Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
(b)
On November 29,
2017, Victor Viegas has agreed to resign as Chief Executive Officer and a director of Immersion.
Carl Schlachte, Chairman of the Board of
Directors of Immersion (the
Board
), will serve as interim Chief Executive Officer.
(c)
As described above, Mr. Schlachte will serve as interim Chief Executive Officer of Immersion. Mr. Schlachte has served as a member of
Immersions Board of Directors since June 2011 and Chairman of the Board since July 2012. Mr. Schlachte is Chairman, President and CEO of Ventiva, Inc., which designs and develops thermal management technologies for consumer applications
in mobile computing, power electronics and LED lighting. Prior to that, Mr. Schlachte was Chairman of the Board of MOSAID Technologies Incorporated, an IP company focused on the licensing and development of semiconductor and communications
technologies and was President and CEO of ARC International, a provider of multimedia solutions to semiconductor companies worldwide. From October 2010 to 2016, Mr. Schlachte served on the Board of Peregrine Semiconductor Corp. He holds a B.S.
from Clemson University.
(e)
Separation
Agreement with Mr.
Viegas
Immersion and Mr. Viegas are parties to an Employment Agreement dated
October 21, 2009 (the
Viegas Employment Agreement
). Immersion and Mr. Viegas agreed that his resignation shall be treated as a termination without Cause under the Viegas Employment Agreement. Under the
Viegas Employment Agreement, in exchange for his entry into a full general release in favor of the Company, Mr. Viegas would be entitled to receive a severance payment in the amount of 12 months salary and payment of COBRA premiums for 12
months, as well as immediate acceleration of 70% of the then unvested equity awards held by him.
On January 2, 2018, Immersion and
Mr. Viegas entered into a separation agreement and release of claims (the
Separation Agreement
). Pursuant to the Separation Agreement and consistent with the Viegas Employment Agreement, Mr. Viegas will receive a
payment of $415,000, representing 12 months of his base salary, and Immersion will pay Mr. Viegas COBRA premiums for up to 12 months. Options with respect to 373,475 shares of Immersion common stock that were outstanding and unvested as
of November 29, 2017 (representing 70% of Mr. Viegas unvested equity awards on such date) will vest, and Mr. Viegas vested options will be exercisable for a
24-month
period following
November 29, 2017. Pursuant to the Separation Agreement, Mr. Viegas and Immersion entered into a general release of claims and covenant not to sue.
On November 28, 2017, in connection with the Boards decision to request Mr. Viegas resignation, the Board resolved to
decrease the size of the Board to six directors upon Mr. Viegas formal resignation as a director of Immersion. On January 2, 2018, as part of the Separation Agreement, Mr. Viegas delivered to Immersion his executed resignation
as a director and officer of Immersion and its subsidiaries (which resignation letter was dated December 14, 2017).
Compensation Arrangements with Mr.
Schlachte
On December 6, 2017, Immersion and Mr. Schlachte entered into an Employment Agreement (the
Schlachte
Employment Agreement
). Pursuant to the Schlachte Employment Agreement, Mr. Schlachte will receive an annual base salary of $250,000. Mr. Schlachte will also be granted an option to
purchase 60,790 shares of common stock, with an exercise price equal to the fair market value of Immersions common stock on the date of grant. The option will vest and become exercisable on a monthly basis over a
one-year
period with 1/12th of the shares vesting on each month of service during which Mr. Schlachte (i) remains employed with Immersion and/or (ii) continues to provide services to Immersion
as a member of the Board (provided that this part (ii) shall be disregarded in the event that Mr. Schlachtes service to Immersion is terminated for Cause under the Schlachte Employment Agreement). In addition, upon the consummation
of a Change of Control as defined in the Schlachte Employment Agreement while Mr. Schlachte remains in the service of Immersion, the option will vest and become exercisable in full with respect to any outstanding unvested shares underlying the
option.
During Mr. Schlachtes service as Interim Chief Executive Officer, Mr. Schlachte will not receive any cash
compensation as a
non-employee
director of the Board and his annual director, Chairman and committee member retainers will be suspended for the period; provided that during such period of service,
Mr. Schlachtes existing unvested director equity grant will continue to vest. Mr. Schlachte will not receive any new
non-employee
director equity grants during his service as interim Chief
Executive Officer.