TiVo 2004 Annual Report Download - page 89

Table of Contents
Index to Financial Statements
The Rights are intended to enable all TiVo stockholders to realize the long-term value of their investment in the Company. They do not prevent a
takeover, but should encourage anyone seeking to acquire TiVo to negotiate with the Board of Directors prior to attempting a takeover. The Rights Plan will
expire on January 9, 2011.
The Rights were not being distributed in response to any specific effort to acquire control of TiVo. The Rights are designed to assure that all TiVo
stockholders receive fair and equal treatment in the event of any proposed takeover of TiVo and to guard against partial tender offers, open market
accumulations and other abusive tactics to gain control of TiVo without paying all stockholders a control premium.
If a person becomes an Acquiring Person, each Right will entitle its holder to purchase, at the Right's then-current exercise price, a number of common
shares of TiVo having a market value at that time of twice the Right's exercise price. Rights held by the Acquiring Person will become void and will not be
exercisable to purchase shares at the bargain purchase price. If TiVo is acquired in a merger or other business combination transaction which has not been
approved by the Board of Directors, each Right will entitle its holder to purchase, at the Right's then-current exercise price, a number of the acquiring
company's common shares having a market value at that time of twice the Right's exercise price.
The dividend distribution to establish the new Rights Plan was paid to stockholders of record on January 31, 2001. The Rights will expire on January 9,
2011. The Rights distribution is not taxable to stockholders.
21. SUBSEQUENT EVENTS
Comcast Agreement
On March 15, 2005, the Company entered into a non-exclusive licensing and marketing agreement with Comcast STB Software DVR, LLC, a wholly-
owned subsidiary of Comcast Corporation, and Comcast Corporation, as guarantor of Comcast STB's obligations under the agreement. Pursuant to this
agreement, the Company has agreed to develop a TiVo-branded software solution for deployment on Comcast's DVR platforms, which would enable any
TiVo-specific DVR and networking features requested by Comcast, such as WishList searches, Season Pass recordings, home media features, and TiVoToGo
transfers. In addition, the Company has agreed to develop an advertising management system for deployment on Comcast platforms to enable the provision of
local and national advertising to Comcast subscribers.
Under the agreement, Comcast will pay TiVo an upfront fee and a recurring monthly fee per Comcast subscriber who receives the TiVo service through
Comcast. Comcast will also pay the Company fees for engineering services for the development and integration of the TiVo service software solution (subject
to adjustment under certain circumstances) and the advertising management system.
The initial term of this agreement is for seven years from completion of the TiVo service software solution, with Comcast permitted to renew for
additional 1-year terms for up to a total of 8 additional years as long as certain deployment thresholds have been achieved. During the term of the agreement,
TiVo will provide Comcast with certain customer and maintenance support and will provide certain additional development work. TiVo will have the
continuing right to sell certain types of advertising in connection with the TiVo service offered through Comcast. TiVo will also have a limited right to sell
certain types of advertising on other Comcast DVR set-top boxes enabled with the advertising management system, subject to Comcast's option to terminate
such right in exchange for certain advertising-related payments. Development and deployment of the TiVo service software solution and advertising
management system is targeted to occur within two years from the date of the agreement, with certain consequences, including, but not limited to, termination
of the agreement, in the event development of the TiVo service software solution has not been completed by such date. As part of this agreement, Comcast is
receiving a non-exclusive, non-transferable license to the Company's intellectual property in order to deploy the TiVo service software solution and
advertising management system, including certain trademark branding rights and a covenant not to assert under our patents, which rights extend only to
Comcast Corporation, its affiliates, and certain of its vendors and suppliers with respect to Comcast products and services. Such non-exclusive, non-
transferable license to the Company's intellectual property will, under certain circumstances, continue after the termination of this agreement. In addition,
Comcast is entitled to certain most favored customer terms as compared with other multi-channel video distributors who license certain TiVo technology.
Pursuant to the terms of this agreement, Comcast has the right to terminate the agreement in the event the Company is the subject of certain change of control
transactions involving any of certain specified companies. On March 22, 2005, TiVo Brands LLC, a wholly owned subsidiary of TiVo Inc., was incorporated
in the State of Delaware as a holding entity for all of the Company's trademarks.
Amended and Restated DIRECTV Services Agreement
On March 31, 2005, the Company entered into a new services agreement with DIRECTV, Inc. that amends and restates the parties' prior services
agreement. Under the terms of the agreement, DIRECTV and TiVo may each distribute software tags within
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