Exhibit 10.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the “Agreement”), entered into as of January 19, 2023 and effective January 1, 2023, (the “Effective Date”), by and between Veritone, Inc., a Delaware corporation (the “Company”), and Michael L. Zemetra (“Executive”). Certain capitalized terms used in this Agreement are defined in Section 24 below.
WHEREAS, the Company desires to continue to retain the services of Executive, Executive desires to continue to provide services to the Company, and the Company and Executive mutually desire to enter into an agreement containing the terms and conditions pursuant to which the Company will employ Executive from and after the Effective Date; and
WHEREAS, effective as of the Effective Date, this Agreement shall supersede and replace the prior Employment Agreement between Executive and the Company, dated as of October 6, 2020 (the “Prior Employment Agreement”), and the Prior Employment Agreement is hereby terminated.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
(v) any other amounts to which Executive is legally entitled to as of the Termination Date.
Except as otherwise expressly provided herein in Section 4(c) and 4(d) or required by applicable law, Executive shall not be entitled to any other salary, bonuses, benefits, severance or other compensation, from the Company or its Subsidiaries or Affiliates after the Termination Date and all of Executive’s rights to salary, bonuses, benefits and other compensation hereunder which would have accrued or become payable after the Termination Date (other than vested retirement benefits accrued on or prior to the termination or expiration of the Employment Period, accrued insurance benefits or other amounts owing hereunder as of the date of such termination or expiration that have not yet been paid) shall cease upon such termination or expiration, other than as expressly required under applicable law (such as COBRA).
Other than any vested benefits under any Company benefit plan (subject to the terms of any such benefit plans in which Employee participates), the foregoing benefits shall be the sole benefits to which Employee is entitled upon a termination of employment described in this Section 4(c).
Notices to Executive:
Michael L. Zemetra [address and email on file with the Company]
with a copy to (which shall not constitute notice hereunder):
Reed Smith LLP
599 Lexington Avenue
New York, NY 10022
Attention: Jess H. Drabkin, Esq.
Notices to the Company or its Subsidiaries:
Veritone, Inc.
5291 California Avenue
Suite 350
Irvine, CA 92617
Attention: Chief Legal Officer
or such other address or to the attention of such other person as the recipient party shall have specified by prior written notice to the sending party. Any notice under this Agreement shall be deemed to have been given when so delivered, sent or mailed.
To the extent any payment or benefit that Executive becomes entitled to by reason of a Change in Control is considered deferred compensation subject to the 20 percent additional tax imposed pursuant to Section 409A(a) of the Code, then a Change in Control shall not be deemed to occur with respect to such payment or benefit unless such Change in Control constitutes an event described under Section 409A(a) (2) (A) (v) of the Code (that is, a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Company, within the meaning of Section 409A of the Code). If any severance payment or benefit payable to Executive may be paid in two calendar years based on the date on which any related release or similar agreement is executed and/or returned by Executive, then any such payment or benefit that would otherwise be payable in the earlier of such two calendar years shall be paid with the first regular payroll of the Company in the later of such two calendar years.
“Affiliate” means, with respect to the Company and its Subsidiaries, any other Person controlling, controlled by or under common control with the Company or any of its Subsidiaries and, in the case of a Person which is a partnership, any partner of the Person. Notwithstanding anything to the contrary in this Agreement, Executive shall not be deemed an Affiliate of the Company or any of its Subsidiaries for purposes of this Agreement.
“Cause” means (i) the Executive's conviction, guilty plea or plea of nolo contendere for any crime involving financial impropriety or moral turpitude, or in any felony criminal proceeding; (ii) a breach by the Executive of a material provision of (A) this Agreement or (B) the Employee PIIA; (iii) breach of any fiduciary duty to the Company; (iv) violation of any written Company policy, in any such case, that causes material harm to the Company or is materially detrimental to the Company's reputation or business or (v) conduct by Executive which in the good faith and reasonable determination of the disinterested members of the Board demonstrates gross unfitness to serve; provided that, with respect to the actions, events or conditions described in clauses (ii), (iii) (iv), and (v) above, any termination by the Company shall be presumed to be other than for Cause unless (A) the Company provides written notice to Executive of the applicable action, event or condition allegedly constituting Cause (which notice shall specify in reasonable detail the particulars of such action, event or condition), and (B) if such condition can be cured, rescinded or remedied as determined by the disinterested members of the Board in their reasonable discretion, the Executive fails to cure, rescind or otherwise remedy the applicable action, event or condition described in such written notice within thirty (30) days after delivery of such written notice (or such longer period as the disinterested members of the Board may agree in writing). For
purposes of this Agreement, no act or failure to act on the part of the Executive shall be deemed “intentional” or “willful” if it was due primarily to an error in judgment or negligence, and any act or failure to act on the part of the Executive shall be deemed “intentional” or “willful” only if done or omitted to be done by the Executive not in good faith and without reasonable belief that the Executive’s action or omission was in the interest of the Company. Failure to meet performance expectations, unless willful, continuing, substantial, and uncured after demand for cure to the extent such failure is curable, shall not be considered “Cause.”
“Change in Control” for the purposes of Executive’s compensatory arrangements, including this Agreement, means a change in ownership or control of the Company effected through any of the following transactions: (a) consummation of a merger, consolidation or other reorganization approved by the Company’s stockholders, unless securities representing at least fifty percent (50%) of the total combined voting power of the voting securities of the successor corporation are immediately thereafter beneficially owned, directly or indirectly and in substantially the same proportion, by the Persons who beneficially owned the Company’s outstanding voting securities immediately prior to such transaction; (b) a sale, transfer or other disposition of all or substantially all of the Company’s assets; (c) the closing of any transaction or series of related transactions pursuant to which any Person or any group of Persons comprising a “group” within the meaning of Rule 13d-5(b) (1) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (other than the Company or a Person that, prior to such transaction or series of related transactions, directly or indirectly controls, is controlled by or is under common control with, the Company) becomes directly or indirectly (whether as a result of a single acquisition or by reason of one or more acquisitions within the twelve (12) -month period ending with the most recent acquisition) the beneficial owner (within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing (or convertible into or exercisable for securities possessing) more than fifty percent (50%) of the total combined voting power of the Company’s securities (as measured in terms of the power to vote with respect to the election of Board members) outstanding immediately after the consummation of such transaction or series of related transactions, whether such transaction involves a direct issuance from the Company or the acquisition of outstanding securities held by one or more of the Company’s existing stockholders; or (d) a change in the composition of the Board over a period of twenty-four (24) consecutive months or less such that a majority of the Board members ceases to be comprised of individuals who either (A) have been Board members continuously since the beginning of such period (“Incumbent Directors”) or (B) have been elected or nominated for election as Board members during such period by at least a majority of the Incumbent Directors who were still in office at the time the Board approved such election or nomination; provided that any individual who becomes a Board member subsequent to the beginning of such period and whose election or nomination was approved by two-thirds of the Board members then comprising the Incumbent Directors will be considered an Incumbent Director.
“Disability” means a physical or mental disability or infirmity that prevents or is reasonably expected to prevent the performance of Executive's employment-related duties for a period of six consecutive months or longer, notwithstanding the provision of any reasonable accommodation, and, within thirty (30) calendar days after the Company notifies Executive in writing that it intends to terminate his employment, Executive shall not have returned to the performance of his employment-related duties on a full-time basis; provided that, with respect to any compensation that constitutes deferred compensation subject to Section 409A of the Internal Revenue Code,
“Disability” shall have the meaning set forth in Section 409A(a) (2) (c) of the Internal Revenue Code. The Board's reasoned and good faith judgment of Disability shall be final, binding and conclusive, and shall be based on such competent medical evidence as shall be presented to it by Executive and/or by any physician or group of physicians or other competent medical expert employed by Executive or the Company to advise the Board.
“Good Reason” means without Executive's consent, (a) a material reduction by Company of Executive's Base Salary or Target Annual Bonus (which shall be deemed to have occurred if either his Annual Base Salary or target Annual Bonus is reduced by ten percent (10%) or more); (b) a material diminution in Executive's titles, duties, or responsibilities or the assignment to him of any duties or responsibilities inconsistent with Executive's position and status as Chief Financial Officer; (c) a change in Executive's reporting relationship such that Executive no longer reports directly to the CEO; (d) a relocation of Executive’s primary location of employment by more than thirty-five (35) miles from the Company’s current offices in Irvine, California (except for remote work from Executive’s residence or an office relocation that reduces the distance from Executive’s principal residence); or (e) any other material breach of this Agreement by the Company. In order for a termination to constitute a termination for “Good Reason” hereunder, Executive must give the Company written notice of his intent to resign for Good Reason within forty-five (45) days following the date Executive first learns of such Good Reason event, the Company shall not have cured such Good Reason event within forty-five (45) days following receipt of such notice from the Executive, and Executive's employment must terminate upon expiration of such forty-five (45) day period.
“Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, a business entity and a governmental entity or any department, agency or political subdivision thereof.
“Subsidiary” or “Subsidiaries” means any Person of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers, or trustees thereof is at the time owned or controlled, directly or indirectly, by the Company or one or more of the other Subsidiaries of the Company or a combination thereof or (ii) if a limited liability company, partnership, association or other business entity (other than a corporation), a majority of partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by the Company or one or more Subsidiaries of the Company or a combination thereof and for Executive’s purpose, a Person or Persons owns a majority ownership interest in such a business entity (other than a corporation), if such Person or Persons shall be allocated a majority of such business entity’s gains or losses or shall be or control any managing director or general partner of such business entity (other than a corporation). For the purposes hereof, the term Subsidiary shall include all Subsidiaries of such Subsidiary.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement as of the date first written above.
Company: | ||
VERITONE, INC., | ||
a Delaware corporation | ||
By:
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| /s/ Ryan Steelberg |
Name: |
| Ryan Steelberg |
Title: |
| Chief Executive Officer and President |
Executive: | ||
/s/ Michael L. Zemetra | ||
MICHAEL L. ZEMETRA |
Exhibit A
FORM OF RELEASE OF CLAIMS
GENERAL RELEASE
THIS GENERAL RELEASE (this “Agreement”) is made and entered into by and between ________________ (hereinafter, “Executive”) and Veritone, Inc. (hereinafter, “Employer”), and inures to the benefit of Employer’s current, former and future parents, subsidiaries, related entities, employee benefit plans and their fiduciaries, predecessors, successors, officers, directors, agents, employees and assigns of Employer.
RECITALS
A. Executive has worked for Employer for a period of time in an executive capacity and has received substantial equity in Employer for the services that he provided to Employer.
B. Executive’s employment with Employer ended effective _____________ (the “Separation Date”).
C. Executive and Employer wish permanently to resolve any and all disputes arising out of the termination of Executive’s employment with Employer.
NOW, THEREFORE, for and in consideration of the execution of this Agreement and the mutual covenants contained in the following paragraphs, Employer and Executive agree as follows:
A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.
Executive expressly agrees and understands that the release given by him pursuant to this Agreement applies to all unknown, unsuspected and unanticipated claims, liabilities and causes of action which he may have against Employer or any of the other Releasees.
BY SIGNING THIS AGREEMENT, EXECUTIVE REPRESENTS THAT EXECUTIVE READ THIS AGREEMENT AND KNOWS THAT EXECUTIVE GIVES UP IMPORTANT RIGHTS.
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Exhibit B
TERMINATION CERTIFICATION
This certification is delivered pursuant to the terms of an Employment Agreement (the “Employment Agreement”) entered into between Veritone, Inc. (the “Company”), and ________________________ (“Executive”).
Executive hereby certifies that Executive does not have in Executive’s possession, nor has Executive failed to return, any devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment, any other documents or property, or reproductions of any and all aforementioned items belonging to the Company or its Subsidiaries, Affiliates, successors, or assigns, except as may have been otherwise agreed by the Board and in connection with its approval of Executive’s pursuit of a corporate opportunity pursuant to the Company’s Corporate Opportunities Policy.
Executive further certifies that Executive has complied with all the terms of the Executive Employment Agreement, including the reporting of any inventions and original works of authorship (as defined therein) conceived or made by Executive (solely or jointly with others), as covered by the Employment Agreement.
Executive further agrees that, in compliance with the Employment Agreement, Executive will preserve as confidential all Company proprietary information, confidential knowledge, data, or other proprietary information relating to products, processes, know-how, designs, formulas, developmental or experimental work, computer programs, databases, other original works of authorship, customer lists, business plans, financial information, or other subject matter pertaining to any business of the Company or any of its employees, clients, consultants, or licensees.
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Exhibit C
SECTION 7 OF THE DEFEND TRADE SECRETS ACT OF 2016
“ . . . [a]n individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that (A) is made (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. . . . An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order.”