AMENDED AND RESTATED RETENTION
AND OWNERSHIP
CHANGE EVENT AGREEMENT
This Amended and
Restated Retention and Ownership Change Event Agreement
(“Agreement”) is made effective as of the last date set
forth below by and between Immersion Corporation (the
“Company”) and Stephen Ambler
(“Executive”).
Executive and the
Company entered into a Retention and Ownership Change Event
Agreement dated as of June 20, 2007 (the “Original
Agreement”).
On
, 2008, Executive and the Company entered into an Amended and
Restated Retention and Ownership Change Event Agreement (the
“Amended Agreement”), to take into account the effect
of Section 409A (as defined below).
The Board and
Executive now wish to amend the Amended Agreement to extend the
time period of certain of the benefits hereunder.
In recognition
thereof, the parties now agree as follows:
1.
Definitions . For purposes of this Agreement:
(a)
“Change in Control” means the occurrence of any of the
following:
(i) any
“person” (as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) becomes the “beneficial
owner” (as defined in Rule 13d-3 promulgated under the
Exchange Act), directly or indirectly, of securities of the Company
representing more than fifty percent (50%) of the total combined
voting power of the Company’s then-outstanding securities
entitled to vote generally in the election of the Company’s
Board of Directors; provided, however, that the following
acquisitions shall not constitute a Change in Control: (1) an
acquisition by any such person who on the effective date of such
transaction is the beneficial owner of more than fifty percent
(50%) of such voting power, (2) any acquisition directly from
the Company, including, without limitation, a public offering of
securities, (3) any acquisition by the Company, (4) any
acquisition by a trustee or other fiduciary under an employee
benefit plan of the Company or (5) any acquisition by an
entity owned directly or indirectly by the stockholders of the
Company in substantially the same proportions as their ownership of
the voting securities of the Company; or
(ii) an
Ownership Change Event or series of related Ownership Change Events
(collectively, a “Transaction”) in which the
stockholders of the Company immediately before the Transaction do
not retain immediately after the Transaction direct or indirect
beneficial ownership of more than fifty percent (50%) of the total
combined voting power of the outstanding securities entitled to
vote generally in the election of Directors or, in
the case of an
Ownership Change Event described in Section 1(c)(iii), the
entity to which the assets of the Company were transferred (the
“Transferee”), as the case may be; or
(iii) a
liquidation or dissolution of the Company;
provided,
however, that a Change in Control shall be deemed not to include a
transaction described in subsections (i) or (ii) of this
Section 1(a) in which a majority of the members of the Board
of Directors of the continuing, surviving or successor entity, or
parent thereof, immediately after such transaction is comprised of
incumbent members. Notwithstanding the foregoing, to the extent
that any amount that constitutes deferred compensation subject to
and not exempted from the requirements of Section 409A of the
Internal Revenue Code of 1986, as amended
(“Section 409A”), would become payable under this
Agreement by reason of a Change in Control, such amount shall
become payable only if the event constituting a Change in Control
would also constitute a change in ownership or effective control of
the Company or a change in the ownership of a substantial portion
of the assets of the Company within the meaning of
Section 409A.
(b)
“Good Reason” means any of the following conditions,
which condition(s) remain(s) in effect thirty (30) days after
written notice to the Board or the Company’s Chief Executive
Officer from Executive of such condition(s):
(i) a
material decrease in Executive’s base salary, other than a
material decrease that applies generally to other executives of the
Company at Executive’s level;
(ii) a
material, adverse change in the Executive’s title, authority,
responsibilities, or duties; or
(iii) the
relocation of the Executive’s work place for the Company to a
location that is more than forty (40) miles distant from
Executive’s present work location for the Company;
provided, that
such written notice must be given within thirty (30) days
following the first occurrence of any of the good reason conditions
set forth in this subsection (b) and the Executive’s
resignation must occur within six (6) months following the
first occurrence of the good reason condition.
(c)
“Ownership Change Event” means the occurrence of any of
the following with respect to the Company: (i) the direct or
indirect sale or exchange in a single or series of related
transactions by the stockholders of the Company of more than fifty
percent (50%) of the voting stock of the Company; (ii) a
merger or consolidation in which the Company is a party; or
(iii) the sale, exchange, or transfer of all or substantially
all of the assets of the Company (other than a sale, exchange or
transfer to one or more subsidiaries of the Company).
(d) a
termination for “Cause” means Executive’s
termination based upon (1) Executive’s theft,
dishonesty, misconduct, breach of fiduciary duty, or falsification
of any Company documents or records; (2) Executive’s
material failure to abide by the Company’s code of conduct or
other policies (including, without limitation, policies relating to
confidentiality and reasonable workplace conduct);
(3) Executive’s unauthorized use, misappropriation,
destruction or diversion of any tangible or intangible asset or
corporate opportunity of the Company (including, without
limitation, Executive’s improper use or disclosure of the
Company’s
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Amended And
Restated Retention And Ownership Change Event Agreement —
April 2009
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confidential or
proprietary information); (4) any intentional act by the
Executive that has a material detrimental effect on the
Company’s reputation or business; (5) Executive’s
repeated failure or inability to perform any reasonable assigned
duties after written notice from the Company of, and a reasonable
opportunity to cure, such failure or inability;
(6) Executive’s conviction (including any plea of guilty
or nolo contendere) for any criminal act that impairs
Executive’s ability to perform his duties for the
Company.
(e)
“Separation from Service” shall have the meaning
determined by Treasury Regulations issued pursuant to
Section 409A.
2.
Termination Without Cause . In the event that the Company or
its successor terminates Executive’s employment without Cause
and Executive is not entitled to receive the severance pay and
benefits described in Section 3 below, Executive will be
entitled to receive the following payment and benefits, provided
that prior to the sixtieth (60th) day following the date of such
termination Executive has signed a general release of known and
unknown claims of known and unknown claims in a form satisfactory
to the Company, and the period for revocation has lapsed without
the general release having been revoked:
(a) payment
in a lump sum on the sixtieth (60th) day foll
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