RETENTION AND OWNERSHIP CHANGE
EVENT AGREEMENT
This Retention and
Ownership Change Event Agreement (“Agreement”) is made
effective as of the date(s) set forth below by and between
Immersion Corporation (the “Company”) and Clent
Richardson (“Executive”).
In order to make
available compensation pursuant to this Agreement that will not be
subject to taxation under Section 409A (as defined below),
Executive and the Board of Directors of the Company (the
“Board”) have determined that it is in the best
interests of the Company and Executive to enter into this Retention
and Ownership Change Event Agreement. The Company intends that
income provided to Executive pursuant to this Agreement will not be
subject to taxation under Section 409A, and the provisions of
this Agreement shall be interpreted and construed in favor of
satisfying any applicable requirements of Section 409A.
However, the Company does not guarantee any particular tax
effect for income provided to Executive pursuant to this
Agreement. In any event, except for the Company’s
responsibility to withhold applicable income and employment taxes
from compensation paid or provided to Executive, the Company shall
not be responsible for the payment of any applicable taxes on
compensation paid or provided to Executive pursuant to this
Agreement.
The Board has
determined that it is in the best interests of the Company to
assure that the Company will have the continued dedication and
service of the Executive, notwithstanding the possibility or
occurrence of a Change in Control (as defined below) of the
Company.
1.
Definitions. For purposes of this Agreement:
(a) An
“Ownership Change Event” shall be deemed to have
occurred if any of the following occurs 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 not the controlling
party;
(iii) the
sale, exchange, or transfer of all or substantially all of the
assets of the Company; or
(iv) a
liquidation or dissolution of the Company.
(b) “Good
Reason” means any of the following conditions, which
condition(s) remain(s) in effect 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) responsibilities,
or duties; a material, adverse change in the Executive’s
title, authority,
(iii) the
relocation of the Executive’s work place for the Company to a
location that is more than 40 miles distant from Executive’s
present work location for the Company; or
(iv) the
failure of any successor to the Company to confirm in writing its
assumption of the Company’s obligations under this
Agreement.
(c) 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 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.
2.
Termination Without Cause . In the event that Executive is
terminated without Cause more than three months prior to, or more
than one year after, an Ownership Change Event, and if at that time
Executive signs (and does not revoke) a general release of known
and unknown claims in a form satisfactory to the Company, Executive
will receive the following:
(a) a
lump sum severance payment equivalent to twelve
(12) months’ base salary at Executive’s final base
salary rate, payable within ten (10) business days following
the effective date of the aforementioned general release of claims;
such severance payment will be subject to applicable withholding;
and
(b) payment
of the premiums necessary to continue Executive’s group
health insurance coverage under COBRA until the earlier of
(i) twelve (12) months following Executive’s
termination date, or (ii) the date on which Executive first
becomes eligible to obtain other group health insurance coverage;
thereafter, Executive may elect to purchase continued group health
insurance coverage at his own expense in accordance with
COBRA.
3.
Termination Without Cause or Resignation for Good Reason Due to
an Ownership Change Event. In the event that Executive is
terminated without Cause or resigns for Good Reason within three
months of, or within 1 year following, an Ownership Change
Event,
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