing pricing of $14.21 on November 10, 2004 .

60. However, this artificial increase was premised on defendants' failure to disclo

the material fact that they planned to substantially limit Laub's role and responsibility as th(

Chief Executive Officer . Indeed, far from exemplifying good corporate governance, from thf

outset, defendant Lee did not relinquish Chief Executive responsibilities, and he and the othe

defendants never permitted Laub to assume the executive role and responsibility of even ,

normal Chief Executive, let alone what Silicon Image called a "world-class" Chief Executiv

Officer . Further, the Company never disclosed that, contrary to its public representations, i

never implemented changes to its overall internal control environment, such as restructuring

reporting relationships among management, clarifying management roles and responsibilities, o

CONSOLIDATED AMENDED COMPLAINT 2 4Master File No . C 05-00456 MMC

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improving communication within the management team and between the management team

the Board of Directors, including the Audit Committee .

61 . Despite the Company's prior representations regarding its commitment to go

corporate governance, and as a result of foregoing, fundamental issues concerning the role a

responsibility of the Chief Executive Officer developed between Laub and defendants as early

his first week with the Company . These undisclosed conflicts resulted in, among other thin

Laub's inability to function effectively as a CEO and led to his untimely resignation barely t

months after his appointment.

62 . Notwithstanding the important distractions that the inability to define roles

responsibilities, including the role of the Chief Executive, can cause a company, Silicon I r

has never , to this day , come clean with what, exactly, the fundamental issues concerned .

63 . Nevertheless, it is apparent that the fundamental issues concerning the roles anc

responsibilities of individuals at the highest levels of Silicon Image, including its top officer

created significant risks to the Company's main business execution, and the repeated inability t c

resolve these issues had material adverse effects on the Company's stock price .

64. Unsuspecting investors, however, were not aware of the breadth and exten t

turmoil among the Board of Directors and upper management, including the fundamental i

involving Laub and, thus, continued to purchase Silicon Image stock fueled by defendants '

statements and material omissions .

65. Equally troubling, defendant Tirado acted to profit from the undisclosed facts

false representations . Namely, during the Class Period, before the disclosure of the true f

defendant Tirado sold 732,000 shares of his personally-held Silicon Image common stock to the

public, virtually his entire holdings, generating more than $10,000,000 in proceeds for himself

After his last sale transaction on December 29, 2004, according to defendant Tirado's Form 4/A


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dated January 20, 2005, he owned only 5,902 shares of Silicon Image common stock . A

hereto as Exhibit A is a chart of defendant Tirado's sales during the Class Period .

The Effects of Defendants' Misconduct

66 . As a direct result of defendants' actions Silicon Image underwent a c

upheaval that included the resignations of no less than six Board members, its Chief Executi

Officer ( in less than six months) and its Chief Financial Officer .

67 . On November 17, 2004, the Company announced the resignations of Andr e

Rappaport and Douglas Spreng from the Board of Directors .

68 . Due to defendant Lee's attempt to constrict the roles and responsibilities o f

so-called Chief Executive and retain executive responsibilities in the Chairman of the B

Laub and members of the Board of Directors never reached an agreement with defendant s

the scope of responsibilities for the Chief Executive. As a consequence of this conflict, La

resigned on January 20, 2005 .

69 . On January 25, 2005, the Company issued a press release entitled "Silico n

Announces Appointment of Steve Tirado as Chief Executive Officer Replacing Steven Laub .'

Tirado has worked with Lee at Silicon Image since 1999, and both previously worked together a

Sun Microsystems, Inc . In the same press release, the Company announced the resignation o

Steven Laub, who was just appointed as President and Chief Executive Officer on November 11

2004. In Laub's resignation letter, dated January 20, 2005, he stated the following reason for h i

resignation :

As you know, there have been fundamental issues of relative role andresponsibility that unexpectedly arose as early as my first week ofemployment, just two months ago .

70 . In fact, defendants caused these fundamental issues by empowering Le e

refusing to grant Laub any significant measure of executive responsibility, resulting in

appointment of Tirado, a confidant of Lee .



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71 . According to a former employee, a main reason that Board members wante d

hire Laub was to "keep an eye on the Company's financial practices ." However, Tirado and

small group of management level executives, including David Lee, limited Laub's access to th

Company's financial information and practices . Thus, Laub decided to resign as the Company'

Chief Executive Officer and President ; this would later be followed by many more resignation :

I See infra .

72. Additionally, this former employee believed that only a small circle of people .

including defendants Lee and Tirado, were familiar with the Company's sales figure s

accounting methods .

73 . By the end of the trading session on January 25, 2005, the Company's stock

dropped over 13% of its value in one day, falling from $14 .14 to $12 .26 .

74 . In addition, after the markets closed on January 25, 2005, the Company detail

its fourth quarter ended December 31, 2004 in a conference call with analysts, but still reftised

provide any further details regarding the fundamental issues between Laub and the Company

When an analyst asked Tirado for further information regarding Laub's resignation, thf

Company continued to hide the ball and deceive investors . Specifically, Tirado stated that :

[A]ll of the information that we're willing to share was circumscribedby the press release, and that's really all I'm willing to share at thispoint .

75. Moreover, the Company failed to explain why these fundamental issues were

disclosed earlier , why clear roles and responsibilities for the Chief Executive Officer had

been developed as previously reported, and why insider sales of stock were permitted prior

such disclosure. The disputes among members of the Board of Directors and the Individi

Defendants went to the core of the Company's corporate governance standards relating to i

respective roles of CEO and Chairman of the Board .


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76. Despite the Company's silence on these material issues, immediately

the Company' s announcement of Laub's resignation, market analysts began to discuss

possible cause of the Company's management disputes . In a January 26, 2005 report by Tore I

Svanberg of Piper Jaffray Co, the analyst reported that "[w]hile details of the resignation wei

not disclosed, we believe it stemmed from differences of opinion among the company's ke

executives and its board of directors ." In a January 25, 2005 analyst report, Adam Benjamin

Jefferies & Company, Inc . believed "Steve Laub resigned as CEO because the company w,

unsuccessful in splitting the role and responsibilities between him and the former CEO, Dav

Lee . In order to prevent this issue from occurring again, we believe Lee was also replaced

Chairman in connection with Laub's resignation ." Similarly, in a January 26, 2005 report, CIB

World Markets analysts stated that Laub's departure was due to "the result of a political pow,

play with the Silicon Image Board and its former Chairman, David Lee ."

77. In the January 25, 2005 press release, the Company also announced

appointment of Christopher Paisley as the Company's new Chairman of the Board of Directors .

Additionally, on April 12, 2005, the Company issued a press release announcing the appointmen

of Richard L . Sanquini to the Company's Board of Directors . However, as analysts noted later

such appointments did not resolve the existing serious management issues .

78 . On January 31, 2005, the Company filed an 8-K with the SEC . The 8-K read

follows :

On the evening of January 25, 2005, the Company's management

received a copy of a written order of the Securities and Exchange

Commission indicating that the Staff of the SEC's Division ofEnforcement is conducting an investigation into trading of the

Company's securities by unidentified persons . The order does not

identify either the Company or any Company personnel as subjects of

the investigation . The Company intends to cooperate with the

investigation, and does not believe that the investigation is related tothe Company's recent changes in its management and board of

directors .


79. On March 16, 2005, the Company filed its 10-K for the year ended December 3 1

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2004. The Company's Form 10-K was signed by defendants Lee and Tirado . It was also

by Gargus, Paisley, McAuliffe and Courtney . Further, the Form 10-K include d

signed by Tirado and Gargus in compliance with §302 of the Sarbanes-Oxley Act of 2002.

80 . In the 10-K, the Company represented the following in relevant part :

(a) For the period covered by this report, we carried out anevaluation, under the supervision and with the participation of ourmanagement, including our Chief Executive Officer, Chief FinancialOfficer, and Chief Accounting Officer of the effectiveness of thedesign and operation of our disclosure controls and procedurespursuant to Exchange Act Rulel3a-15(e) . Based upon that evaluation,our Chief Executive Officer, Chief Financial Officer, and ChiefAccounting Officer concluded that our disclosure controls andprocedures as of the end of the period covered by this report wereeffective in ensuring that all material information required to bedisclosed in the reports we file and submit under the Securities andExchange Act of 1934 has been made known to them on a timelybasis and that such information has been properly recorded, processed,summarized and reported, as required .

(b) Changes in Internal Control Over Financial Reporting. Therehave not been any changes in our internal controls over financialreporting (as such term is defined in Rulesl3a-15(f) under theSecurities Exchange Act of 1934, as amended) during the fourthquarter of our 2004 fiscal year that have materially affected, or arereasonably likely to materially affect, our internal control overfinancial reporting .

Management is responsible for establishing and maintaining anadequate system of internal control over financial reporting .Management conducted an assessment of the Company's internalcontrol over financial reporting as of December 31, 2004 . . . Based onthis assessment, management concluded that, as of December31,2004, the Company's internal control over financial reporting waseffective .

81 . On April 1, 2005, the Company filed a 10-K/A for the year ended December 31 ,

2004 that contained corrected certifications signed by Tirado and Gargus in compliance


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§302 of the Sarbanes-Oxley Act of 2002 . In its Explanatory Note, the Company represented

following in relevant part :

We are filing this Amendment No. 1 to our Annual Report on Form10-K for the fiscal year ended December 31, 2004, solely to amend and restatethe certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002filed previously as Exhibits 31 .01 and 31 .02 with the original Annual Reporton Form 10-K. The amended and restated certifications are being filed toinclude certain required representations with respect to internal control overfinancial reporting that were inadvertently omitted from the previously filedcertifications .

82 . Specifically, the certifications filed with the original Form 10-K failed to

comply with §302 of the Sarbanes-Oxley Act of 2002 by not certifying that the Company is

compliance in regards to internal control over financial reporting as defined in Exchange f

Rules 13(a)-15(f) and 15d-15(f) . As a result, the certifications in the Form 10-K failed to cont ;

the following internal control language :

Designed such internal control over financial reporting, or caused suchinternal control over financial reporting to be designed under our supervision,to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles[ . ]

83 . Meanwhile, unbeknownst to the public, who continued to purchase Silico n

stock, even after Laub's departure there was an ongoing dispute between the top executives

the management and various members of the Board of Directors who were seeking, among of

things, to prevent Lee's re-nomination to the Board. These members of the Board wi

Christopher Paisley, David Courtney, Keith McAuliffe, and subsequently Richard Sanquini .

84. Defendant Lee, joined by his protege defendant Tirado, resiste d

recommendations and authority of the other Board members . According to the Company '

Proxy Statement, dated May 16, 2005, Board members Christopher Paisley and Davi d

stated that :

they would not continue as directors if Dr . Lee was re-nominated to the Board.Messrs . Paisley and Courtney also stated their view that they were unwilling to


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continue to serve as directors of Silicon Image because, in part, (i) SteveTirado, a director and President and Chief Executive Officer of Silicon Image,had advised the Board on April 23, 2005 that if the Board chose not to re-nominate Dr. Lee to the Board, Mr . Tirado would be resigning from hisposition as Chief Executive Officer and (ii) they believed that if the Boardchose not to re-nominate Dr. Lee to the Board, Dr . Lee also would terminatehis employment with Silicon Image .

85 . As a direct result of the Individual Defendants' efforts, on April 24, 2005, al l

one of the Company's outside directors resigned . Specifically, the following resignations

the Board of Directors occurred for, among others, the following reasons :

a. Christopher Paisley (Chairman of the Board and member of the a

compensation and governance and nominating committees), who was just appointed as Chai

of the Board of Directors in January 2005, and David Courtney (Chairman of th e

committee and member of the governance and nominating committees), resigned due to

disagreement over whether or not defendant David Lee should be re-nominated t o

Company's Board of Directors .

b. Keith McAuliffe (Chairman of the compensation commi ttee and member o f

I audit and governance and nominating committees) resigned due to events surroundin g

question of whether or not defendant David Lee should be re-nominated to the Company's B o

of Directors .

c. Richard Sanquini (member of the compensation and governance an d

committees), who was just appointed as a member of the Board of Directors less than tw o

prior, resigned without stating a reason .

86 . After these resignations, by press release dated April 25, 2005, the Compan

announced defendant Lee's appointment as Chairman Emeritus of the Company and represente

that he will continue to serve as the Chairman of PanelLink Cinema, LLC, a wholly own e

subsidiary of the Company .



87. On May 10, 2005, the Company filed its Form 10-Q with the Securities

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Exchange Commission for the quarter ended March 31, 2005 . In its 10-Q, the

represented, in part, the following :

As of the end of the period covered by this report, we carried out anevaluation, under the supervision and with the participation of ourmanagement, including our Chief Executive Officer, Chief FinancialOfficer, and Chief Accounting Officer, of the effectiveness of thedesign and operation of our disclosure controls and procedurespursuant to Exchange Act Rulel3a- 15(e) . Based upon, and as of thedate of this evaluation , our ChiefExecutive Officer, Chief FinancialOfficer, and Chief Accounting Officer concluded that our disclosurecontrols and procedures were ineffective because of the materialweakness in our internal control over financial reporting describedbelow . . .

(b) Changes in Internal Control over Financial Reporting

A material weakness is a control deficiency, or combination of controldeficiencies, that results in more than a remote likelihood that amaterial misstatement of the annual or interim financial statements willnot be prevented or detected. We identified the following materialweakness in our internal control over financial reporting as o fMarch 31, 2005 :

Management concluded that the oversight of the Company'sexternal financial reporting and internal control over financialreporting by the Company's Audit Committee was ineffective as ofMarch 31, 2005. Specifically, on April 24, 2005, subsequent to theend of the quarter ended March 31, 2005, but during the period ofthe Company's financial closing and reporting process for thequarter, four of the five independent members of the Company'sBoard of Directors resigned, leaving the Audit Committee with onlyone member. The sole Audit Committee member is not a 'financialexpert" as that term is defined by the rules of the Securities andExchange Commission. These resignations resulted in the inability ofthe Audit Committee to provide effective oversight over the processesrelated to the Company's external financial reporting and internalcontrol over financial reporting as of and for the quarter endedMarch 31, 2005.


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Additionally, this control deficiency could result in a materialmisstatement to annual or interim financial statements that would notbe prevented or detected . Accordingly, management has determinedthat this control deficiency constitutes a material weakness . Because ofthis material weakness, we have concluded that the Company did notmaintain effective internal control over financial reporting as ofMarch 31, 2005, based on the criteria in the Internal Control-IntegratedFramework issued by the Committee of Sponsoring Organizations ofthe Treadway Commission.


88 . Despite the foregoing turmoil and the Board's lack of requisite outside directors ,

on June 21, 2005, the Company filed a Form 8-K announcing that the compensatio n

of the Board of Directors approved incentive bonuses .

Analysts' Reactions to the Board Exodu s

89 . Following the Company' s announcement of the four director resignations ,

analysts continued to express concern about the Company's ongoing management and i

Board disputes .

90 . On April 25, 2005, Baird/U .S . Equity Research reported that the res

were "the result of a conflict between the company's founder David Lee and its board members

. . Specifically, we believe that co-founder CEO Steve Tirado supports David Lee's nominatio .

for a new term as director ." In a April 26, 2005 report, Needham analysts stated "that the boar

resignations dealt with whether founder David Lee would stay with the company were he force

to step down as a Director . Our sources indicated that the previous board could have vote

David off, and had already showed it would take action when it demoted David after th

resignation of interim-CEO, Steve Laub . . . "

91 . In a April 26, 2005 report, Jason Paraschac of Kaufman Bros. Equity

stated in relevant part :

We believe that the board dispute involves both personality conflicts as

well as disagreements over strategy and direction for the company. Inour view, this event represented a power struggle involving Dr . Lee and

CONSOLIDATED AMENDED COMPLA INT 33


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current CEO, Steve Tirado, in conflict with the four independentdirectors of the board .

This latest saga represents one in a string of embarrassing andcontentious disputes within the company that have spilled into thepublic eye. This has a negative impact on customer perceptions of thecompany as well as internal perceptions of the stability within thecompany .

Our view of the fundamental outlook for SIMG has been shaken by thisrecent development . Our concern is specifically that customers willshy away from working with SIMG given the public turmoil at thecompany. We heard from customers in January following theresignation of Steve Laub, who was CEO for less than two months, thatthey were weary of working with SIMG given perception ofuncertainty in the company's future direction . We believe that thislatest event severely exacerbates that concern on the part of customers .Given that SIMG is entering the beginning of the design cycle for 2006Product designs, this could not be happening at a worse time . Webelieve the Company is at real risk of losing market share as a result ofthis development.

92. Further, Mr. Paraschac commented the following regarding defendant Le e

named Chairman Emeritus of the Board :

Our initial understanding of this development is that Dr. Lee will havesome role on the board going forward, even though he will not berequired to be voted in by shareholders . Needless to say, this is aninteresting turn of events on which we hope to gain further information.However, our view is that this likely solidifies control of the boardunder CEO Steve Tirado and Dr . Lee .

93 . Michael Bertz of WR Hambrecht + Co. reported on April 26, 2005 "that

primary causes are due to issues surrounding the re-nomination of founder and former CEO and

Chairman David Lee to the board . We believe that this is likely due to some continued fallout

from the previous management shakeup last January when Lee was removed from the

Chairman's position following short tenured former CEO Steve Laub's departure .'

Additionally, Mr . Bertz commented the following in regards to the resignations :CONSOLIDATED AMENDED COMPLAINT 34


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We did not foresee this coming, having felt that much of the issueswere resolved in January with the management changes at that time andthe transition of Lee into a non-Chairman role . However, this wasevidently not the case and will likely create some difficulties for manyinvestors to get behind the story .

94. By the end of the trading session on April 25, 2005, Silicon Image stoc k

over 17% of its value in one day, falling from $11 .49 to $9 .50 .

95 . (a) Tellingly, none of the foregoing statements reveal why there was

Luidisclosed but ongoing dispute between defendant Lee and the other members of the Boar,

throughout the Class Period . According to an ex-employee of the Company, a main reason thr

most of the Board had a dispute with defendant Lee (and that defendant Laub was hired) is thz

the Board was concerned that Dr . Lee's improper influence over financial reporting adversel;

affected the quality of the numbers . Based upon this statement and corroborating circumstance

(including Dr . Lee's admitted improper conduct regarding the financial statements prior to Jun

2004, the resignation of the auditors (see paragraph 97) and Audit Committee, and th

seriousness of the disputes), plaintiffs have good grounds to believe and do allege that concern

about Dr. Lee's improper influence over the financial numbers was a main reason for th

undisclosed dispute during the Class Period .

(b) Silicon Image suffered severe consequences for its poor corporate governanc e

internal control problems and management practices . On May 4, 2005, the Company issued :

press release entitled "Silicon Image Announces Receipt of Communications From NASDAQ . "

It was announced in the press release that on May 2, 2005, the NASDAQ Listing Qualification,

Hearings Department notified the Company that it was not in compliance with certain NASDA(

Marketplace Rules . First, the Company's 10-K/A was "incomplete because the Company di(

not include the body of the entire Form 10-K with the corrected certifications, and that as a resul

the Company [was] not in compliance with NASDAQ Marketplace Rule 4301(c)(14) .'

Secondly, due to the resignations of the four independent directors, a majority of the Board wa;


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not comprised of independent directors, and the Company's Audit Committee did not consist

three independent directors, "including at least one director with requisite fnanc

sophistication . As a result, the Company is not in compliance with NASDAQ Marketplace Ru

4350(c)(1) and 4350(d)(2) . "

96. In a June 10, 2005 press release, the Company acknowledged that :

As of March 31, 2005, management of the Company concluded that amaterial weakness in internal controls over financial reporting existeddue to the fact that the oversight of the Company's control overfinancial reporting by the Company's Audit Committee was ineffectivedue to the resignations on April 24, 2005 of four of the fiveindependent members of the Company's Board of Directors, which atthat time left the Audit Committee of the Board of Directors with onlyone member .

97. As a further consequence of its management and Board problems, in the June 1 C

1 1 2005 press release, the Company also announced the unusual and immediate resignation of i

auditor , PwC, on June 7, 2005 . This resignation was the direct result of Silicon Image' s

I internal control problems, including defendant Lee's continuing undisclosed control and adver s

effect on the Company .

98 . Indeed, in its Proxy Statement for the period ended June 15, 2005, the Company '

Board of Directors had every intention of keeping PwC as its independent registered put

accounting firm, and even recommended that the stockholders vote to ratify the appointment

PwC as the Company's independent registered public accounting firm for the year endi

December 31, 2005.

99. Following the Company's announcement of PwC's resignation, Jason

of Kaufman Bros. Equity Research released an analyst report on June 10, 2005 in which

stated "that PWC resigned in large part due to the resignation of four of seven board members

April . . . We continue to believe that there are too many distractions and negative eve]

surrounding SIMG which pose significant risks to the company's execution, particularly

regard to securing design wins for 2006 . "CONSOLIDATED AMENDED COMPLAINT 36


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ADDITIONAL SCIENTER ALLEGATION S

100. As alleged herein, defendants acted with scienter in that defendants knew that

public documents and statements issued or disseminated in the name of the Company w

I materially false and misleading, knew that such statements or documents would be issue d

disseminated to the investing public, and knowingly and substantially participated or

in the issuance of dissemination of such statements or documents in primary violations o f

federal securities laws . As set forth elsewhere herein in detail, defendants, by virtue o f

receipt of information reflecting the true facts regarding Silicon Image, their control over and/

receipt and/or modification of Silicon Image's allegedly materially misleading misstateme n

and/or their associations with the Company which made them privy to confidential propriel

information concerning Silicon Image, participated in the fraudulent scheme alleged herein .

101 . Because of their executive and managerial positions with Silicon Image, all of

Individual Defendants had access to the adverse non-public information about the busin ,

finances, markets and present and future business prospects of Silicon Image

herein via access to internal corporate documents, conversations or connections with

officers or employees, attendance at management meetings and committees thereof and/o r

reports and other information provided to them in connection therewith .

102. Defendants had a duty to promptly disseminate accurate and truthful

with respect to Silicon Image's operations and financial condition or to cause and direct tha t

information be disseminated and to promptly correct any previously disseminated informa

that was misleading to the market . As a result of their failure to do so, the price of Sili

Image's common stock was artificially inflated during the Class Period, damaging Plaintiffs

the Class .

103 . The Individual Defendants , because of their positions with Silicon Image

controlled the contents of the quarterly reports and press releases disseminated throughout


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Class Period . Each Individual Defendant was provided with or had access to copies of

I reports and press releases alleged herein to be false and/or misleading prior to or shortly

their issuance and had the ability and opportunity to prevent their issuance or cause them t o

I corrected. Because of their positions and access to material non-public information, each o f

Individual Defendants knew or recklessly disregarded that the adverse facts specified herein

I not been disclosed to and were being concealed from the public and that the posit i

representations which were being made were false and misleading . As a result, each of

Individual Defendants is responsible for the accuracy of Silicon Image's corporat e

detailed herein and is therefore responsible and liable for the representations contained therein .

104. Each defendant is liable as a primary violator in making false an d

I statements, and for participating in a fraudulent scheme and course of business that operated a s

fraud or deceit on purchasers of Silicon Image stock during the Class Period .

105. As alleged herein, defendants acted with scienter in that each defendants kne w

I recklessly disregarded that the public documents and statements, issued or disseminated by o r

the name of the Company were materially false and misleading, knew or recklessly disregardec

that such statements or documents would be issued to the investing public, and knowingly an(

substantially participated or acquiesced in the issuance or dissemination of such statement o

documents as primary violators of the federal securities laws . Defendants, by virtue of their

receipt of information reflecting the true facts regarding Silicon Image and it business practices

their control over and/or receipt of Silicon Image's allegedly materially misleading

misstatements, and/or their associations with the Company which made them privy tc

confidential proprietary information concerning Silicon Image, were active and culpablf

participants in the fraudulent scheme alleged herein. Defendants knew and/or recklessly

disregarded the falsity and misleading nature of the information which they caused to bE

disseminated to the investing public . The ongoing fraudulent scheme described in this complai n


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could not have been perpetuated over a substantial period of time, as has occurred, without

knowledge and complicity of the personnel at the highest level of the Company, including

Individual Defendants . Among other things, defendants knew and participated in B c

meetings where disputes occurred, as well as Board and other meetings where the roles

responsibilities for Laub and other top officers and directors were not resolved .

106 . In addition, defendants were further motivated to maintain the artificially

price of the Company's common stock in order to enable defendant Tirado to sell shares of hi

personally-held Silicon Image common stock during the Class Period for proceeds of ove

$10,000,000 .

APPLICABILITY OF PRESUMPTION OF RELIANCE :FRAUD-ON-THE-MARKET DOCTRIN E

107. At all relevant times, the market for Silicon Image's securities was an

market for the following reasons, among others :

(a) Silicon Image's stock met the requirements for listing, and was listed and activel

traded on the Nasdaq, a highly efficient and automated market ;

(b) As a regulated issuer, Silicon Image filed periodic public reports with the SEC

the Nasdaq;

(c) Silicon Image regularly communicated with public investors via established mar

communication mechanisms, including, but not limited to, the regular dissemination of pr e

releases on the national circuits of major newswire services and other wide-ranging public

disclosures, such as communications with the financial press and other similar reporting service s

and

(d) Silicon linage was followed by numerous securities analysts employed by maj

brokerage firms who wrote reports which were distributed to the sales force and certa

customers of their respective brokerage firms . Each of these reports was publicly available ai


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entered the public marketplace . As noted on Silicon Image's website, the Company is covere

I by at least thirteen different securities analysts .

108 . As a result of the foregoing, the market for Silicon Image's securities prom

digested current information regarding Silicon Image from all publicly available sources

reflected such information in Silicon Image's stock price . Under these circumstances,

purchasers of Silicon Image's securities during the Class Period suffered similar injury throe

their purchase of Silicon Image's securities at artificially inflated prices and a presumption

reliance applies .

109 . At all relevant times, the material misrepresentations and omissions particul

in this complaint directly or proximately caused or were a substantial contributing cause of th

damages sustained by Plaintiffs and other members of the Class . As described herein, during th

Class Period, defendants made or caused to be made a series of materially false or misleadi n

statements about Silicon Image's business, prospects and operations . These ma

misstatements and omissions had the cause and effect of creating in the market an unrealisti

positive assessment of Silicon Image and its business, prospects and operations, thus causing thf

Company's securities to be overvalued and artificially inflated at all relevant times . Defendants

materially false and misleading statements during the Class Period resulted in Plaintiffs and othe]

members of the Class purchasing the Company's securities at artificially inflated prices . Clas.,

members' losses from these purchases were proximately caused by the disclosures of th e

facts, and were directly caused by their justifiable reliance on defendants' fraudulent

material statements, misrepresentations and omissions .

NO SAFE HARBO R

110 . The statutory safe harbor provided for forward-looking statements under

circumstances does not apply to any of the allegedly false statements pleaded in this cot

Many of the specific statements pleaded herein were not identified as "forward-


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statements" when made . To the extent there were any forward-looking statements, there were

meaningful cautionary statements identifying important factors that could cause actual results

differ materially from those in the purportedly forward-looking statements . Alternatively, to I

extent that the statutory safe harbor does apply to any forward-looking statements plead

herein, defendants are liable for those false forward-looking statements because at the time e a

of those forward-looking statements was made, the particular speaker knew that the particu l

forward-looking statement was false, and/or the forward-looking statement was authc

and/or approved by an executive officer of Silicon Image who knew that those statement s

false when made .

FIRST CLAIM

Violation of Section 10(b) Of The Exchange Act AndRule lOb-5 Promulgated Thereunder Against All Defendant s

111 . Plaintiffs repeat and reallege each and every allegation contained above as i f

set forth herein .

112 . During the Class Period, defendants carried out a plan, scheme and course

conduct which was intended to and, throughout the Class Period, did : (i) deceive the invest

public, including Plaintiffs and other Class members, as alleged herein ; (ii) enable defer

Tirado to sell over $10,000,000 of his personally-held common stock ; and (iii) cause Plai

and other members of the Class to purchase Silicon Image's securities at artificially in]

prices . In furtherance of this unlawful scheme, plan and course of conduct, defendants, an d

of them, took the actions set forth herein .

113 . Defendants (a) employed devices, schemes, and artifices to defraud ; (b) rr

untrue statements of material fact and/or omitted to state material facts necessary to mak e

statements not misleading ; and (c) engaged in acts, practices, and a course of business wh

operated as a fraud and deceit upon the purchasers of the Company's securities in an effort

CONSOLIDATED AMENDED COMPLAINT 4 1Master File No . C 05-00456 MMC

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maintain artificially high market prices for Silicon Image's securities in violation of Sect

10(b) of the Exchange Act and Rule 10b-5 . All defendants are sued either as prim

participants in the wrongful and illegal conduct charged herein or as controlling persons

alleged below .

114. Each of the Individual Defendants ' primary liability , and controllin g

liability, arises from the following facts : (i) the Individual Defendants were high-level executive

and/or directors at the Company during the Class Period and members of the Company's Boar

of Directors and/or management team or had control thereof; (ii) each of these defendants, b

virtue of his responsibilities and activities as a senior officer and/or director of the Company wa

privy to and participated in the creation, development and reporting of the Company's interne

budgets, plans, projections and/or reports; (iii) each of these defendants enjoyed significar

personal contact and familiarity with the other defendants and was advised of and had access t

other members of the Company's management team, internal reports and other data an

information about the Company's finances, operations, and sales at all relevant times ; an

(iv) each of these defendants was aware of the Company's dissemination of information to th

investing public which they knew or recklessly disregarded was materially false and misleading .

115 . The defendants had actual knowledge of the misrepresentations and omission s

material facts set forth herein, or acted with reckless disregard for the truth in that they failed t

ascertain and to disclose such facts, even though such facts were available to them . Suc

defendants' material misrepresentations and/or omissions were done knowingly or recklessly an

for the purpose and effect of concealing Silicon Image's internal control problems, operatin

condition and future business prospects from the investing public and supporting the artificiall

inflated price of its securities . As demonstrated by defendants' misleading statements of th

Company's business, management and operations throughout the Class Period, defendants,

they did not have actual knowledge of the misrepresentations and omissions alleged, we r


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I reckless in failing to obtain such knowledge by deliberately refraining from taking thos e

necessary to discover whether those statements were false or misleading .

116. As a result of the dissemination of the materially false and misleading informatio

and failure to disclose material facts, as set forth above, the market price of Silicon Image'

I common stock was artificially inflated during the Class Period. In ignorance of the fact

I market prices of Silicon Image's publicly-traded common stock were artificially inflated,

relying directly or indirectly on the false and misleading statements made by defendants, o r

the integrity of the market in which the common stock trades, and/or on the absence of mate

adverse information that was known to or recklessly disregarded by defendants but not discl o

in public statements by defendants during the Class Period, Plaintiffs and the other members

the Class acquired Silicon Image common stock during the Class Period at artificially high pri g

and were damaged thereby.

117. At the time of said misrepresentations and omissions , Plaintiffs an d

members of the Class were ignorant of their falsity, and believed them to be true . Had

and the other members of the Class and the marketplace known the truth regarding the pr o

that Silicon Image was experiencing, which were not disclosed by defendants, Plaintiffs

other members of the Class would not have purchased or otherwise acquired their Silicon In

common stock, or, if they had acquired such securities during the Class Period, they would

have done so at the artificially inflated prices which they paid .

118 . By virtue of the foregoing, defendants have violated Section 10(b) of

Exchange Act, and Rule I Ob-5 promulgated thereunder .

119. As a direct and proximate result of defendants' wrongful conduct, Plaintiff s

the other members of the Class suffered damages in connection with their respective

of the Company's common stock during the Class Period .

SECOND CLAI M



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Violation Of Section 20(a) O fThe Exchange Act Against Individual Defendant s

120 . Plaintiffs repeat and reallege each and every allegation contained above as i f

set forth herein .

121 . The Individual Defendants acted as controlling persons of Silicon Image

the meaning of Section 20(a) of the Exchange Act as alleged herein . By virtue of their high-leve

positions, and their ownership and contractual rights, participation in and/or awareness of th

Company's operations and/or intimate knowledge of the false financial statements filed by th

Company with the SEC and disseminated to the investing public, the Individual Defendants ha

the power to influence and control and did influence and control, directly or indirectly, th

decision-making of the Company, including the content and dissemination of the variou

statements which Plaintiffs contend are false and misleading . The Individual Defendants wer

provided with or had unlimited access to copies of the Company's reports, press releases, publi

filings and other statements alleged by Plaintiffs to be misleading prior to and/or shortly afte

these statements were issued and had the ability to prevent the issuance of the statements c

cause the statements to be corrected .

122. In particular, each of these defendants had direct and supervisory involvemen t

the day-to-day operations of the Company and, therefore, is presumed to have had the powe r

control or influence the particular transactions giving rise to the securities violations a s

herein, and exercised the same .

123 . As set forth above , Silicon Image and the Individual Defendants each violate

Section 10(b) and Rule 1 Ob-5 by their acts and omissions as alleged in this Complaint . By vi

of their positions as controlling persons, the Individual Defendants are liable pursuant to S

20(a) of the Exchange Act. As a direct and proximate result of defendants' wrongful condu

Plaintiffs and other members of the Class suffered damages in connection with their purchase s

the Company's securities during the Class Period .


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WHEREFORE, Plaintiffs pray for relief and judgment, as follows :

A. Determining that this action is a proper class action and certifyii

Plaintiffs as class representatives under Rule 23 of the Federal Rules of Civil Procedure ;

B. Declaring and determining that defendants violated the federal securiti

laws by reason of their conduct as alleged herein ;

C. Awarding compensatory damages in favor of Plaintiffs and the othe .

Class members against all defendants, jointly and severally, for all damages sustained as a resul

of defendants' wrongdoing, in an amount to be proven at trial, including interest thereon ;

D . Awarding Plaintiffs and the Class their reasonable costs and expense :

incurred in this action, including counsel fees and expert fees ; and

E. Such other and further relief as the Court may deem just and proper .

JURY TRIAL DEMANDED

Plaintiffs hereby demand a trial by jury .

DATED: Pacific Grove, CaliforniaJuly 27, 2005

LOVELL STEWART HALEBIAN LLP

By : MSLIMERRICK SCOTT RAYLE ( S .B.N. 139478)LOVELL STEWART HALEBIAN LLP212 Wood Stree tPacific Grove , CA 93950Telephone : (831) 333-0309Facsimile : (831) 333-0325mravle (a0shll ) .com

CHRISTOPHER LOVELLLOVELL STEWART HALEBIAN LLP500 Fifth AvenueNew York, New York 10110Telephone: (212) 608-1900Facsimile: (212) 719-4677cloveltnlshllp.com


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RICHARD A. SPEIRSPAUL KLEIDMANZWERLING, SCHACHTER & ZWERLING, LLP41 Madison AvenueNew York, NY 10010Telephone : (212) 223-3900Facsimile: (212) [email protected](zsz .com

Co-Lead Counsel for Plaintiffs

ROBERT C . SCHUBERT ( S .B .N. 62684)JUDEN JUSTICE REED (S .B .N. 153748)SCHUBERT & REED LLPTwo Embarcadero Center, Suite 1660San Francisco , CA 9411 1Telephone : (415) 788-4220Facsimile : (415) 788-0161rschubert g schubert-reed.comjreednscbubert-reed .com



Exhibit A

Defendant Tirado's Sales During the Class Perio d

Date Name Sold Price Value6/30/04 Tirado, Steve 7,000 $12.85 $ 89,95 0

7/7/04 Tirado, Steve 7,000 $12.68 $ 88,7607/14/04 Tirado, Steve 7,000 $12.50 $ 87,500

7/21/04 Tirado, Steve 7,000 $10.58 $ 74,060

7/28/04 Tirado, Steve 7,000 $11 .00 $ 77,000

8/4/04 Tirado, Steve 7,000 $11 .10 $ 77,7008/11/04 Tirado, Steve 33,000 $10.28 $ 339,240

8/18/04 Tirado, Steve 33,000 $11 .29 $ 372,570

8/23/04 Tirado, Steve 15,000 Gifted Share s

8/25/04 Tirado, Steve 33,000 $11 .17 $ 368,6109/1/04 Tirado, Steve 33,000 $11 .02 $ 363,660

9/8/04 Tirado, Steve 33,000 $10.63 $ 350,790

9/15/04 Tirado, Steve 33,000 $12.52 $ 413,16 0

9/22/04 Tirado, Steve 33,000 $12.31 $ 406,23 09/29/04 Tirado, Steve 33,000 $12.25 $ 404,25 010/6/04 Tirado, Steve 33,000 $13 .92 $ 459,36 0

10/13/04 Tirado, Steve 33,000 $13 .52 $ 446,16 0

10/20/04 Tirado, Steve 33,000 $12.01 $ 396,33 0

10/27/04 Tirado, Steve 33,000 $13 .35 $ 440,55 011/3/04 Tirado, Steve 33,000 $13 .80 $ 455,440

11/10/04 Tirado, Steve 33,000 $14.29 $ 471,570

11/17/04 Tirado, Steve 33,000 $16.32 $ 538,560

11/24/04 Tirado, Steve 33,000 $16.83 $ 555,39 012/1/04 Tirado, Steve 33,000 $17.20 $ 567,600

12/8/04 Tirado, Steve 33,000 $17.22 $ 568,260

12/15/04 Tirado, Steve 32,000 $17.04 $ 545,280

12/22/04 Tirado, Steve 33,000 $16.63 $ 548,79012/29/04 Tirado, Steve 31,992 $16.61 $ 531,387

TOTALS 747,992 $ 10,038,157

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1 Consolidated Amended Complaint 07/27/2005

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