8-KMaterial AgreementsOther EventsExhibits & Filings

COGNIZANT TECHNOLOGY SOLUTIONS CORP 8-K Report, Material Agreement (Dec 5, 2008)

Filed December 5, 2008For Securities:CTSH

Summary

Cognizant Technology Solutions Corporation (CTSH) filed an 8-K on December 5, 2008, detailing amendments to executive agreements and a new stock repurchase program. The company's Compensation Committee approved amendments to existing Severance and Noncompetition Agreements with Named Executive Officers to ensure compliance with Section 409A of the Internal Revenue Code. Additionally, the executive pension plan was amended and restated for the same compliance reasons, effective January 1, 2009. Of significant interest to investors, the Board of Directors authorized a new stock repurchase program allowing for the buyback of up to $50 million of the Company's Class A Common Stock over a 12-month period. These repurchases, which can be conducted through open market or private transactions, are intended to be funded by existing cash and operational cash flow. This initiative signals management's confidence in the company's financial position and its commitment to returning value to shareholders.

Key Highlights

  • 1Cognizant Technology Solutions Corporation (CTSH) announced a new stock repurchase program authorizing the buyback of up to $50 million of its Class A Common Stock.
  • 2The stock repurchase program has a duration of up to 12 months and will be funded by existing cash and cash generated from operations.
  • 3Amendments were made to Severance and Noncompetition Agreements with Named Executive Officers to comply with Section 409A of the Internal Revenue Code.
  • 4The Cognizant Technology Solutions Executive Pension Plan was amended and restated, also to comply with Section 409A of the Internal Revenue Code, effective January 1, 2009.
  • 5These executive agreement and pension plan amendments aim to ensure regulatory compliance and proper governance.
  • 6The repurchase program indicates management's confidence in the company's financial health and its strategy to enhance shareholder value.

Frequently Asked Questions

The amendments to the Severance and Noncompetition Agreements with Named Executive Officers and the Cognizant Technology Solutions Executive Pension Plan were made to ensure compliance with Section 409A of the Internal Revenue Code, which governs non-qualified deferred compensation.

The Board of Directors authorized a program to repurchase up to an aggregate of $50,000,000 of the Company's Class A Common Stock over a period not to exceed 12 months.

The company anticipates that the repurchase program will be funded using its existing cash on hand and cash generated from its operations.

The authorization of a stock repurchase program often signals that management believes the company's stock is undervalued and that it has sufficient financial resources to return capital to shareholders, indicating a degree of financial strength and confidence in future performance.