Exhibit 10.35
IMMERSION CORPORATION
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
          This Amended and Restated Employment Agreement (the “Agreement”) is
entered into by and between Immersion Corporation, a Delaware corporation (the
“Company”) and Victor Viegas (the “Employee”), effective as of December 1, 2007
(the “Effective Date”).
RECITALS
          1.     The Employee is and has been employed by the Company and is
currently the Company’s President and Chief Executive Officer.
          2.     The Company and the Employee are parties to an employment
agreement dated November 5, 2001, (the “Prior Agreement”).
          3.     The Company and the Employee wish to amend and restate the
Prior Agreement in the form of this Agreement, effective as of the Effective
Date.
          4.     Certain capitalized terms used in this Agreement are defined in
Section 8 below.
AGREEMENT
          In consideration of the mutual covenants herein contained, and in
consideration of the continuing employment of the Employee by the Company, the
parties agree as follows:
          1.     POSITION AND RESPONSIBILITIES. The Company shall employ the
Employee in the position of President and Chief Executive Officer, reporting
solely to the Board of Directors of the Company (the “Board”), and assuming and
discharging such responsibilities as are commensurate with such position. The
Employee shall comply with and be bound by the Company’s operating policies,
procedures and practices from time to time in effect during his employment.
During the Employee’s employment with the Company, the Employee shall devote his
full time, skill and attention to his duties and responsibilities, and shall
perform them faithfully, diligently and competently, and the Employee shall use
his best efforts to further the Company’s business.
          2.     TERM OF EMPLOYMENT. This Agreement shall become effective as of
the Effective Date, and shall supersede and replace the Prior Agreement, which
shall be void and of no further effect. This Agreement and the Employee’s
employment with the Company shall continue until terminated by reason of the
Employee’s death or by either party at any time, with or without notice, for any
or no reason. The parties agree and acknowledge that this Agreement is an “at
will” agreement and that no implied covenant or standard of practice will cause
this Agreement to have any minimum period of employment.
          3.     BASE COMPENSATION. For all services to be rendered by the
Employee to the Company while this Agreement is in effect, the Employee shall
receive a minimum annual base salary of $300,000, payable in accordance with the
Company’s standard payroll practices. The Compensation Committee of the Board
shall review the Employee’s base salary at least annually. The annual base
salary specified in this Section 3, as such base salary may be increased during
the term of this Agreement, is referred to herein as “Base Compensation.”
          4.     ANNUAL INCENTIVE. For each fiscal year during the term of this
Agreement, the Employee shall be eligible to receive additional cash
compensation (“Annual Incentive”) under the Company’s annual variable
compensation plan based upon specific financial and/or other targets approved by
the Compensation Committee of the Board. Unless the Company determines
otherwise, the Employee’s Annual Incentive shall be an amount equal to a
predetermined percentage of his Base Compensation. Any Annual Incentive
compensation that becomes payable to the Employee shall be paid in accordance
with the Company’s standard practices and policies.
          5.     OTHER BENEFITS. The Employee shall be entitled to participate
in the employee benefit plans and programs that the Company makes available to
its senior executives, subject to the rules and the regulations applicable
hereto. The Company reserves the right to cancel or change the benefit plans and
programs it offers to its senior executives at any time. The Employee will be
eligible for vacation and sick leave in accordance with the policies in effect
for senior executives during the term of this Agreement. The Company shall
reimburse the Employee for all reasonable expenses actually incurred or paid by
the

 

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Employee in the performance of his services on behalf of the Company, subject to
and in accordance with the Company’s expense reimbursement policy as from time
to time in effect. Any reimbursement of business expenses the Employee is
entitled to receive pursuant to this Agreement shall (a) be paid no later than
the last day of the Employee’s taxable year following the taxable year in which
the expense was incurred, (b) not affect any other expenses that are eligible
for reimbursement in any taxable year and (c) not be subject to liquidation or
exchange for another benefit.
          6.     TERMINATION OF EMPLOYMENT.
               (a)     TERMINATION WITHOUT CAUSE OR FOR CONSTRUCTIVE REASON. If
the Company terminates the Employee’s employment other than for “Cause,” or if
the Employee terminates his employment for a “Constructive Reason” (as those
terms are defined in Section 8), then, provided that the Executive has executed
a full general release, in a form satisfactory to Company, of all claims, known
or unknown, that the Employee may have against the Company arising out of or any
way related to Employee’s employment or termination of employment with Company
and such release has become effective on or before the forty-fifth (45th) day
following the Employee’s termination of employment, in addition to all earned
but unpaid Base Compensation and any other amounts to which the Employee is
entitled:
                    (i)     the Company shall pay the Employee an amount equal
to his Base Compensation for a period of twelve (12) months, with fifty percent
(50%) of such amount to be paid in a lump sum on the forty-fifth (45th) day
following such termination of employment and the remaining 50% of such amount to
be paid in a lump sum on the first day of the seventh month following such
termination of employment;
                    (ii)     for a period of twelve (12) months following the
Employee’s termination of employment, the Company shall continue to provide the
Employee with the same health, dental and vision benefits as provided to the
Employee immediately prior to such termination or, at the election of the
Company and provided that the Employee makes a timely election to obtain
continued group health insurance (COBRA) under the Company’s applicable group
health plan, the Company will pay the Employee’s COBRA premiums for such period
of twelve (12) months or, in any event until the Employee is eligible to receive
health insurance benefits under another group health plan, whichever occurs
first,
                    (iii)     the Company shall pay to the Employee any earned
but unpaid Annual Incentive, prorated to the date of the Employee’s termination
of employment, reimburse all reasonable business-related expenses and pay all
other benefits required by law or by the terms of the applicable plan or benefit
program; and
                    (iv)     except as otherwise provided under Section 7(a)
below with respect to a termination in connection with a Change of Control, the
Employee shall immediately vest in an additional seventy-five percent (75%) of
his then unvested Company stock and Company stock options.
All options, to the extent unexercised and exercisable by the Employee on the
date on which the Employee’s Service is terminated, may be exercised by the
Employee within six (6) months (or such other longer period of time as
determined by the Board, in its sole discretion) after the date on which the
Employee’s Service terminated, but in any event no later than the Option
Expiration Date.
               (b)     TERMINATION AS A RESULT OF DEATH; DISABILITY. In the
event of the Employee’s death or termination of employment by reason of the
Employee’s “Disability,” (as such terms are defined in Section 8), during the
term of this Agreement, then:
                    (i)     the Company shall pay the Employee or to the
representative of the Employee’s estate all amounts of unpaid Base Compensation
and any earned but unpaid Annual Incentive, reimburse all reasonable
business-related expenses and pay all other benefits required by law or by the
terms of the applicable plan or benefit program;
                    (ii)     the Employee’s then unvested Company stock and
Company stock options shall immediately vest with respect to the number of
shares that would have vested had the Employee’s employment continued for an
additional twenty-four (24) months; and
                    (iii)     in the event of the Employee’s termination of
employment by reason of Disability, the Company shall pay to the Employee in a
lump sum on the first day of the seventh month

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following such termination of employment an amount equal to his Base
Compensation for a period of six (6) months, less any disability payments made
by the Company or its insurance carriers.
All options, to the extent unexercised and exercisable on the date on which the
Employee’s Service is terminated, may be exercised by the Employee’s guardian or
legal representative at any time prior to the expiration of 12 months after the
date on which the Employee’s Service terminated, but in any event no later than
the Option Expiration Date.
               (c)     VOLUNTARY TERMINATION; TERMINATION FOR CAUSE. In the
event the Employee’s employment with the Company terminates either
(i) voluntarily by the Employee without a “Constructive Reason,” of
(ii) involuntarily by the Company for “Cause,” then the Company shall have no
further obligations hereunder except to pay to the Employee all amounts of
unpaid Base Compensation and any earned but unpaid Annual Incentive, reimburse
all reasonable business-related expenses and pay all other benefits required by
law or by the terms of the applicable plan or benefit program.
               (d)     COMPLIANCE WITH SECTION 409A. Notwithstanding anything
set forth herein to the contrary, no amount payable pursuant to this Agreement
which constitutes a “deferral of compensation” within the meaning of the
Treasury Regulations issued pursuant to Section 409A of the Internal Revenue
Code (the “Section 409A Regulations”) shall be paid unless and until the
Employee has incurred a “separation from service” within the meaning of the
Section 409A Regulations. Furthermore, to the extent that the Employee is a
“specified employee” within the meaning of the Section 409A Regulations as of
the date of the Employee’s separation from service, no amount that constitutes a
deferral of compensation which is payable on account of the Employee’s
separation from service shall be paid to the Employee before the date (the
“Delayed Payment Date”) which is first day of the seventh month after the date
of the Employee’s separation from service or, if earlier, the date of the
Employee’s death following such separation from service. All such amounts that
would, but for this Section, become payable prior to the Delayed Payment Date
will be accumulated and paid on the Delayed Payment Date.
          The Company intends that income provided to the Employee pursuant to
this Agreement will not be subject to taxation under Section 409A of the
Internal Revenue Code. 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 the Employee 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 the Employee, the Company shall not be
responsible for the payment of any applicable taxes on compensation paid or
provided to the Employee pursuant to this Agreement.
          7.     CHANGE OF CONTROL.
               (a)     ACCELERATED VESTING. Upon a “Change of Control” (as
defined in Section 8), the Employee shall immediately vest in an additional
seventy-five percent (75%) of his then unvested Company stock and Company stock
options. Notwithstanding the forgoing, in the event that a Change of Control
occurs on or before the date three (3) months following the date on which either
(i) the Company terminates the Employee’s employment other than for Cause, or
(ii) the Employee terminates his employment for a Constructive Reason, then in
either case upon the date of such subsequent Change of Control the Employee
shall vest in an additional seventy-five percent of his then unvested Company
stock and Company stock options.
          8.     DEFINITIONS. For purposes of this Agreement, the following
terms shall have the following meanings:
               (a)     CAUSE. “Cause” means: (i) the Employee’s willful and
repeated failure to comply with the lawful written direction of the Board, after
receiving written notice; (ii) the Employee’s gross negligence or willful
misconduct in the performance his duties, after receiving written notice; or
(iii) the conviction of or entry of a plea of nolo contendere or guilty to a
felony or a crime causing demonstrable material harm to the Company.
               (b)     CHANGE OF CONTROL “Change of Control” means:
                    (i)     Any “person” (as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended) becomes the
“beneficial owner” (as defined in Rule 13d-3

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under said Act), directly or indirectly, of securities of the Company
representing fifty percent (50%) or more of the total voting power represented
by the Company’s then outstanding voting securities; or
                    (ii)     A change in the composition of the Board occurring
within a three-year period, as a result of which fewer than a majority of the
directors are “Incumbent Directors.” “Incumbent Directors” shall mean directors
who either (A) are directors of the Company as of December 1, 2007, or (B) are
elected, or nominated for election, to the Board with the affirmative votes of
at least a majority of the Incumbent Directors at the time of such election or
nomination (but shall not include an individual whose election or nomination is
in connection with an actual or threatened proxy contest relating to the
election of directors of the Company); or
                    (iii)     The consummation of a merger or consolidation of
the Company with any other corporation, other than a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving entity
(or parent thereof)) at least sixty percent (60%) of the total voting power
represented by the voting securities of the Company or such surviving entity (or
parent) outstanding immediately after such merger or consolidation; provided,
however, that any person who acquired securities of the Company prior to the
occurrence of a merger or consolidation in contemplation of such transaction,
and who after such transaction possesses direct or indirect beneficial ownership
of at least ten percent (10%) of the securities of the Company or the surviving
entity (or parent) immediately following such transaction, shall not be included
in the group of shareholders of the Company immediately prior to such
transaction; or
                    (iv)     The consummation of the sale, lease or other
disposition by the Company of all or substantially all of the Company’s assets.
               (c)     CONSTRUCTIVE REASON. “Constructive Reason” means the
occurrence of any one or more of the following without the Employee’s prior
written consent:
                    (i)     A material adverse change in the Employee’s position
that causes it to be of less stature or of less responsibility; provided,
however, that if after a Change of Control the Employee is still the most senior
operations and/or finance executive of the Company and the Company continues to
operate as an independent subsidiary or independent controlled affiliate, then
no Constructive Reason shall have occurred;
                    (ii)     A change in the position to whom the Employee
reports; provided, however, that if after a Change of Control the Employee
reports to the Company’s Chief Executive Officer and the Company continues to
operate as an independent subsidiary or independent controlled affiliate, then
no Constructive Reason shall have occurred;
                    (iii)     An involuntary reduction of more than fifteen
percent (15%) of the Employee’s Base Compensation; or
                    (iv)     Relocating the Employee to a facility or location
more than thirty (30) miles from his then current location.
This provision applies only if the Employee elects to terminate his employment
within thirty (30) days after the occurrence of a Constructive Reason.
               (d)     DISABILITY. “Disability” means that the Employee has been
unable to substantially perform his duties under this Agreement as a result of
his incapacity due to physical or mental illness, and such inability, at least
90 days after its commencement, is determined to be total and permanent by a
physician selected by the Company or its insurers and acceptable to the Employee
or the Employee’s legal representative (such agreement as to acceptability not
to be unreasonably withheld).
          9.     SUCCESSORS.
               (a)     COMPANY’S SUCCESSORS. Any successor, whether direct or
indirect and whether by purchase, lease, merger, consolidation, liquidation or
otherwise, to all or substantially all of the Company’s business and/or assets
shall assume the obligations under this Agreement and shall perform the
obligations under this Agreement in the same manner and to the same extent as
the Company would be required to perform such obligations in the absence of a
succession. Other than for purposes of Section 8(c)

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(the definition of “Constructive Reason”), the term “Company” shall include any
such successor to the Company’s business and/or assets.
               (b)     EMPLOYEE’S SUCCESSORS. The terms of this Agreement and
all rights of the Employee hereunder shall inure to the benefit of, and be
enforceable by, the Employee’s personal or legal representatives, executors,
administrators, successors, heirs, devisees and legatees.
          10.     NOTICE.
               (a)     MANNER. Any notice hereby required or permitted to be
given shall be sufficiently given if in writing and upon mailing by registered
or certified mail, postage prepaid, to either party at the address of such party
or such other address as shall have been designated by written notice by such
party to the other party.
               (b)     EFFECTIVENESS. Any notice or other communication required
or permitted to be given under this Agreement will be deemed given on the day
when delivered in person, or the third business day after the day on which such
notice was mailed in accordance with Section 10(a).
          11.     GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal substantive laws, but not the choice
of law rules, of the state of California.
          12.     SEVERABILITY. The invalidity or unenforceability of any
provision of this Agreement, or any terms hereof, shall not affect the validity
or enforceability of any other provision or term of this Agreement.
          13.     INTEGRATION. Except as otherwise expressly provided herein,
this Agreement, together with the Confidential Information, Invention Assignment
and Arbitration Agreement between the Employee and the Company (the
“Confidential Information Agreement”), represent the entire agreement and
understanding between the parties as to the subject matter herein and supersedes
all prior or contemporaneous agreements, whether written or oral. No waiver,
alteration or modification of any of the provisions of this Agreement shall be
binding unless in writing and signed by duly authorized representatives of the
parties hereto.
          14.     EMPLOYMENT TAXES. The payments made pursuant to this Agreement
will be subject to applicable income and employment taxes.
          15.     COUNTERPARTS. This Agreement may be executed by either of the
parties hereto in one or more counterparts, none of which need contain the
signature of more than one party hereto, and each of which shall be deemed to be
an original, and all of which together shall constitute a single agreement.
          16.     ARBITRATION. Any dispute or controversy arising out of, or
relating to, this Agreement or the Employee’s employment or termination thereof
shall be settled by binding arbitration in accordance with the provisions of
Section 9 of the Confidential Information Agreement, which are incorporated by
reference herein.
          IN WITNESS WHEREOF, each of the parties has executed this Agreement,
in the case of the Company by a duly authorized officer, as of the Effective
Date.

          IMMERSION CORPORATION
      By:   /s/ Jack Saltich         Jack Saltich       Title:  Chairman,
Compensation Committee       EMPLOYEE
      /s/ Victor Viegas       Victor Viegas     

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