<SUBMISSION>
<ACCESSION-NUMBER>0000891618-02-001865
<TYPE>DEF 14A
<PUBLIC-DOCUMENT-COUNT>5
<PERIOD>20020604
<FILING-DATE>20020419
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>IMMERSION CORP
<CIK>0001058811
<ASSIGNED-SIC>3577
<IRS-NUMBER>943180138
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>DEF 14A
<ACT>34
<FILE-NUMBER>000-27969
<FILM-NUMBER>02616135
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>801 FOX LANE
<CITY>SAN JOSE
<STATE>CA
<ZIP>95131
<PHONE>4084671900
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>801 FOX LANE
<CITY>SAN JOSE
<STATE>CA
<ZIP>95131
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>IMMERSION HUMAN INTERFACE CORP
<DATE-CHANGED>19980602
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>f79568dedef14a.htm
<DESCRIPTION>IMMERSION CORPORATION DEFINITIVE NOTICE & PROXY
<TEXT>
<HTML>
<HEAD>
<TITLE>Immersion Corporation Definitive Notice & Proxy</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center"><FONT size="2">SCHEDULE 14A<BR>
(RULE 14A-101)</FONT>

<P align="center"><FONT size="2">INFORMATION REQUIRED IN PROXY STATEMENT</FONT>

<P align="center"><FONT size="2">SCHEDULE 14A INFORMATION<BR>
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES<BR>
EXCHANGE ACT OF 1934</FONT>

<P><FONT size="2">Filed by the Registrant <IMG src="f79568dexbox.gif" alt="xbox">
</FONT>
<P><FONT size="2">Filed by a Party other than the Registrant <IMG src="f79568debox.gif" alt="box">
</FONT>
<P><FONT size="2">Check the appropriate box:
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
        <TD width="2%">&nbsp;</TD>
        <TD width="2%">&nbsp;</TD>
        <TD width="28%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="2%">&nbsp;</TD>
        <TD width="2%">&nbsp;</TD>
        <TD width="54%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD valign="top"><FONT size="2"><IMG src="f79568debox.gif" alt="box"></FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Preliminary Proxy Statement
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2"><IMG src="f79568debox.gif" alt="box">
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">Confidential, for Use of the Commission<BR>Only (as permitted by Rule&nbsp;14a-6(e)(2))</FONT></TD>
</TR>

<TR valign="bottom">
        <TD valign="top"><FONT size="2"><IMG src="f79568dexbox.gif" alt="xbox"></FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Definitive Proxy Statement</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD valign="top"><FONT size="2"><IMG src="f79568debox.gif" alt="box"></FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Definitive Additional Materials</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD valign="top"><FONT size="2"><IMG src="f79568debox.gif" alt="box"></FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Soliciting Material Pursuant to Rule<BR>
14a-11(c) or Rule&nbsp;14a-12</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">IMMERSION CORPORATION</FONT>

<HR size="1" noshade>




<DIV align="center"><FONT size="2">(Name of Registrant as Specified In Its Charter)</FONT></DIV>



<p><BR>
<HR size="1" noshade>



<DIV align="center"><FONT size="2">(Name of Person(s) Filing Proxy Statement, if other than the Registrant)</FONT></DIV>

<P><FONT size="2">Payment of Filing Fee (Check the appropriate box):
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
        <TD width="2%">&nbsp;</TD>
        <TD width="2%">&nbsp;</TD>
        <TD width="96%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD valign="top"><FONT size="2"><IMG src="f79568dexbox.gif" alt="xbox"></FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
No fee required.</FONT></TD>
</TR>

<TR valign="bottom">
        <TD valign="top"><FONT size="2"><IMG src="f79568debox.gif" alt="box"></FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Fee computed on table below per Exchange Act Rules&nbsp;14a-6(i)(1) and 0-11.</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
   <TD width="5%" nowrap><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD width="1%" align="right" nowrap><FONT size="2">1.</FONT></TD>
        <TD width="1%" nowrap><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
        <TD width="93%"><FONT size="2">Title of each class of securities to which transaction
applies:</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
   <TD width="1%" nowrap><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD width="1%" align="right" nowrap><FONT size="2">2.</FONT></TD>
        <TD width="1%" nowrap><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
        <TD width="97%"><FONT size="2">Aggregate number of securities to which transaction applies:</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
   <TD width="1%" nowrap><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD width="1%" align="right" nowrap><FONT size="2">3.</FONT></TD>
        <TD width="1%" nowrap><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
        <TD width="97%"><FONT size="2">Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule&nbsp;0-11 (set forth the amount on
which the filing fee is calculated and state how it was determined):</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
   <TD width="1%" nowrap><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD width="1%" align="right" nowrap><FONT size="2">4.</FONT></TD>
        <TD width="1%" nowrap><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
        <TD width="97%"><FONT size="2">Proposed maximum aggregate value of transaction:</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
   <TD width="1%" nowrap><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD width="1%" align="right" nowrap><FONT size="2">5.</FONT></TD>
        <TD width="1%" nowrap><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
        <TD width="97%"><FONT size="2">Total fee paid:</FONT></TD>
</TR>
</TABLE>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
        <TD width="2%">&nbsp;</TD>
        <TD width="2%">&nbsp;</TD>
        <TD width="96%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD valign="top"><FONT size="2"><IMG src="f79568debox.gif" alt="box"></FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Fee paid previously with preliminary materials:</FONT></TD>
</TR>

<TR valign="bottom">
        <TD valign="top"><FONT size="2"><IMG src="f79568debox.gif" alt="box"></FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Check box if any part of the fee is offset as provided by Exchange Act Rule
0- 11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
   <TD width="5%" nowrap><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD width="1%" align="right" nowrap><FONT size="2">1.</FONT></TD>
        <TD width="1%" nowrap><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
        <TD width="93%"><FONT size="2">Amount Previously Paid:</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
   <TD width="1%" nowrap><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD width="1%" align="right" nowrap><FONT size="2">2.</FONT></TD>
        <TD width="1%" nowrap><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
        <TD width="97%"><FONT size="2">Form, Schedule or Registration Statement No.:</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
   <TD width="1%" nowrap><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD width="1%" align="right" nowrap><FONT size="2">3.</FONT></TD>
        <TD width="1%" nowrap><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
        <TD width="97%"><FONT size="2">Filing Party:</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
   <TD width="1%" nowrap><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD width="1%" align="right" nowrap><FONT size="2">4.</FONT></TD>
        <TD width="1%" nowrap><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
        <TD width="97%"><FONT size="2">Date Filed:</FONT></TD>
</TR>
</TABLE>

<P align="center"><FONT size="2"></FONT>


<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<IMG src="f79568def79568l1.gif" alt="(IMMERSION CORPORATION LOGO)">
</DIV>

<P align="right">
<FONT size="2">April&nbsp;26, 2002
</FONT>

<P align="left">
<FONT size="2">TO THE STOCKHOLDERS OF IMMERSION CORPORATION
</FONT>

<P align="left">
<FONT size="2">Dear Stockholder:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">You are cordially invited to attend the Annual
Meeting of Stockholders (the &#147;Annual Meeting&#148;) of
Immersion Corporation (the &#147;Company&#148;), which will be
held at the Silicon Valley Convention Center, 2161 North First
Street, San Jose, California 95131, on Tuesday, June&nbsp;4,
2002, at 9:30&nbsp;a.m.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Details of the business to be conducted at the
Annual Meeting are given in the attached Proxy Statement and
Notice of Annual Meeting of Stockholders. In addition to
conducting the business affairs of the Company, we will
demonstrate several of the leading applications of
Immersion&#146;s Haptic technology.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">It is important that your shares be represented
and voted at the Annual Meeting. WHETHER OR NOT YOU PLAN TO
ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, SIGN, DATE AND
PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE. Returning the proxy does NOT deprive you
of your right to attend the Annual Meeting. If you decide to
attend the Annual Meeting and wish to change your proxy vote,
you may do so automatically by voting in person at the meeting.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On behalf of the Board of Directors, I would like
to express our appreciation for your continued support for and
interest in the affairs of the Company. We look forward to
seeing you at the Annual Meeting.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="40%"></TD>
	<TD width="60%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Sincerely,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">ROBERT O&#146;MALLEY
	</FONT></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<I><FONT size="2">Chairman and Chief Executive Officer</FONT></I></TD>
</TR>

</TABLE>

<!-- PAGEBREAK -->
<P><HR noshade><P>

<!-- TOC -->
<A name="toc"><DIV align="CENTER" style="page-break-before:always"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

<P><CENTER>
<TABLE border="0" width="90%" cellpadding="0" cellspacing="0">
<TR>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="76%"></TD>
</TR>
<TR><TD colspan="9"><A HREF="#000"><FONT size="2">PROXY STATEMENT</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#001"><FONT size="2">PURPOSE OF MEETING</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#002"><FONT size="2">VOTING RIGHTS AND SOLICITATION OF PROXIES</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#003"><FONT size="2">PROPOSAL NO. 1 ELECTION OF DIRECTORS</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#004"><FONT size="2">EXECUTIVE COMPENSATION AND RELATED INFORMATION</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#005"><FONT size="2">EMPLOYMENT CONTRACTS AND CHANGE IN CONTROL ARRANGEMENTS</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#006"><FONT size="2">AUDIT COMMITTEE REPORT</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#007"><FONT size="2">RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#008"><FONT size="2">COMPENSATION COMMITTEE REPORT</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#009"><FONT size="2">COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#010"><FONT size="2">CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#011"><FONT size="2">STOCK PERFORMANCE GRAPH</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#012"><FONT size="2">PROPOSAL NO. 2 RATIFICATION OF INDEPENDENT ACCOUNTANTS</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#013"><FONT size="2">SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#014"><FONT size="2">STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#015"><FONT size="2">STOCKHOLDER PROPOSALS FOR 2003 ANNUAL MEETING</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#016"><FONT size="2">OTHER MATTERS</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#017"><FONT size="2">APPENDIX A</FONT></A></TD></TR>
</TABLE>
</CENTER>
<!-- /TOC -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="4">IMMERSION CORPORATION</FONT></B>

<DIV align="center">
<B><FONT size="2">801 Fox Lane</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">San Jose, California 95131</FONT></B>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="center">
<B>NOTICE OF ANNUAL MEETING OF STOCKHOLDERS</B>

<DIV align="center">
<B>To Be Held June 4, 2002</B>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Annual Meeting of Stockholders (the
&#147;Annual Meeting&#148;) of Immersion Corporation (the
&#147;Company&#148;) will be held at the Silicon Valley
Convention Center, 2161 North First Street, San Jose,
California&nbsp;95131, on Tuesday, June 4, 2002, at 9:30 a.m.
for the following purposes:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">1.&nbsp;To elect two (2)&nbsp;members of the
	Board of Directors to serve for a three-year term as
	Class&nbsp;III directors;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">2.&nbsp;To ratify the appointment of Deloitte
	&#38; Touche LLP as the Company&#146;s independent public
	accountants for the fiscal year ending December&nbsp;31, 2002;
	and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">3.&nbsp;To transact such other business as may
	properly come before the meeting or any adjournments or
	postponements thereof.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The foregoing items of business are more fully
described in the attached Proxy Statement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Only stockholders of record at the close of
business on April&nbsp;12, 2002 are entitled to notice of, and
to vote at, the Annual Meeting and at any adjournments or
postponements thereof. A list of such stockholders will be
available for inspection at the Company&#146;s headquarters
located at 801 Fox Lane, San Jose, California 95131 during
ordinary business hours for the ten-day period prior to the
Annual Meeting.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="40%"></TD>
	<TD width="60%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">BY ORDER OF THE BOARD OF DIRECTORS,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">ROBERT O&#146;MALLEY
	</FONT></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<I><FONT size="2">Chairman and Chief Executive Officer</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">San Jose, California
</FONT>

<DIV align="left">
<FONT size="2">April&nbsp;26, 2002
</FONT>
</DIV>

<P align="center">
<B><FONT size="2">IMPORTANT</FONT></B>

<P align="left">
<B><FONT size="2">WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL
MEETING, PLEASE COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE
ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE. YOU
MAY REVOKE YOUR PROXY AT ANY TIME PRIOR TO THE ANNUAL MEETING.
IF YOU DECIDE TO ATTEND THE ANNUAL MEETING AND WISH TO CHANGE
YOUR PROXY VOTE, YOU MAY DO SO AUTOMATICALLY BY VOTING IN PERSON
AT THE MEETING.</FONT></B>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="4">IMMERSION CORPORATION</FONT></B>

<DIV align="center">
<B><FONT size="2">801 Fox Lane</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">San Jose, California 95131</FONT></B>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<DIV>&nbsp;</DIV>

<!-- link1 "<FONT size="2">PROXY STATEMENT</FONT>" -->
<DIV align="left"><A NAME="000"></A></DIV>

<DIV align="center">
<B>PROXY STATEMENT</B>
</DIV>

<DIV align="center">
<B>FOR ANNUAL MEETING OF STOCKHOLDERS</B>
</DIV>

<DIV align="center">
<B>To Be Held June 4, 2002</B>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">These proxy materials are furnished in connection
with the solicitation of proxies by the Board of Directors (the
&#147;Board&#148;) of Immersion Corporation, a Delaware
corporation (the &#147;Company&#148;), for the Annual Meeting of
Stockholders (the &#147;Annual Meeting&#148;) to be held at the
Silicon Valley Convention Center, 2161&nbsp;North First Street,
San&nbsp;Jose, California 95131, on Tuesday, June&nbsp;4, 2002,
at 9:30&nbsp;a.m., and at any adjournment or postponement of the
Annual Meeting. These proxy materials were first mailed to
stockholders on or about April&nbsp;26, 2002.
</FONT>

<!-- link1 "<FONT size="2">PURPOSE OF MEETING</FONT>" -->
<DIV align="left"><A NAME="001"></A></DIV>

<P align="center">
<B><FONT size="2">PURPOSE OF MEETING</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The specific proposals to be considered and acted
upon at the Annual Meeting are summarized in the accompanying
Notice of Annual Meeting of Stockholders. Each proposal is
described in more detail in this Proxy Statement.
</FONT>

<!-- link1 "<FONT size="2">VOTING RIGHTS AND SOLICITATION OF PROXIES</FONT>" -->
<DIV align="left"><A NAME="002"></A></DIV>

<P align="center">
<B><FONT size="2">VOTING RIGHTS AND SOLICITATION OF
PROXIES</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s Common Stock is the only type
of security entitled to vote at the Annual Meeting. On
April&nbsp;12, 2002, the record date for determination of
stockholders entitled to vote at the Annual Meeting, there were
19,905,470 shares of Common Stock outstanding. Each stockholder
of record on April&nbsp;12, 2002 is entitled to one vote for
each share of Common Stock held by such stockholder on
April&nbsp;12, 2002. Shares of Common Stock may not be voted
cumulatively in the election of directors. All votes will be
tabulated by the inspector of elections appointed for the
meeting, who will separately tabulate affirmative and negative
votes, abstentions, and broker non-votes.
</FONT>

<P align="left">
<B><FONT size="2">Quorum Required</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s bylaws provide that the
holders of a majority of the Company&#146;s Common Stock issued
and outstanding and entitled to vote at the Annual Meeting,
present in person or represented by proxy, shall constitute a
quorum for the transaction of business at the Annual Meeting.
Abstentions and broker non-votes will be counted as present for
the purpose of determining the presence of a quorum.
</FONT>

<P align="left">
<B><FONT size="2">Votes Required</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Generally, stockholder approval of a matter,
other than the election of directors, requires the affirmative
vote of a majority of the shares present in person or
represented by proxy and entitled to vote on the matter.
Directors are elected by a plurality of the votes of the shares
present in person or by proxy and entitled to vote on the
election of directors. Shares voted to abstain on a matter will
be treated as entitled to vote on the matter and will thus have
the same effect as &#147;no&#148; votes. Broker non-votes are
not counted as entitled to vote on a matter in determining the
number of affirmative votes required for approval of the matter,
but are counted as present for quorum purposes. The term
&#147;broker non-votes&#148; refers to shares held by a broker
in street name, which are present by proxy but are not voted on
a matter pursuant to rules prohibiting brokers from voting on
non-routine matters without instructions from the beneficial
owner of the shares. The election of directors and ratification
of the appointment of independent public accountants are
generally considered to be routine matters on which brokers may
vote without instructions from beneficial owners.
</FONT>

<P align="center">

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<P align="left">
<B><FONT size="2">Proxies</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Whether or not you are able to attend the
Company&#146;s Annual Meeting, you are urged to complete and
return the enclosed proxy, which is solicited by the
Company&#146;s Board of Directors and which will be voted as you
direct on your proxy when properly completed. In the event no
directions are specified, such proxies will be voted as follows:
(i)&nbsp;FOR Proposal No.&nbsp;1, the election of the Board
nominees named in this Proxy Statement or otherwise nominated as
described in this Proxy Statement; (ii)&nbsp;FOR Proposal
No.&nbsp;2; and (iii)&nbsp;in the discretion of the proxy
holders as to other matters that may properly come before the
Annual Meeting. You may also revoke or change your proxy at any
time before the Annual Meeting. To do this, send a written
notice of revocation or another signed proxy with a later date
before the beginning of the Annual Meeting to Victor Viegas,
President, Chief Operating Officer and Chief Financial Officer
of the Company, at the Company&#146;s principal executive
offices. You may also automatically revoke your proxy by
attending the Annual Meeting and voting in person. All shares
represented by a valid proxy received prior to the Annual
Meeting will be voted.
</FONT>

<P align="left">
<B><FONT size="2">Solicitation of Proxies</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The cost of solicitation of proxies will be borne
by the Company, and in addition to soliciting stockholders by
mail through its regular employees, the Company may request
banks, brokers and other custodians, nominees and fiduciaries to
solicit their customers who have stock of the Company registered
in the names of a nominee and, if so, will reimburse such banks,
brokers and other custodians, nominees and fiduciaries for their
reasonable out-of-pocket costs. Solicitation by officers and
employees of the Company may also be made of some stockholders
in person or by mail or telephone following the original
solicitation.
</FONT>

<!-- link1 "<FONT size="2">PROPOSAL NO. 1 ELECTION OF DIRECTORS</FONT>" -->
<DIV align="left"><A NAME="003"></A></DIV>

<P align="center">
<B><FONT size="2">PROPOSAL NO. 1</FONT></B>

<P align="center">
<B><FONT size="2">ELECTION OF DIRECTORS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the Company&#146;s Amended
Certificate of Incorporation (the &#147;Certificate of
Incorporation&#148;), the Company&#146;s Board is divided into
three classes&nbsp;&#151; Class&nbsp;I, II and&nbsp;III
directors. Each director is elected for a three-year term of
office, with one class of directors being elected at each annual
meeting of stockholders. Each director holds office until his
successor is elected and qualified or until his earlier death,
resignation or removal. In accordance with the Certificate of
Incorporation, Class&nbsp;III directors are to be elected at the
2002 Annual Meeting, Class&nbsp;I directors are to be elected at
the annual meeting in 2003 and a Class&nbsp;II director is to be
elected at the annual meeting in 2004.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Two Class&nbsp;III directors are to be elected to
the Board at the 2002 Annual Meeting, to serve until the annual
meeting of stockholders to be held in 2005 and until their
successors have been elected and qualified, or until their
earlier death, resignation or removal.
</FONT>

<P align="left">
<B><FONT size="2">Nominees</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The nominees for election as the Class&nbsp;III
Directors are John Hodgman and Robert O&#146;Malley. The
nominees are presently serving as directors of the Company and
Robert O&#146;Malley also serves as the Company&#146;s Chairman
of the Board and Chief Executive Officer. Shares represented by
all proxies received by the Board and not so marked as to
withhold authority to vote for Messrs.&nbsp;Hodgman and
O&#146;Malley (by writing Mr.&nbsp;Hodgman&#146;s and/or
Mr.&nbsp;O&#146;Malley&#146;s name where indicated on the proxy)
will be voted (unless Mr.&nbsp;Hodgman and/or
Mr.&nbsp;O&#146;Malley is unable or unwilling to serve) FOR the
election of Mr.&nbsp;Hodgman and Mr.&nbsp;O&#146;Malley. The
Board knows of no reason why Mr.&nbsp;Hodgman and/or
Mr.&nbsp;O&#146;Malley would be unable or unwilling to serve,
but if such should be the case, proxies may be voted for the
election of another nominee(s) of the Board.
</FONT>

<P align="center"><FONT size="2">2
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The information below sets forth the current
members of the Board of Directors, including the nominees for
Class&nbsp;III Directors:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="22%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="40%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="15%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Class of</FONT></B></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Name</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Age</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Director</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Principal Occupation</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Director Since</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">John Hodgman
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">47</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">III</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Chief Executive Officer, Chairman, Cygnus
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">January 31, 2002
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Robert O&#146;Malley
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">56</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">III</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Chairman and Chief Executive Officer, Immersion
	Corporation
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">2000
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Steven Blank
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">48</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">I</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Private Investor
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">1996
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Jack Saltich
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">58</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">I</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">President, Chief Executive Officer, Director,
	Three Five Systems
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">January 31, 2002
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Jonathan Rubinstein
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">45</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">II</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Senior Vice President of Hardware Engineering,
	Apple Computer, Inc.
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">1999
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">Nominees to Serve as Directors for a Term
Expiring at the 2005 Annual Meeting of Stockholders
(Class&nbsp;III Directors):</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">John Hodgman</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mr.&nbsp;Hodgman has served as a member of the
Board since January&nbsp;31, 2002. Mr.&nbsp;Hodgman is the Chief
Executive Officer, President, and Chairman of the Board of
Cygnus, Inc., a medical company focused on the development,
manufacturing and commercialization of new and improved glucose
monitoring devices. He also served as President of Cygnus
Diagnostics where he was responsible for the commercialization
efforts for the GlucoWatch monitor, which recently received FDA
clearance. He joined Cygnus in August 1994 as Vice President,
Finance and Chief Financial Officer. Mr.&nbsp;Hodgman holds a
B.S. degree from Brigham Young University and an M.B.A. degree
from the University of Utah.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Robert O&#146;Malley</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mr.&nbsp;O&#146;Malley has served as our Chief
Executive Officer since October 2000 and as our President from
October 2000 until February 2002. From June 1999 to July 2000,
he served as President of Intermec Technologies Corporation, a
supply chain management company, a subsidiary of Unova, Inc, an
industrial technologies company. From May 1995 to May 1999,
Mr.&nbsp;O&#146;Malley held several executive positions at
MicroAge, an information technologies company, and its wholly
owned subsidiary Pinacor, a distributor of computer product
solutions. From 1976 to 1995, Mr.&nbsp;O&#146;Malley held a
variety of management positions at IBM, an information systems
company, including General Manager of desktop systems from
September 1994 to February 1995. Mr.&nbsp;O&#146;Malley holds a
B.S. degree in aeronautical engineering from the University of
Minnesota, and an M.B.A. from Arizona State University.
Mr.&nbsp;O&#146;Malley is a board member of the University of
North Dakota Aerospace Foundation.
</FONT>

<P align="left">
<B><FONT size="2">Directors Serving for a Term Expiring at the
2003 Annual Meeting of Stockholders (Class&nbsp;I
Directors):</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Steven Blank</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mr.&nbsp;Blank has served as a member of the
Board since October 1996. From November 1996, until August 1999,
Mr.&nbsp;Blank served as Executive Vice President of Marketing
for E.piphany, an enterprise software company that
Mr.&nbsp;Blank co-founded. From February 1993 to October 1996,
Mr.&nbsp;Blank served as chief executive officer of Rocket
Science Games, a video game software company. From February 1990
to January 1993, Mr.&nbsp;Blank served as Vice President of
Marketing of SuperMac, a supplier of Macintosh peripherals.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Jack Saltich</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mr.&nbsp;Saltich has served as a member of the
Board since January&nbsp;31, 2002. Since July 1999,
Mr.&nbsp;Saltich has served as the President, Chief Executive
Officer and a Director of Three-Five Systems Inc., a technology
company specializing in the design, development and
manufacturing of custom displays and display systems employing
liquid crystal display (LCD)&nbsp;and liquid crystal on silicon
(LCoS<SUP>TM</SUP>) microdisplay technology. From
</FONT>

<P align="center"><FONT size="2">3
</FONT>
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<DIV align="left">
<FONT size="2">April 1996 until August 1999, Mr.&nbsp;Saltich
served as Vice-President and General Manager of Advanced Micro
Device&#146;s European Center in Dresden Germany, and from 1993
until 1996 he was responsible for establishing AMD&#146;s first
200 mm wafer manufacturing facility. Mr.&nbsp;Saltich received
both a B.S. and an M.S. in electrical engineering from the
University of Illinois. In 2002, Mr.&nbsp;Saltich was awarded an
honorary Ph.D. from the University of Illinois. He also
completed all course work towards a Doctorate in electrical
engineering at Arizona State University.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Director Serving for a Term Expiring at the
2004 Annual Meeting of Stockholders (Class&nbsp;II
Director):</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Jonathan Rubinstein</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mr.&nbsp;Rubinstein has served as a member of the
Board since October 1999. Since February 1997,
Mr.&nbsp;Rubinstein has served as senior Vice President of
Hardware Engineering at Apple Computer, Inc., a personal
computer company. From August 1993 to August 1996,
Mr.&nbsp;Rubinstein was Executive Vice President and Chief
Operating Officer of Fire Power Systems, a developer and
manufacturer of Power PC-based computer systems.
Mr.&nbsp;Rubinstein received a B.S. and an M.S. in electrical
engineering from Cornell University and an M.S. in computer
science from Colorado State University.
</FONT>

<P align="center">
<B><FONT size="2">THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE</FONT></B>

<DIV align="center">
<B><FONT size="2">&#147;FOR&#148; THE CLASS&nbsp;III DIRECTOR
NOMINEES LISTED HEREIN.</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">Board of Directors Meetings and
Committees</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During the year ended December&nbsp;31, 2001, the
Board held six meetings. Each of the current directors attended
at least 75% of the total number of meetings of the Board and
meetings held by all committees of the Board on which each such
director served during the year. The Board has a standing audit
committee, compensation committee, executive committee and
nomination/governance committee.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Audit Committee</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The audit committee met four times in 2001. The
audit committee reviews with the Company&#146;s independent
public accountants the scope and timing of its audit services
and any other services that the auditor is asked to perform, the
auditor&#146;s report on the Company&#146;s consolidated
financial statements following completion of its audit, and the
Company&#146;s policies and procedures with respect to internal
accounting and financial controls. In addition, the audit
committee makes annual recommendations to the Board regarding
the appointment of the independent public accountants for the
upcoming year. The members of the audit committee are
Messrs.&nbsp;Blank, Hodgman and Saltich.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Compensation Committee</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The compensation committee met four times in
2001. The compensation committee reviews and approves the
compensation of the Company&#146;s executives and administers
the Company&#146;s stock plans. The members of the compensation
committee are Messrs.&nbsp;Blank and Rubinstein.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Executive Committee</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The executive committee met four times in 2001.
The executive committee exercises certain powers of the Board
during intervals between meetings of the Board. The members of
the executive committee are Messrs.&nbsp;Rubinstein, Blank and
O&#146;Malley.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Nomination/ Governance
	Committee</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During the fourth quarter of 2001, the Board
authorized the formation of a Nomination/ Governance committee.
The purpose of this committee is to recommend candidates for
Board positions to the Board of Directors for consideration. In
addition, this committee will periodically review policies of
the Company and the compliance of senior executives of the
Company with respect to these policies. This committee did not
meet in the year ended December&nbsp;31, 2001, however it is
anticipated that the committee will meet at least two
</FONT>

<P align="center"><FONT size="2">4
</FONT>

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<DIV align="left">
<FONT size="2">times in 2002. The members of the nomination/
governance committee are Messrs.&nbsp;Blank, Hodgman,
O&#146;Malley, Rubinstein and Saltich.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Director Compensation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">No cash compensation was paid to directors in
2001. Under guidelines adopted by the Board in July 2000, each
director of the Company is granted an option to purchase 25,000
shares of common stock under the Company&#146;s 1997 Stock
Option Plan on the date the director first becomes a member of
the Board. In addition, each director who has served for at
least eleven months, receives an additional 7,500 share option
grant at the first meeting of the Board following each annual
meeting of the Company&#146;s stockholders. Subject to continued
service to the Company, options granted to directors vest as to
25% of the shares on the first anniversary of their grant date,
with the remaining portion vesting as to 2.083% per month
thereafter.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 2001, the Company granted options to purchase
the Company&#146;s common stock to its directors. The options
granted to Mr.&nbsp;O&#146;Malley, the Company&#146;s employee
director, are described in the Summary Compensation Table. The
options granted to Messrs.&nbsp;Blank and Rubinstein,
non-employee directors of the Company, are described in the
following table.
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="50%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Shares Subject</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise Price</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Date of Grant</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">to Option</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Per Share</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Steven Blank
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10/24/01</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,500</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.91</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Jonathan Rubinstein
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10/24/01</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,500</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.91</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During the fourth quarter of 2001, the
compensation of the Board was adjusted in order to make it
comparable to peer companies. Board member compensation for 2002
is as follows:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">1.&nbsp;Board members will receive $2,500 for
	attending the quarterly board meeting.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">2.&nbsp;New Board members will receive options to
	purchase 40,000 shares of the Company&#146;s common stock,
	subject to vesting.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">3.&nbsp;Board members will receive annual option
	grants to purchase 10,000 shares of the Company&#146;s common
	stock, subject to vesting.
	</FONT></TD>
</TR>

</TABLE>

<!-- link1 "<FONT size="2">EXECUTIVE COMPENSATION AND RELATED INFORMATION</FONT>" -->
<DIV align="left"><A NAME="004"></A></DIV>

<P align="center">
<B><FONT size="2">EXECUTIVE COMPENSATION AND RELATED
INFORMATION</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table presents information
concerning compensation earned during the years ended
December&nbsp;31, 2001, 2000 and 1999 by each person who served
as the Company&#146;s chief executive officer in 2001 and the
Company&#146;s four other most highly compensated executive
officers in 2001 (collectively, the &#147;Named Executive
Officers&#148;). In accordance with the rules of the Securities
and Exchange Commission (the &#147;SEC&#148;), the compensation
described in this table does not include perquisites and other
personal benefits
</FONT>

<P align="center"><FONT size="2">5
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">received by these executive officers that do not
exceed the lesser of $50,000 or 10% of the total salary and
bonus reported for these officers.
</FONT>
</DIV>

<P align="center">
<B><FONT size="2">Summary Compensation Table</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="41%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Long Term Compensation</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Annual Compensation</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Restricted</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Securities</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Fiscal</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Stock</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Underlying</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2" align="center" nowrap><B><FONT size="1">Name &#38; Principal Position</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Year</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Salary($)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Bonus(1)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Awards(2)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Options</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Robert O&#146;Malley
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2001</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">216,593</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">150,000</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">(4)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Chairman and Chief Executive Officer(3)
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">42,244</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">500,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1999</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Louis Rosenberg, Ph.D.&nbsp;</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2001</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">190,632</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">19,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">165,900</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Founder and Former President and
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">211,439</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,500</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Chief Executive Officer(5)
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1999</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">179,587</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">50,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">227,894</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Victor Viegas
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2001</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">153,709</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">133,600</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">President, Chief Operating Officer and
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">150,206</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,750</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Chief Financial Officer(6)
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1999</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">66,154</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,250</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">564,900</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">J. Stuart Mitchell
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2001</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">168,708</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">26,030</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Executive Vice President,
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">151,287</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">114,193</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Business Groups(7)
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1999</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">49,333</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,250</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">356,660</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Rodney Hilton
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2001</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">185,286</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">235,832</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">(9)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">130,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Former President, Immersion Medical, Inc.(8)
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">151,879</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">582,258</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">(10)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17,280</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1999</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">44,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="4%"></TD>
	<TD width="95%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Bonuses are reported in the year earned, even if
	actually paid in a subsequent year.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">(2)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">All figures in this column represent the value of
	restricted awards at the date of grant.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">(3)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Mr.&nbsp;O&#146;Malley was appointed President
	and Chief Executive Officer in October 2000.
	Mr.&nbsp;O&#146;Malley did not earn any compensation from the
	Company prior to October 2000.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">(4)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Represents relocation bonus earned by
	Mr.&nbsp;O&#146;Malley in 2001 as part of the employment
	agreement Mr.&nbsp;O&#146;Malley entered into with the Company
	in October 2000.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">(5)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Dr.&nbsp;Rosenberg served as President and Chief
	Executive Officer of the Company from May 1993 until October
	2000. Dr.&nbsp;Rosenberg served as Chairman of the Board until
	June&nbsp;22, 2001, at which time he took over the position of
	Founder. Dr.&nbsp;Rosenberg resigned as Founder on
	February&nbsp;11, 2002, and is currently working as a consultant
	for the Company.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">(6)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Mr.&nbsp;Viegas joined the Company in August
	1999. Mr.&nbsp;Viegas did not earn any compensation from the
	Company prior to August 1999.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">(7)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Mr.&nbsp;Mitchell joined the Company in August
	1999. Mr.&nbsp;Mitchell did not earn any compensation from the
	Company prior to August 1999.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">(8)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Mr.&nbsp;Hilton joined Immersion Medical, a
	wholly owned subsidiary of the Company, in September 1999, and
	Mr.&nbsp;Hilton and the Company agreed to terminate his
	employment as President of Immersion Medical effective
	April&nbsp;19, 2002. Mr.&nbsp;Hilton did not earn any
	compensation from Immersion Medical or the Company prior to
	September 1999.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">(9)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Represents amounts paid to Mr.&nbsp;Hilton in
	connection with the Company&#146;s integration of Immersion
	Medical and the subsequent management of its operations.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="5%"></TD>
	<TD width="95%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(10)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Represents 37,565 shares of restricted common
	stock awarded on September&nbsp;29, 2000, with a fair market
	value $15.50 per share on the date of grant. These shares had a
	value of $282,338 and $253,150 as of December&nbsp;31, 2000 and
	2001, respectively. All 37,565 shares vested on
	February&nbsp;13, 2001. As of April&nbsp;19, 2002,
	Mr.&nbsp;Hilton had not sold any of these shares.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">6
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">
<B><FONT size="2">Option Grants In Fiscal Year Ended
December&nbsp;31, 2001</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table presents information with
respect to stock options granted during 2001 to the Named
Executive Officers.
</FONT>

<P align="center">
<B><FONT size="2">Stock Option Grants in the Last Fiscal
Year</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="26%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">No. of</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Percent of</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Potential Realizable Value</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Securities</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Total Options</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">at Assumed Annual Rates</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Underlying</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Granted to</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">of Stock Appreciation for</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Options</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Employees</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Option Term (1)</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Granted</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">During</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Price</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Expiration</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Name</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">(#)(2)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Period(%)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">($/Share)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Date</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">5%</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">10%</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Robert O&#146;Malley
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15,000</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">(3)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.23</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">05/01/11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">58,770</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">148,935</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Louis Rosenberg, Ph.D.&nbsp;</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">150,000</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">(4)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.38</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.66</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">04/26/06</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">159,135</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">462,538</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15,000</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">(3)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.23</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">05/01/11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">58,770</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">148,935</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">900</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.96</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10/12/11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,241</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,680</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Victor Viegas
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,600</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10.50</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">02/07/11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">122,823</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">311,258</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15,000</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">(3)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.23</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">05/01/11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">58,770</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">148,935</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.26</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.03</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">06/18/11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">378,953</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">961,027</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">J. Stuart Mitchell
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15,000</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">(3)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.23</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">05/01/11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">58,770</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">148,935</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Rodney Hilton
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">120,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7.50</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">02/23/11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">566,005</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,434,368</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,000</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">(5)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.23</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">05/01/11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">39,180</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">99,290</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">The potential realizable value represents the
	hypothetical gains of the options granted based on assumed
	annual compound stock appreciation rates over the exercise price
	per share (before taxes). Actual gains, if any, on stock option
	exercises are dependent on the future performance of the
	Company&#146;s Common Stock. There can be no assurance that any
	of the value reflected in this table will be achieved.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(2)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Except as noted in the footnotes below, options
	granted pursuant to the Company&#146;s 1997 Stock Option Plan
	generally vest at a rate of 25% of the underlying shares
	12&nbsp;months after the date of grant, and 2.0833% monthly
	thereafter over the next 36&nbsp;months, and have a maximum term
	of ten years measured from the option grant date, subject to
	earlier termination in the event of the optionee&#146;s
	cessation of service with the Company.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(3)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Each option vests at a rate of 25% of the
	underlying shares 6 months after the date of grant, and 4.1667%
	monthly thereafter over the next 18&nbsp;months. Each option has
	a maximum term of ten years measured from the option grant date,
	subject to earlier termination in the event of the
	optionee&#146;s cessation of service with the Company. These
	options were granted as consideration for a corresponding 25%
	salary reduction for 2001, effective June&nbsp;4, 2001.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(4)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Dr.&nbsp;Rosenberg&#146;s option to purchase
	150,000 shares was cancelled in February 2002, pursuant to the
	Independent Consultant Services Agreement entered into between
	Dr.&nbsp;Rosenberg and the Company, dated February&nbsp;11, 2002.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(5)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Each option vests at a rate of 25% of the
	underlying shares 6&nbsp;months after the date of grant, and
	4.1667% monthly thereafter over the next 18&nbsp;months. Each
	option has a maximum term of ten years measured from the option
	grant date, subject to earlier termination in the event of the
	optionee&#146;s cessation of service with the Company. These
	options were granted as consideration for a corresponding 10%
	salary reduction for 2001, effective June&nbsp;4, 2001.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">7
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">Aggregated Option Exercises in Last Fiscal
Year</FONT></B>

<DIV align="center">
<B><FONT size="2">and Fiscal Year End Option Values</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table presents information for the
Named Executive Officers concerning option exercises during 2001
and the value of exercisable and unexercisable options held as
of December&nbsp;31, 2001 by these officers:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="44%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Number of Securities</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Value Of Unexercised</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Underlying Options at</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">In-The-Money Options at</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Fiscal Year End</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Fiscal Year End ($)(1)</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Name</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Exercisable</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Unexercisable</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Exercisable</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Unexercisable</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Robert O&#146;Malley
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">150,208</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">364,792</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,227</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,408</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Louis Rosenberg, Ph.D
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">957,421</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">196,632</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,400,430</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">102,044</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Victor Viegas
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">333,900</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">364,600</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,227</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">76,308</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">J. Stuart Mitchell
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">245,759</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">225,901</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,227</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,408</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Rodney Hilton
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">31,308</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">161,921</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,484</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,606</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Based on the closing price of $6.74 of the
	Company&#146;s Common Stock as reported on The Nasdaq National
	Market System at December&nbsp;31, 2001, the last day of trading
	of the Company&#146;s Common Stock during fiscal year 2001, less
	the exercise price payable for such shares.
	</FONT></TD>
</TR>

</TABLE>

<!-- link1 "<FONT size="2">EMPLOYMENT CONTRACTS AND CHANGE IN CONTROL ARRANGEMENTS</FONT>" -->
<DIV align="left"><A NAME="005"></A></DIV>

<P align="center">
<B><FONT size="2">EMPLOYMENT CONTRACTS AND CHANGE</FONT></B>

<DIV align="center">
<B><FONT size="2">IN CONTROL ARRANGEMENTS</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On November&nbsp;5, 2001, the Company entered
into an employment agreement with Robert O&#146;Malley, Chairman
and Chief Executive Officer of the Company. The agreement
provides for a minimum annual base salary of $250,000, as well
as eligibility to receive an annual bonus based upon the
achievement of certain financial and/or other performance
targets established by the Board of Directors. In the event
Mr.&nbsp;O&#146;Malley&#146;s employment with the Company is
terminated without &#147;cause,&#148; or if
Mr.&nbsp;O&#146;Malley terminates his employment for
&#147;constructive reason,&#148; Mr.&nbsp;O&#146;Malley shall be
entitled to (i)&nbsp;the continuation of his base salary for a
period of twelve months, (ii)&nbsp;the continuation of his
health, dental and vision benefits for as long as he remains
entitled to receive his base salary, and (iii)&nbsp;except with
respect to a termination in connection with a change in control,
75% of Mr.&nbsp;O&#146;Malley&#146;s then unvested stock and
stock options shall become vested. If Mr.&nbsp;O&#146;Malley is
terminated as result of death or disability, 24&nbsp;months of
his unvested stock and stock options shall vest, and in the
event of disability, he shall be entitled to his base salary for
a period of six months. In the event of a change in control, 75%
of Mr.&nbsp;O&#146;Malley&#146;s then unvested stock and stock
options shall immediately vest. In the event
Mr.&nbsp;O&#146;Malley&#146;s employment is terminated without
&#147;cause&#148; or for &#147;constructive reason&#148; during
the period three months prior to a change in control, 100% of
his then unvested stock and stock options shall vest in full.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On November&nbsp;5, 2001, the Company entered
into an employment agreement with Victor Viegas, President,
Chief Financial Officer and Chief Operating Officer of the
Company. The agreement provides for a minimum annual base salary
of $200,000, as well as eligibility to receive an annual bonus
based upon the achievement of certain financial and/or other
performance targets established by the Board of Directors. In
the event Mr.&nbsp;Viegas&#146; employment with the Company is
terminated without &#147;cause,&#148; or if Mr.&nbsp;Viegas
terminates his employment for &#147;constructive reason,&#148;
Mr.&nbsp;Viegas shall be entitled to (i)&nbsp;the continuation
of his base salary for a period of twelve months, (ii)&nbsp;the
continuation of his health, dental and vision benefits for as
long as he remains entitled to receive his base salary, and
(iii)&nbsp;except with respect to a termination in connection
with a change in control, 75% of Mr.&nbsp;Viegas&#146; then
unvested stock and stock options shall become vested. If
Mr.&nbsp;Viegas is terminated as result of death or disability,
24&nbsp;months of his unvested stock and stock options shall
vest, and in the event of disability, he shall be entitled to
his base salary for a period of six months. In the event of a
change in control, 75% of Mr.&nbsp;Viegas&#146; then unvested
stock and stock options shall immediately vest. In the event
Mr.&nbsp;Viegas&#146; employment is terminated without
&#147;cause&#148; or for &#147;constructive reason&#148; during
the period three months prior to a change in control, 100% of
his then unvested stock and stock options shall vest in full.
</FONT>

<P align="center"><FONT size="2">8
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On November&nbsp;5, 2001, the Company entered
into an employment agreement with J.&nbsp;Stuart Mitchell,
Executive Vice President of the Company&#146;s Business Groups.
The agreement provides for a minimum annual base salary of
$200,000, as well as eligibility to receive an annual bonus
based upon the achievement of certain financial and/or other
performance targets established by the Board of Directors. In
the event Mr.&nbsp;Mitchell&#146;s employment with the Company
is terminated without &#147;cause,&#148; or if Mr.&nbsp;Mitchell
terminates his employment for &#147;constructive reason,&#148;
Mr.&nbsp;Mitchell shall be entitled to (i)&nbsp;the continuation
of his base salary for a period of six months, (ii)&nbsp;the
continuation of his health, dental and vision benefits for as
long as he remains entitled to receive his base salary, and
(iii)&nbsp;except with respect to a termination in connection
with a change in control, an additional 12&nbsp;months of
Mr.&nbsp;Mitchell&#146;s then unvested stock and stock options
shall immediately vest. If Mr.&nbsp;Mitchell is terminated as
result of death or disability, 12&nbsp;months of his unvested
stock and stock options shall vest, and in the event of
disability, he shall be entitled to his base salary for a period
of six months. In the event of a change in control, an
additional 12&nbsp;months of Mr.&nbsp;Mitchell&#146;s then
unvested stock and stock options shall immediately vest. In the
event Mr.&nbsp;Mitchell&#146;s employment is terminated without
&#147;cause&#148; or for &#147;constructive reason&#148; during
the period three months prior to a change in control, an
additional 12&nbsp;months of his then unvested stock and stock
options shall immediately vest.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On August&nbsp;29, 2001, the Company entered into
a retention agreement with Mr.&nbsp;Rodney Hilton, President of
Immersion Medical, Inc. Effective April&nbsp;19, 2002,
Mr.&nbsp;Hilton and the Company agreed to terminate his
employment as President of Immersion Medical. Pursuant to the
retention agreement, Mr.&nbsp;Hilton was entitled to a bonus
payment of $220,000 on January&nbsp;7, 2002, and is entitled to
a bonus payment of $220,000 on January&nbsp;6, 2003. In
addition, the Company will pay him a severance payment equal to
twelve months of base salary, plus the balance of the current
term expiring on September&nbsp;28, 2002. Upon his termination
effective April&nbsp;19, 2002, the Company will accelerate the
contractual bonus owed to Mr.&nbsp;Hilton on January&nbsp;6,
2003 of $220,000, and compensate Mr.&nbsp;Hilton his severance
payments of $259,890. These amounts, net of applicable taxes,
will pay in full any indebtedness and accrued interest
Mr.&nbsp;Hilton owes the Company. Pursuant to the terms of the
retention agreement the Company may elect to offset any amounts
owed to Mr.&nbsp;Hilton against any indebtedness Mr.&nbsp;Hilton
owes the Company. On August&nbsp;29, 2001, the Company loaned
Mr.&nbsp;Hilton $420,000 due on January&nbsp;6, 2003 at 4%
interest per annum. In March 2002, pursuant to the terms of
Mr.&nbsp;Hilton&#146;s retention agreement, the Company applied
the net of tax amount of $138,451 from Mr.&nbsp;Hilton&#146;s
January&nbsp;7, 2002 bonus against the principal loan balance.
As of April&nbsp;19, 2002, the Company earned $10,436, of
interest under this indebtedness. Pursuant to
Mr.&nbsp;Hilton&#146;s stock option agreements, all unvested
options were cancelled upon his termination from the Company,
except 8,384 shares granted to Mr.&nbsp;Hilton during his term
as a member of the board of directors of Immersion Medical prior
to the merger. These shares will continue to vest for a period
of up two years after his date of termination.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On February&nbsp;11, 2002, Dr.&nbsp;Rosenberg
entered into an Independent Consultant Services Agreement and
ceased to be an employee of the Company. Pursuant to the terms
of the Independent Consultant Services Agreement,
Dr.&nbsp;Rosenberg will be paid $110 per hour for consulting
services to the Company for a period of eighteen months based on
average of 20 hours per week. Certain options previously granted
to Dr.&nbsp;Rosenberg in 2001 accelerated in vesting, while
154,688&nbsp;share options were cancelled as part of this
Agreement. As of April&nbsp;16, 2002, Dr.&nbsp;Rosenberg
currently has 560,765 vested exercisable share options.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s 1994 stock option plan
provides that, in the event of a change in control, the Board
may either arrange with the acquiring corporation that
outstanding options be assumed or that equivalent options be
substituted by the acquiring corporation; or provide that any
unexercisable or unvested portions of the outstanding options
shall be immediately exercisable and vested in full. The options
terminate if they are not assumed, substituted or exercised
prior to a change of control.
</FONT>

<!-- link1 "<FONT size="2">AUDIT COMMITTEE REPORT</FONT>" -->
<DIV align="left"><A NAME="006"></A></DIV>

<P align="center">
<B><FONT size="2">AUDIT COMMITTEE REPORT</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the guidance of a written charter adopted
by the Board of Directors, the purpose of the Audit Committee is
to monitor the integrity of the financial statements of the
Company, oversee the independence of the Company&#146;s
independent public accountants, and recommend to the Board the
selection of the independent public accountants. During fiscal
2001, the Audit Committee met four times, and discussed the
interim
</FONT>

<P align="center"><FONT size="2">9
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">financial information contained in each quarterly
earnings announcement with the President and Chief Financial
Officer and the Vice President of Finance and Controller and the
Company&#146;s independent public accountants prior to the
public release of such information. Each member of the Audit
Committee meets the independence requirements of Nasdaq. A copy
of the charter is included as Appendix&nbsp;A to this Proxy
Statement.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Management has the primary responsibility for the
system of internal controls and the financial reporting process.
The independent public accountants have the responsibility to
express an opinion on the financial statements based on an audit
conducted in accordance with generally accepted auditing
standards. The Audit Committee has the responsibility to monitor
and oversee these processes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In this context and in connection with the
audited financial statements contained in the Company&#146;s
Annual Report on Form&nbsp;10-K, the Audit Committee:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
        <TD width="3%"></TD>
        <TD width="1%"></TD>
        <TD width="96%"></TD>
</TR>

<TR valign="top">
        <TD>&nbsp;</TD>
        <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
        <TD align="left">
        <FONT size="2">reviewed and discussed the audited financial
        statements with the Company&#146;s management;
        </FONT></TD>
</TR>

<TR>
        <TD>&nbsp;</TD>
</TR>

<TR valign="top">
        <TD>&nbsp;</TD>
        <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
        <TD align="left">
        <FONT size="2">discussed with Deloitte&nbsp;&#38; Touche LLP,
        the Company&#146;s independent public accountants, the matters
        required to be discussed under Statement of Auditing Standards
        No.&nbsp;61, Communication with Audit Committees, as amended;
        </FONT></TD>
</TR>

<TR>
        <TD>&nbsp;</TD>
</TR>

<TR valign="top">
        <TD>&nbsp;</TD>
        <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
        <TD align="left">
        <FONT size="2">reviewed the written disclosures and the letter
        from Deloitte &#38; Touche LLP required by the Independence
        Standards Board Standard No.&nbsp;1, Independence Discussions
        with Audit Committees, and has discussed with the auditors, the
        independent public accountants&#146; independence, and concluded
        that the nonaudit services performed by Deloitte &#38; Touche
        LLP are compatible with maintaining its independence;
        </FONT></TD>
</TR>

<TR>
        <TD>&nbsp;</TD>
</TR>

<TR valign="top">
        <TD>&nbsp;</TD>
        <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
        <TD align="left">
        <FONT size="2">based on the foregoing reviews and discussions,
        recommended to the Board of Directors that the audited financial
        statements be included in the Company&#146;s 2001 Annual Report
        on Form&nbsp;10-K for the fiscal year ended December&nbsp;31,
        2001 filed with the Securities and Exchange Commission; and
        </FONT></TD>
</TR>

<TR>
        <TD>&nbsp;</TD>
</TR>

<TR valign="top">
        <TD>&nbsp;</TD>
        <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
        <TD align="left">
        <FONT size="2">instructed the independent public accountants
        that the Committee expects to be advised if there are any
        subjects that require special attention.
        </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
        <TD width="40%"></TD>
        <TD width="60%"></TD>
</TR>

<TR valign="top">
        <TD>&nbsp;</TD>
        <TD align="left">
        <FONT size="2">AUDIT COMMITTEE
        </FONT></TD>
</TR>

<TR>
        <TD>&nbsp;</TD>
</TR>

<TR valign="top">
        <TD>&nbsp;</TD>
        <TD align="left">
        <FONT size="2">John Hodgman
        </FONT></TD>
</TR>

<TR valign="top">
        <TD>&nbsp;</TD>
        <TD align="left">
        <FONT size="2">Jack Saltich
        </FONT></TD>
</TR>

<TR valign="top">
        <TD>&nbsp;</TD>
        <TD align="left">
        <FONT size="2">Steven Blank
        </FONT></TD>
</TR>

</TABLE>

<!-- link1 "<FONT size="2">RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS</FONT>" -->
<DIV align="left"><A NAME="007"></A></DIV>

<P align="center">
<B><FONT size="2">RELATIONSHIP WITH INDEPENDENT
ACCOUNTANTS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Deloitte&nbsp;&#38; Touche LLP has been the
independent accounting firm that audits the financial statements
of the Company since 1997. In accordance with standing policy,
Deloitte&nbsp;&#38; Touche LLP periodically changes the
personnel who work on the audit. The Company has no current
consulting agreements with Deloitte and Touche.
</FONT>

<P align="left">
<B><FONT size="2">Principal Accounting Firm Fees</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Aggregate fees billed to the Company for the
fiscal year ended December&nbsp;31, 2001 by the Company&#146;s
principal accounting firm, Deloitte&nbsp;&#38; Touche LLP, the
member firms of Deloitte Touche Tohmatsu, and their respective
affiliates:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
        <TD width="79%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
        <TD align="left" valign="top">
        <DIV style="margin-left:10px; text-indent:-10px">
        <FONT size="2">Audit Fees
        </FONT></DIV>
        </TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">$0.23&nbsp;million</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
        <TD align="left" valign="top">
        <DIV style="margin-left:10px; text-indent:-10px">
        <FONT size="2">Financial Information Systems Design and
        Implementation Fees
        </FONT></DIV>
        </TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">$0</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
        <TD align="left" valign="top">
        <DIV style="margin-left:10px; text-indent:-10px">
        <FONT size="2">All Other Fees
        </FONT></DIV>
        </TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">$0.13&nbsp; million(1)(2)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">10
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes fees for tax preparation, tax
	compliance, tax consulting and other non-audit services.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(2)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">The Audit Committee has considered and determined
	that then provision of these services is compatible with
	maintaining the principal accountant&#146;s independence.
	</FONT></TD>
</TR>

</TABLE>

<!-- link1 "<FONT size="2">COMPENSATION COMMITTEE REPORT</FONT>" -->
<DIV align="left"><A NAME="008"></A></DIV>

<P align="center">
<B><FONT size="2">COMPENSATION COMMITTEE REPORT</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This Compensation Committee Report describes the
compensation policies and rationale applied to the compensation
paid to the Company&#146;s executive officers for the fiscal
year ended December&nbsp;31, 2001. The compensation committee
has the authority to administer the Company&#146;s stock option
plans, establish the level of base salary payable to the Chief
Executive Officer (&#147;CEO&#148;) and the other executive
officers of the Company and the responsibility of approving the
bonus program to be in effect for the CEO and the other
executive officers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">General Compensation
Policy.</FONT></I><FONT size="2"> The Committee&#146;s
fundamental compensation policy is to align compensation with
business objectives and performance, and to enable the Company
to attract, retain and reward executive officers whose
contributions are necessary for the long term success of the
Company. Accordingly, each executive officer&#146;s compensation
package consists of: (i)&nbsp;base salary; (ii)&nbsp;annual cash
bonus and (iii)&nbsp;long-term stock-based incentive awards.
Executive bonuses for 2002 have been approved by the
Compensation Committee and are based upon the Company achieving
profitability in 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Base Salary.</FONT></I><FONT size="2"> The
base salary for each executive officer is set on the basis of
personal performance, taking into account the average salary
levels in effect for comparable positions with companies having
total revenues similar to the Company&#146;s. Each
individual&#146;s base pay is positioned relative to the total
compensation package, including cash bonus incentives and
long-term stock-based incentives.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Cash Bonuses.</FONT></I><FONT size="2"> An
executive officer of the Company was guaranteed quarterly
bonuses in accordance with the terms of his offer letter and his
employment agreement with the Company. That guaranteed bonus was
in effect for one year or less. In addition, certain of the
Company&#146;s executive officers are eligible for annual
bonuses based on the achievement of both corporate and
functional objectives, including sales targets and patent
issuances. Effective as of January 2002, the Company has adopted
a revised annual cash bonus program applicable to all of the
Company&#146;s executive officers that provides for the payment
of bonuses based upon the Company meeting certain revenue and
profit objectives.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Long-term Incentive
Compensation.</FONT></I><FONT size="2"> During the fiscal year
ended December&nbsp;31, 2001, the Committee made discretionary
option grants to all of the executive officers of the Company
under the Company&#146;s 1997 Stock Option Plan based on each
officer&#146;s personal performance. Option grants were
generally made at varying times and in varying amounts in the
discretion of the Committee. Typically, the size of each grant
was set at a level that is deemed appropriate to create a
meaningful opportunity for stock ownership based upon the
individual&#146;s position with the Company, the
individual&#146;s potential for future responsibility and
promotion, the individual&#146;s performance in the recent
period and the number of unvested options held by the individual
at the time of the new grant. The relative weight given to each
of these factors varied from individual to individual.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Options generally vest over four years. Thus, the
vesting of each option is contingent upon the executive
officer&#146;s continued employment with the Company.
Accordingly, the options provided compensation to the executive
officer only if he remained in the Company&#146;s employ, and
then only if the market price of the Company&#146;s Common Stock
appreciated over the option term.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">An option grant on May&nbsp;1, 2001, of 431,000
shares of common stock of the Company was made to the
Company&#146;s employees and vests over a two-year period. This
grant was approved by the Board and subsequently granted based
upon the Company wide salary reduction plan put into effect
during the second quarter of 2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">CEO Compensation.</FONT></I><FONT size="2"> On
October&nbsp;22, 2000, Mr.&nbsp;Robert O&#146;Malley was hired
as President and Chief Executive Officer of the Company. An
offer letter relating to his hiring governed
Mr.&nbsp;O&#146;Malley&#146;s fiscal year 2000 compensation. In
approving Mr.&nbsp;O&#146;Malley&#146;s compensation, the
Committee focused on the importance of
</FONT>

<P align="center"><FONT size="2">11
</FONT>

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<DIV align="left">
<FONT size="2">hiring a President and Chief Executive Officer
with an outstanding business and leadership record. The final
determination of his compensation was made primarily on the
basis of Mr.&nbsp;O&#146;Malley&#146;s qualifications for the
position. For 2001, Mr.&nbsp;O&#146;Malley received a base
salary of $250,000 and a one-time relocation bonus of $150,000,
offset by the 25% senior executive salary reduction program the
Company incurred in the second quarter of 2001. On
November&nbsp;5, 2001, Mr.&nbsp;O&#146;Malley signed an
Employment Agreement with the Company, that entitles
Mr.&nbsp;O&#146;Malley to receive a base salary of $250,000 per
year, plus an annual incentive based upon the Company&#146;s
annual variable compensation plan based upon the Company
exceeding certain financial targets. The terms of
Mr.&nbsp;O&#146;Malley&#146;s employment agreement are further
described in the section entitled &#147;Employment Contracts and
Change In Control Arrangements.&#148; This employment agreement
is consistent with agreements in similar companies and with peer
executives at Immersion.
</FONT>
</DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="40%"></TD>
	<TD width="60%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">COMPENSATION COMMITTEE
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Steven Blank
	</FONT></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Jonathan Rubinstein
	</FONT></TD>
</TR>

</TABLE>

<!-- link1 "<FONT size="2">COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION</FONT>" -->
<DIV align="left"><A NAME="009"></A></DIV>

<P align="center">
<B><FONT size="2">COMPENSATION COMMITTEE INTERLOCKS</FONT></B>

<DIV align="center">
<B><FONT size="2">AND INSIDER PARTICIPATION</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Neither of these individuals serving on the
Compensation Committee was at any time during fiscal year 2001,
or at any other time, an officer or employee of the Company. No
executive officer of the Company serves as a member of the board
of directors or compensation committee of any entity that has
one or more executive officers serving as a member of the Board
or the Compensation Committee.
</FONT>

<!-- link1 "<FONT size="2">CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS</FONT>" -->
<DIV align="left"><A NAME="010"></A></DIV>

<P align="center">
<B><FONT size="2">CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Except as described elsewhere in this Proxy
Statement, including in &#147;Executive Compensation and Related
Information&#148; above, or in &#147;Other Transactions&#148;
below, since January&nbsp;1, 2001, there has not been, nor is
there currently proposed, any transaction or series of similar
transactions to which the Company is or was a party in which the
amount involved exceeds $60,000 and in which any of its
directors, executive officers or holders of more than 5% of the
Company&#146;s capital stock had or will have a direct or
indirect material interest.
</FONT>

<P align="left">
<B><FONT size="2">Other Transactions</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Promissory Note</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On August&nbsp;29, 2001, the Company loaned
Mr.&nbsp;Rodney Hilton, President of Immersion Medical, Inc.,
$420,000 at 4% interest per annum, compounded quarterly, payable
on January&nbsp;6, 2003. In March 2002, pursuant to the terms of
Mr.&nbsp;Hilton&#146;s retention agreement, the Company applied
the net of tax amount of $138,451 from Mr.&nbsp;Hilton&#146;s
January&nbsp;7, 2002 bonus against the principal loan balance.
Upon the termination of Mr.&nbsp;Hilton&#146;s employment as
President of Immersion Medical, the Company applied any amounts,
net of applicable taxes, owed to Mr.&nbsp;Hilton pursuant to his
August&nbsp;29, 2001 retention agreement against the principal
and accrued interest balance on the note. As of April&nbsp;19,
2002, the promissory note was paid in full.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Logitech Agreements</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Logitech formerly held more than 5% of the
Company&#146;s capital stock. Logitech is a licensee that
accounts for a large portion of the Company&#146;s licensing and
consulting services revenue. In 2001, the Company recorded
revenue of approximately $2.7&nbsp;million from Logitech. In
October 1996, the Company entered into a royalty-based license
agreement and a technology product development agreement with
Logitech. The license agreement grants Logitech a worldwide,
irrevocable, non-exclusive license under the Company&#146;s
patents for touch-enabled gaming products. Pursuant to the
technology product development agreement, the Company provided
Logitech consulting services with respect to the development of
a touch-enabled joystick. In October 2001, the Company and
Logitech amended this technology license agreement. Pursuant to
the terms of this
</FONT>

<P align="center"><FONT size="2">12
</FONT>

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<DIV align="left">
<FONT size="2">amended agreement Logitech is required to pay the
Company certain royalties on sales of royalty bearing products.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In April 1998, the Company entered into a
royalty-based license agreement and a technology product
development agreement with Logitech. Pursuant to the technology
product development agreement, the Company provided Logitech
consulting services with respect to the development of a
touch-enabled mouse. Under the development agreement, the
Company also agreed that it would not enable a third-party to
ship a similar touch-enabled mouse product until
October&nbsp;23, 1999. Pursuant to the license agreement, the
Company granted Logitech an irrevocable, non-exclusive,
worldwide license to technology incorporated by Logitech into a
touch-enabled mouse product.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company signed a co-marketing agreement with
Logitech in November 1999 in which the Company agreed to assist
Logitech with the launch and promotion of its touch-enabled
mice. Under the terms of the agreement, for a period of five
calendar quarters, beginning in the first calendar quarter of
2000, the Company will reimburse Logitech for certain marketing
related expenses not to exceed $200,000 per quarter. Only
third-party marketing services that are targeted at promoting
Logitech&#146;s touch-enabled mice are eligible for
reimbursement. In addition, all promotional activities will have
to be approved by the Company in advance. In order to remain
eligible for reimbursement, Logitech will have to include the
Company&#146;s brand and slogan on all its marketing materials
that reference touch-enabled functionality or products, and
commit to other conditions regarding its touch-enabled mice. The
Company&#146;s obligations under the co-marketing agreement have
been fulfilled.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">MicroScribe Agreements</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On July&nbsp;1, 1997, the Company formed
MicroScribe LLC (&#147;MicroScribe&#148;), a privately held
limited liability company with two types of outstanding
membership interests&nbsp;&#151; class&nbsp;1 membership
interests and class&nbsp;2 membership interests.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In July 1997, the Company entered into an
exchange agreement, a patent license agreement and an
intellectual property license agreement with MicroScribe.
Pursuant to the exchange agreement and the patent license
agreement, the Company assigned its patents and associated
intellectual property relating to three-dimensional digitizing
products and the Pin-Point arm, a medical device used for
image-guided biopsies whose design is based on the
Company&#146;s three-dimensional digitizing product, to
MicroScribe in exchange for a worldwide, royalty-free,
exclusive, irrevocable license and all of the class&nbsp;1
membership interests and class&nbsp;2 membership interests in
MicroScribe. The Company retained the class&nbsp;1 membership
interest and distributed the class&nbsp;2 membership interests
to the stockholders of the Company at the time of the exchange
agreement, on a pro rata basis, including:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="73%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="12%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Percentage Interest</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Name of Beneficial Holder</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Owned in Microscribe</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Louis Rosenberg, Ph.D.&nbsp;</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">25.9</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">There are no membership interests in MicroScribe
other than the class&nbsp;1 and class&nbsp;2 membership
interests. MicroScribe has not issued any additional membership
interests other than the initial issuance of the class&nbsp;1
and class&nbsp;2 membership interests to the Company.
Accordingly, stockholders who have acquired shares of the
Company after the one-time distribution do not own any
membership interests in MicroScribe. The following table
presents information regarding the percentage interest in
MicroScribe of each director, officer
</FONT>

<P align="center"><FONT size="2">13
</FONT>

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<DIV align="left">
<FONT size="2">and 5% stockholder who has an interest in
MicroScribe and each member of the immediate family of such
director, officer and 5% stockholder of the Company.
</FONT>
</DIV>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="73%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="12%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Percentage Interest</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Name of Beneficial Holder</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Owned in Microscribe</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">DIRECTOR AND 2001 EXECUTIVE OFFICERS</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Steven Blank
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Louis Rosenberg, PhD
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">25.9</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">IMMEDIATE FAMILY OF 5% STOCKHOLDER,
	DIRECTOR<BR>
	AND OFFICER</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Max and Helen Johnston
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.4</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Arthur and Marilynn Rosenberg
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.8</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Arthur Rosenberg
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Marilynn Rosenberg
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.2</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">MicroScribe&#146;s sole business is the licensing
of its patents and associated intellectual property to the
Company. Distributable cash from its licensing activities is
distributed 99% to the class&nbsp;2 members and 1% to the
Company, as the sole class&nbsp;1 member. Pursuant to the terms
of the license agreement, MicroScribe granted the Company rights
to use intellectual property of MicroScribe for the development
and distribution of three-dimensional digitizing products. Under
the intellectual property license agreement, the Company pays
MicroScribe a formula-based royalty that varies between 5% and
10% of the net receipts the Company receives from selling
products incorporating MicroScribe technology. Based upon the
formula-based royalty with MicroScribe, the Company recorded an
expense of $132,000 in 1999, $117,000 in 2000 and $167,000 in
2001. The agreement, which has a term of ten years and is
scheduled to expire in 2007, also provides that beginning in
2002 the royalty rate will be set at 10% for the remainder of
the license term. Products for which the Company currently pays
MicroScribe a royalty include the Company&#146;s MicroScribe-3D
digitizing product and the Pin-Point arm, a medical device used
for image-guided biopsies whose design is based upon the
MicroScribe-3D. The agreement also requires MicroScribe to
indemnify the Company against claims that the technology it has
delivered to us infringes a third party&#146;s intellectual
property rights.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Cybernet Agreements.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In March 1999, the Company acquired patents and
in-process technology from Cybernet Systems Corporation in
exchange for 1,291,200 shares of the Company&#146;s common
stock. In addition, the Company entered into a consulting
services agreement with Cybernet, under which the Company issued
Cybernet a warrant to purchase 322,800&nbsp;shares of Common
Stock at an exercise price of $3.66 and agreed to pay Cybernet
$300,000. The Company paid $150,000 of this amount in March 1999
and $75,000 of this amount in January 2000. The Company paid the
remaining $75,000 to Cybernet in January 2001. In connection
with this acquisition and consulting arrangement, the Company
agreed to provide Cybernet with registration rights with respect
to their common stock and the common stock issuable upon
exercise of this warrant. As a result of these transactions,
Cybernet is a holder of more than 5% of the Company&#146;s
capital stock.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">There Agreements.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In October 1999, the Company entered into a
marketing agreement with There. In addition, in April 2000, the
Company purchased 540,540 shares of Series&nbsp;D Preferred
Stock of There for approximately $1.0&nbsp;million.
Mr.&nbsp;Blank, a member of the Board, serves as a director and
is a minority shareholder of There. Pursuant to the marketing
agreement, There has agreed to promote the Company&#146;s
Touch-enabling technologies and its licensees&#146;
touch-enabled products. The Company also has agreed to promote
There&#146;s services through a number of means, including
providing There up to $300,000 for its advertising and marketing
programs. In February 2001, the Company and There amended the
marketing agreement. The amendment reduced by $100,000 the
amount that the Company will make available to There for its
advertising and marketing programs, and further specified how
the Company&#146;s touch-enabling technologies will be
incorporated into There&#146;s products.
</FONT>

<P align="center"><FONT size="2">14
</FONT>

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<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Indemnification.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to indemnification provisions in the
Company&#146;s bylaws, the Company has entered into agreements
to indemnify its directors and executive officers. These
agreements provide for indemnification of the Company&#146;s
directors and executive officers for some types of expenses,
including attorney&#146;s fees, judgments, fines and settlement
amounts incurred by persons in any action or proceeding,
including any action by or in the right of the Company, arising
out of their services as the Company&#146;s director or
executive officer. We believe that these provisions and
agreements are necessary to attract and retain qualified persons
as directors and executive officers.
</FONT>

<P align="center"><FONT size="2">15
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "<FONT size="2">STOCK PERFORMANCE GRAPH</FONT>" -->
<DIV align="left"><A NAME="011"></A></DIV>

<P align="center">
<B><FONT size="2">STOCK PERFORMANCE GRAPH</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The graph set forth below compares the cumulative
total stockholder return on the Company&#146;s Common Stock
between November&nbsp;12, 1999 (the date the Company&#146;s
Common Stock commenced public trading) and December&nbsp;31,
2001, with the cumulative total return of (i)&nbsp;the Nasdaq
Stock Market Total Return Index (U.S.&nbsp;Companies) (the
&#147;Nasdaq Stock Market-U.S. Index&#148;) and (ii)&nbsp;the JP
Morgan H&#38;Q Technology Index, over the same period. This
graph assumes the investment of $100.00 on November&nbsp;12,
1999, in the Company&#146;s Common Stock, The NASDAQ Stock
Market-U.S. Index and the JP Morgan H&#38;Q Technology Index,
and assumes the reinvestment of dividends, if any.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The comparisons shown in the graph below are
based upon historical data and the Company cautions that the
stock price performance shown in the graph below is not
indicative of, nor intended to forecast, the potential future
performance of the Company&#146;s Common Stock. Information used
in the graph was obtained from a source believed to be reliable,
but the Company is not responsible for any errors or omissions
in such information.
</FONT>

<P align="center">
<B><FONT size="2">COMPARISON OF 25 MONTH CUMULATIVE TOTAL
RETURN*</FONT></B>

<DIV align="center">
<B><FONT size="2">AMONG IMMERSION CORPORATION,</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">THE NASDAQ STOCK MARKET-U.S. INDEX</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">AND THE JP MORGAN H&#38;Q TECHNOLOGY
INDEX</FONT></B>
</DIV>

<P align="center">
<IMG src="f79568def7956801.gif" alt="(PERFORMANCE GRAPH)">

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="27%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="41"></TD>
</TR>

<TR>
	<TD colspan="41" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">&nbsp;</FONT></B><FONT size="1">Cumulative Total Return</FONT></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">11/12/99</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">12/99</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">3/00</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">6/00</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">9/00</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">12/00</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">3/01</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">6/01</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">9/01</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">12/01</FONT></B></TD>
</TR>

<TR>
	<TD colspan="41"></TD>
</TR>

<TR>
	<TD colspan="41" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">&nbsp;IMMERSION CORPORATION
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">206.04</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">322.15</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">161.07</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">83.22</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">40.35</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">30.54</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">37.58</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16.64</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">36.18</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">&nbsp;NASDAQ STOCK MARKET-U.S. INDEX
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">126.13</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">141.60</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">123.12</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">113.30</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">75.87</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">56.63</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">66.75</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">46.31</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">60.20</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">&nbsp;JP MORGAN H&#38;Q TECHNOLOGY INDEX
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">129.28</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">145.84</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">130.99</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">128.61</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">83.58</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">58.44</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">65.15</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">42.67</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">57.77</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="2%"></TD>
	<TD width="98%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">*&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">$100 invested on 11/12/99 in stock or
	index&nbsp;&#151; including reinvestment of dividends. Fiscal
	year ending December&nbsp;31.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company effected its initial public offering
on November&nbsp;11, 1999 at a per share price of $12.00. The
graph above, however, commences with the closing price of
$18.625 per share on November&nbsp;12, 1999; the date the
Company&#146;s Common Stock commenced public trading.
</FONT>

<P align="center"><FONT size="2">16
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Notwithstanding anything to the contrary set
forth in any of the Company&#146;s previous or future filings
under the Securities Act of 1933, as amended, or the Securities
exchange Act of 1934, as amended, that might incorporate this
Proxy Statement or future filings made by the Company under
those statutes, the Audit Committee Report, the Compensation
Committee Report and Stock Performance Graph are not deemed
filed with the Securities and Exchange Commission and shall not
be deemed incorporated by reference into any of those prior
filings or into any future filings made by the Company under
those statutes.
</FONT>

<!-- link1 "<FONT size="2">PROPOSAL NO. 2 RATIFICATION OF INDEPENDENT ACCOUNTANTS</FONT>" -->
<DIV align="left"><A NAME="012"></A></DIV>

<P align="center">
<B><FONT size="2">PROPOSAL NO. 2</FONT></B>

<P align="center">
<B><FONT size="2">RATIFICATION OF INDEPENDENT
ACCOUNTANTS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company is asking the stockholders to ratify
the appointment of Deloitte&nbsp;&#38; Touche LLP as the
Company&#146;s independent accountants for the fiscal year
ending December&nbsp;31, 2002. In the event the stockholders
fail to ratify the appointment, the Board of Directors will
reconsider its selection. Even if the appointment is ratified,
the Board of Directors, in its discretion, may direct the
appointment of a different independent accounting firm at any
time during the year if the Board of Directors feels that such a
change would be in the Company&#146;s and its stockholders&#146;
best interests. Deloitte&nbsp;&#38; Touche LLP has audited the
Company&#146;s financial statements since 1997. Representatives
of Deloitte&nbsp;&#38; Touche LLP are expected to be present at
the Annual Meeting, will have the opportunity to make a
statement if they desire to do so, and will be available to
respond to appropriate questions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Audit Committee considered whether the
non-audit services rendered by Deloitte&nbsp;&#38; Touche LLP
were compatible with maintaining Deloitte&nbsp;&#38; Touche
LLP&#146;s independence as auditor of the Company&#146;s
financial statements.
</FONT>

<P align="center">
<B><FONT size="2">THE BOARD OF DIRECTORS HAS UNANIMOUSLY
APPROVED AND RECOMMENDS THAT STOCKHOLDERS VOTE &#147;FOR&#148;
PROPOSAL 2.</FONT></B>

<!-- link1 "<FONT size="2">SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE</FONT>" -->
<DIV align="left"><A NAME="013"></A></DIV>

<P align="center">
<B><FONT size="2">SECTION&nbsp;16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The members of the Board of Directors, the
executive officers of the Company and persons who hold more than
10% of the Company&#146;s outstanding Common Stock are subject
to the reporting requirements of Section&nbsp;16(a) of the
Securities Exchange Act of 1934, as amended, which require them
to file reports with respect to their ownership of the
Company&#146;s Common Stock and their transactions in such
Common Stock. Based upon (i)&nbsp;the copies of
Section&nbsp;16(a) reports that the Company received from such
persons for their fiscal year 2001 transactions in the Common
Stock and their Common Stock holdings and (ii)&nbsp;the written
representations received from one or more of such persons, the
Company believes that all reporting requirements under
Section&nbsp;16(a) for fiscal year 2001 were met in a timely
manner by its executive officers, Board members and greater than
10% stockholders.
</FONT>

<!-- link1 "<FONT size="2">STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</FONT>" -->
<DIV align="left"><A NAME="014"></A></DIV>

<P align="center">
<B><FONT size="2">STOCK OWNERSHIP OF CERTAIN
BENEFICIAL</FONT></B>

<DIV align="center">
<B><FONT size="2">OWNERS AND MANAGEMENT</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth as of
March&nbsp;14, 2002, certain information with respect to shares
beneficially owned by (i)&nbsp;each person who is known by the
Company to be the beneficial owner of more than 5% of the
Company&#146;s outstanding shares of Common Stock,
(ii)&nbsp;each of the Company&#146;s directors, and the
executive officers named in the Summary Compensation Table and
(iii)&nbsp;all current directors and executive officers as a
group. Beneficial ownership has been determined in accordance
with Rule&nbsp;13d-3 under the Exchange Act. Under this rule,
certain shares may be deemed to be beneficially owned by more
than one person (if, for example, persons share the power to
vote or the power to dispose of the shares). In addition, shares
are deemed to be beneficially owned by a person if the person
has the right to acquire shares (for example, upon exercise of
an option or warrant) within 60&nbsp;days of the date as of
which the information is provided; in computing the percentage
ownership of any person, the amount of shares is deemed to
include the amount of shares beneficially owned by such person
(and only such person) by reason of such acquisition rights. As a
</FONT>

<P align="center"><FONT size="2">17
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">result, the percentage of outstanding shares of
any person as shown in the following table does not necessarily
reflect the person&#146;s actual voting power at any particular
date.
</FONT>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="54%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Subject to</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Amount and</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Options</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Nature of</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Included in</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Beneficial</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Beneficial</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Percent of</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2" align="center" nowrap><B><FONT size="1">Beneficial Owner</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Ownership(1)(2)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Ownership(3)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Class(4)</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Jundt Associates, Inc.(5)</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,532,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">1550 Utica Avenue South, Suite&nbsp;950<BR>
	Minneapolis, Minnesota 55416
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Mazama Capital Management Inc.(6)</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,464,350</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">One SW Columbia, Suite&nbsp;1860<BR>
	Portland, Oregon 97258
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Cybernet Systems Corporation(7)</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,116,110</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">311,502</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">727 Airport Boulevard<BR>
	Ann Arbor, Michigan 48108-1639
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Executive Officer and Directors</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Robert O&#146;Malley
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">208,999</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">195,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">J. Stuart Mitchell
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">293,106</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">286,939</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Louis Rosenberg(8)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,876,874</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">635,734</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Victor Viegas
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">405,885</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">400,518</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Rodney Hilton
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">123,237</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">85,672</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Steven Blank
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">162,929</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">67,195</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Jonathan Rubinstein
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">68,731</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">56,661</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">All executive officers and directors as a group
	(9&nbsp;persons)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,139,761</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,727,719</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="5%"></TD>
	<TD width="95%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">&nbsp; *</FONT></TD>
	<TD align="left">
	<FONT size="2">Less than 1% of the outstanding shares of Common
	Stock.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Except as indicated in the footnotes to this
	table and pursuant to applicable community property laws, the
	persons named in the table have sole voting and investment power
	with respect to all shares of Common Stock. To the
	Company&#146;s knowledge, the entities named in the table have
	sole voting and investment power with respect to all shares of
	Common Stock shown as beneficially owned by them. Except as
	otherwise indicated, the address of each of the persons in this
	table is as follows: c/o Immersion Corporation, 801&nbsp;Fox
	Lane, San Jose, California 95131.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(2)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">The number of shares of Common Stock deemed
	outstanding includes shares issuable pursuant to stock options
	that may be exercised within 60&nbsp;days after March&nbsp;14,
	2002 held by the person whose percentage of outstanding stock is
	calculated.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(3)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Only shares subject to option and exercisable
	within 60&nbsp;days are included for purposes of determining
	beneficial ownership.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(4)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Based on 19,800,124 shares of Common Stock deemed
	outstanding as of March&nbsp;14, 2002.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(5)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Based solely on information reported on
	Schedule&nbsp;13G filed by Jundt Associates, Inc. with the
	Securities and Exchange Commission on January&nbsp;29, 2002.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(6)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Based solely on information reported on
	Schedule&nbsp;13G filed by Mazama Capital Management Inc. with
	the Securities and Exchange Commission on December&nbsp;6, 2001.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(7)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Based solely on information reported on
	Schedule&nbsp;13G filed by Cybernet Systems Corporation with the
	Securities and Exchange Commission on February&nbsp;18, 2002.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(8)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Represents shares of the Company&#146;s Common
	Stock beneficially owned by Dr.&nbsp;Rosenberg as of
	April&nbsp;10, 2002, as reported to the Company by
	Dr.&nbsp;Rosenberg. Includes 6,600 shares held of record by
	Mr.&nbsp;Rosenberg&#146;s wife and trust for minor child and
	750,000 shares held of record by the Rosenberg Revocable Trust,
	a family trust in which Dr.&nbsp;Rosenberg is the trustee.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">18
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "<FONT size="2">STOCKHOLDER PROPOSALS FOR 2003 ANNUAL MEETING</FONT>" -->
<DIV align="left"><A NAME="015"></A></DIV>

<P align="center">
<B><FONT size="2">STOCKHOLDER PROPOSALS FOR 2003 ANNUAL
MEETING</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Stockholders who intend to have a proposal
considered for inclusion in the Company&#146;s proxy materials
for presentation at the 2003 Annual Meeting of Stockholders or
who intend to present a proposal without inclusion of such
proposal in the Company&#146;s proxy materials must submit the
proposal to the Company no later than December&nbsp;31, 2002.
The Company reserves the right to reject, rule out of order, or
take other appropriate action with respect to any proposal that
does not comply with these and other applicable requirements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">It is important that your stock be represented at
the meeting, regardless of the number of shares that you hold.
You are, therefore, urged to execute and return, at your
earliest convenience, the accompanying Proxy Card in the
enclosed envelope.
</FONT>

<!-- link1 "<FONT size="2">OTHER MATTERS</FONT>" -->
<DIV align="left"><A NAME="016"></A></DIV>

<P align="center">
<B><FONT size="2">OTHER MATTERS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Board knows of no other matters to be
presented for stockholder action at the Annual Meeting. However,
if other matters do properly come before the Annual Meeting or
any adjournments or postponements thereof, the Board intends
that the persons named in the proxies will vote upon such
matters in accordance with their best judgment.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="40%"></TD>
	<TD width="60%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">BY ORDER OF THE BOARD OF DIRECTORS,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">ROBERT O&#146;MALLEY
	</FONT></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<I><FONT size="2">Chairman and Chief Executive Officer</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">San Jose, California
</FONT>

<DIV align="left">
<FONT size="2">April&nbsp;26, 2002
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL
MEETING, PLEASE COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE
ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE. YOU
MAY REVOKE YOUR PROXY AT ANY TIME PRIOR TO THE ANNUAL MEETING.
IF YOU DECIDE TO ATTEND THE ANNUAL MEETING AND WISH TO CHANGE
YOUR PROXY VOTE, YOU MAY DO SO AUTOMATICALLY BY VOTING IN PERSON
AT THE MEETING.</FONT></B>

<P align="left">
<B><FONT size="2">THANK YOU FOR YOUR ATTENTION TO THIS MATTER.
YOUR PROMPT RESPONSE WILL GREATLY FACILITATE ARRANGEMENTS FOR
THE ANNUAL MEETING.</FONT></B>

<P align="center"><FONT size="2">19
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "<FONT size="2">APPENDIX A</FONT>" -->
<DIV align="left"><A NAME="017"></A></DIV>

<P align="right">
<B><FONT size="2">APPENDIX A</FONT></B>

<P align="center">
<B><FONT size="2">AUDIT COMMITTEE CHARTER</FONT></B>

<DIV align="center">
<B><FONT size="2">Adopted By The Board Of Directors Of</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">IMMERSION CORPORATION</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Membership</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Audit Committee shall be composed of no less
than three &#147;independent&#148; Directors, as selected by the
Board of Directors, each of whom is able to read and understand
fundamental financial statements, including a company&#146;s
balance sheet, income statement, and cash flow statement or will
become able to do so within a reasonable period of time after
his or her appointment to the audit committee, including at
least one member who has past employment experience in finance
or accounting, requisite professional certification in
accounting, or any other comparable experience or background
which results in the individual&#146;s financial sophistication,
including being or having been a chief executive officer, chief
financial officer or other senior officer with financial
oversight responsibilities. Such members will be elected and
serve at the pleasure of the Board. Each member shall be free of
any relationship that, in the opinion of the Board, would
interfere with his/her individual exercise of independent
judgment, and shall meet the director independence requirements
for serving on audit committees as set forth in the corporate
governance standards of the NASDAQ. The Board shall appoint one
member of the Audit Committee as Chairperson. He or she shall be
responsible for leadership of the Committee, including preparing
the agenda, presiding over the meetings, making committee
assignments and reporting to the Board of Directors. The Chief
Financial Officer and Vice President, Controller will help plan
and facilitate the Committee meetings. The Committee shall have
the authority to retain the services of outside counsel,
experts, and other advisors as it deems appropriate to assist in
the full performance of its functions.
</FONT>

<P align="left">
<B><FONT size="2">B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purpose</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The purpose of the Audit Committee of the Board
of Directors established pursuant to this charter will be to
make such examinations as are necessary to monitor the corporate
financial reporting and the internal and external audits of the
Company and its subsidiaries, to provide to the Board of
directors the results of its examinations and recommendations
derived therefrom, to outline to the Board improvements made, or
to be made, in internal accounting controls, to nominate
independent public accountants, and to provide the Board such
additional information and materials as it may deem necessary to
make the Board aware of significant financial matters which
require board attention. The Audit Committee does not itself
prepare financial statements or perform audits, and its members
are not auditors or certifiers of the Company&#146;s financial
statements. This charter shall be reviewed, updated and approved
annually by the Board of Directors.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Committee&#146;s primary purpose, with the
responsibilities and powers set forth in this Charter, is truly
one of oversight. The Company&#146;s management is responsible
for preparing the Company&#146;s financial statements. The
Company&#146;s independent public accountants are responsible
for auditing the Company&#146;s financial statements. The
activities of the Committee are in no way designed to supersede
or alter these traditional responsibilities. The
Committee&#146;s role does not provide any special assurances
about the Company&#146;s financial statements, nor does it
involve a professional evaluation of the quality of the audits
performed by the independent accountants. Nor is it the duty of
the Audit Committee to conduct investigations, to resolve
disagreements, if any, between management and the independent
public independent public accountant or to ensure compliance
with laws and regulations, and legal and ethics conduct programs.
</FONT>

<P align="left">
<B><FONT size="2">C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Meetings</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Committee will meet with the Chairman,
President and CFO of the Company at least quarterly to review
the financial affairs of the Company. The Audit Committee will
meet with the independent public independent public accountant
of the Company prior to and upon the completion of the annual
audit, and at such other times as it deems appropriate, to
review the independent public accountants&#146;s examination and
management report. The Audit Committee meetings may be held in
conjunction with Board meetings, and
</FONT>

<P align="center"><FONT size="2">A-1
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">may precede or follow each Board meeting. The
Committee members, Board Chairman or President of the Company
shall have the power to call special meetings as required.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Functions and Responsibilities of the Audit
Committee</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The primary function of the Committee is to
assist the Board of Directors in fulfilling its financial
oversight responsibilities by reviewing and reporting to the
Board upon (i)&nbsp;the financial reports and other financial
information provided by the Company to any governmental body or
to the public, (ii)&nbsp;the Company&#146;s systems of internal
and external controls regarding finance, accounting, legal
compliance and ethics that management and the Board have
established and (iii)&nbsp;the Company&#146;s auditing,
accounting and financial reporting processes in general.
Consistent with this function, the Committee should encourage
continuous improvement of, and should foster adherence to, the
Company&#146;s financial policies, procedures and practices at
all levels. In carrying out its responsibilities, the policies
and procedures of the Committee should remain flexible, in order
to best react to changing conditions and circumstances. The
Committee should take the appropriate actions to set the overall
corporate &#147;tone&#148; for quality financial reporting,
sound business risk practices, and ethical behavior. The
Committee&#146;s primary duties and responsibilities are to:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Serve as an independent and objective party to
	monitor the Company&#146;s financial reporting process and
	internal control systems.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Review and appraise the audit efforts and
	independence of the Company&#146;s auditors.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Provide an open avenue of communication among the
	independent public accountants, financial and senior management,
	and the Board.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Review compliance with codes of ethics or conduct
	and the procedures to monitor such compliance.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">The Committee will primarily fulfill these
responsibilities, and others as may be prescribed by the Board
from time to time, by carrying out the activities enumerated
below.</FONT></B>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">&nbsp;1.&nbsp;The Committee shall recommend to
	the Board of Directors, and evaluate, the firm of independent
	certified public accountants to be appointed as auditors of the
	Company. The Committee shall have a clear understanding with
	management and the independent public accountants that the
	independent public accountants are ultimately accountable to the
	Board of Directors and the Audit Committee, as representatives
	of the Company&#146;s stockholders.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">&nbsp;2.&nbsp;The Committee shall have the
	ultimate authority and responsibility to evaluate and, where
	appropriate, replace the independent public accountants. The
	Committee shall review and discuss with the independent public
	accountants the overall scope and procedures for their audits,
	including the adequacy of their staffing and compensation.
	Annually, the Committee shall review and recommend to the Board
	of Directors the selection of the Company&#146;s independent
	public accountants, subject to the approval of the
	Company&#146;s stockholders, and whether it is appropriate to
	adopt a policy of rotating independent public accountants on a
	regular basis.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">&nbsp;3.&nbsp;The Committee shall discuss with
	management and the independent public accountants the adequacy
	and effectiveness of the accounting and financial controls,
	including the Company&#146;s system to monitor and manage
	business risk, and legal and ethics compliance programs. The
	Committee shall meet separately with the independent public
	accountants, with and without management present, to discuss the
	results of the auditors&#146; examinations, including the
	Company&#146;s internal controls and the fullness and accuracy
	of the Company&#146;s financial statements.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">&nbsp;4.&nbsp;The Committee shall discuss the
	auditors&#146; independence from management and the Company with
	the auditors. The Committee shall obtain from the independent
	public accountants a formal written statement delineating all
	relationships between the auditor and the Company. The Committee
	shall discuss with the independent public accountants any
	disclosed relationships or services that may impact the
	auditor&#146;s objectivity and independence.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">&nbsp;5.&nbsp;The Committee shall approve the
	retention of the independent public accountants for any
	non-audit services and the fees for such services.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">A-2
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">&nbsp;6.&nbsp;The Committee shall review and
	discuss with management and the independent public accountants
	(i)&nbsp;any material financial or non-financial arrangements of
	the Company which do not appear on the financial statements
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">of the Company, and (ii)&nbsp;any transactions or
courses of dealing with parties related to the Company which are
significant in size or involve terms or other aspects that
differ from those that would likely be negotiated with
independent parties, and which arrangements or transactions are
relevant to an understanding of the Company&#146;s financial
statements.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">&nbsp;7.&nbsp;The Committee shall review and
	discuss with management and the outside auditors the accounting
	policies which may be viewed as critical, and review and discuss
	any significant changes in accounting policies of the Company
	and accounting and financial reporting proposals that may have a
	significant impact on the Company&#146;s financial reports.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">&nbsp;8.&nbsp;The Committee shall discuss with a
	representative of management and the independent public
	accountants: (a)&nbsp;the interim financial information
	contained in the Company&#146;s quarterly report on
	Form&nbsp;10-Q prior to its filing, (b)&nbsp;the earnings
	announcement prior to its release (if practicable), and
	(c)&nbsp;the results of the review of such information by the
	auditors. These discussions may be held with the Committee as a
	whole or with the Committee chair in person or by telephone.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">&nbsp;9.&nbsp;The Committee shall review with
	management and the independent public accountants the financial
	statements to be included in the Company&#146;s Annual Report on
	Form&nbsp;10-K (or the annual report to shareholders if
	distributed prior to the filing of Form 10-K), including their
	judgment about the quality, not just acceptability, of
	accounting principles, the reasonableness of significant
	judgments, and the clarity of the disclosures in the financial
	statements. Also, the Committee shall discuss the results of the
	annual audit and any other matters required to be communicated
	to the Committee by the independent public accountants under
	generally accepted auditing standards.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">10.&nbsp;The Committee shall prepare the report
	required by the rules of the Securities and Exchange Commission
	to be included in the Company&#146;s annual proxy statement.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">11.&nbsp;The Committee shall discuss with the
	Company&#146;s General Counsel any significant legal matters
	that may have a material effect on the financial statements and
	the Company&#146;s compliance policies, including material
	notices to or inquiries received from governmental agencies.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">12.&nbsp;The Committee shall review alleged
	fraudulent actions or violations of law reported by internal
	compliance programs or, under the terms of the Private
	Securities Litigation Reform Act of 1995, by independent public
	accountants. The Committee shall review management&#146;s
	conflict of interest&#146; transactions.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">A-3
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P><FONT size="2">THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF IMMERSION
CORPORATION IN CONJUNCTION WITH THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD
ON JUNE 4, 2002
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned stockholder of IMMERSION CORPORATION, a Delaware
corporation (the &#147;Company&#148;), hereby acknowledges receipt of the Notice of
Annual Meeting of Stockholders and Proxy Statement, each dated April, 26 2002,
and hereby appoints Robert O&#146;Malley and Victor Viegas, or either of them,
proxies and attorneys-in-fact, with full power to each of substitution, on
behalf and in the name of the undersigned, to represent the undersigned at the
Annual Meeting of Stockholders of IMMERSION CORPORATION to be held on Tuesday,
June&nbsp;4, 2002, at 9:30 a.m., local time, at the Silicon Valley Convention
Center, 2161 North First Street, San Jose, California 95131, and for any
adjournment or adjournments thereof, and to vote all shares of Common Stock
which the undersigned would be entitled to vote if then and there personally
present, on the matters set forth below. Under Delaware law and the Company&#146;s
By-laws, no business shall be transacted at an annual meeting other than the
matters stated in the accompanying Notice of Meeting, which matters are set
forth below. However, should any other matter or matters properly come before
the Annual Meeting, or any adjournment or adjournments thereof, it is the
intention of the proxy holders named above to vote the shares they represent
upon such other matter or matters in their discretion.
</FONT>
<P><FONT size="2">THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS INDICATED,
WILL BE VOTED FOR APPROVAL OF THE PROPOSALS TO ELECT TWO DIRECTORS AND FOR
PROPOSAL 2 AND IN THE DISCRETION OF THE PROXIES UPON SUCH OTHER MATTERS AS MAY
PROPERLY COME BEFORE THE MEETING.
</FONT>
<P><FONT size="2">CONTINUED AND TO BE SIGNED ON REVERSE SIDE
</FONT>
<P align="center"><FONT size="2">&nbsp;
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P><FONT size="2">THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
</FONT>
<P><FONT size="2">THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
   <TD width="1%" nowrap><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD width="1%" align="right" nowrap><FONT size="2">1.</FONT></TD>
        <TD width="1%" nowrap><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
        <TD width="97%"><FONT size="2">Proposal to elect as directors John Hodgman and Robert O&#146;Malley to
serve for a three-year term as Class&nbsp;III directors.</FONT></TD>
</TR>
</TABLE>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
        <TD width="67%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="28%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD nowrap align="center"><FONT size="2">For All Nominees</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="center"><FONT size="2">Withhold From All Nominees</FONT></TD>
</TR>
<TR valign="bottom">
        <TD nowrap align="center">&nbsp;</TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD align="center" valign="top"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><IMG src="f79568debox.gif" alt="box"></FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" valign="top"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
<IMG src="f79568debox.gif" alt="box"></FONT></DIV></TD>
</TR>
</TABLE>
</CENTER>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
   <TD width="1%" nowrap><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD width="1%" align="right" nowrap><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" nowrap><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
        <TD width="97%"><FONT size="2"><IMG src="f79568debox.gif" alt="box">_______________________________<BR>
For all nominees except as noted above</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
   <TD width="1%" nowrap><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD width="1%" align="right" nowrap><FONT size="2">2.</FONT></TD>
        <TD width="1%" nowrap><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
        <TD width="97%"><FONT size="2">Proposal to ratify the appointment of Deloitte &#038; Touche LLP as the
Company&#146;s independent public accountants for the year ending December
31, 2002.</FONT></TD>
</TR>
</TABLE>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="95%">
<TR valign="bottom">
        <TD width="34%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="28%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="28%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD nowrap align="center"><FONT size="2">For</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="center"><FONT size="2">Against</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="center"><FONT size="2">Abstain</FONT></TD>
</TR>
<TR valign="bottom">
        <TD align="center" valign="top"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><IMG src="f79568debox.gif" alt="box"></FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" valign="top"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
<IMG src="f79568debox.gif" alt="box">
</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" valign="top"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><IMG src="f79568debox.gif" alt="box"></FONT></DIV></TD>
</TR>
</TABLE>
</CENTER>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
   <TD width="1%" nowrap><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD width="1%" align="right" nowrap><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" nowrap><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
        <TD width="97%"><FONT size="2">(This Proxy should be marked, dated and signed by the stockholder(s)
exactly as his or her name appears hereon, and returned promptly in the
enclosed envelope. Persons signing in a fiduciary capacity should so indicate.
If shares are held by joint tenants or as community property, all such
stockholders should sign.)</FONT></TD>
</TR>
</TABLE>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
        <TD width="8%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="87%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Signature(s):<BR><BR><HR size="1" width="25%" noshade><BR>
<HR size="1" width="25%" noshade></FONT></TD>
</TR>

<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Dated:__________________________, 2002<BR>
(Be sure to date Proxy.)</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Please mark, sign, date and return the proxy card promptly, using the
enclosed return-addressed and postage-paid envelope.
</FONT>

<P align="center"><FONT size="2">&nbsp;</FONT>


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