Cerence Inc.
09/05/2025 | Press release | Distributed by Public on 09/05/2025 14:01
Reorganization, Management Change/Compensation (Form 8-K)
Item 2.05 Costs Associated with Exit or Disposal Activities.
On September 2, 2025, Cerence Inc. (the "Company") announced a restructuring plan with respect to certain foreign operations intended to further reduce operating expenses and position the Company for profitable future growth (the "Plan"). The Company estimates that it will incur cash restructuring charges of approximately $7.2 to $7.9 million in connection with the Plan, primarily consisting of severance payments, payments in lieu of notice, employee benefits and related costs. The Company expects to incur the majority of these expenses in the first quarter of fiscal year 2026 and the implementation of the Plan will be substantially complete by the end of the first quarter of fiscal year 2026. Potential position eliminations are subject to applicable legal requirements, which may extend this process beyond the first quarter of fiscal year 2026 in certain cases. The charges that the Company expects to incur are subject to a number of assumptions, including applicable legal requirements, and actual expenses and charges may differ materially from the estimates disclosed above.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On September 2, 2025, the Company entered into a retention agreement with Nils Schanz, Executive Vice President, Product and Technology of the Company (the "Retention Agreement"). Pursuant to the Retention Agreement, Mr. Schanz will receive a retention bonus of $350,000 (converted to Euro as of September 1, 2025) (the "Retention Bonus"). Mr. Schanz will be obligated to repay the full amount of the Retention Bonus if (i) he resigns or gives the Company notice of his resignation or (ii) he receives a notice from the Company of a termination for "cause", in each case on or prior to August 25, 2026.
The Retention Agreement also provides for Mr. Schanz to receive a one-time equity award with a target value of $2,000,000, of which 50% will be in the form of time-based restricted stock units and the other 50% will be in the form of performance-based restricted stock units. The time-based restricted stock units will vest in three equal installments on each of October 1, 2026, October 1, 2027 and October 1, 2028, in each case subject to Mr. Schanz's continued service with the Company through the applicable vesting date. The performance-based restricted stock units will be earned based on the achievement of pre-established performance metrics for each of fiscal years 2026, 2027 and 2028, with one-third of the total performance-based restricted stock units eligible to be earned for each fiscal year. The performance-based restricted stock units, to the extent earned, will vest after three years, subject to Mr. Schanz's continued service with the Company through such date.
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