The personal embarrassment that one feels on account of and for another (i.e. a friend, a family member or a complete stranger) who is making a fool of him or herself. A person experiencing secondhand embarrassment feels as if they are doing the embarrassing action themselves, effectively putting themselves in the other person's shoes.
Guy 1: Man, Sarah's presentation today was terrible. She forgot half of it and stumbled through the rest.
Guy 2: Oh I know. I had so much secondhand embarrassment for her. It was like watching a train wreck.