8-KLeadership Changes

COGNIZANT TECHNOLOGY SOLUTIONS CORP 8-K Report, Executive Changes (Dec 3, 2009)

Filed December 3, 2009For Securities:CTSH

Summary

This Form 8-K filing by Cognizant Technology Solutions Corporation (CTSH) on December 3, 2009, details compensatory arrangements for its named executive officers. The Compensation Committee of the Board of Directors granted both Restricted Stock Units (RSUs) and Performance Units to key executives, including the President and CEO, CFO, and other senior leaders. The RSUs are designed to vest over a three-year period, providing a stable incentive tied to continued service. The Performance Units, on the other hand, are directly linked to achieving specific 2010 revenue targets, with vesting percentages varying based on the level of revenue attained. This dual approach to executive compensation aims to reward both long-term commitment and the achievement of critical business objectives, particularly revenue growth in the upcoming fiscal year.

Key Highlights

  • 1Cognizant Technology Solutions granted Restricted Stock Units (RSUs) to its top executives on December 1, 2009.
  • 2These RSUs vest over a three-year period, with full vesting expected by December 1, 2012, contingent on continued employment.
  • 3The company also granted Performance Units to the same named executives.
  • 4Vesting of Performance Units is tied to the achievement of specific 2010 revenue milestones.
  • 5Performance Unit vesting ranges from 0% to 180% of the awarded units, depending on whether 2010 revenue falls below $3.663 billion up to $4.070 billion.
  • 6The Compensation Committee has sole discretion in determining the achievement of performance milestones based on audited 2010 financials.
  • 7Performance Units have a tiered payout structure with issuance dates at 18 and 36 months post-grant, subject to continued service and milestone achievement.

Frequently Asked Questions

The primary purpose of this 8-K filing is to disclose compensatory arrangements for Cognizant Technology Solutions Corporation's named executive officers, specifically the grant of Restricted Stock Units and Performance Units.

The Restricted Stock Units granted vest in quarterly installments over a three-year period, with full vesting expected by December 1, 2012. Continued service with the company through each vesting date is a condition for vesting.

The Performance Units are tied to achieving specific 2010 revenue targets. The vesting percentage ranges from 0% if revenue is below $3.663 billion, up to 180% if revenue reaches $4.070 billion. The exact achievement and payout are subject to the Compensation Committee's discretion.

A portion of the vested Performance Units will be issued 18 months after the grant date, and the remainder will be issued 36 months after the grant date. Both issuances are contingent on the executive remaining employed by the company and the achievement of the performance milestones.