Veritone, Inc. Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed by Veritone, Inc. on June 17, 2020, reporting events occurring on June 15, 2020. The filing discloses the entry into new employment agreements with the Company's Chief Executive Officer, Chad Steelberg, and President, Ryan Steelberg, replacing prior agreements established in 2017.
Key Financial Metrics
This filing does not contain financial performance data such as revenue, profit, cash flow, margins, debt, or liquidity. The document focuses exclusively on executive compensation arrangements.
Material Changes and Compensation Details
The new Employment Agreements establish the following compensation terms for the initial term expiring December 31, 2022, with automatic one-year renewals:
- Base Salary: Chad Steelberg at $500,000 annually; Ryan Steelberg at $375,000 annually. Salaries are subject to an annual increase of no less than 5%.
- Salary Deferral: Officers may elect to receive up to 25% of their base salary in fully vested stock awards per quarter.
- Incentive Bonuses:
- Chad Steelberg: Target of at least 120% of base salary. Guaranteed minimum of 50% of base salary annually regardless of performance.
- Ryan Steelberg: Target of at least 100% of base salary. Guaranteed minimum of 25% of base salary annually regardless of performance.
- Structure: 50% tied to annual goals, 50% tied to quarterly goals.
- Equity Awards (Initial):
- Chad Steelberg: 350,000 Restricted Stock Units (RSUs) vesting in full on June 15, 2021.
- Ryan Steelberg: 140,000 RSUs vesting in full on June 15, 2021.
- Equity Awards (Annual Commencing 2021):
- Chad Steelberg: 175,000 RSUs plus RSUs valued at $150,000.
- Ryan Steelberg: 125,000 RSUs plus RSUs valued at $75,000.
- Vesting: Full vesting on the first anniversary of the grant date.
- Benefits: Quarterly commuting allowances ($25,000 for CEO; $12,500 for President), separate healthcare policies, and legal fee reimbursement up to $50,000.
Termination and Change in Control Provisions
The agreements are at-will but include significant severance protections for "Good Leaver Terminations" (termination without cause, death, disability, or resignation for good reason):
- Standard Severance: 50% acceleration of unvested equity (excluding 2018 Plan performance options), prorated annual bonus, and a lump sum or salary continuation equal to 1.5x (Base Salary + Target Bonus) paid over 36 months.
- Change in Control Severance: If termination occurs within 6 months prior to or 12 months following a change in control, the severance multiplier increases to 3.5x (Base Salary + Target Bonus), payable in a lump sum.
Investor Verification Checklist
- Review the full text of Exhibits 10.1 and 10.2 for specific definitions of "Cause," "Good Reason," and "Change in Control."
- Verify the impact of the guaranteed minimum bonuses on the Company's future operating expenses.
- Assess the dilution impact of the initial and annual RSU grants on existing shareholders.
- Confirm the Company's cash position to support the potential 3.5x severance payout in the event of a change in control.