Exhibit 10.39
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”).
RECITALS
     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.
AGREEMENT
     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

 

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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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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 following
Executive’s termination of employment of an amount equal to twelve (12) months’
base salary at Executive’s final base salary rate, subject to applicable
withholding; and
          (b) commencing on the sixtieth (60th) day following Executive’s
termination of employment, payment of the premiums (including reimbursement to
Executive of any such premiums paid by Executive during such sixty (60) day
period) 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. Notwithstanding the foregoing, payment of such premiums
shall not commence unless and until Executive has incurred a Separation from
Service.
     3. Termination Without Cause or Resignation for Good Reason Due to a Change
in Control. In the event that, within one (1) year following a Change in
Control, the Company or its successor terminates Executive’s employment without
Cause or Executive resigns for Good Reason, Executive will be entitled to
receive the following payment and benefits, provide 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 following
Executive’s termination of employment of an amount equal to twelve (12) months’
base salary at Executive’s final base salary rate, subject to applicable
withholding; and
          (b) commencing on the sixtieth (60th) day following Executive’s
termination of employment, payment of the premiums (including reimbursement to
Executive of any such premiums paid by Executive during such sixty (60) day
period) necessary to continue Executive’s group health insurance coverage under
COBRA until the earlier of (i) twelve (12)

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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. Notwithstanding
the foregoing, payment of such premiums shall not commence unless and until
Executive has incurred a Separation from Service.
     4. Voluntary Termination. In the event that Executive resigns from his
employment with the Company at any time (other than a resignation for Good
Reason during the period covered by Section 3), or in the event that Executive’s
employment terminates at any time as a result of his death or disability
(meaning Executive is unable to perform his duties for any consecutive six (6)
month period, with or without reasonable accommodation, as a result of a
physical and/or mental impairment), Executive will be entitled to no
compensation or benefits from the Company other than those earned through the
date of Executive’s termination. Executive agrees that if he resigns from his
employment with the Company, he will provide the Company with 20 calendar days’
written notice of such resignation. The Company may, in its sole discretion,
elect to waive all or any part of such notice period and accept the Executive’s
resignation at an earlier date.
     5. Termination for Cause. If Executive’s employment is terminated by the
Company at any time for Cause as defined above in paragraph 1, Executive will be
entitled to no compensation or benefits from the Company other than those earned
through the date of his termination for Cause.
     6. Compliance With Section 409A.
          (a) Notwithstanding anything set forth herein to the contrary, no
amount payable pursuant to Section 2 or Section 3 of the Agreement which
constitutes a “deferral of compensation” within the meaning of Treasury
Regulations promulgated pursuant to Section 409A (the “Section 409A
Regulations”) shall be paid unless and until Executive has incurred a Separation
from Service. Furthermore, to the extent that Executive is a “specified
employee” of the Company as of the date of Executive’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 paid to Executive before
the date (the “Delayed Payment Date”) which is first day of the seventh month
after the date of Executive’s separation from service or, if earlier, the date
of Executive’s death following such separation from service. All such amounts
that would, but for this paragraph, become payable prior to the Delayed Payment
Date will be accumulated and paid on the Delayed Payment Date.
          (b) The parties intend that the payments and benefits provided to
Executive pursuant to this Agreement be paid in compliance with Section 409A so
that no excise tax is incurred under Section 409A. To the extent permitted by
Section 409A and the Section 409A Regulations, the parties agree to modify this
Agreement, the timing (but not the amount(s)) of the payments or benefits
provided herein, or both, to the extent necessary to comply with Section 409A.
     7. At-Will Employment. Notwithstanding anything contained in this
Agreement, the parties acknowledge and agree that Executive’s employment with
the Company is and shall continue to be “at-will.”

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     8. Dispute Resolution. In the event of any dispute or claim between the
parties, including any claims relating to or arising out of this Agreement or
the termination of Executive’s employment with the Company for any reason,
Executive and the Company agree that all such disputes shall be fully resolved
by binding arbitration conducted by the American Arbitration Association (“AAA”)
in Santa Clara County, under the AAA’s National Rules for the Resolution of
Employment Disputes then in effect, which are available online at the AAA’s
website at www.adr.org. Executive and the Company each acknowledge and agree
that they are waiving their respective rights to have any such disputes or
claims tried by a judge or jury.
     9. Notices. Notices and all other communications contemplated by this
Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or when received if mailed by U.S. registered or certified
mail, return receipt requested and postage prepaid. In the case of the
Executive, mailed notices shall be addressed to the Executive at the home
address which the Executive most recently communicated to the Company in
writing. In the case of the Company, mailed notices shall be addressed to its
corporate headquarters, and all notices shall be directed to the attention of
its Chief Executive Officer.
     10. Successors.
          (a) Company’s Successors. Any successor to the Company (whether direct
or indirect and whether by purchase, lease, merger, consolidation, liquidation
or purchase of all or substantially all of the Company’s business and/or assets)
shall assume the Company’s obligations under this Agreement in writing and agree
expressly to perform the Company’s obligations under this Agreement in the same
manner and to the same extent that the Company would be required to perform such
obligations in the absence of a succession. For all purposes under this
Agreement, the term “Company” shall include any successor to the Company’s
business and/or assets which executes and delivers the assumption agreement
described in this subsection (a) or which becomes bound by the terms of this
Agreement by operation of law.
          (b) Executive’s Successors. Without the written consent of the
Company, the Executive shall not assign or transfer this Agreement or any right
or obligation under this Agreement to any other person or entity.
Notwithstanding the foregoing, the terms of this Agreement and all rights of the
Executive hereunder shall inure to the benefit of, and be enforceable by, the
Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
     11. Miscellaneous Provisions.
          (a) No Duty to Mitigate. The Executive shall not be required to
mitigate the amount of any payment contemplated by this Agreement, nor shall any
such payment be reduced by any earnings that the Executive may receive from any
other source.
          (b) Modification/Waiver. No provision of this Agreement may be
amended, modified, waived or discharged unless the amendment, modification,
waiver or discharge is agreed to in writing and signed by the Executive and by
an authorized officer of the Company (other than Executive). No waiver by either
party of any breach of, or of compliance with, any condition or provision of
this Agreement by the other party shall be considered a waiver of any other
condition or provision or of the same condition or provision at another time.

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          (c) Integration. This Agreement constitutes the entire agreement and
understanding between the parties regarding Executive’s retention and severance
benefits, and it supersedes all prior or contemporaneous agreements, whether
written or oral, regarding that subject matter, including the Original Agreement
and the Amended Agreement.
          (d) Choice of Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
California.
          (e) Severability. The invalidity or unenforceability of any provision
or provisions of this Agreement shall not affect the validity or enforceability
of any other provision hereof, which shall remain in full force and effect.
          (f) Employment Taxes. All payments made pursuant to this Agreement
shall be subject to withholding of applicable income and employment taxes.
          (g) Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together will constitute
one and the same instrument.
THE PARTIES SIGNING BELOW HAVE READ THE FOREGOING AGREEMENT AND FULLY UNDERSTAND
AND AGREE TO EACH AND EVERY PROVISION CONTAINED HEREIN.

                Dated: 15 April 2009  /s/ Stephen Ambler       Stephen Ambler   
          Immersion Corporation
    Dated: 22 April 2009  By:   /s/ Clent Richardson               Its:
President and CEO     

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