SCHEDULE: Immersion Corp Reaches Cooperation Agreement with Larson Trust

Immersion Corp has entered into a cooperation agreement with the Irrevocable Larson Family Investment Trust and Scott A. Larson, establishing voting and standstill commitments until December 31, 2027.

Summary

• Immersion Corp and the Irrevocable Larson Family Investment Trust, along with Scott A. Larson, entered into a Cooperation Agreement on December 5, 2025.
• The Reporting Persons (Larson Trust and Scott A. Larson) collectively beneficially own 2,352,000 shares, representing 7.3% of Immersion Corp's common stock, based on 32,396,432 shares outstanding as of March 6, 2025.
• The agreement, effective until December 31, 2027, includes commitments from the Reporting Persons to vote all beneficially owned shares in line with the Board's recommendations, with specific exceptions for ISS/Glass Lewis recommendations on certain proposals and discretion on Extraordinary Transactions.
• The Reporting Persons also agreed to customary standstill restrictions, including not increasing their beneficial ownership beyond 9.99% of outstanding voting securities, refraining from proxy solicitations, and not engaging in or publicly commenting on certain Extraordinary Transactions.
• The agreement includes mutual non-disparagement and non-suit clauses between Immersion Corp and the Reporting Persons.
• The aggregate purchase price for Mr. Larson's beneficially owned Common Stock and options was approximately $17,318,934.00.
• On November 4, 2025, the Trust purchased an additional 150,000 shares of Common Stock in open market transactions at prices between $6.37 and $6.58 per share.

Sentiment

Score: 7

Explanation: The agreement provides stability by resolving potential shareholder activism and aligning a significant shareholder's voting with the board, which is generally positive for corporate stability. However, it also limits potential external pressure for change, which could be seen as a slight negative for some investors seeking more aggressive shareholder advocacy.

Positives

• The Cooperation Agreement brings stability by resolving potential shareholder activism from the Larson Trust, reducing uncertainty for Immersion Corp.
• The agreement ensures the Reporting Persons will generally support the Board's recommendations on key matters, including director elections, enhancing corporate governance stability.
• The standstill provisions prevent the Reporting Persons from increasing their stake beyond 9.99% or engaging in proxy contests, reducing potential disruption to company operations.
• The non-disparagement clause fosters a more constructive relationship between the company and a significant shareholder.

Negatives

• The standstill agreement limits the ability of a significant shareholder to actively advocate for changes that might be beneficial to other shareholders, potentially reducing external pressure on management.
• The agreement restricts the Reporting Persons' ability to acquire more shares, capping their potential influence and investment in the company.

Risks

• The standstill agreement could be perceived by some investors as limiting shareholder activism, potentially reducing oversight or the ability to push for strategic changes that might otherwise enhance shareholder value.
• The agreement's exceptions for ISS/Glass Lewis recommendations on certain proposals (excluding directors, takeover defenses, say-on-pay, equity compensation) introduce a layer of complexity and potential for divergent voting on specific issues.

Future Outlook

The Cooperation Agreement establishes a framework for the relationship between Immersion Corp and the Reporting Persons until December 31, 2027, ensuring shareholder support for board recommendations and limiting activist actions during this period, which suggests a period of reduced shareholder-driven volatility.

Management Comments

• Immersion Corp entered into a letter agreement (the 'Cooperation Agreement') with the Reporting Persons on December 5, 2025.

Industry Context

This filing reflects a common practice where public companies engage with significant activist shareholders to reach a 'cooperation agreement' or 'standstill agreement.' Such agreements aim to reduce potential disruption from activist campaigns, provide stability for management, and often involve the activist agreeing to vote with management on certain issues in exchange for concessions. This is typical in situations where a large shareholder might otherwise pursue a proxy contest or other forms of activism, indicating a move towards corporate stability.

Comparison to Industry Standards

• Cooperation agreements with standstill provisions are a standard tool used by public companies to manage relationships with significant shareholders, particularly those who might be perceived as activist, aligning with common corporate governance practices.
• The 9.99% ownership cap is a common threshold in such agreements, often designed to keep the shareholder below a level that might trigger certain regulatory or governance implications, such as requiring additional disclosures or board representation.
• The inclusion of ISS and Glass Lewis recommendations as exceptions to voting with the board is also a common feature, acknowledging the significant influence of proxy advisory firms on institutional investors' voting decisions.

Corporate Governance

Legal Proceedings

• The Cooperation Agreement includes a clause where neither the Issuer nor the Reporting Persons shall disparage or sue the other party, subject to certain exceptions. This indicates a mutual agreement to avoid future legal disputes or public criticisms between the parties.

Stakeholder Impact

• **Shareholders**: Provides clarity on the voting intentions of a significant shareholder, potentially reducing uncertainty. The standstill agreement might limit future activist-driven value creation but also reduces the risk of disruptive proxy contests, leading to more stable governance.
• **Management/Board**: Gains stability and support from a major shareholder, allowing them to focus on strategic initiatives without immediate activist pressure or the threat of a proxy fight.
• **Employees**: A more stable corporate governance environment can lead to greater focus on long-term business objectives, potentially benefiting employees through consistent strategic direction.

Next Steps

• The Reporting Persons will vote their shares in accordance with the Issuer's board recommendations until December 31, 2027, with specific exceptions.
• The Reporting Persons will adhere to standstill restrictions, including not increasing their beneficial ownership beyond 9.99% and refraining from proxy solicitations, until December 31, 2027.
• Both Immersion Corp and the Reporting Persons will abide by non-disparagement and non-suit clauses until December 31, 2027.

Key Dates

Recommendation

The filing details a cooperation agreement that brings stability by resolving potential shareholder activism. This reduces immediate uncertainty and potential for disruptive proxy contests, which is generally positive for corporate stability. However, it also limits the upside potential from aggressive shareholder advocacy that might push for significant strategic changes or asset sales. Given the agreement's terms, the stock is likely to trade based on the company's operational performance rather than immediate activist-driven catalysts. Therefore, a 'hold' recommendation is appropriate as the agreement stabilizes the situation without providing a strong new catalyst for either significant upside or downside based solely on this filing.

Keywords

Immersion Corp, IMMR, Schedule 13D, shareholder agreement, cooperation agreement, Scott Larson, Larson Family Investment Trust, corporate governance, standstill agreement, voting agreement, activist investor