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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported) August 31, 2000
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IMMERSION CORPORATION
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(Exact Name of Registrant as Specified in its Charter)
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Delaware 000-27969 94-3180138
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(State or Other Jurisdiction of (Commission File Number) (IRS Employer
Incorporation) Identification No.)
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801 Fox Lane, San Jose, California 95131
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (408) 467-1900
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Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On August 31, 2000, Immersion Corporation ("Immersion") acquired Virtual
Technologies, Inc. ("Virtual Technologies"), through the merger (the "Merger")
of Immersion's wholly owned subsidiary, VT Acquisitions, Inc. ("Merger Sub"),
with and into Virtual Technologies, which survived the Merger, in accordance
with the Agreement and Plan of Merger, dated as of July 28, 2000 (the "Merger
Agreement"), among Immersion, Merger Sub, Virtual Technologies and James F.
Kramer, as the representative of Virtual Technologies' shareholders (the
"Shareholder Representative").
By virtue of the Merger, Immersion acquired all of the issued and
outstanding stock of Virtual Technologies, and Virtual Technologies'
shareholders immediately prior to the Merger received the right to receive
0.06415616 of a share of Immersion common stock, plus $0.193 in cash (without
interest), for each share of Virtual Technologies common stock held immediately
prior to the Merger, less the shares of Immersion common stock being escrowed
(as described below), plus cash paid in lieu of fractional shares. In total,
Immersion will issue up to approximately 320,000 shares of Immersion common
stock and pay approximately $1 million in cash to these shareholders. Immersion
has also assumed all vested and unvested options to purchase Virtual
Technologies' common stock outstanding at the Merger and, as a result, may also
issue up to an additional 22,000 shares of Immersion common stock on exercise of
the assumed options.
Under the Merger Agreement, Immersion is being indemnified in the event
of losses, as the term is defined in the Merger Agreement, in accordance with
the terms and conditions of the Merger Agreement. In addition, James F. Kramer
and Marc Tremblay, two of the principal shareholders of Virtual Technologies
immediately prior to the Merger, agreed to indemnify Immersion in the event of
such losses, including losses greater than the shares being held in escrow,
under an Indemnification and Joinder Agreement, dated as of July 28, 2000 (the
"Indemnification and Joinder Agreement"), with Immersion.
Immersion and the Shareholder Representative also entered into an Escrow
Agreement, dated as of August 31, 2000, with U.S. Trust Company, National
Association, as escrow agent, to establish an escrow to facilitate the ability
of Immersion to recover amounts to which it is entitled as a result of the
Merger Agreement and the Indemnification and Joinder Agreement. The initial
escrow fund consists of approximately 60,000 shares of Immersion common stock
that the prior shareholders of Virtual Technologies would have otherwise
received in the Merger. Subject to the satisfaction of any claims asserted by
Immersion, (1) up to 30,000 of the remaining escrowed shares will be distributed
to the Shareholder Representative, on behalf of the shareholders, on the first
anniversary of the date of the Merger (less any shares allocated to pending
claims), and
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(2) the remainder of the escrowed shares will be distributed to the
Shareholder Representative, on behalf of the shareholders, on the second
anniversary of the date of the Merger (less any shares allocated to pending
claims).
The shares of Immersion common stock being issued in the Merger are
being issued under an exemption to the registration requirements of the
Securities Act of 1933, as amended (the "Securities Act"). Accordingly, such
shares are "restricted securities," as defined in Rule 144 of the Securities
Act, and are not freely transferable. Immersion has granted the shareholders of
Virtual Technologies immediately prior to the Merger who entered into a
Registration Rights Agreement, dated as of August 31, 2000, with Immersion the
right to request one shelf registration on Form S-3, at such time as Immersion
is eligible to use Form S-3, and piggy-back registration rights in the event
that Immersion files a registration statement under the Securities Act in
connection with the proposed offer and sale for cash of shares of common stock
by it or by its shareholders under certain circumstances.
Separate and apart from the Merger, on the date of the Merger, Immersion
also granted options to purchase up to approximately 500,000 shares of Immersion
common stock to certain of Virtual Technologies' employees and directors. Of the
options granted, (1) up to approximately 300,000 become exercisable over a four
year period of continuous employment with Virtual Technologies, and (2) up to
approximately 200,000 become exercisable in four annual installments, based on
continuous employment with Virtual Technologies, with exercisability
accelerating if certain Virtual Technologies revenue targets are met.
Copies of the Merger Agreement, the Indemnification and Joinder
Agreement, the Escrow Agreement, the Registration Rights Agreement and the
Immersion Corporation 2000 Non-Officer Nonstatutory Stock Option Plan are
attached to this Report as Exhibits. The foregoing descriptions of the Merger
Agreement, the Indemnification and Joinder Agreement, the Escrow Agreement, the
Registration Rights Agreement and the Immersion Corporation 2000 Non-Officer
Nonstatutory Stock Option Plan are qualified in their entirety by reference to
the full text of those agreements and such plan.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.
Immersion has determined that it is not required to provide
financial statements under Item 7(a) of Form 8-K for its acquisition of Virtual
Technologies.
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(b) PRO FORMA FINANCIAL INFORMATION.
Immersion has determined that it is not required under Item 7(b)
of Form 8-K to provide pro forma financial information on the Virtual
Technologies acquisition.
(c) EXHIBITS.
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EXHIBIT NO. DESCRIPTION
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2.1 Agreement and Plan of Merger dated as of July 28, 2000, among
Immersion Corporation, VT Acquisition, Inc., Virtual
Technologies, Inc., and James F. Kramer (Incorporated herein by
reference to Exhibit 10.27 to Immersion's Registration
Statement on S-4 (Registration No. 333-45254) (the "S-4
Registration Statement"))
2.2 Indemnification and Joinder Agreement dated as of July 28,
2000, among Immersion Corporation, James F. Kramer and Marc
Tremblay
2.3 Escrow Agreement dated as of August 31, 2000, among Immersion
Corporation, James F. Kramer and U.S. Trust Company, National
Association
2.4 Registration Rights Agreement dated as of August 31, 2000,
among Immersion Corporation and the shareholders party thereto
10.1 Immersion Corporation 2000 Non-Officer
Nonstatutory Stock Option Plan (Incorporated
herein by reference to Exhibit 10.29 to the S-4
Registration Statement)
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: September 15, 2000
Immersion Corporation
By /s/ Victor Viegas
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Victor Viegas
Chief Financial Officer
and Vice President, Finance
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EXHIBIT INDEX
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EXHIBIT NO. DESCRIPTION
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2.1 Agreement and Plan of Merger dated as of July 28, 2000, among
Immersion Corporation, VT Acquisition, Inc., Virtual
Technologies, Inc., and James F. Kramer (Incorporated herein
by reference to Exhibit 10.27 to the S-4 Registration
Statement)
2.2 Indemnification and Joinder Agreement dated as of July 28,
2000, among Immersion Corporation, James F. Kramer and Marc
Tremblay
2.3 Escrow Agreement dated as of August 31, 2000, among Immersion
Corporation, James F. Kramer and U.S. Trust Company, National
Association
2.4 Registration Rights Agreement dated as of August 31, 2000,
among Immersion Corporation and the shareholders party thereto
10.1 Immersion Corporation 2000 Non-Officer Nonstatutory Stock
Option Plan (Incorporated herein by reference to Exhibit
10.29 to the S-4 Registration Statement)
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