Document:

exv10w42

Exhibit 10.42

IMMERSION CORPORATION

EMPLOYMENT AGREEMENT

     This 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 October 21, 2009 (the “Effective Date”).

RECITALS

     1. The Employee is being employed by the Company as the Company’s Interim President and Chief
Executive Officer.

     2. Certain capitalized terms used in this Agreement are defined in Section 9 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
Interim 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. 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 $350,000,
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 COMPENSATION. 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 Compensation Committee of the Board determines otherwise, the Employee’s Annual
Incentive target shall be an amount equal to 100% 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. STOCK OPTIONS. Effective upon board approval, the Company will grant Employee an
option to purchase 600,000 shares of the Company’s Common Stock pursuant to the Company’s stock
option plan and standard stock option agreement. All options will have an exercise price that will
be equal to the fair market value of the Company’s Common Stock at the date of grant. The options
will vest on a monthly basis and become exercisable over a four-year period with 1/48th
of the shares vesting on each month of service during which Employee remains employed with or
continues to provide services to the Company.

     6. 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 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.

     7. TERMINATION OF EMPLOYMENT APART FROM A CHANGE OF CONTROL.

          (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 9), then, provided that the Employee
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 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) a lump sum severance payment equivalent to twelve (12) months’ of Base Compensation,
payable within ten (10) business days following the effective date of the aforementioned general
release of claims;

               (ii) 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 and his dependents’ 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 8 below with respect to a termination in
connection with a Change of Control, the Employee shall immediately vest in an additional seventy
percent (70%) 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 pursuant to this Section 7(a), 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 expiration date of such options.

          (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 9), 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 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 Company stock options, to the extent unexercised and exercisable by the Executive on the date
on which the Executive’s employment is terminated pursuant to this Section 7(b), may be exercised
by the Executive within twelve (12) months (or such other longer period of time as determined by
the Board, in its sole discretion) after the date on which the Executive’s employment 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,”
or (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.

     8. TERMINATION IN CONNECTION WITH CHANGE OF CONTROL.

          (a) 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 9) within three months of, or within 1 year following, Change of Control, then, provided
that the Employee 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 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:

               (i) a lump sum severance payment equivalent to twelve (12) months’
Base Compensation, 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;

               (ii) payment of the premiums necessary to continue Employee’s and
dependents group health insurance coverage under COBRA until the earlier of (i) twelve (12) months
following Employee’s termination date, or (ii) the date on which Employee first becomes eligible to
obtain other group health insurance coverage; thereafter, Employee may elect to

 

 

purchase continued group health insurance coverage at his own expense in accordance with
COBRA; and

               (iii) immediate vesting in seventy percent (70%) of his then unvested Company equity
awards.

All Company stock options, to the extent unexercised and exercisable by the Executive on the date
on which the Executive’s employment is terminated pursuant to this Section 8, may be exercised by
the Executive 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 Executive’s employment terminated, but
in any event no later than the option expiration date.

     9. 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 directions of the Board, after receiving written notice of
such
failure; (ii) the Employee’s gross negligence or willful misconduct in the performance of his
duties; or (iii) the conviction of or entry of a plea of nolo contendere or guilty to a (x)
felony or
(y) a crime causing demonstrable 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 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 October 22, 2009,
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
materially less stature or of materially less responsibility; provided, however, that if after a
Change of Control the Employee is still the most senior 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 other than a reduction in salary applicable to all senior executives of the Company;
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 providing notice to the Company of the occurrence of a Constructive Reason and the
Company’s failure to cure.

          (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).

     10. 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 9(c) (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.

     11. 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 11(a).

     12. 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.

     13. 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.

     14. 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.

     15. EMPLOYMENT TAXES. The payments made pursuant to this Agreement will be subject to
applicable income and employment taxes.

     16. 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.

     17. 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.

	 	 	 	 	 
	 	 	 
	Dated:        October 21, 2009 	/s/ Victor Viegas
 	 
	 	Victor Viegas 	 
	 	 	 
	 	Immersion Corporation

 	 
	Dated:      October 21, 2009 	By:  	/s/ Jack L. Saltich
 	 
	 	 	Its: Chairmanexv10w44

Exhibit 10.44

SECOND AMENDED AND RESTATED RETENTION AND OWNERSHIP CHANGE EVENT

AGREEMENT

     This Second 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 G. Craig Vachon (“Executive”).

RECITALS

     Executive and the Company entered into a Retention and Ownership Change Event
Agreement dated as of October 30, 2008 (the “Original Agreement”).

     On June 16, 2009, the parties amended the Original Agreement to make
minor modifications to the terms (the “Amended Agreement”);

     The Board and Executive now wish to amend the Amended Agreement as provided
herein.

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 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 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

			
	 
	 
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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 or Resignation for Good Reason. In the event that
the Company or its successor terminates Executive’s employment without Cause or Executive resigns
for Good Reason 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 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 six (6) 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 and dependents group
health insurance coverage under COBRA until the earlier of (i) six (6) 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.

     In the event that a Change in Control constituting 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 (a “Section 409A Change in Control Event”) occurs on or before
the ninetieth (90th) day following a date on which Executive experiences a termination of
employment in connection with which Executive is entitled to receive the payment provided by
Section 2(a), Executive will be entitled to receive the following additional payment and benefits:

          (c) payment on the sixtieth (60th) day following the Section 409A Change in Control Event of
an amount equal to six (6) months’ base salary at Executive’s final base salary rate, subject to
applicable withholding; and

          (d) commencing with the seventh (7th) month following Executive’s termination of employment,
payment of the premiums necessary to continue Executive’s and dependents 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.

      

			
	 
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     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, 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 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;

          (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 and dependents 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; and

          (c) immediate vesting in fifty percent (50%) of his then unvested Company equity awards

     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 2 or 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

      

			
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the Company as of the date of Executive’s Separation from Service, and to the extent required
by the Section 409A Regulations, no amount that constitutes a deferral of compensation which is
payable on account of the Employee’s Separation from Service shall be paid to Executive before the
date (the “Delayed Payment Date”) which is the 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. To the extent
that any provision of this Agreement is ambiguous as to its compliance with Section 409A, the
provision will be read in such a manner so that all payments hereunder comply with Section 409A.
Payments pursuant to this section are intended to constitute separate payments for purposes of
Section 1.409A-2(b)(2) of the Section 409A Regulations.

          (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.”

     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

      

			
	 
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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. Termination. This Agreement shall terminate in the event that Executive is no
longer part of the executive team of the Company as determined by the Board of Directors and
does not terminate service for Good Reason.

     12. 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.

          (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.

          (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.

      

			
	 
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THE PARTIES SIGNING BELOW HAVE READ THE FOREGOING AGREEMENT AND FULLY UNDERSTAND AND AGREE TO
EACH AND EVERY PROVISION CONTAINED HEREIN.

	 	 	 	 	 
	 	 	 
	Dated:  23 Feb 10  	/s/ G. Craig Vachon
 	 
	 	G. Craig Vachon 	 
	 	 	 
	 

	 	 	 	 	 
	 	Immersion Corporation

 	 
	Dated: 3/1/10 	By:  	/s/ Victor Viegas
 	 
	 	 	Its: Interim CEO 	 
	 	 	 	 
	 

			
	 	 	 
	 
	 	Page 7

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