DEF 14A of Veritone, Inc.
Filed Apr 23, 2025 · FY20240001140361-25-015213
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS
BOARD OF DIRECTORS
BOARD OF DIRECTORS Our Board of Directors is currently fixed at six directors. On March 12, 2025, Chad Steelberg resigned as a member of the Board, and on March 12, 2025, the Board appointed Francisco Morales as a member of the Board, effective as of March 20, 2025. Our Certificate of Incorporation and Amended and Restated Bylaws (“Bylaws”) provide for a staggered, or classified, Board consisting of three classes of directors, each serving a staggered three-year term and with one class being elected at each year’s annual meeting of stockholders as follows:
BOARD OF DIRECTORS
| • | the Class II directors are Mr. Knute P. Kurtz and Mr. Michael Zilis, and their terms will expire at the Annual Meeting. |
BOARD OF DIRECTORS
| • | the Class III directors are Mr. Francisco Morales and Mr. Ryan Steelberg, and their terms will expire at the annual meeting of stockholders to be held in 2026. |
BOARD OF DIRECTORS
| • | the Class I directors are Mr. Richard H. Taketa and Mr. Michael Keithley, and their terms will expire at the annual meeting of stockholders to be held in 2027. |
BOARD OF DIRECTORS
Upon the expiration of the term of a class of directors, directors for that class may be elected for a new three-year term at the annual meeting of stockholders in the year in which their term expires. Each director’s term is subject to the election and qualification of his or her successor, or his or her earlier death, resignation or removal. Subject to any rights applicable to any then outstanding preferred stock, any vacancies on our Board may be filled only by the affirmative vote of a majority of the directors then in office. The Corporate Governance and Nominating Committee of the Board is responsible for reviewing and recommending to the Board from time to time the criteria for Board membership including independence, character, judgment, diversity, age, expertise and corporate experience, as well as identifying, evaluating and recommending prospective director nominees for election to the Board. The Corporate Governance and Nominating Committee will review and consider any candidates recommended by stockholders in accordance with the bylaws of the Company. In considering candidates for nomination or appointment to the Board, the Board considers such factors as whether the director candidate has relevant expertise upon which to be able to offer advice and guidance to management, has sufficient time to devote to the affairs of the Company, has demonstrated excellence in his or her field, has the ability to exercise sound business judgment and has the commitment to rigorously represent the long-term interests of the Company’s stockholders. Candidates for director nominees are reviewed in the context of the current composition of the Board, the operating requirements of the Company and the long-term interests of stockholders. In conducting its assessment, the Board considers diversity, age, skills, and such other factors as it deems appropriate given the current needs of the Board and the Company to maintain a balance of knowledge, experiences, background and capability. Although we do not have a formal diversity policy, we believe it is important to have a diversity of skills, experience, backgrounds and perspectives for the optimal functionality of the Board. In the case of incumbent directors whose terms of office are set to expire, the Board reviews such directors’ overall service to the Company during their term, including the number of meetings attended, level of participation, quality of performance, and any other relationships and transactions that might impair such directors’ independence. All of our directors bring to the Board a wealth of executive leadership experience. In addition, of our current six Board members, one member identifies as part of an under-represented community. Below we identify and describe the key experience, qualifications, and skills our directors bring to the Board that are important in light of our businesses and structure. The directors’ experiences, qualifications, and skills that the Board considers in their nominations are included in their individual biographies.
Director Nominees
Director Nominees Based upon the recommendation of our Corporate Governance and Nominating Committee, our Board has nominated the individuals set forth below to stand for re-election to serve as Class II directors until our annual meeting of stockholders in 2028 and until their respective successors are duly elected and qualified, or until their earlier death, resignation or removal. Each nominee is currently serving on our Board. The following sets forth certain information about our director-nominees as of April 16, 2025:
Director Nominees
| Name | Principal Occupation | Age | Director Since | | Knute P. Kurtz | Independent Investor | 69 | 2017 | | Michael Zilis | Chief Financial Officer, Ingram Micro, Inc. | 55 | 2023 |
Director Nominees
Knute P. Kurtz has served as our director since June 2017. Until his retirement in June 2016, Mr. Kurtz was the Managing Partner of the Orange County office of PricewaterhouseCoopers LLP (“PwC”). During his ten years in that role, Mr. Kurtz was responsible for leading all important market facing activities on behalf of PwC and overseeing the delivery of assurance, financial/tax and advisory services to public and private clients in the market. He was a member of PwC’s senior leadership for the Southern California, Phoenix and Las Vegas cluster of offices and also served as the Market Leader for PwC’s Private Company Services practice in that region. Prior to his role in the Southern California market, Mr. Kurtz served in various other leadership positions with PwC over a career that spanned 38 years and six offices throughout the United States. His professional experience includes serving as the lead advisor and audit partner to public and private clients in a number of different industry sectors and companies as diverse as Fortune 500 companies to high tech start-up entities. In addition to financial/audit services, he has extensive experience in capital market transactions including initial public offerings, mergers and acquisitions and debt offerings. His client work has also included advising audit committees and senior management on matters pertaining to corporate governance, risk assessments, internal controls and strategic initiatives. Mr. Kurtz holds a Bachelor of Science from Nicholls State University. We believe that Mr. Kurtz is qualified to serve on our Board based on his extensive experience and knowledge in accounting and auditing matters involving publicly traded technology companies, which provide our Board with valuable insight in their oversight of our company in these areas. Michael Zilis has served as our director since December 2023. Mr. Zilis has served as Executive Vice President and Chief Financial Officer of Ingram Micro Holding Corporation (“Ingram Micro”) since January 2020. He joined Ingram Micro in 2006 as Senior Vice President and Corporate Controller, heading the company’s financial planning and analysis, external and internal financial reporting, long-term strategic planning, financial due diligence and merger and acquisition work. In addition, between 2012 and 2020, Mr. Zilis held a variety of roles at Ingram Micro, including EVP and President of Asia Pacific, most recently from 2017 to 2020, and prior to that, Emerging Markets and Latin American regional operations. Prior to Ingram Micro, Mr. Zilis was Vice President and Corporate Controller for Avnet, Inc., where he was instrumental in leading the company’s cost-saving initiatives and efforts to streamline and add efficiency to ongoing processes. Mr. Zilis began his career with 10 years in the commercial audit practice of Arthur Andersen LLP. He is a licensed Certified Public Accountant (inactive) and received his Bachelor of Science degree in Finance and Accounting from Boston College. We believe that Mr. Zilis is qualified to serve on our Board based on his financial expertise and service as the chief financial officer of a large publicly-traded multinational technology company. Unless otherwise instructed, each proxy received by us will be voted in favor of the election of the nominees named above as directors. The nominees have consented to being named in this Proxy Statement and to serve as directors if elected. If any nominee should become unable or unwilling to serve, it is the intention of the persons designated as proxies to vote instead, in their discretion, for any such other person as may be designated as a nominee by our Board.
Continuing Directors
Continuing Directors The individuals set forth below will continue to serve as directors on our Board. The following sets forth certain information about each director as of April 16, 2025:
Continuing Directors
| Name | Principal Occupation | Age | Class | Term Expires | Director Since | | Ryan Steelberg | President and Chief Executive Officer and Chairman of the Board, Veritone, Inc. | 51 | III | 2026 | 2014 | | Francisco Morales | Co-Founder and Executive Chairman, 5.11 Tactical | 51 | III | 2026 | 2025 | | Michael Keithley | Former Chief Information Officer, United Talent Agency | 62 | I | 2027 | 2024 | | Richard H. Taketa | President, Taketa Capital Corporation | 53 | I | 2027 | 2019 |
Continuing Directors
Ryan Steelberg is a co-founder of our company and has served as our Chief Executive Officer since January 2023. Mr. Steelberg has also served as a director since our inception in June 2014, and he was appointed as Chairman of our Board in January 2024. From March 2017 to December 2022, Mr. Steelberg served as our President. From October 2007 to June 2014, he served as the President and Chief Executive Officer of Brand Affinity Technologies, Inc. and as a member of the Board of Directors. Prior to that, Mr. Steelberg served as the Head of the Radio Division of Google Inc. from February 2006 to February 2007. From September 2002 to February 2007, he was the co-founder and President of dMarc Broadcasting, an advertising company that was acquired by Google Inc. in 2006. Mr. Steelberg holds a Bachelor of Science degree in Biology from the University of California, Los Angeles. We believe that Mr. Steelberg is qualified to serve on our Board because of his extensive experience in the business development, marketing and management of enterprises in the media and digital technology industries. In addition, Mr. Steelberg’s intimate knowledge of our operations, products and technology solutions provides our Board with an in-depth understanding of our company. Francisco Morales is the Co-Founder and Executive Chairman of 5.11 Tactical. He previously served as its Chief Executive Officer of 5.11 Tactical from September 2018 to January 2024, when he transitioned to serving as Executive Chairman. Founded in 2003, 5.11 Tactical is widely recognized as a global market leader in tactical apparel, footwear, and gear for law enforcement, military, and first responders, serving thousands of agencies and institutions worldwide. Mr. Morales holds a B.S. in Fashion Apparel Management, Business and Textiles from Philadelphia University and an M.B.A. from the Thunderbird School of Global Management. We believe that Mr. Morales is qualified to serve on our Board because of his experience with law enforcement, first responder and military customer relationships, and his expertise in operations and marketing. Michael Keithley has served as our director since June 2024. From March 2017 until April 2024, Mr. Keithley served as the Chief Information Officer at United Talent Agency. In this capacity, he was responsible for all aspects of United Talent Agency’s technology platform and advised clients and companies on emerging digital business models, distribution platforms and other technology-related issues. In addition to managing United Talent Agency’s Information Technology department, Mr. Keithley provided United Talent Agency’s clients with corporate consulting, marketing, venture funding and strategic advisory services to companies ranging from start-ups to Fortune 500 companies. Prior to his role at United Talent Agency, Mr. Keithley was the Chief Information Officer and Chief Technology Officer at Creative Artists Agency from 1991 to 2016, where he made significant contributions to the agency’s technological advancement and digital strategy. Mr. Keithley currently serves on the board of directors of Bfilter Inc., and on numerous startup and venture capital advisory boards. Michael holds a B.S. in Business Information Systems from Arizona State University. We believe that Mr. Keithley is qualified to serve on our Board based on his blend of strategic vision, technological expertise, and leadership experience, all of which make him an invaluable asset to our Board. Richard H. Taketa has served as our director since May 2019. Since September 2018, Mr. Taketa has been President of Taketa Capital Corporation, a private equity investment and consulting company. Previously, he served as President and Chief Executive Officer of York Risk Services, Inc. (“York”), a leading provider of technology-enabled, integrated insurance services to the property and casualty insurance industry, from January 2014 to September 2018, and served as Chairman of York’s board of directors from October 2014 to July 2017. Prior to becoming York’s Chief Executive Officer, Mr. Taketa served in a variety of capacities including as the President of Commercial Business, Chief Operating Officer and Chief Strategy Officer. Mr. Taketa joined York in 2006 upon its acquisition of Southern California Risk Management Associates, a regional provider of third-party administration services to insurance companies, where he had served as Chief Executive Officer since 2004. Prior to that, he was a co-founder and managing director of Eventide Capital, a small private equity firm, after working as a corporate securities lawyer with DLA, a global law firm and in various public policy roles with non-governmental organizations in Washington, D.C. Mr. Taketa has served on the board of directors of Palomar Holdings, Inc., a publicly traded provider of property catastrophe insurance, since 2019, and has served on the board of Farmers and Merchants Bank of Long Beach since May 2024. He has also served on the boards of directors of several privately held companies and charitable organizations. He was named an Ernst & Young’s Entrepreneur of the Year in 2017 for the State of New Jersey. He has been a recurring guest lecturer at the Stanford Graduate School of Business and is a member of the California Bar Association, inactive status. Mr. Taketa holds a Bachelor of Arts degree from Colgate University and a law degree from Stanford Law School. We believe that Mr. Taketa is qualified to serve on our Board based on his extensive experience in financing, developing and managing high-growth, technology-enabled companies, as well as his experience in the insurance and healthcare industries, corporate law and governance, mergers and acquisitions, public policy, and operating in regulated markets.
Vote Required for Election of Directors
Vote Required for Election of Directors Directors are elected if they received a plurality of the votes cast on the election of directors at the Annual Meeting. Accordingly, the two nominees receiving the largest number of “For” votes will be elected. Broker non-votes and withhold votes will have no effect on the election of directors. EACH OF THE TWO DIRECTOR NOMINEES.
2023 Employment Agreements
2023 Employment Agreements As noted above, in January 2023, we entered into new employment agreements with Ryan Steelberg and Michael Zemetra, which superseded and replaced the employment agreements previously entered into with such officers in 2020. These new employment agreements are intended to ensure that our executive compensation program is designed to pay for performance. Our Compensation Committee believes it is important to structure a significant portion of our named executive officers’ compensation so that it is aligned with the Company’s corporate strategies and business objectives, and it incentivizes our named executive officers to create long-term value for our stockholders without encouraging unnecessary or excessive risk taking. In line with this compensation philosophy, generally, a substantial majority of each named executive officer’s annual compensation opportunity is not fixed but consists of performance-based compensation (annual bonus opportunity and equity awards with performance-based vesting requirements) and/or compensation tied to long-term vesting requirements with a value dependent on our stock price (all equity awards). Ryan Steelberg. Pursuant to Mr. Steelberg’s 2023 employment agreement, his annual base salary was set initially at $525,000. Mr. Steelberg voluntarily reduced his salary to $1 in May 2023, and such reduction remained in effect until February 2025. On February 10, 2025, the Compensation Committee of our Board approved an increase in the annual base salary of Mr. Steelberg to $665,000, which the Compensation Committee believed returned his base salary to an amount more reflective of market levels. The base salary increase became effective as of January 1, 2025. Mr. Steelberg is also eligible to receive discretionary annual incentives under our cash incentive program, with a target of not less than one hundred percent (100%) of his annual base salary, up to a maximum amount determined in accordance with the terms of our annual bonus plan, or such amount in excess of target as may be determined by our Compensation Committee, based on the achievement of performance goals determined by our Compensation Committee. Pursuant to his 2023 employment agreement, on January 19, 2023, Mr. Steelberg was granted a time-based restricted stock unit (“RSU”) award representing the right to receive 158,025 shares of our common stock and a performance-based RSU award representing the right to receive 148,176 shares of our common stock. The number of shares for each award was determined by dividing $1,000,000 by the 90-day average closing price of our common stock prior to the date of grant. The time-based RSU award vests in equal installments on the first three anniversaries of the effective date of Mr. Steelberg’s employment agreement, subject to his continuous service through the relevant vesting date. The performance-based RSU awards did not vest because the Compensation Committee determined in April 2024 that the performance criteria for such performance-based RSUs had not been met. In April 2024, Mr. Steelberg was granted three time-based RSU awards: (1) a 2023 salary replacement award representing the right to receive 47,076 shares of our common stock vesting monthly over one year beginning on January 1, 2024; (2) a 2024 salary replacement award representing the right to receive 122,399 shares of our common stock vesting monthly over one year beginning on January 1, 2024; and (3) an award pursuant to his 2023 employment agreement representing the right to receive 200,000 shares of our common stock vesting in three equal installments on January 1 of 2025, 2026, and 2027. Additionally in April 2024, Mr. Steelberg was granted a performance-based RSU award representing the right to receive 200,000 shares of our common stock. The performance-based RSU awards did not vest because the Compensation Committee determined in March 2025 that the performance criteria for such performance-based RSUs had not been met. Mr. Steelberg is also entitled to receive: (i) purchase of a separate healthcare policy covering him and his family; (iii) reimbursement of legal fees reasonably incurred in the negotiation of his employment agreement, up to a maximum of $15,000; and (iii) other benefits generally made available to employees under our employee benefit plans. Mr. Steelberg also received a one-time cash bonus in the amount of $400,000 in connection with his promotion to Chief Executive Officer in January 2023. Our employment agreement with Mr. Steelberg is an at-will agreement and may be terminated at any time and for any reason or without reason. However, if Mr. Steelberg terminates his employment as a Good Leaver (as defined in his employment agreement), then he will be entitled to receive cash severance payments and acceleration of the vesting of certain of his equity awards, as discussed under the heading “Payments Upon Termination of Employment or Change in Control” below. Michael Zemetra. Pursuant to Mr. Zemetra’s 2023 employment agreement, his annual base salary was set initially at $400,000. He is also eligible to receive discretionary annual incentives under our cash incentive program, with a target of not less than sixty percent (60%) of his annual base salary, up to a maximum amount determined in accordance with the terms of our annual bonus plan, or such amount in excess of target as may be determined by our Compensation Committee, based on the achievement of performance goals determined by our Compensation Committee. In February 2025, Mr. Zemetra’s annual base salary was increased to $425,000. Pursuant to his 2023 employment agreement, on January 19, 2023, Mr. Zemetra was granted a time-based RSU award representing the right to receive 71,111 shares of our common stock, a second time-based RSU award representing the right to receive 28,396 shares of our common stock; and a performance-based RSU award representing the right to receive 22,226 shares of our common stock. The number of shares for each award was determined by dividing the dollar value of the award ($450,000 for the first time-based RSU and $150,000 for each of the second time-based RSU and the performance-based RSU) by the 90-day average closing price of our common stock prior to the date of grant. In addition, in June 2024, Mr. Zemetra was granted two time-based RSU award representing the right to receive 72,000 and 30,000 shares of our common stock and, in April 2024, a performance-based RSU award representing the right to receive an additional 48,000 shares of our common stock. The time-based RSU awards granted in 2023 vest in equal installments on the first three anniversaries of the effective date of Mr. Zemetra’s employment agreement and the time-based RSU awards granted in 2024 vest in three equal installments on January 1 of 2025, 2026, and 2027, subject to his continuous service through the relevant vesting date. The performance-based RSU awards in 2023 and 2024 did not vest because the Compensation Committee determined in April 2024 and March 2025, respectively, that the performance criteria for such performance-based RSUs had not been met. Mr. Zemetra is also entitled to receive: (i) payment by us of 100% of the costs of healthcare benefits for Mr. Zemetra and his family; (ii) reimbursement of legal fees reasonably incurred in the negotiation of his employment agreement, up to a maximum of $5,000; and (iii) other benefits generally made available to employees under our employee benefit plans.
2023 Employment Agreements
Our employment agreement with Mr. Zemetra is an at-will agreement and may be terminated at any time and for any reason or without reason. However, if Mr. Zemetra terminates his employment as a Good Leaver (as defined in his employment agreement), then he will be entitled to receive cash severance payments and acceleration of the vesting of certain of his equity awards, as discussed under the heading “Payments Upon Termination of Employment or Change in Control” below.
Cash Incentives
Cash Incentives The Compensation Committee has established a cash incentive program for our executive officers to link a significant portion of each executive’s total compensation to the achievement of pre-established quarterly and/or annual financial performance goals. For 2024, the Compensation Committee established target and maximum levels for each financial measure, with the target level corresponding to the level for such measure reflected in our annual operating plan and the maximum level reflecting significant overachievement of the target level. Payouts are prorated on a straight-line basis in the event of achievement between the target and maximum levels for the applicable financial measure. 2024 Annual Bonus. For 2024, the target and maximum incentive amounts for Mr. Steelberg were set at 100% and 200%, respectively, of his annual base salary and the target and maximum incentive amounts for Mr. Zemetra were set at 60% and 120%, respectively, of his annual base salary, in each case pursuant to the terms of the applicable officer’s employment agreement. For the annual performance goals for 2024, the Compensation Committee selected two financial measures, which were equally weighted, and established target levels for such measures equal to the levels for such measures set forth in the annual operating plan approved by our Board for 2024, as follows: (i) reported GAAP revenue of $145.1 million and (ii) non-GAAP net loss prior to any bonus accrual of $14.9 million. The maximum achievement levels for these measures were set at up to a 200% target payout at (i) reported GAAP revenue of $151.7 million and (ii) pre-bonus non-GAAP net income of $5.59 million. For the year ended December 31, 2024, our reported GAAP revenue was $96.2 million (0% payout) and our non-GAAP net loss prior to any bonus accrual for 2024 was $30.7 million (0% payout). As a result, we paid no incentive bonuses under our cash incentive program to our executive officers for 2024. However, we paid cash bonuses of $79,500 each in November 2024 to Mr. Steelberg and Mr. Zemetra in connection with the successful completion of the divestiture of our former wholly-owned subsidiary, Veritone One, Inc. (“Veritone One”). An explanation of non-GAAP net loss and a reconciliation of this non-GAAP measure to our net loss calculated in accordance with GAAP for 2024 is included under the heading “Non-GAAP Financial Measures and Key Performance Indicators” in Part II, Item 7 (Management’s Discussion and Analysis of Financial Condition and Results of Operations) of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
Equity Incentives
Equity Incentives We provide long-term incentive compensation to our executive officers through equity-based awards under our equity incentive plans, such as stock options and RSUs, with time-based and/or performance-based vesting conditions. 2024 Equity Awards On April 8, 2024, the Compensation Committee granted to Ryan Steelberg under the 2023 Equity Incentive Plan (the “2023 Plan”) a time-based award of RSUs representing the right to receive 200,000 shares of our common stock upon vesting. Mr. Steelberg’s award had a grant date fair value of $1,394,000 as computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation—Stock Compensation (“ASC Topic 718”). This award vests in three equal installments on January 1 of 2025, 2026, and 2027, subject to Mr. Steelberg’s continued service to us through each applicable vesting date. Additionally, on April 8, 2024, the Compensation Committee granted to Ryan Steelberg under the 2023 Plan two awards of RSUs representing the right to receive 47,076 and 122,399 shares of our common stock upon vesting. Mr. Steelberg’s awards had a grant date fair value of $328,120 and $853,121, respectively, as computed in accordance with ASC Topic 718. These awards were intended as salary replacement awards due to the fact that Mr. Steelberg’s annual base salary was reduced to $1 in May 2023, and vested in monthly installments over a period of one year beginning on January 1, 2024. On April 8, 2024, the Compensation Committee also granted to Mr. Steelberg under the 2023 Plan an award of performance-based RSUs representing the right to receive 200,000 shares of our common stock upon vesting. These performance-based RSUs became eligible to vest upon the achievement of certain revenue and non-GAAP net income targets in 2024 (the “2024 Milestones”). Mr. Steelberg’s award had a grant date fair value of $1,394,000 as computed in accordance with ASC Topic 718. In March 2024, the Compensation Committee determined that the 2024 Milestones had not been achieved; as a result, these performance-based RSUs were not eligible to vest and were forfeited by Mr. Steelberg. On April 8, 2024, the Compensation Committee granted to Michael Zemetra under the 2023 Plan a time-based award of RSUs representing the right to receive 72,000 shares of our common stock upon vesting. Mr. Zemetra’s award had a grant date fair value of $501,840 as computed in accordance with ASC Topic 718. On June 6, 2024, the Compensation Committee granted to Michael Zemetra under the 2023 Plan a time-based award of RSUs representing the right to receive 30,000 shares of our common stock upon vesting. Mr. Zemetra’s award had a grant date fair value of $75,900 as computed in accordance with ASC Topic 718. Both awards vest in three equal installments on January 1 of 2025, 2026, and 2027, subject to Mr. Zemetra’s continued service to us through each applicable vesting date. On April 8, 2024, the Compensation Committee granted to Mr. Zemetra under the 2023 Plan an award of performance-based RSUs representing the right to receive 48,000 shares of our common stock upon vesting. These performance-based RSUs became eligible to vest upon the achievement of the 2024 Milestones. Mr. Zemetra’s award had a grant date fair value of $334,560 as computed in accordance with ASC Topic 718. In March 2025, the Compensation Committee determined that the 2024 Milestones had not been achieved; as a result, these performance-based RSUs were not eligible to vest and were forfeited by Mr. Zemetra. Inducement Grant Plan Our Inducement Grant Plan (the “Inducement Grant Plan”) was adopted by our Board in October 2020. Under the Inducement Grant Plan, non-statutory stock options, stock appreciation rights, stock awards, RSUs and dividend equivalent rights may be granted as an inducement material for eligible persons to enter into employment with the company in accordance with NASDAQ Marketplace Rule 5635(c)(4) and the related guidance under NASDAQ IM 5635-1, and any amendments or supplements thereto. All stock options granted under the Inducement Grant Plan have exercise prices equal to or greater than the fair market value of our common stock on the grant date, and expire 10 years after the grant date, subject to earlier expiration in the event of termination of the awardee’s continuous service with the company. All equity awards granted under the Inducement Grant Plan vest in accordance with the vesting schedules established by the Compensation Committee at the time of award, subject to the awardee’s continued service with our Company. The vesting of equity awards granted to our executive officers under the Inducement Grant Plan is subject to acceleration under certain circumstances as discussed under the heading “Payments Upon Termination of Employment or Change in Control” below. In March 2023, our Board amended and restated the Inducement Grant Plan to increase by 425,000 the number of shares of our common stock reserved for issuance pursuant to equity awards granted under the Inducement Grant Plan to 1,175,000 shares. As of March 31, 2025, there are 427,485 shares of Common Stock currently available for issuance under the Inducement Grant Plan. In accordance with NASDAQ Listing Rule 5635(c)(4), we did not seek stockholder approval of the amended and restated Inducement Grant Plan. Other than the increase in the Inducement Grant Plan share reserve, there were no other changes to any terms and conditions of the previously existing Inducement Grant Plan.
PAYMENTS UPON TERMINATION OF EMPLOYMENT OR CHANGE IN CONTROL
PAYMENTS UPON TERMINATION OF EMPLOYMENT OR CHANGE IN CONTROL
2023 Employment Agreements
2023 Employment Agreements
2018 Plan
2018 Plan Pursuant to the terms of our 2018 Performance-Based Stock Incentive Plan, as amended in June 2020 (the “2018 Plan”), in the event of a change in control (as defined in the 2018 Plan) of Veritone, then outstanding performance-based stock options granted under the 2018 Plan to Mr. Steelberg will be assumed, substituted or exchanged for an equivalent award (which may include a cash payment) by the successor entity to the extent the successor entity agrees to such treatment, and shall remain exercisable for the remainder of their term. In addition, if Mr. Steelberg’s employment is terminated by us without cause, other than following a change in control of Veritone, then the exercisable portion of such awards held by him will remain exercisable for the remainder of their term, provided that he has not engaged in misconduct, as defined in the 2018 Plan.
2023 Plan
2023 Plan In the event of a corporate transaction or change in control (each as defined in the 2023 Plan) in which the surviving or acquiring corporation (or its parent company) does not assume or continue outstanding awards under the 2023 Plan, or substitute similar stock awards for such outstanding awards, then, unless the participant’s (including Mr. Steelberg and Mr. Zemetra) award agreement or other written agreement with Veritone provides otherwise, with respect to any such awards that have not been assumed, continued or substituted and that are held by participants (including Mr. Steelberg and Mr. Zemetra) whose continuous service has not terminated prior to the effective time of the corporate transaction or change in control, the vesting (and exercisability, if applicable) of such awards will be accelerated in full (and with respect to any such awards that are subject to performance-based vesting conditions or requirements, vesting will be deemed to be satisfied at the target level of performance) to a date prior to the effective time of the corporate transaction or change in control (contingent upon the closing or completion of the corporate transaction or change in control) as the plan administrator will determine, and such awards will terminate if not exercised (if applicable) prior to the effective time of the corporate transaction or change in control in accordance with the exercise procedures determined by the plan administrator, and any reacquisition or repurchase rights held by Veritone with respect to such awards will lapse (contingent upon the closing or completion of the corporate transaction or change in control).
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE The following table sets forth compensation earned during the fiscal years ended December 31, 2024 and 2023 by Ryan Steelberg, our principal executive officer, and Michael Zemetra, our other executive officer serving at December 31, 2024, as well as the grant date fair values of share-based compensation awarded to such officers during such fiscal years, calculated in accordance with ASC Topic 718. Mr. Zemetra was also serving as our principal financial officer as of December 31, 2024. These officers are referred to herein as the “named executive officers.” Other than Mr. Steelberg and Mr. Zemetra, we did not have any other “executive officers” (as defined in Rule 3b-7 under the Exchange Act) during the fiscal year ended December 31, 2024.
SUMMARY COMPENSATION TABLE
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards(1) ($) | Non-equity Incentive Plan Compen- sation ($) | All Other Compen- sation ($) | Total ($) | | Ryan Steelberg President, Chief Executive Officer and Chairman of the Board | 2024 | 525,000(2) | 79,500(3) | 3,116,122 | — | 84,043(4) | 3,804,665 | | | 2023 | 524,997(2) | 425,840 | 1,872,066 | — | 52,264 | 2,875,167 | | Michael L. Zemetra Executive Vice President, Chief Financial Officer and Treasurer | 2024 | 400,000 | 79,500(3) | 912,300 | — | 31,578(5) | 1,423,378 | | | 2023 | 400,000 | 50,000 | 711,332 | — | 39,299 | 1,200,631 |
SUMMARY COMPENSATION TABLE
| (1) Reflects the grant date fair values of RSUs awarded to the named executive officers, which were computed in accordance with ASC Topic 718. See additional information regarding the RSUs awarded to our named executive officers in 2024 under the heading “2024 Equity Awards” above. |
SUMMARY COMPENSATION TABLE
| (2) In 2024, Mr. Steelberg was entitled to receive a base salary of $525,000 under his employment agreement with us. Mr. Steelberg voluntarily reduced his annual base salary from $525,000 to $1.00 in May 2023, which remained in effect through December 31, 2024. On April 8, 2024, the Compensation Committee granted to Ryan Steelberg under the 2023 Plan two awards of RSUs representing the right to receive 47,076 and 122,399 shares of our common stock upon vesting. These awards were intended as 2023 and 2024 salary replacement awards, respectively, due to the fact that Mr. Steelberg’s annual base salary was reduced to $1 in May 2023. The 2023 salary replacement award had a grant date fair value of $328,120 as computed in accordance with ASC Topic 718. In accordance with SEC disclosure rules, the grant date fair value of the 2023 salary replacement award is reflected in the “Salary” column for 2023 in the Summary Compensation Table. The 2024 salary replacement award had a grant date fair value of $853,121 as computed in accordance with ASC Topic 718. In granting the replacement grants, our compensation committee used a 90-day VWAP of our stock price to determine the number of RSUs to replace Mr. Steelberg’s foregone salary. The value of the replacement grants reflected in this table are computed in accordance with FASB Topic ASC 718, which resulted in a higher value of the replacement grants than the 90-day VWAP of our stock price used by our compensation committee. In accordance with SEC disclosure rules, the portion of the grant date fair value of the 2024 salary replacement award that replaced Mr. Steelberg’s foregone base salary of $524,999 is reflected in the “Salary” column for 2024 in the Summary Compensation Table. The portion of the grant date fair value of the 2024 salary replacement award that exceeded the amount of Mr. Steelberg’s foregone base salary in 2024 was $328,122 and is reported in the “Stock Awards” column of the Summary Compensation Table. For a discussion of Mr. Steelberg’s base salary in effect as of January 1, 2025, please refer to the sections above titled, “2023 Employment Agreements—Ryan Steelberg” and “Compensation Components—Base Salaries.” |
SUMMARY COMPENSATION TABLE
| (3) Reflects a one-time deal bonus for the successful completion of the Veritone One divestiture in 2024. |
SUMMARY COMPENSATION TABLE
| (4) Consists of reimbursement of costs of Mr. Steelberg’s separate healthcare plan totaling $14,043 and payment for the use of Mr. Steelberg’s personal rental property for Company purposes totaling $70,000. |
SUMMARY COMPENSATION TABLE
| (5) Consists of Company contributions made to Mr. Zemetra’s 401(k) account totaling $3,000 and contributions made towards Mr. Zemetra’s health insurance premiums totaling $28,578. |
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR END
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR END The table below sets forth information regarding outstanding equity awards held by each named executive officer as of December 31, 2024, including: (i) the numbers of shares of our common stock underlying exercisable and unexercisable stock options, and unearned performance-based stock options, held by each named executive officer and the exercise prices and expiration dates thereof; and (ii) the aggregate number of RSUs held by each named executive officer, and the market value thereof, that had not vested as of December 31, 2024.
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR END
| | | Option Award | | | | Stock Award | | | | | | | Number of Securities Underlying Unexercised Options (#) | | Option Exercise Price ($) | Option Expiration Date | Number of Shares Or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | | Name | Grant Date | Exercisable | Unexercisable | | | | | | | | Ryan Steelberg | 4/8/24 | — | — | — | — | — | — | 200,000(2) | 656,000 | | | 4/8/24 | — | — | — | — | 200,000(3) | 656,000 | — | — | | | 1/19/23 | — | — | — | — | 105,350(4) | 345,548 | — | — | | | 5/11/17 | 522,409 | — | 15.00 | 05/11/27 | — | — | — | — | | | 5/11/17 | 1,044,819 | — | 15.00 | 05/11/27 | — | — | — | — | | | 3/15/18 | 68,015 | — | 15.14 | 03/15/28 | — | — | — | — | | | 8/27/20 | 1,357,425(5) | — | 11.97 | 08/27/30 | — | — | — | — | | Michael L. Zemetra | 6/6/24 | — | — | — | — | 30,000(3) | 98,400 | — | — | | | 4/8/24 | — | — | — | — | — | — | 48,000(2) | 157,440 | | | 4/8/24 | — | — | — | — | 72,000(3) | 236,160 | — | — | | | 1/19/23 | — | — | — | — | 47,407(4) | 155,495 | — | — | | | 6/21/23 | — | — | — | — | 18,930(4) | 62,090 | — | — | | | 10/8/20 | 60,000 | — | 11.10 | 10/08/30 | — | — | — | — | | | 10/8/20 | 120,000(5) | — | 11.10 | 10/08/30 | — | — | — | — |
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR END
| (1) The market values of all RSUs reflected in the table above have been calculated based on the closing price of our common stock on December 31, 2024 as reported on the NASDAQ Global Market, which was $3.28 per share. |
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR END
| (2) In April 2025, the Compensation Committee determined that, for purposes of this award, the 2024 Milestones (defined above) had not been achieved; as a result, these performance-based RSUs were not eligible to vest and were forfeited. |
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR END
| (3) Represents time-based restricted stock unit awards that vest in three equal installments on each of January 1, 2025, January 1, 2026 and January 1, 2027. |
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR END
| (4) Represents time-based restricted stock unit awards that vest in three equal installments on each of January 1, 2024, January 1, 2025 and January 1, 2026. |
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR END
| (5) Consists of performance-based stock options awarded to Ryan Steelberg on August 27, 2020, and a performance-based stock option awarded to Mr. Zemetra under our Inducement Grant Plan on October 8, 2020. The vesting of one-third (1/3rd) of such performance-based stock options was conditioned upon the achievement of stock price milestones for our common stock of $17.50, $22.50 and $27.50 per share, respectively. The first and second stock price milestones were achieved in January 2021, and the third stock price milestone was achieved in February 2021. Accordingly, all such performance-based stock options have vested in full. |
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR END
The vesting of equity awards held by the named executive officers is subject to each officer’s continued service with our company and is subject to acceleration under certain circumstances as discussed under the heading “Payments Upon Termination of Employment or Change in Control” above.
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE As required by Item 402(v) of Regulation S-K, we are providing the following information about the relationship between the “compensation actually paid” (“CAP”) to our current and former principal executive officers (“PEOs”) and our non-PEO named executive officers (“Non-PEO NEOs”) and certain aspects of our financial performance for the fiscal years ended December 31, 2024, 2023 and 2022.
PAY VERSUS PERFORMANCE
| Year(1) | Summary Compensation Table Total for PEO(2) | Compensation Actually Paid to PEO(3) | Average Summary Compensation Table Total for Non-PEO NEOs(2) | Average Compensation Actually Paid to Non-PEO NEOs(4) | Total Shareholder Return: Value of Initial $100 Investment(5) | Net Income(6) | | 2024 | $3,804,665 | $2,176,330 | $1,423,378 | $952,463 | $15 | $(37,384,000) | | 2023 | $2,875,167 | $1,424,903 | $1,200,561 | $654,974 | $8 | $(58,625,000) | | 2022 | $4,125,172 | $1,020,990 | $1,736,422 | $124,911 | $24 | $(25,557,000) |
PAY VERSUS PERFORMANCE
| (1) Ryan Steelberg served as our PEO for the entirety of 2023 and 2024. Chad Steelberg served as our PEO for the entirety of 2022. Our Non-PEO NEOs for the applicable years were as follows: |
PAY VERSUS PERFORMANCE
| • | 2024: Michael Zemetra |
PAY VERSUS PERFORMANCE
| • | 2023: Michael Zemetra |
PAY VERSUS PERFORMANCE
| • | 2022: Ryan Steelberg and Michael Zemetra |
PAY VERSUS PERFORMANCE
| (2) Amounts reported in these columns represent (i) the total compensation reported in the Summary Compensation Table for the applicable years for our PEO and (ii) the average of the total compensation reported in the Summary Compensation Table for the applicable years for our Non-PEO NEOs. |
PAY VERSUS PERFORMANCE
| (3) Amounts reported in this column represent CAP to our PEO, based on his total compensation reported in the Summary Compensation Table for the indicated fiscal years and certain adjustments required by Item 402(v) of Regulation S-K. The following adjustments were made to the reported total compensation of the PEO for 2024 to determine CAP for 2024: |
PAY VERSUS PERFORMANCE
| | PEO | 2024 | | | Summary Compensation Table - Total Compensation | $3,804,665 | | - | Grant Date Fair Value of Stock Awards and Option Awards Granted in Fiscal Year* | $3,116,122 | | + | Fair Value at Fiscal Year End of Outstanding and Unvested Stock Awards and Option Awards Granted in Fiscal Year | $656,000 | | + | Change in Fair Value of Outstanding and Unvested Stock Awards and Option Awards Granted in Prior Fiscal Years | $154,875 | | + | Fair Value at Vesting of Stock Awards and Option Awards Granted in Fiscal Year That Vested During Fiscal Year | $676,912 | | + | Change in Fair Value as of Vesting Date of Stock Awards and Option Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | $0 | | - | Fair Value as of Prior Fiscal Year End of Stock Awards and Option Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | $0 | | = | Compensation Actually Paid | $2,176,330 |
PAY VERSUS PERFORMANCE
Equity award values are calculated in accordance with ASC Topic 718, and the valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant.
PAY VERSUS PERFORMANCE
| * On April 8, 2024, the Compensation Committee granted to Ryan Steelberg an award of RSUs representing the right to receive 122,399 shares of our common stock upon vesting. This award was intended as a 2024 salary replacement award due to the fact that Mr. Steelberg’s annual base salary was reduced to $1 in May 2023. The 2024 salary replacement award had a grant date fair value of $853,121 as computed in accordance with ASC Topic 718. The portion of the grant date fair value of the that replaced Mr. Steelberg’s foregone base salary of $524,999 is reflected in the “Salary” column for 2024 in the Summary Compensation Table, and is accordingly not reflected in “Grant Date Fair Value of Stock Awards and Option Awards Granted in Fiscal Year” in the table provided in this footnote 3. The fair value of this award is reflected in “Fair Value at Vesting of Stock Awards and Option Awards Granted in Fiscal Year That Vested During Fiscal Year” in the table provided in this footnote 3. |
PAY VERSUS PERFORMANCE
| (4) Amounts reported in this column represent CAP to our Non-PEO NEOs, based on their average total compensation reported in the Summary Compensation Table for the indicated fiscal years and certain adjustments required by Item 402(v) of Regulation S-K. The following adjustments were made to the reported total compensation of the Non-PEO NEOs for 2024 to determine CAP for 2024: |
PAY VERSUS PERFORMANCE
| | Non-PEO NEO Average | 2024 | | | Summary Compensation Table - Total Compensation | $1,423,378 | | - | Grant Date Fair Value of Stock Awards and Option Awards Granted in Fiscal Year | $912,300 | | + | Fair Value at Fiscal Year End of Outstanding and Unvested Stock Awards and Option Awards Granted in Fiscal Year | $334,560 | | + | Change in Fair Value of Outstanding and Unvested Stock Awards and Option Awards Granted in Prior Fiscal Years | $97,518 | | + | Fair Value at Vesting of Stock Awards and Option Awards Granted in Fiscal Year That Vested During Fiscal Year | $0 | | + | Change in Fair Value as of Vesting Date of Stock Awards and Option Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | $9,306 | | - | Fair Value as of Prior Fiscal Year End of Stock Awards and Option Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | $0 | | = | Compensation Actually Paid | $952,463 |
PAY VERSUS PERFORMANCE
Please see footnote 1 for the Non-PEO NEOs included in the average for 2024. Equity award values are calculated in accordance with ASC Topic 718, and the valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant.
PAY VERSUS PERFORMANCE
| (5) Pursuant to Item 402(v), the comparison assumes $100 was invested on December 31, 2021 in our common stock. Historic stock price performance is not necessarily indicative of future stock price performance. |
PAY VERSUS PERFORMANCE
| (6) The dollar amounts reported represent the amount of net income reflected in our audited financial statements for the applicable year. |
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION Our non-employee director compensation program is comprised of two key components: equity awards and cash retainer fees. Non-employee director compensation is reviewed by our Compensation Committee on an annual basis. The compensation components and amounts that were in effect for 2024 are described below.
DIRECTOR COMPENSATION
| • | Equity Awards: each non-employee director receives awards of RSUs under the automatic grant program for non-employee directors approved by our Compensation Committee and issued under our 2023 Plan, including: |
DIRECTOR COMPENSATION
| • | Annual RSU Award: on the date of each annual meeting of our stockholders, each non-employee director will be granted a number of RSUs having a grant date value equal to $150,000, which RSUs will vest on the first anniversary of the grant date (or the day immediately preceding the date of the next regular annual meeting following the grant date, if earlier), subject to the non-employee director’s continued service to us through the vesting date; and |
DIRECTOR COMPENSATION
| • | Initial Time-Based RSU Award for New Directors: for each new non-employee director appointed or elected to the Board other than on the date of an annual meeting of our stockholders, on the date of initial appointment or election to our Board, each such new non-employee director will be granted a number of RSUs having a grant date value equal to a prorated portion of the $150,000 annual RSU award (such proration based on the number of whole months that have elapsed from the date of our last annual meeting of stockholders to the date of such initial appointment or election but not more than 12 months), which RSUs will vest on the first anniversary of the grant date (or the day immediately preceding the date of the next regular annual meeting following the grant date, if earlier), subject to the non-employee director’s continued service to us through the vesting date. |
DIRECTOR COMPENSATION
Each non-employee director’s initial RSU award or annual RSU award outstanding immediately prior to the occurrence of a change in control (as defined in the applicable equity plan) will fully accelerate vesting at such time, subject to the non-employee director’s continued service to us through immediately prior to the occurrence of the change in control. The number of RSUs issued for each initial RSU award or annual RSU award is determined by dividing $150,000 by the closing price of the Company’s common stock on that date, or such other “floor” price that may be set by the Compensation Committee which exceeds the closing price of Veritone’s common stock on that date.
DIRECTOR COMPENSATION
| • | Board Fees: on an annual basis, each non-employee director receives an annual cash retainer for serving as a member of our Board in the amount of $30,000; |
DIRECTOR COMPENSATION
| • | Non-Executive Chair Fee: in addition to the annual cash retainer set forth above, the non-executive Chair of our Board, if any, receives an additional annual retainer in the amount of $30,000; and |
DIRECTOR COMPENSATION
| • | Committee Fees: on an annual basis, each non-employee director serving as a member of our Audit Committee, our Compensation Committee, or our Corporate Governance and Nominating Committee receives an annual cash retainer in the amount of $7,500, $5,000 and $2,500, respectively. In addition, each non-employee director serving as Chair of our Audit Committee, Chair of our Compensation Committee, and Chair of our Corporate Governance and Nominating Committee receives an additional annual cash retainer of $20,000, $15,000, and $7,500, respectively. |
DIRECTOR COMPENSATION
The annual cash retainer fees are paid in equal quarterly installments in arrears, prorated for any partial months of service. Our directors are also reimbursed for expenses incurred in attending Board and/or committee meetings or in connection with other business activities on behalf of our company. All such expenses must be in accordance with our travel and expense reimbursement policy. Our M&A Committee did not meet in 2024 and was dissolved in March 2025. Our President, Chief Executive Officer and Chairman of the Board, Ryan Steelberg, does not receive any additional compensation for his service on our Board.
2024 Director Compensation
2024 Director Compensation The table below sets forth cash compensation earned by each non-employee director, and the grant date fair values of equity awards granted to each non-employee director, during the fiscal year ended December 31, 2024. All compensation of Ryan Steelberg is reported in the “Summary Compensation Table” and has been excluded from the table below.
2024 Director Compensation
| Name | Fees Earned or Paid in Cash(3) ($) | RSU Awards(4)(5) ($) | All Other Compensation ($) | Total ($) | | Jeffrey P. Gehl(1) | $24,063 | — | $— | $24,063 | | Michael Keithley | 24,375 | 73,800(7) | — | 98,175 | | Knute P. Kurtz | 60,000 | 73,800(7) | — | 133,800 | | Chad Steelberg(2) | 32,500 | 73,800(7) | 1,450,000(6) | 1,556,300 | | Richard H. Taketa | 60,000 | 73,800(7) | — | 133,800 | | Michael Zilis | 42,500 | 73,800(7) | — | 116,300 |
2024 Director Compensation
| (1) Mr. Gehl resigned from the Board in June 2024. |
2024 Director Compensation
| (2) Mr. Chad Steelberg resigned from the Board in March 2025. |
2024 Director Compensation
| (3) Reflects cash retainer fees earned in 2024 by each non-employee director for service on our Board and committees of our Board, as applicable. Mr. Morales was appointed to the Board in March 2025 and, as such, did not receive any compensation for Board service during 2024. Mr. Morales will receive compensation for his service on the Board in fiscal year 2025 in accordance with the Company’s non-employee director compensation policy. |
2024 Director Compensation
| (4) Reflects the grant date fair values of RSU awards granted to each non-employee director in 2024, calculated in accordance with ASC Topic 718. |
2024 Director Compensation
| (5) The number of stock awards, consisting of RSUs and non-qualified stock options, held as of December 31, 2024 by each non-employee director serving on the Board on such date is set forth in the table below. |
2024 Director Compensation
| Name | Aggregate Number of Shares Underlying Outstanding RSUs | Aggregate Number of Shares Underlying Outstanding Options | | Michael Keithley | 30,000 | — | | Knute P. Kurtz | 30,000 | 8,688 | | Chad Steelberg | 30,000 | 3,513,157 | | Richard H. Taketa | 30,000 | 8,688 | | Michael Zilis | 30,000 | — |
2024 Director Compensation
| (6) Reflects amounts paid in cash pursuant to the Consulting Agreement between the Company and Steel Holdings, LLC, an entity affiliated with Mr. Steelberg. Mr. Steelberg was paid $1,450,000 in cash under the Consulting Agreement in 2024. |
2024 Director Compensation
| (7) RSUs representing a right to receive 30,000 shares of our common stock were awarded to each of our then-serving non-employee directors on June 13, 2024, and the grant date fair value of such awards was determined as computed in accordance with ASC Topic 718. Such RSUs will vest in full on June 13, 2025. |
Indemnification of Directors and Officers
Indemnification of Directors and Officers Our Certificate of Incorporation and our Bylaws provide that we will indemnify our directors and officers to the fullest extent permitted under Delaware law, which prohibits our Certificate of Incorporation from limiting the liability of our directors for the following:
Indemnification of Directors and Officers
| • | any breach of the director’s duty of loyalty to us or our stockholders; |
Indemnification of Directors and Officers
| • | acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law; |
Indemnification of Directors and Officers
| • | unlawful payment of dividends or unlawful stock repurchases or redemptions; or |
Indemnification of Directors and Officers
| • | any transaction from which the director derived an improper personal benefit. |
Indemnification of Directors and Officers
Our Certificate of Incorporation also provides that if Delaware law is amended to authorize corporate action further eliminating or limiting the personal liability of a director, then the liability of our directors will be eliminated or limited to the fullest extent permitted by Delaware law, as so amended. This limitation of liability does not apply to liabilities arising under the federal securities laws and does not affect the availability of equitable remedies such as injunctive relief or rescission. If our Certificate of Incorporation is amended as requested in Proposal 5 (approval of an amendment to the Certificate of Incorporation to allow exculpation of officers) described below, the provisions similar to the provisions described above will apply to our officers as well. Our Certificate of Incorporation and our Bylaws also provide that we will indemnify our employees and agents to the fullest extent permitted by law. Our Bylaws also permit us to secure insurance on behalf of any officer, director, employee or other agent for any liability arising out of his or her actions in this capacity, regardless of whether we would have the power to indemnify such person against such expense, liability or loss under the Delaware General Corporation Law (the “DGCL”). We have obtained directors’ and officers’ liability insurance. We have entered into separate indemnification agreements with each of our directors and executive officers, in addition to indemnification provided for in our Certificate of Incorporation and our Bylaws. These agreements, among other things, provide for indemnification of our directors and executive officers for expenses, judgments, fines and settlement amounts incurred by this person in any action or proceeding arising out of this person’s services as a director or executive officer or at our request. We will not indemnify such director or officer, however, for expenses and the payment of profits arising from the purchase and sale by the director or officer of securities in violation of Section 16(b) of the Exchange Act.
Rationale
| • | Limit on non-employee director compensation. The aggregate value of all cash and equity-based compensation paid or granted by us to any individual for service as a non-employee director of our Board with respect to any fiscal year of the Company will not exceed (i) $750,000 in total value or (ii) in the event such non-employee director is first appointed or elected to the Board during such fiscal year, $1,000,000 in total value, in each case calculating the value of any equity awards based on the grant date fair value of such equity awards for financial reporting purposes. |