Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On January 6, 2023, Cerence Inc. (the "Company") entered into a Change of
Control and Severance Agreement (the "Severance Agreement") with Prateek
Kathpal, the Company's Executive Vice President and Chief Technology Officer on
terms consistent with the Company's standard form of Change of Control and
Severance Agreement for executive officers. The Severance Agreement provides for
an initial three-year term and for automatic renewal of additional one-year
terms unless either party provides timely notice of non-renewal. In the event of
a "change of control" (as defined in the Severance Agreement), the term of the
Severance Agreement will automatically extend until the one-year anniversary of
the date of the change of control. The Severance Agreement provides that in the
event that Mr. Kathpal's employment is terminated by the Company other than for
"cause" (as defined in the Severance Agreement) and for a reason other than due
to his death or "disability" (as defined in the Severance Agreement) outside of
the one-year period following a change of control, Mr. Kathpal will be eligible
to receive: (i) a payment equal to 100% of his annual base salary then in
effect, payable in twelve equal installments; (ii) a lump sum payment equal to
100% of his target bonus and a pro-rated percentage of his target bonus for the
fiscal year in which the termination occurs; (iii) vesting of the portion of his
time-based equity awards that would have vested in the twelve months following
the termination date; (iv) vesting of the earned portion of any
performance-based equity awards for which the performance period is complete as
of the termination date and the opportunity under certain circumstances to earn
a pro rata portion of any performance-based awards with a single three-year
performance period for which the performance period is not complete as of the
termination date based on actual performance at the end of the performance
period; and (v) up to twelve months of monthly COBRA premiums (at the coverage
levels in effect for active employees of the Company).
If Mr. Kathpal's employment is terminated by the Company other than for cause
and for a reason other than due to his death or disability or he resigns for
"good reason" (as defined in the Severance Agreement) within one year following
a change of control, he will instead be eligible to receive: (i) a lump sum
payment equal to 150% of his annual base salary then in effect (or, if greater,
as in effect immediately prior to the change of control); (ii) a lump sum
payment equal to 150% of his target bonus for the year in which the termination
occurs (or, if greater, as in effect immediately prior to the change of control)
and a pro-rated percentage of his target bonus for the fiscal year in which the
termination occurs (or, if greater, as in effect immediately prior to the change
of control); (iii) accelerated vesting of 100% of his unvested time-based equity
awards; (iv) accelerated vesting of any performance-based equity awards based on
actual performance through the termination date, if measurable, and based upon
target performance if performance is not measurable as of the termination date;
and (v) up to 18 months of monthly COBRA premiums (at the coverage levels in
effect for active employees of the Company).
In the event that Mr. Kathpal's employment is terminated due to death or
disability, he will be eligible to receive accelerated vesting of 100% of his
unvested time-based equity awards, 100% of the earned portion of any
performance-based equity awards for which the performance period is complete,
and the opportunity under certain circumstances to earn a pro rata portion of
any performance-based awards with a single three-year performance period for
which the performance period is not complete as of the termination date based on
actual performance at the end of the performance period.
To receive the foregoing severance payments and benefits, except in the case of
a termination due to death, Mr. Kathpal is required to enter into a separation
and release agreement in favor of the Company.
The foregoing description of the Severance Agreement does not purport to be
complete and is qualified in its entirety by reference to the full text of the
Severance Agreement, which is attached as Exhibit 10.1 to this Current Report on
Form 8-K and incorporated herein by reference.
--------------------------------------------------------------------------------
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number Description
10.1 Change of Control and Severance Agreement, effective as of
January 6, 2023, by and between Cerence Inc. and Prateek Kathpal
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
--------------------------------------------------------------------------------
© Edgar Online, source Glimpses
CERENCE INC. 
