EXHIBIT 10.3

 

TIVO INC.

 

1999 NON-EMPLOYEE DIRECTORS’ STOCK OPTION PLAN

 

Adopted by the Board of Directors July 14, 1999

Approved By Stockholders July 14, 1999

 

Amended by the Board of Directors January 5, 2000

Stockholder Approval Not Required

 

Amended by the Board of Directors March 17, 2004

Stockholder Approval Not Required

 

Amended and Restated by Board of Directors December 8, 2004

Stockholder Approval Not Required

 

Effective Date: July 14, 1999

Termination Date: July 13, 2009

 

1. PURPOSES.

 

(a) Eligible Option Recipients. The persons eligible to receive Options are the
Non-Employee Directors of the Company.

 

(b) Available Options. The purpose of the Plan is to provide a means by which
Non-Employee Directors may be given an opportunity to benefit from increases in
value of the Common Stock through the granting of Nonstatutory Stock Options.

 

(c) General Purpose. The Company, by means of the Plan, seeks to retain the
services of its Non-Employee Directors, to secure and retain the services of new
Non-Employee Directors and to provide incentives for such persons to exert
maximum efforts for the success of the Company and its Affiliates.

 

2. DEFINITIONS.

 

(a) “Affiliate” means any parent corporation or subsidiary corporation of the
Company, whether now or hereafter existing, as those terms are defined in
Sections 424(e) and (f), respectively, of the Code.

 

(b) “Annual Grant” means an Option granted annually to all Non-Employee
Directors who meet the specified criteria pursuant to subsection 6(b) of the
Plan.

 

(c) “Annual Meeting” means the annual meeting of the stockholders of the
Company.

 

1

--------------------------------------------------------------------------------

(d) “Board” means the Board of Directors of the Company.

 

(e) “Code” means the Internal Revenue Code of 1986, as amended.

 

(f) “Common Stock” means the common stock of the Company.

 

(g) “Company” means TiVo Inc., a Delaware corporation.

 

(h) “Consultant” means any person, including an advisor, (i) engaged by the
Company or an Affiliate to render consulting or advisory services and who is
compensated for such services or (ii) who is a member of the Board of Directors
of an Affiliate. However, the term “Consultant” shall not include either
Directors of the Company who are not compensated by the Company for their
services as Directors or Directors of the Company who are merely paid a
director’s fee by the Company for their services as Directors.

 

(i) “Continuous Service” means that the Optionholder’s service with the Company
or an Affiliate, whether as an Employee, Director or Consultant, is not
interrupted or terminated. The Optionholder’s Continuous Service shall not be
deemed to have terminated merely because of a change in the capacity in which
the Optionholder renders service to the Company or an Affiliate as an Employee,
Consultant or Director or a change in the entity for which the Optionholder
renders such service, provided that there is no interruption or termination of
the Optionholder’s Continuous Service. For example, a change in status from a
Non-Employee Director of the Company to a Consultant of an Affiliate or an
Employee of the Company will not constitute an interruption of Continuous
Service. The Board or the chief executive officer of the Company, in that
party’s sole discretion, may determine whether Continuous Service shall be
considered interrupted in the case of any leave of absence approved by that
party, including sick leave, military leave or any other personal leave.

 

(j) “Director” means a member of the Board of Directors of the Company.

 

(k) “Disability” means the permanent and total disability of a person within the
meaning of Section 22(e)(3) of the Code.

 

(l) “Employee” means any person employed by the Company or an Affiliate. Mere
service as a Director or payment of a director’s fee by the Company or an
Affiliate shall not be sufficient to constitute “employment” by the Company or
an Affiliate.

 

(m) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

(n) “Fair Market Value” means, as of any date, the value of the Common Stock
determined as follows:

 

(i) If the Common Stock is listed on any established stock exchange or traded on
the Nasdaq National Market or the Nasdaq SmallCap Market, the Fair Market Value
of a share of Common Stock shall be the closing sales price for such stock (or
the closing bid, if no sales were reported) as quoted on such exchange or market
(or the exchange or market with the

 

2

--------------------------------------------------------------------------------

greatest volume of trading in the Common Stock) on the day of determination (or
the next day on which sales were reported if none were reported on such date),
as reported in The Wall Street Journal or such other source as the Board deems
reliable.

 

(ii) In the absence of such markets for the Common Stock, the Fair Market Value
shall be determined in good faith by the Board.

 

(o) “Initial Grant” means an Option granted to a Non-Employee Director who meets
the specified criteria pursuant to subsection 6(a) of the Plan.

 

(p) “IPO Date” means the effective date of the initial public offering of the
Common Stock.

 

(q) “Non-Employee Director” means a Director who is not an Employee.

 

(r) “Nonstatutory Stock Option” means an Option not intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.

 

(s) “Option” means a Nonstatutory Stock Option granted pursuant to the Plan.

 

(t) “Option Agreement” means a written agreement between the Company and an
Optionholder evidencing the terms and conditions of an individual Option grant.
Each Option Agreement shall be subject to the terms and conditions of the Plan.

 

(u) “Optionholder” means a person to whom an Option is granted pursuant to the
Plan or, if applicable, such other person who holds an outstanding Option.

 

(v) “Plan” means this TiVo Inc. 1999 Non-Employee Directors’ Stock Option Plan.

 

(w) “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any
successor to Rule 16b-3, as in effect from time to time.

 

(x) “Securities Act” means the Securities Act of 1933, as amended.

 

3. ADMINISTRATION.

 

(a) Administration by Board. The Board shall administer the Plan. The Board may
not delegate administration of the Plan to a committee.

 

(b) Powers of Board. The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:

 

(i) To determine the provisions of each Option to the extent not specified in
the Plan.

 

3

--------------------------------------------------------------------------------

(ii) To construe and interpret the Plan and Options granted under it, and to
establish, amend and revoke rules and regulations for its administration. The
Board, in the exercise of this power, may correct any defect, omission or
inconsistency in the Plan or in any Option Agreement, in a manner and to the
extent it shall deem necessary or expedient to make the Plan fully effective.

 

(iii) To amend the Plan or an Option as provided in Section 12.

 

(iv) Generally, to exercise such powers and to perform such acts as the Board
deems necessary or expedient to promote the best interests of the Company which
are not in conflict with the provisions of the Plan.

 

4. SHARES SUBJECT TO THE PLAN.

 

(a) Share Reserve. Subject to the provisions of Section 11 relating to
adjustments upon changes in stock, the stock that may be issued pursuant to
Options shall not exceed in the aggregate Five Hundred Thousand (500,000) shares
of Common Stock.

 

(b) Additional Shares. Commencing on December 31, 1999, the aggregate number of
shares of Common Stock that may be issued pursuant to Options granted under the
Plan as specified in subsection 4(a) shall automatically be increased each
December 31 by one hundred thousand (100,000) shares of Common Stock.

 

(c) Reversion of Shares to the Share Reserve. If any Option shall for any reason
expire or otherwise terminate, in whole or in part, without having been
exercised in full, the stock not acquired under such Option shall revert to and
again become available for issuance under the Plan.

 

(d) Source of Shares. The stock subject to the Plan may be unissued shares or
reacquired shares, bought on the market or otherwise.

 

5. ELIGIBILITY. Nondiscretionary Options as set forth in section 6 shall be
granted under the Plan to all Non-Employee Directors.

 

6. NON-DISCRETIONARY GRANTS.

 

(a) Initial Grants.

 

(i) Each person who became a Non-Employee Director between July 14, 1999 and
March 16, 2004 automatically shall upon the date of his or her initial election
or appointment to be a Non-Employee Director by the Board or stockholders of the
Company, be granted an Initial Grant to purchase Twenty Thousand (20,000) shares
of Common Stock on the terms and conditions set forth herein.

 

(ii) Each person who is elected or appointed for the first time to be a
Non-Employee Director on or after March 17, 2004 automatically shall, upon the
date of his or her

 

4

--------------------------------------------------------------------------------

initial election or appointment to be a Non-Employee Director by the Board or
stockholders of the Company, be granted an Initial Grant to purchase Fifty
Thousand (50,000) shares of Common Stock on the terms and conditions set forth
herein.

 

(iii) Make-Whole Grants. Each person who became a Non-Employee Director between
August 5, 2003 and March 17, 2004 shall, upon March 29, 2004, be granted a
Make-Whole Grant to purchase Thirty Thousand (30,000) shares of Common Stock on
the terms and conditions set forth herein for Initial Grants.

 

(b) Annual Grants.

 

(i) On the day following each Annual Meeting commencing with the Annual Meeting
in 2001 and running through the Annual Meeting in 2003, each person who is then
a Non-Employee Director and has been a Non-Employee Director for at least six
(6) months prior to such date automatically shall be granted an Annual Grant to
purchase Ten Thousand (10,000) shares of Common Stock on the terms and
conditions set forth herein.

 

(ii) On the day following each Annual Meeting commencing with the Annual Meeting
in 2004, each person who is then a Non-Employee Director and has been a
Non-Employee Director for at least six (6) months prior to such date
automatically shall be granted an Annual Grant to purchase Twenty-Five Thousand
(25,000) shares of Common Stock on the terms and conditions set forth herein.

 

(iii) With respect to the first Annual Grant made to any Non-Employee Director,
at least eighteen (18) months must have elapsed between the Initial Grant to
such person and the first Annual Grant to such person.

 

7. OPTION PROVISIONS.

 

Each Option shall be in such form and shall contain such terms and conditions as
required by the Plan. Each Option shall contain such additional terms and
conditions, not inconsistent with the Plan, as the Board shall deem appropriate.
Each Option shall include (through incorporation of provisions hereof by
reference in the Option or otherwise) the substance of each of the following
provisions:

 

(a) Term. No Option shall be exercisable after the expiration of ten (10) years
from the date it was granted.

 

(b) Exercise Price. Subject to subsection 6(b)(ii) below, the exercise price of
each Option shall be one hundred percent (100%) of the Fair Market Value of the
stock subject to the Option on the date the Option is granted. Notwithstanding
the foregoing, an Option may be granted with an exercise price lower than that
set forth in the preceding sentence if such Option is granted pursuant to an
assumption or substitution for another option in a manner satisfying the
provisions of Section 424(a) of the Code.

 

5

--------------------------------------------------------------------------------

(c) Consideration. The purchase price of stock acquired pursuant to an Option
may be paid, to the extent permitted by applicable statutes and regulations, in
any combination of (i) cash or check, (ii) delivery to the Company of other
Common Stock which, in the case of Common Stock acquired from the Company, has
been held such minimum period as necessary to avoid adverse accounting
consequences for the Company or (iii) any other form of legal consideration that
may be acceptable to the Board and provided in the Option Agreement; provided,
however, that at any time that the Company is incorporated in Delaware, payment
of the Common Stock’s “par value,” as defined in the Delaware General
Corporation Law, shall not be made by deferred payment.

 

(d) Transferability. An Option is not transferable, except (i) by will or by the
laws of descent and distribution, (ii) by instrument to an inter vivos or
testamentary trust, in a form accepted by the Company, in which the Option is to
be passed to beneficiaries upon the death of the trustor (settlor) and (iii) by
gift, in a form accepted by the Company, to a member of the “immediate family”
of the Optionholder as that term is defined in 17 C.F.R. 240.16a-1(e). In
addition, Optionholder may, by delivering written notice to the Company, in a
form satisfactory to the Company, designate a third party who, in the event of
the death of the Optionholder, shall thereafter be entitled to exercise the
Option.

 

(e) Vesting and Exercise.

 

(i) Initial Grants shall vest at the rate of 1/24th of the shares subject to the
Initial Grant per month over two (2) years from the date of grant. An
Optionholder may elect at any time before the Optionholder’s Continuous Service
terminates to exercise the Optionholder’s Initial Grant as to any part or all of
the shares of Common Stock subject to the Initial Grant prior to the full
vesting of the Initial Grant. Any unvested shares of Common Stock so purchased
shall be subject to a seven-month repurchase option (or such longer period of
time required to avoid a charge to earnings for financial accounting purposes)
in favor of the Company and to any other restriction that the Company determines
to be appropriate. The Company will not exercise its repurchase option until at
least six (6) months (or such longer or shorter period of time required to avoid
a charge to earnings for financial accounting purposes) have elapsed following
exercise of the Initial Grant.

 

(ii) Annual Grants shall be fully vested and exercisable on the date of grant.

 

(f) Termination of Continuous Service. In the event an Optionholder’s Continuous
Service terminates (other than upon the Optionholder’s death or Disability), the
Optionholder may exercise his or her Option but only within such period of time
ending on the earlier of (i) the date three (3) months following the termination
of the Optionholder’s Continuous Service, or (ii) the expiration of the term of
the Option as set forth in the Option Agreement. If, after termination, the
Optionholder does not exercise his or her Option within the time specified in
the Option Agreement, the Option shall terminate.

 

(g) Extension of Termination Date. If the exercise of the Option following the
termination of the Optionholder’s Continuous Service (other than upon the
Optionholder’s death or Disability) would be prohibited at any time solely
because the issuance of shares would

 

6

--------------------------------------------------------------------------------

violate the registration requirements under the Securities Act, then the Option
shall terminate on the earlier of (i) the expiration of the term of the Option
set forth in subsection 7(a) or (ii) the expiration of a period of three (3)
months after the termination of the Optionholder’s Continuous Service during
which the exercise of the Option would not be in violation of such registration
requirements.

 

(h) Disability of Optionholder. In the event an Optionholder’s Continuous
Service terminates as a result of the Optionholder’s Disability, the
Optionholder may exercise his or her Option, but only within such period of time
ending on the earlier of (i) the date twelve (12) months following such
termination or (ii) the expiration of the term of the Option as set forth in the
Option Agreement. If, after termination, the Optionholder does not exercise his
or her Option within the time specified herein, the Option shall terminate.

 

(i) Death of Optionholder. In the event (i) an Optionholder’s Continuous Service
terminates as a result of the Optionholder’s death or (ii) the Optionholder dies
within the three-month period after the termination of the Optionholder’s
Continuous Service for a reason other than death, then the Option may be
exercised by the Optionholder’s estate, by a person who acquired the right to
exercise the Option by bequest or inheritance or by a person designated to
exercise the Option upon the Optionholder’s death, but only within the period
ending on the earlier of (1) the date eighteen (18) months following the date of
death or (2) the expiration of the term of such Option as set forth in the
Option Agreement. If, after death, the Option is not exercised within the time
specified herein, the Option shall terminate.

 

8. COVENANTS OF THE COMPANY.

 

(a) Availability of Shares. During the terms of the Options, the Company shall
keep available at all times the number of shares of Common Stock required to
satisfy such Options.

 

(b) Securities Law Compliance. The Company shall seek to obtain from each
regulatory commission or agency having jurisdiction over the Plan such authority
as may be required to grant Options and to issue and sell shares of Common Stock
upon exercise of the Options; provided, however, that this undertaking shall not
require the Company to register under the Securities Act the Plan, any Option or
any stock issued or issuable pursuant to any such Option. If, after reasonable
efforts, the Company is unable to obtain from any such regulatory commission or
agency the authority which counsel for the Company deems necessary for the
lawful issuance and sale of stock under the Plan, the Company shall be relieved
from any liability for failure to issue and sell stock upon exercise of such
Options unless and until such authority is obtained.

 

9. USE OF PROCEEDS FROM STOCK.

 

Proceeds from the sale of stock pursuant to Options shall constitute general
funds of the Company.

 

7

--------------------------------------------------------------------------------

10. MISCELLANEOUS.

 

(a) Stockholder Rights. No Optionholder shall be deemed to be the holder of, or
to have any of the rights of a holder with respect to, any shares subject to
such Option unless and until such Optionholder has satisfied all requirements
for exercise of the Option pursuant to its terms.

 

(b) No Service Rights. Nothing in the Plan or any instrument executed or Option
granted pursuant thereto shall confer upon any Optionholder any right to
continue to serve the Company as a Non-Employee Director or shall affect the
right of the Company or an Affiliate to terminate (i) the employment of an
Employee with or without notice and with or without cause, (ii) the service of a
Consultant pursuant to the terms of such Consultant’s agreement with the Company
or an Affiliate or (iii) the service of a Director pursuant to the Bylaws of the
Company or an Affiliate, and any applicable provisions of the corporate law of
the state in which the Company or the Affiliate is incorporated, as the case may
be.

 

(c) Investment Assurances. The Company may require an Optionholder, as a
condition of exercising or acquiring stock under any Option, (i) to give written
assurances satisfactory to the Company as to the Optionholder’s knowledge and
experience in financial and business matters and/or to employ a purchaser
representative reasonably satisfactory to the Company who is knowledgeable and
experienced in financial and business matters and that he or she is capable of
evaluating, alone or together with the purchaser representative, the merits and
risks of exercising the Option; and (ii) to give written assurances satisfactory
to the Company stating that the Optionholder is acquiring the stock subject to
the Option for the Optionholder’s own account and not with any present intention
of selling or otherwise distributing the stock. The foregoing requirements, and
any assurances given pursuant to such requirements, shall be inoperative if
(iii) the issuance of the shares upon the exercise or acquisition of stock under
the Option has been registered under a then currently effective registration
statement under the Securities Act or (iv) as to any particular requirement, a
determination is made by counsel for the Company that such requirement need not
be met in the circumstances under the then applicable securities laws. The
Company may, upon advice of counsel to the Company, place legends on stock
certificates issued under the Plan as such counsel deems necessary or
appropriate in order to comply with applicable securities laws, including, but
not limited to, legends restricting the transfer of the stock.

 

(d) Withholding Obligations. The Optionholder may satisfy any federal, state or
local tax withholding obligation relating to the exercise or acquisition of
stock under an Option by any of the following means (in addition to the
Company’s right to withhold from any compensation paid to the Optionholder by
the Company) or by a combination of such means: (i) tendering a cash payment;
(ii) authorizing the Company to withhold shares from the shares of the Common
Stock otherwise issuable to the Optionholder as a result of the exercise or
acquisition of stock under the Option; or (iii) delivering to the Company owned
and unencumbered shares of the Common Stock.

 

8

--------------------------------------------------------------------------------

11. ADJUSTMENTS UPON CHANGES IN STOCK.

 

(a) Capitalization Adjustments. If any change is made in the stock subject to
the Plan, or subject to any Option, without the receipt of consideration by the
Company (through merger, consolidation, reorganization, recapitalization,
reincorporation, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of shares, exchange of shares, change
in corporate structure or other transaction not involving the receipt of
consideration by the Company), the Plan will be appropriately adjusted in the
class(es) and maximum number of securities subject both to the Plan pursuant to
subsection 4(a) and to the nondiscretionary Options specified in Section 5, and
the outstanding Options will be appropriately adjusted in the class(es) and
number of securities and price per share of stock subject to such outstanding
Options. The Board shall make such adjustments, and its determination shall be
final, binding and conclusive. (The conversion of any convertible securities of
the Company shall not be treated as a transaction “without receipt of
consideration” by the Company.)

 

(b) Change in Control—Dissolution or Liquidation. In the event of a dissolution
or liquidation of the Company, then the vesting and exercisability of
outstanding Options shall accelerate immediately prior to such event, and all
outstanding Options shall terminate immediately prior to such event.

 

(c) Change in Control—Asset Sale, Merger, Consolidation or Reverse Merger. In
the event of (i) a sale, lease or other disposition of all or substantially all
of the assets of the Company, (ii) a sale by the stockholders of the Company of
the voting stock of the Company to another corporation and/or its subsidiaries
that results in the ownership by such corporation and/or its subsidiaries of
eighty percent (80%) or more of the combined voting power of all classes of the
voting stock of the Company entitled to vote; (iii) a merger or consolidation in
which the Company is not the surviving corporation or (iv) a reverse merger in
which the Company is the surviving corporation but the shares of Common Stock
outstanding immediately preceding the merger are converted by virtue of the
merger into other property, whether in the form of securities, cash or
otherwise, then any surviving corporation or acquiring corporation shall assume
any Options outstanding under the Plan or shall substitute similar options
(including an option to acquire the same consideration paid to the stockholders
in the transaction described in this subsection 11(c)) for those outstanding
under the Plan. Whether or not any surviving corporation or acquiring
corporation assumes such Options or substitutes similar options for those
outstanding under the Plan, the vesting and exercisability of outstanding
Options shall accelerate ten (10) days prior to such event. In the event any
surviving corporation or acquiring corporation refuses to assume such Options or
to substitute similar options for those outstanding under the Plan, then such
Options shall terminate if not exercised prior to such event.

 

12. AMENDMENT OF THE PLAN AND OPTIONS.

 

(a) Amendment of Plan. The Board at any time, and from time to time, may amend
the Plan. However, except as provided in Section 11 relating to adjustments upon
changes in stock, no amendment shall be effective unless approved by the
stockholders of the Company to the extent stockholder approval is necessary to
satisfy the requirements of Rule 16b-3 or any Nasdaq or securities exchange
listing requirements.

 

9

--------------------------------------------------------------------------------

(b) Stockholder Approval. The Board may, in its sole discretion, submit any
other amendment to the Plan for stockholder approval.

 

(c) No Impairment of Rights. Rights under any Option granted before amendment of
the Plan shall not be impaired by any amendment of the Plan unless (i) the
Company requests the consent of the Optionholder and (ii) the Optionholder
consents in writing.

 

(d) Amendment of Options. The Board at any time, and from time to time, may
amend the terms of any one or more Options; provided, however, that the rights
under any Option shall not be impaired by any such amendment unless (i) the
Company requests the consent of the Optionholder and (ii) the Optionholder
consents in writing.

 

13. TERMINATION OR SUSPENSION OF THE PLAN.

 

(a) Plan Term. The Board may suspend or terminate the Plan at any time. Unless
sooner terminated, the Plan shall terminate on the day before the tenth (10th)
anniversary of the date the Plan is adopted by the Board or approved by the
stockholders of the Company, whichever is earlier. No Options may be granted
under the Plan while the Plan is suspended or after it is terminated.

 

(b) No Impairment of Rights. Suspension or termination of the Plan shall not
impair rights and obligations under any Option granted while the Plan is in
effect except with the written consent of the Optionholder.

 

14. EFFECTIVE DATE OF PLAN.

 

The Plan shall become effective upon adoption by the Board, but no Option shall
be exercised unless and until the Plan has been approved by the stockholders of
the Company, which approval shall be within twelve (12) months before or after
the date the Plan is adopted by the Board.

 

15. CHOICE OF LAW.

 

All questions concerning the construction, validity and interpretation of this
Plan shall be governed by the law of the State of Delaware, without regard to
such state’s conflict of laws rules.

 

10