8-KOther EventsExhibits & Filings

COGNIZANT TECHNOLOGY SOLUTIONS CORP 8-K Report, Corporate Update (Jun 13, 2006)

Filed June 13, 2006For Securities:CTSH

Summary

This Form 8-K filing from Cognizant Technology Solutions Corporation (CTSH) reports on key outcomes from its 2006 Annual Meeting of Stockholders held on June 13, 2006. The primary focus for investors is the significant increase in the authorized number of the Company's capital stock shares. This move, approved by stockholders, raises the total authorized shares from 340,000,000 to 515,000,000, primarily by increasing Class A Common Stock from 325,000,000 to 500,000,000. This strategic adjustment provides the company with greater flexibility for future corporate actions, such as potential acquisitions, stock splits, or equity incentive programs. Additionally, the stockholders approved an amendment to the Amended and Restated 1999 Incentive Compensation Plan, which increases the maximum number of Class A Common Stock shares issuable under the plan. While the total number of shares available for equity compensation remains largely unchanged due to a corresponding reduction in shares under the Key Employees Stock Option Plan, this plan amendment ensures continued alignment with performance-based compensation requirements under Section 162(m) of the Internal Revenue Code. The reappointment of directors and ratification of the independent auditor were also confirmed.

Key Highlights

  • 1Stockholders approved an amendment to the Restated Certificate of Incorporation, increasing authorized capital stock from 340,000,000 to 515,000,000 shares.
  • 2The increase in authorized shares is primarily driven by an expansion of Class A Common Stock from 325,000,000 to 500,000,000 shares.
  • 3The company's Amended and Restated 1999 Incentive Compensation Plan was approved, with an increase in the maximum shares issuable from 37,500,000 to 38,261,580.
  • 4Additional shares (761,580) were reserved under the Incentive Plan for stock options, SARs, or other equity awards.
  • 5The total number of shares available for equity compensation plans remains effectively unchanged due to a reduction in shares under the Key Employees Stock Option Plan.
  • 6The plan amendment ensures continued compliance with performance-based compensation rules under Section 162(m) of the Internal Revenue Code.
  • 7Venetia Kontogouris and Thomas M. Wendel were reelected as Class III directors.
  • 8PricewaterhouseCoopers LLP was ratified as the independent registered public accounting firm for the year ending December 31, 2006.

Frequently Asked Questions

The increase in authorized shares provides Cognizant with greater financial and strategic flexibility. This expanded share pool can be used for various corporate purposes, including potential future acquisitions, stock splits, dividends, employee stock option plans, or other equity-based financing needs.

The amendment to the Incentive Plan primarily adjusts the number of shares available for equity awards. While the overall pool for equity compensation remains similar, this allows for the issuance of more shares under the Incentive Plan, aligning with the company's compensation strategies and ensuring compliance with tax regulations for performance-based compensation.

This filing does not specify any immediate plans for issuing the newly authorized shares. The increase is generally viewed as a proactive measure to ensure the company has sufficient authorized capital for future strategic opportunities and operational needs as it grows.

Yes, Venetia Kontogouris and Thomas M. Wendel were reelected as Class III directors to serve until the 2009 Annual Meeting of Stockholders. This indicates continuity in the company's board leadership.