8-KOther EventsExhibits & Filings

COGNIZANT TECHNOLOGY SOLUTIONS CORP 8-K Report, Corporate Update (Sep 17, 2007)

Filed September 17, 2007For Securities:CTSH

Summary

Cognizant Technology Solutions Corporation (CTSH) announced on September 17, 2007, a significant decision by its Board of Directors to implement a two-for-one stock split in the form of a 100% stock dividend. This action will effectively double the number of outstanding Class A Common Stock shares, with shareholders of record on October 1, 2007, receiving one additional share for each share they own. The distribution is slated for October 16, 2007. This move is generally seen as a way to make the stock more accessible to a broader range of investors and potentially increase its liquidity. In addition to the stock split, Cognizant also revealed a new stock repurchase program, authorizing the buyback of up to $100 million of its Class A Common Stock over the next 12 months. This program, funded by existing working capital, indicates management's confidence in the company's financial health and its commitment to returning value to shareholders. The timing and extent of these repurchases will be at management's discretion, influenced by market conditions.

Key Highlights

  • 1Announced a two-for-one stock split via a 100% stock dividend, effective for shareholders of record on October 1, 2007.
  • 2The stock distribution is expected to occur on or about October 16, 2007, doubling the number of outstanding Class A Common Stock shares.
  • 3Authorized a new stock repurchase program to buy back up to $100 million of Class A Common Stock.
  • 4The repurchase program has a duration of up to 12 months.
  • 5Repurchases will be funded using available working capital.
  • 6Management will determine the timing and number of shares repurchased based on market conditions and other factors.
  • 7The filing includes a press release dated September 17, 2007, detailing these announcements.

Frequently Asked Questions

A two-for-one stock split in the form of a 100% stock dividend means that for every share of Class A Common Stock an investor owns, they will receive one additional share. This effectively doubles the total number of shares outstanding and reduces the price per share proportionally, while the total market capitalization of the company remains the same immediately after the event. Shareholders of record on October 1, 2007, will benefit from this.

Stock splits are often implemented to make the stock price more affordable and accessible to a wider range of investors, potentially increasing liquidity and trading volume. A stock repurchase program signals management's belief that the company's stock is undervalued and demonstrates a commitment to returning capital to shareholders, which can boost shareholder value.

If you owned shares of Cognizant Technology Solutions Corporation's Class A Common Stock as of the close of business on October 1, 2007, you will receive one additional share for each share you held. Your total number of shares will double, but the value of your holdings should remain approximately the same immediately after the distribution, as the price per share will adjust downwards.

The stock distribution is expected to occur on or about October 16, 2007. Shareholders of record as of October 1, 2007, will receive these additional shares around that date.