TiVo 2011 Annual Report Download - page 32

Table of Contents
subscriptions and the marketing of rebate offers related to the sale of our products and services. It is possible that money received by us for the sale of gift
subscriptions or related to our past rebate offers could be subject to state and federal escheat, or unclaimed property, laws in the future. If this were the case,
our business could be adversely impacted.
If we fail to comply with the laws and regulations relating to the collection of sales tax and payment of income taxes in the various States in
which we do business, we could be exposed to unexpected costs, expenses, penalties, and fees as a result of our noncompliance in which case our
business could be harmed.
As our business grows and expands, we have started to do business in an increasing number of states nationally. By engaging in business activities in
these states, we become subject to their various laws and regulations, including requirements to collect sales tax from our sales within those states and the
payment of income taxes on revenue generated from activities in those states. The laws and regulations governing the collection of sales tax and payment of
income taxes are numerous, complex, and vary between states. If we fail to comply with these laws and regulations requiring the collection of sales tax and
payment of income taxes in one or more states where we do business, we could be subject to significant costs, expenses, penalties, and fees in which case our
business could be harmed.
We are subject to the Foreign Corrupt Practices Act (“FCPA”), and our failure to comply with the laws and regulations there under could
result in penalties which could harm our reputation, business, and financial condition.
We are subject to the FCPA, which generally prohibits companies and their intermediaries from making improper payments to foreign officials for the
purpose of obtaining or keeping business. The FCPA also requires companies to maintain adequate record-keeping and internal accounting practices to
accurately reflect the transactions of the Company. Under the FCPA, U.S. companies may be held liable for actions taken by their strategic or local partners or
representatives. The FCPA and similar laws in other countries can impose civil and criminal penalties for violations.
If we do not properly implement practices and controls with respect to compliance with the FCPA and similar laws, or if we fail to enforce those
practices and controls properly, we may be subject to regulatory sanctions, including administrative costs related to governmental and internal investigations,
civil and criminal penalties, injunctions and restrictions on our business activities, all of which could harm our reputation, business and financial condition.
Our Certificate of Incorporation, Bylaws and Delaware law could discourage a third-party from acquiring us and consequently decrease the
market value of our common stock.
In the future, we could become the subject of an unsolicited attempted takeover of our Company. Although an unsolicited takeover could be in the best
interests of our stockholders, certain provisions of Delaware law and our organizational documents could be impediments to such a takeover.
We are subject to the provisions of Section 203 of the Delaware General Corporation Law, an anti-takeover law. In general, the statute prohibits a
publicly held Delaware corporation from engaging in a business combination with an interested stockholder for a period of three years after the date of the
transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner. Our Amended and
Restated Certificate of Incorporation and Amended and Restated Bylaws also require that any action required or permitted to be taken by our stockholders
must be effected at a duly called annual or special meeting of the stockholders and may not be effected by a consent in writing. In addition, special meetings
of our stockholders may be called only by a majority of the total number of authorized directors, the chairman of the board, our chief executive officer or the
holders of 50% or more of our common stock. Our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws also provide that
directors may be removed only for cause by a vote of a majority of the stockholders and that vacancies on the Board of Directors created either by resignation,
death, disqualification, removal or by an increase in the size of the Board of Directors may be filled by a majority of the directors in office, although less than
a quorum. Our Amended and Restated Certificate of Incorporation also provides for a classified Board of Directors and specifies that the authorized number
of directors may be changed only by resolution of the Board of Directors. These provisions of Delaware law, our Amended and Restated Certificate of
Incorporation and Amended and Restated Bylaws could make it more difficult for us to be acquired by another company, even if our acquisition is in the best
interests of our stockholders. Any delay or prevention of a change of control or change in management could cause the market price of our common stock to
decline.
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