Item 9A. Controls and Procedures
Item 9A. Controls and Procedures.
Evaluation of disclosure controls and procedures. Based on the evaluation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act required by Exchange Act) Rules 13a-15(b) or 15d-15(b), our principal executive officer and principal financial officer have concluded that as of the end of the period covered by this report, our disclosure controls and procedures were effective to ensure that information required to be disclosed by Cerence in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and include controls and procedures designed to ensure that information required to be disclosed by us in such reports is accumulated and communicated to our management, including the principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Management report on internal control over financial reporting. Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with generally accepted accounting principles.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions and that the degree of compliance with the policies or procedures may deteriorate.
Management has assessed the effectiveness of our internal control over financial reporting as of September 30, 2020, utilizing the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in the 2013 Internal Control-Integrated Framework. Based on the results of this assessment, management (including our Chief Executive Officer and our Chief Financial Officer) has concluded that, as of September 30, 2020, our internal control over financial reporting was effective based on those criteria.
Changes in internal control over financial reporting. There were no material changes in our internal control over financial reporting during the three months ended September 30, 2020 that have materially affected, or are reasonability likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information.
None.
104
PART III
Item 10. Directors, Executive Officers and Corporate Governance.
Our Board of Directors adopted a Code of Business Conduct and Ethics for all of our directors, officers and employees on October 2, 2019. Our Code of Business Conduct and Ethics can be found at our website: www.cerence.com. We will provide to any person without charge, upon request, a copy of our Code of Business Conduct and Ethics. Such a request should be made in writing and addressed to Investor Relations, Cerence Inc., 15 Wayside Road, Burlington, MA 01803.
To date, there have been no waivers under our Code of Business Conduct and Ethics. We will post any waivers, if and when granted, of our Code of Business Conduct and Ethics on our website at www.cerence.com .
The additional information required by this Item for the Company will be set forth in the Company’s Proxy Statement for the 2021 Annual Meeting of Stockholders, which information is hereby incorporated by reference.
Item 11. Executive Compensation.
The information required by this Item for the Company will be set forth in the Company’s Proxy Statement for the 2021 Annual Meeting of Stockholders, which information is hereby incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The information required by this Item for the Company will be set forth in Company’s Proxy Statement for the 2021 Annual Meeting of Stockholders, which information is hereby incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
The information required by this Item for the Company will be set forth in the Company’s Proxy Statement for the 2021 Annual Meeting of Stockholders, which information is hereby incorporated herein by reference.
Item 14. Principal Accounting Fees and Services.
The information required by this Item for the Company will be set forth in Company’s Proxy Statement for the 2021 Annual Meeting of Stockholders, which information is hereby incorporated herein by reference.
105
PART IV
Item 15. Exhib its, Financial Statement Schedules.
(a)
The following documents are filed as a part of this Report:
(1)
All Financial Statements— See Index to Financial Statements in Item 8 of this Report;
(2)
Financial Statement Schedules — All schedules have been omitted as the requested information is inapplicable or the information is presented in the financial statements or related notes included as part of this Report.
(3)
Exhibits — See Item 15(b) of this Report below.
(b)
Exhibits.
EXHIBIT INDEX
Incorporated by Reference
Exhibit
Index #
Exhibit Description
Filed
Herewith
Form
File No.
Exhibit
Filing
Date
2.1
Separation and Distribution Agreement between Nuance Communications, Inc. and Cerence Inc.
8-K
001-39030
2.1
October 2, 2019
3.1
Amended and Restated Certificate of Incorporation of Cerence Inc.
8-K
001-39030
3.1
October 2, 2019
3.2
Amended and Restated By-Laws of Cerence Inc.
8-K
001-39030
3.2
October 2, 2019
4.1
Indenture, dated as of June 2, 2020, between Cerence Inc. and U.S. Bank, National Association, as Trustee.
8-K
001-39030
4.1
June 2, 2020
4.2
Form of Global Note, representing Cerence Inc.’s 3.00% Convertible Senior Notes due 2025 (included as Exhibit A to the Indenture filed as Exhibit 4.1).
8-K
001-39030
4.1
June 2, 2020
4.3
Description of Registrant's Securities
X
10.1
Tax Matters Agreement between Nuance Communications, Inc. and Cerence Inc.
8-K
001-39030
10.1
October 2, 2019
10.2
Transition Services Agreement between Nuance Communications, Inc. and Cerence Operating Company
8-K
001-39030
10.2
October 2, 2019
10.3
Employee Matters Agreement between Nuance Communications, Inc. and Cerence Inc.
8-K
001-39030
10.3
October 2, 2019
10.4
Intellectual Property Agreement between Nuance Communications, Inc. and Cerence Inc.
8-K
001-39030
10.4
October 2, 2019
10.5
Transitional Trademark License Agreement between Nuance Communications, Inc. and Cerence Inc.
8-K
001-39030
10.5
October 2, 2019
10.6†
Offer Letter of Sanjay Dhawan, dated February 14, 2019
10
001-39030
10.6
August 21, 2019
10.7†
Change of Control and Severance Agreement between Sanjay Dhawan and Nuance Communications, Inc.
10
001-39030
10.7
August 21, 2019
10.8†
Amendment to Offer Letter of Sanjay Dhawan, dated August 26, 2019
10/A
001-39030
10.8
September 4, 2019
10.9†
Cerence 2019 Equity Incentive Plan
S-8
333-234040
4.3
October 2, 2019
106
10.10†
Cerence 2019 Employee Stock Purchase Plan
S-8
333-234040
4.6
October 2, 2019
10.11†
Form of Change of Control and Severance Agreement - NEO
10-K
001-39030
10.14
December 19, 2020
10.12
Indemnification Agreement
10-K
001-39030
10.15
December 19, 2020
10.13†
Restricted Stock Unit Award Agreement
X
10.14†
Performance-Based Restricted Stock Unit Award Agreement
X
10.15
Credit Agreement, dated June 12, 2020, by and between Cerence Inc., the lenders and issuing banks party thereto and Wells Fargo Bank, N.A., as administrative agent.
8-K
001-39030
10.1
June 17, 2020
10.16
Subsidiary Guarantee Agreement, dated June 12, 2020, by and between certain domestic subsidiaries of Cerence, as subsidiary guarantors, and Wells Fargo Bank, N.A., as administrative agent.
8-K
001-39030
10.2
June 17, 2020
10.17
Collateral Agreement, dated June 12, 2020, by and between Cerence Inc. and certain subsidiaries of Cerence, as pledgors, and Wells Fargo Bank, N.A., as collateral agent.
8-K
001-39030
10.3
June 17, 2020
10.18†
Amendment No. 1 to Cerence 2019 Equity Incentive Plan
X
21.1
Subsidiaries of the Registrant
X
23.1
Consent of BDO USA, LLP, Independent Registered Public Accounting Firm.
X
24.1
Power of Attorney (including in signature pages hereto)
X
31.1
Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
X
31.2
Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
X
32.1
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
X
32.2
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
X
101.INS
XBRL Instance Document
X
101.SCH
XBRL Taxonomy Extension Schema Document.
X
107
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document.
X
101.DEF
XBRL Taxonomy Extension Definition Linkbase Document.
X
101.LAB
XBRL Taxonomy Extension Label Linkbase Document.
X
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document.
X
†
Management contract or compensatory plan or arrangement
Item 16. Form 10-K Summary
Not applicable.
108
SIGNA TURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized .
CERENCE INC.
Date: November 19, 2020
By:
/s/ Sanjay Dhawan
Sanjay Dhawan
Chief Executive Officer
(Principal Executive Officer)
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each individual whose signature appears below constitutes and appoints each of Sanjay Dhawan, Mark Gallenberger and Leanne Fitzgerald, acting singly, his or her true and lawful agent, proxy and attorneys-in-fact, each with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K and to file the same with all exhibits thereto, and all documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he or she might or could do in person, and hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. This power of attorney may be executed in counterparts.
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Name
Title
Date
/s/ Sanjay Dhawan
Chief Executive Officer and Director
November 19, 2020
Sanjay Dhawan
(Principal Executive Officer)
/s/ Mark Gallenberger
Chief Financial Officer
November 19, 2020
Mark Gallenberger
(Principal Financial Officer and Principal Accounting Officer)
/s/ Arun Sarin
Chairman of the Board
November 19, 2020
Arun Sarin
/s/ Thomas Beaudoin
Director
November 19, 2020
Thomas Beaudoin
/s/ Marianne Budnik
Director
November 19, 2020
Marianne Budnik
/s/ Sanjay Jha
Director
November 19, 2020
Sanjay Jha
/s/ Kristi Ann Matus
Director
November 19, 2020
Kristi Ann Matus
/s/ Alfred Nietzel
Director
November 19, 2020
Alfred Nietzel
109