Document:

exv10w42

Exhibit 10.42

30 July 2008

RE: Restated Offer of Employment with Immersion Corporation

Dear Clent:

     This offer letter supersedes your offer dated March 26, 2008 and all amendments thereto. The
effective date of this Restated Offer of Employment with Immersion Corporation is April 28, 2008.

     Immersion Corporation (the “Company” or “Immersion”) is pleased to present this offer for the
position of President and Chief Executive Officer, on the terms set forth in this agreement,
effective upon your acceptance by execution of a counterpart copy of this letter where indicated
below.

     Reporting Duties and Responsibilities. In this position, you will report to the
Company’s Board of Directors.

     Salary and Benefits. Your initial base salary will be $315,000.00 annually, payable
in accordance with the Company’s customary payroll practice, which is bi-weekly. This offer is
for a full-time, salaried, exempt position. Further, upon approval by the Company’s Board of
Directors (the “Board”), you will be eligible for a bonus in accordance with the Company’s 2008
Executive Incentive Plan of up to 100% of your salary, and (i) 40% of which is based upon the
Company’s performance, and (ii) 40% of which is based upon Corporate Initiatives, and (iii) 20% is
based on individual performance criteria (MBO performance). Your participation in the plan will be
prorated based on your start date.

Additionally, the Company will advance you an amount of up to $75,000.00. This payment will be
deducted from your earnings under the 2008 Executive Incentive Plan. You will also be provided
with a Commute package of up to $4200.00 per month for reasonable expenses related to the lease of
your local apartment and travel expenses to and from Portland, Oregon. The Commute package will be
in effect for up to 2 years at which time we will re-evaluate the terms.

     Sign-on Bonus. The Company will also provide you with a sign-on bonus in the amount
of $40,000.00 to be paid within your first week of employment. Should you leave voluntarily within
your first year of employment with Immersion, the sign-on bonus will be required to be repaid on a
prorata basis.

     Background Investigation. This offer is contingent upon the completion of a
satisfactory investigation concerning your background and references. This agreement may be
revoked in the event the results of the investigation do not meet Immersion’s requirements.

     Stock Options. Subject to the approval of the Board, the Company will grant you an
option to purchase 675,000 shares of the Company’s Common Stock pursuant to the Company’s 2008
Employment Inducement Award Plan anticipated to be approved by the Board and related form of stock
option agreement in effect at that time. All shares of stock subject to your option will have an
exercise price equal to the fair market value of the Company’s Common Stock at the date of grant.
So long as you remain employed by the Company, your option will become exercisable over a four-year
period with 25% of the shares vesting at the end of your first twelve months of service, and an
additional 2.083% vesting at the end of each month thereafter.

     Change of Control Benefits. Subject to the approval of the Compensation Committee of
the Board, the Company will enter into the Retention and Ownership Change Event Agreement,
enclosed.

 

 

     Confidential Information. As an employee of the Company, you will have access to
certain Company confidential information and you may during the course of your employment, develop
certain information or inventions that will be the property of the Company. To protect the
interest of the Company, you will need to sign the Company’s standard “Employee Inventions and
Confidentiality Agreement” as a condition of your employment. A copy of the agreement is attached
for your review. We wish to impress upon you that we do not wish you to bring with you any
confidential or proprietary material of any former employer or to violate any other obligation to
your former employers.

     At-Will Employment. While we look forward to a long and profitable relationship,
should you decide to accept our offer, you will be an at-will employee of the Company, which means
the employment relationship can be terminated by either of us for any reason at any time. Any
statements or representations to the contrary (and indeed, any statements contradicting any
provision in this letter) are ineffective. Further, your participation in any stock option or
benefit program is not an assurance of continued employment for any particular period of time.

     Authorization to Work. The Immigration Reform and Control Act of 1986 requires you,
within three business days of hire, to present documentation demonstrating that you have
authorization to work in the United States. Acceptable documentation is shown on the enclosed form
titled Employment Eligibility Verification (Form I-9). Please bring this form, along with the
appropriate documentation, to the new employee orientation on your first day of employment. If you
have questions about this requirement, which applies to U.S. citizens and non-U.S. citizens alike,
please contact our Human Resources department.

     Term of Offer. This offer will remain open until close of business on March 28, 2008.
If you decide to accept our offer, and we hope that you will, please sign the enclosed copy of
this letter in the space indicated and return it to me. Upon your signature below, this agreement
and the other agreements referenced herein will become our binding agreement with respect to the
subject matter of this letter (although the Retention and Ownership Change Event Agreement and
eligibility for the Company’s Executive Incentive Plan will only become effective as described
above), superseding in their entirety all other or prior agreements by you with the Company as to
the specific subjects addressed in this letter. This agreement will be binding upon and inure to
the benefit of our respective successors and assigns, and heirs, administrators and executors, will
be governed by California law, and may only be amended in a writing signed by you and an authorized
officer of the Company.

     Start Date. This offer is made with the understanding that you will start employment
with Immersion on April 28, 2008. For purposes of this Agreement, the term “start date” shall mean
the day on which you commence employment with the Company.

     We are excited and pleased to have you join the Immersion team in this exciting role and we
look forward to a mutually beneficial working relationship.

Sincerely,

	 	 	 	 	 
	 	 	 
	 	/s/ Victor Viegas
 	 
	 	Victor Viegas 	 
	 	Chairman of the Board, President and CEO 	 
	 

Agreed and Accepted

	 	 	 	 	 
	/s/ Clent Richardson

	 	30 July 2008
	 	 
	 

	 	 	 	 
	Clent Richardson

	 	Dateexv10w43

Exhibit 10.43

FY2008

Executive Incentive Plan

Richard Vogel

 

 

OBJECTIVES 

The specific aim of the 2008 Executive Incentive Plan is to focus Immersion’s executive
management on Immersion’s revenue, operating profit, gross margin goals and business objectives,
and to reward achievement of those goals.

ELIGIBILITY 

In addition to your base salary, you are eligible to earn an incentive payment under Immersion’s
2008 Executive Incentive Plan as set out in this Plan and the attached document titled
Attachment A. In order to be eligible to receive any payment under this Plan, you must sign and
date a copy of the Plan on the space provided below and return it to Human Resources. An
executive’s eligibility to participate in this Plan will be subject to the review and approval
of the CEO and CFO of the Company, and any payments under this Plan will be subject to the
review and approval of the Company’s CEO, which approval may be withheld in his/her sole
discretion. This Plan supersedes all prior executive bonus, incentive, and/or variable
compensation plans of the Company, which are of no further force or effect.

Employees hired after January 1, and during the Plan Period who are permitted to participate in
the Plan shall be eligible to participate on a pro-rata basis, based upon their start date and
contingent upon continued active employment through the date when the Bonus Plan payout occurs.
The proration will be based on the number of work days during the plan year.

PLAN ADMINISTRATION 

This Plan is effective for the Company’s 2008 fiscal year. The Company may cancel, suspend,
amend, or revise all or any part of the Plan for any reason at any time.

To the extent earned, payments hereunder will be wages and will be subject to withholding of
federal and state income and employment taxes. Earned payments under this Plan will be paid on
the next regular payroll date following the later of (a) 45 days after the end of the fiscal
year, (b) the date on which the Company’s Income Statement for the year has been finalized, or
(c) the date on which the Company’s earnings for the year have been publicly disclosed (the
“Payment Date”).

Nothing in this Plan shall in any way alter the at-will employment relationship between the
Company and its executives. All employees of the company are employed on an “at-will” basis,
which means that either the employee or the Company may terminate the relationship at any time,
with or without cause or notice.

For purposes of this Plan, a participant’s employment with Immersion terminates on the last day
on which work duties are actually performed by the participant. Periods of pay in lieu of
notice, severance, or any other post-termination benefits or compensation period shall not be
deemed periods of employment for purposes of this Plan. In order to earn any payment under the
Plan, a participant must have been continuously employed by Immersion from January 1, 2008
through the Payment Date. A participant who resigns from his employment with Immersion prior to
the Payment Date, or whose employment is terminated prior to the Payment Date, will not earn any
payment under this Plan.

Provided they meet the other eligibility requirements described in this Plan, participants who
are on an approved leave of absence at any time during the 2008 fiscal year will earn a pro
rated payment under this Plan based upon the portion of the year that they are actively employed
and not on leave status. To the extent that a participant is on an approved leave of absence on
the Payment Date, he/she will not earn any payment under this Plan unless he/she returns to
active employment with Immersion, at which time he/she will receive his/her Plan payment.

 

 

PLAN DEFINITIONS 

Revenue is revenue that is recognized by Immersion for the applicable period in accordance with
generally accepted accounting principles and as reported in the Company’s audited financial
statements.

Cost of Goods Sold is the direct and allocated indirect production costs of producing goods and
services.

Gross Margin (GM) is determined by subtracting the Cost of Goods Sold (COGS) from the actual
sale price of the product. The net result is the GM. GM excludes non cash stock compensation
expense for the purposes of this Executive Incentive Plan.

Operating Profit (Loss) is Business Unit Operating Profit (Loss) less corporate support costs,
litigation expenses, and intangible amortization. Operating Profit (Loss) excludes non cash
stock compensation expense for the purposes of this Executive Incentive Plan.

Business Unit Operating Profit (Loss) is the revenue less departmental cost of goods sold and
direct operating expenses for a business unit. Direct operating expenses are the expenses
directly charged to a business unit including all variable compensation accruals and all
allocated departmental expenses. Business Unit Operating Profit (Loss) excludes non cash stock
compensation expense for the purposes of this Executive Incentive Plan.

Target Incentive is a percentage determined by management of the participant’s annual base
salary as of February 4, 2008. The actual bonus amount will vary depending on the extent to
which Company performance targets, Business Unit targets, and milestones are met as determined
by the Company at its sole discretion.

MBO’s are specific business milestones which must be completed, in strict accordance with the
stated terms and conditions associated with each MBO, to the satisfaction of the CFO and CEO.

	 	 	 	 	 	 	 
	/s/ Richard Vogel

	 	 	 	May 21, 2008	 	 
	 	 	 	 	 	 	 
	Executive

	 	 	 	Date	 	 
	 
	 	 	 	 	 	 
	/s/ J Passarello

	 	 	 	May 23, 2008	 	 
	 	 	 	 	 	 	 
	VP of Human Resources

	 	 	 	Date	 	 
	 
	 	 	 	 	 	 
	/s/ S M Ambler

	 	 	 	May 23, 2008	 	 
	 	 	 	 	 	 	 
	CFO

	 	 	 	Date	 	 
	 
	 	 	 	 	 	 
	/s/ Clent Richardson

	 	 	 	May 23, 2008	 	 
	 	 	 	 	 	 	 
	CEO

	 	 	 	Date	 	 

 

 

Attachment A

EXECUTIVE INCENTIVE PLAN STATEMENT OF GOALS FOR YEAR 2008

Richard Vogel

Percent of Base Salary Payment at Plan: 60%

The following is a statement of financial, strategic and tactical objectives for 2008 that will
serve as a basis for overall performance evaluation and determination of year-end executive
incentive award.

CEO Discretionary Multiplier: The CEO will determine a performance “weighting” to be applied to the
Executive’s initial incentive payment calculation (as determined based on the goals and objectives
below),which weighting will be based on the Executive’s overall annual performance as determined
solely by the CEO. The weighting factor will typically range from 0.80 to 1.20, which factor is
then multiplied by the executive’s initial incentive payment calculation to determine the
executive’s incentive payment.

Plan Components: The Plan has two independent Company financial performance components: Corporate
Metrics and Business Unit Metrics. Within each financial component you will be measured against
specific goals.

	A.	 	30% of your target bonus will be based on Corporate performance as follows.

	 	•	 	(50%) Achieve GAAP Revenue of $42.900M. Achieve GAAP Operating Profit (Loss) of
($16.100)M. Operating Profit (Loss) includes non cash stock compensation expense.
Operating Profit (Loss) amounts are stated prior to taking account of Executive
Incentive Plan payment amounts. Payment amounts are not pro-rated between matrix
levels.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Revenue /	 	 	 	 	 	 	 	 	 	 
	Operating	 	 	 	 	 	 	 	 	 	 
	Profit (Loss)	 	 	 	 	 	 	 	 	 	 
	Targets	 	$38.600M	 	$40.750M	 	$42.900M	 	$45.900M	 	$48.900M
	$(12.900)M
	 	 	100	%	 	 	110	%	 	 	120	%	 	 	150	%	 	 	200	%
	$(14.000)M
	 	 	90	%	 	 	100	%	 	 	110	%	 	 	120	%	 	 	150	%
	$(16.100)M
	 	 	50	%	 	 	80	%	 	 	100	%	 	 	110	%	 	 	120	%
	$(16.900)M
	 	 	0	%	 	 	50	%	 	 	80	%	 	 	90	%	 	 	90	%
	$(17.700)M
	 	 	0	%	 	 	0	%	 	 	50	%	 	 	80	%	 	 	80	%

	 	•	 	(50%) Corporate Initiatives

	 	1.	 	M&A Activity:  During FY2008 identify, conduct due diligence,
close, and assimilate at least one acquisition for the corporation that is
greater than $10M in Revenue or greater than $5M in Operating Income.
	 
	 	2.	 	Oracle Implementation: Implement a company-wide ERP system by
upgrading to Oracle 11i in FY2008 from current version.  A company-wide system
will help to integrate the majority of the data and processes of the
organization into a unified system and aid in the company attaining an
overarching goal of integrating the businesses more completely for operational
and strategic efficiencies.
	 
	 	3.	 	Increase International presence across all businesses: FY2008
International Revenue is equal to or greater than 45% or $19M of total revenue.
	 
	 	4.	 	During 2008 generate at least 20 non financial or administrative
press releases.

	B.	 	70% of your target bonus will be based on Business Unit performance as follows.

	 	•	 	(75%) Achieve GAAP Revenue of $20.100M. Achieve GAAP Operating Profit (Loss) of
($6.700)M. Operating Profit (Loss) includes non cash stock compensation expense.
Operating

 

 

	 	 	 	Profit (Loss) amounts are stated prior to taking account of Executive Incentive Plan
payment amounts. Payment amounts are not pro-rated between matrix levels.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Revenue /	 	 	 	 	 	 	 	 	 	 
	Operating	 	 	 	 	 	 	 	 	 	 
	Profit (Loss)	 	 	 	 	 	 	 	 	 	 
	Targets	 	$18.100M	 	$19.100M	 	$20.100M	 	$21.500M	 	$22.900M
	$(5.350)M
	 	 	100	%	 	 	110	%	 	 	120	%	 	 	150	%	 	 	200	%
	$(6.025)M
	 	 	90	%	 	 	100	%	 	 	110	%	 	 	120	%	 	 	150	%
	$(6.700)M
	 	 	50	%	 	 	80	%	 	 	100	%	 	 	110	%	 	 	120	%
	$(7.050)M
	 	 	0	%	 	 	50	%	 	 	80	%	 	 	90	%	 	 	90	%
	$(7.400)M
	 	 	0	%	 	 	0	%	 	 	50	%	 	 	80	%	 	 	80	%

	 	•	 	(25%) Business Unit Initiatives as agreed upon with CEO.

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