SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): March 6, 2023
Cognizant Technology Solutions Corporation
(Exact Name of Registrant as Specified in Charter)
(State or Other Jurisdiction
300 Frank W. Burr Blvd.
Teaneck, New Jersey 07666
(Address of Principal Executive Offices including Zip Code)
(Registrant’s telephone number, including area code)
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
|Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).|
|Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12).|
|Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)).|
|Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).|Securities registered pursuant to Section 12(b) of the Act:
|Title of each class||Trading Symbol(s)||Name of each exchange on which registered|
Class A Common Stock,
$0.01 par value per share
|CTSH||The Nasdaq Stock Market LLC|Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Cash Severance Policy1
On March 6, 2023, the Board of Directors of Cognizant Technology Solutions Corporation (the “Company”) adopted the Company’s Senior Executive Cash Severance Policy (the “Policy”). This Policy provides that the Company will not enter into any new employment agreement or severance or separation arrangement or agreement with any senior executive of the Company, or establish any new severance plan or policy covering any senior executive of the Company, in each case, that provides for cash severance benefits exceeding 2.99 times the sum of the senior executive’s base salary plus target bonus for the year of termination, without seeking stockholder approval or ratification of such agreement, arrangement, plan or policy.
The foregoing description of the Policy is qualified in its entirety by reference to the Policy, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference herein.
The Company previously announced the appointments of Eric Branderiz and Nella Domenici to its Board of Directors (the “Board”) effective February 21, 2023. It also announced that Maureen Breakiron-Evans, who joined the Board in 2009, had informed the Board that she will not stand for re-election at Cognizant's 2023 Annual Meeting of Shareholders.
Given these changes to the Board's composition, the Company previously announced that the Board intended to evaluate the composition of its committees. The Board has completed such evaluation and made the following changes, each effective as of March 6, 2023:
•Appointed Mr. Branderiz to the Audit Committee and Compensation and Human Capital Committee;
•Appointed Ms. Domenici to the Finance and Strategy Committee and Governance and Sustainability Committee;
•Removed Michael Patsalos-Fox from the Governance and Sustainability Committee and appointed Stephen Rohleder to the Governance and Sustainability Committee; and
•Removed Vinita Bali from the Finance and Strategy Committee and appointed her to the Governance and Sustainability Committee.
Item 9.01. Financial Statements and Exhibits.
|*||Management contract or compensatory plan or arrangement.|
1 NTD: All references to the policy and its provisions to be updated to reflect any changes in the as-adopted policy.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
|/s/ John Kim|
Executive Vice President, General Counsel, Chief Corporate Affairs Officer and Secretary
Date: March 6, 2023
COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
Senior Executive Cash Severance Policy
It is the policy of the Board of Directors (the “Board”) of Cognizant Technology Solutions Corporation (the “Company”) that the Company and its subsidiaries will not enter into any new employment agreement or severance or separation arrangement or agreement with any senior executive of the Company, or establish any new severance plan or policy covering any senior executive of the Company (such agreement, arrangement, plan or policy, a “Severance Arrangement”), in each case, that provides for Cash Severance Benefits (as defined below) exceeding 2.99 times the sum of the senior executive’s Base Salary (as defined below) plus Target Bonus (as defined below), without seeking stockholder approval of such Severance Arrangement.
In addition, any new Severance Arrangement covering any senior executive that provides for Cash Severance Benefits payable upon or in connection with a Change in Control (as defined below) shall be contingent upon termination of the senior executive’s employment with the Company and its successor (or any subsidiary of either of them).
The Board delegates to the Compensation and Human Capital Committee (the “Committee”) exclusive authority to make determinations regarding the interpretation and application of the provisions of this policy, in its sole discretion, including, without limitation, the determination of the value of any non-cash items, as well as the estimated present value of any periodic payments of cash following the date of such senior executive’s termination of employment. Such determinations shall be conclusive and binding upon all persons.
If the Board or the Committee determines that it would be in the best interest of stockholders to enter into a future Severance Arrangement that would require seeking stockholder ratification of such Severance Arrangement, the Company may seek stockholder approval of such Severance Arrangement after the material terms have been agreed upon but the payment of any benefits in excess of the foregoing limits will be contingent upon such stockholder approval.
For purposes of this policy:
“Cash Severance Benefits” means cash payments:
(i)in respect of the termination of the senior executive’s employment;
(ii)to secure an agreement not to compete with the Company; or
(iii)to offset any tax liability in respect of any of the foregoing.
The value of Cash Severance Benefits shall include the estimated present value of any periodic payments of cash following the date of such senior executive’s termination of employment.
For the avoidance of doubt, “Cash Severance Benefits” do not include (a) the payment, vesting, acceleration or other handling of equity-based awards granted under stockholder-approved plans, (b) payment of deferred compensation, earned retirement benefits or other vested employee benefits, in each case consistent with the terms of the Company’s retirement or employee benefit plans, (c) the provision of perquisites, insurance, disability, health and welfare plan coverage and other non-cash benefits, (d) any interest required to be paid pursuant to the terms of any Company plan or policy between the termination date and the payment date, (e) any unpaid bonus for any previously completed performance period, (f) compensation and benefits (including unpaid Base Salary and vacation pay) earned, accrued or otherwise provided with respect to services rendered prior to the date of such senior executive’s termination of
employment and reimbursement for any expenses validly incurred prior to the date of such senior executive’s termination of employment, (g) any payment in respect of the senior executive’s annual bonus for the year of termination (prorated based on the senior executive’s days of service during the annual performance period, whether or not subject to actual performance), (h) amounts paid for services following termination of employment for a reasonable consulting agreement for a period not to exceed one year or (i) any payment that the Board determines in good faith to be a reasonable settlement of any claim made against the Company or any of its subsidiaries.
“Change in Control” shall have the meaning set forth in the Company’s 2017 Incentive Award Plan, as amended from time to time or any successor plan in effect as of the date of the senior executive’s termination of employment.
“Base Salary” means the amount an senior executive is entitled to receive as wages or salary on an annualized basis, excluding all bonus, overtime, health additive and incentive compensation, payable by the Company (including its subsidiaries) as consideration for the senior executive’s services, provided that following a Change in Control, “Base Salary” means the higher of (x) the senior executive’s Base Salary as in effect immediately prior to the Change in Control and (y) the senior executive’s highest Base Salary in effect at any time thereafter.
“senior executive” shall mean any “executive officer”, as defined in Rule 3b-7 under the Securities Exchange Act of 1934, as amended, and any officer of the Company at the level of Executive Vice President or above who is not otherwise an “executive officer”.
“Target Bonus” means the senior executive’s target bonus under the Company’s annual cash incentive program applicable to the senior executive for the year of termination, provided that if no target bonus has been established for such year under such plan, Target Bonus means the senior executive’s target bonus for the year immediately preceding the year of termination, provided further that following a Change in Control, “Target Bonus” means the higher of (x) the Participant’s Target Bonus immediately prior to the Change in Control, provided that if no Target Bonus has been established for such year under such plan, the year immediately preceding the year in which the Change in Control occurs or (y) the senior executive’s highest Target Bonus in effect at any time after the Change in Control.