Exhibit 99.1
RETENTION AND OWNERSHIP CHANGE EVENT AGREEMENT
This Retention and Ownership Change Event Agreement ("Agreement") is
made effective as of the date(s) set forth below by and between Immersion
Corporation (the "Company") and (Name of Executive) ("Executive").
RECITALS
A. The Board of Directors of the Company (the "Board") has determined
that it is in the best interests of the Company to assure that the Company will
have the continued dedication and service of the Executive, notwithstanding the
possibility or occurrence of an Ownership Change Event (as defined below) of the
Company.
B. In view of the determination described in Section A, the Board
believes that it is necessary to provide the Executive with certain retention
and severance benefits as described herein in order to provide Executive with
sufficient incentive and encouragement to remain with the Company in the event
of an Ownership Change Event.
In recognition thereof, the parties now agree as follows:
1. Definitions. For purposes of this Agreement:
(a) An "Ownership Change Event" shall be deemed to have occurred if
any of the following occurs with respect to the Company:
(i) the direct or indirect sale or exchange in a single or
series of related transactions by the stockholders of the Company of more than
fifty percent (50%) of the voting stock of the Company;
(ii) a merger or consolidation in which the Company is not the
controlling party;
(iii) the sale, exchange, or transfer of all or substantially
all of the assets of the Company; or
(iv) a liquidation or dissolution of the Company.
(b) "Good Reason" means any of the following conditions, which
condition(s) remain(s) in effect 30 days after written notice to the Board or
the Company's Chief Executive Officer from Executive of such condition(s):
(i) a material decrease in Executive's base salary, other than
a material decrease that applies generally to other executives of the Company at
Executive's level;
(ii) a material, adverse change in the Executive's title,
authority, responsibilities, or duties;
(iii) the relocation of the Executive's work place for the
Company to a location that is more than 40 miles distant from Executive's
present work location for the Company; or
(iv) the failure of any successor to the Company to confirm in
writing its assumption of the Company's obligations under this Agreement.
(c) a termination for "Cause" means Executive's termination based
upon (1) Executive's theft, dishonesty, misconduct, breach of fiduciary duty, or
falsification of any Company documents or records; (2) Executive's material
failure to abide by the Company's code of conduct or other policies (including,
without limitation, policies relating to confidentiality and reasonable
workplace conduct); (3) Executive's unauthorized use, misappropriation,
destruction or diversion of any tangible or intangible asset or corporate
opportunity of the Company (including, without limitation, Executive's improper
use or disclosure of the Company's confidential or proprietary information); (4)
any intentional act by the Executive that has a material detrimental effect on
the Company's reputation or business; (5) Executive's repeated failure or
inability to perform any reasonable assigned duties after written notice from
the Company of, and a reasonable opportunity to cure, such failure or inability;
(6) Executive's conviction (including any plea of guilty or nolo contendere) for
any criminal act that impairs Executive's ability to perform her/his duties for
the Company.
2. Termination Without Cause. In the event that Executive is terminated
without Cause more than three months prior to, or more than one year after, an
Ownership Change Event, and if at that time Executive signs (and does not
revoke) a general release of known and unknown claims in a form satisfactory to
the Company, Executive will receive the following:
(a) a lump sum severance payment equivalent to six (6) months'
base salary at Executive's final base salary rate, payable within ten (10)
business days following the effective date of the aforementioned general release
of claims; such severance payment will be subject to applicable withholding; and
(b) payment of the premiums necessary to continue Executive's
group health insurance coverage under COBRA until the earlier of (i) 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 her/his own expense in accordance with COBRA.
3. Termination Without Cause or Resignation for Good Reason Due to an
Ownership Change Event. In the event that Executive is terminated without Cause
or resigns for Good Reason within three months of, or within 1 year following,
an Ownership Change Event, and if at that time Executive signs (and does not
revoke) a general release of known and unknown claims in a form satisfactory to
the Company, Executive will receive the following:
(a) a lump sum severance payment equivalent to twelve (12) months'
base salary at Executive's final base salary rate, payable within ten (10)
business days following the effective date of the aforementioned general release
of claims; such severance payment will be subject to applicable withholding; and
(b) payment of the premiums necessary to continue Executive's
group health insurance coverage under COBRA until the earlier of (i) twelve (12)
months following Executive's termination date, or (ii) the date on which
Executive first becomes eligible to obtain other group health insurance
coverage; thereafter, Executive may elect to purchase continued group health
insurance coverage at her/his own expense in accordance with COBRA.
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4. Voluntary Termination. In the event that Executive resigns from
her/his employment with the Company at any time (other than a resignation for
Good Reason), or in the event that Executive's employment terminates at any time
as a result of her/his death or disability (meaning Executive is unable to
perform her/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 s/he resigns from her/his employment with the Company, s/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 her/his termination for Cause.
6. Modification To Comply With Section 409A. The parties intend that the
payments and benefits provided to Executive pursuant to this Agreement be paid
in compliance with Section 409A of the Code so that no excise tax is incurred
under Section 409A. 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 Xxxxx 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 xxx.xxx.xxx. 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.
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(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.
(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.
(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.
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Dated:
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(Name of Executive)
Immersion Corporation
Dated: By:
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Its:
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