COGNIZANT TECHNOLOGY SOLUTIONS CORP — Proxy Solicitation & Information Statement 2017

Apr 20, 2017

Table of Contents

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. )

☑ Filed by the Registrant ☐ Filed by a Party other than the Registrant

CHECK THE APPROPRIATE BOX:
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(as permitted by Rule 14a-6(e)(2))
☑	Definitive Proxy Statement
☐	Definitive Additional Materials
☐	Soliciting Material Under Rule
14a-12

Cognizant Technology Solutions Corp.

(Name of Registrant as Specified In Its Charter) (Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

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PART 01

Table of Contents

Table of Contents

Table of Contents

–	Notice of 2017 Annual Meeting
1	Proxy Statement Summary
10	Corporate Governance
10	Election of Directors – Proposal 1*
14	Board Composition
16	The Board’s Role and
Responsibilities
18	Committees of the Board
19	Director Attendance
19	Director Compensation
21	Stock Ownership Information
22	Compensation
22	Advisory Votes on Executive Compensation (Say-on-Pay) and
Frequency of Future Say-on-Pay Votes (Say-on-Frequency) – Proposals 2 and
3*
23	Compensation Discussion and
Analysis
23	Overview of Executive
Compensation Program
24	Role of Stockholder
Say-on-Pay Votes
24	The Compensation-Setting
Process
25	Direct Compensation of
NEOs
30	Other Elements of
Compensation
32	Compensation
Committee
33	Executive Compensation
Tables
38	Potential Payments upon Termination
or Change in Control
40	Approval of 2017 Incentive Award Plan – Proposal
4*
47	Audit Matters
47	Ratification of Appointment of Independent Registered Public
Accounting Firm – Proposal 5*
48	Audit Committee Report
49	Independent Registered Public
Accounting Firm Fees and Other Matters
50	Stockholder Proposals
50	Stockholder Proposal Requesting that the Board take the Steps
Necessary to Eliminate the Supermajority Voting Provisions in the
Company’s Certificate of Incorporation and By-Laws – Proposal
6*
51	Stockholder Proposal Regarding Stockholder Action by Written
Consent – Proposal 7*
53	Stockholder Proposals and Nominees
for the 2018 Annual Meeting
54	Additional Information
54	Proxy Statement and Proxy
Solicitation
55	Annual Meeting Q&A
57	Cognizant’s Annual Report on Form
10-K
57	Non-GAAP Financial Measures and
Forward-Looking Statements
59	Appendix A – 2017 Incentive Award
Plan
78	Helpful Resources

• To be voted on at the meeting

The Cognizant Cultural Values

Table of Contents

●	●
John E. Klein	Francisco
D’Souza

April 20, 2017

To Our Stockholders:

We are pleased to invite you to our 2017 Annual Meeting of Stockholders, which will be held at the Teaneck Marriott at Glenpointe, 100 Frank W. Burr Blvd., Teaneck, New Jersey 07666, on Tuesday, June 6, 2017, at 9:30 a.m. Eastern Time.

There have been a number of developments with the Company since our last annual meeting that we would like to highlight for you. In terms of financials, we completed 2016 with revenue at a record $13.5 billion (8.6% higher than in 2015). Net income was $1.6 billion. GAAP diluted earnings per share was $2.55 (down 3.8% from 2015), which included the tax costs of $0.39 per share on a cash remittance of $2.8 billion by our principal operating subsidiary in India that increased, after tax, our cash holdings outside of India, including an additional $1.0 billion in the U.S. Our non-GAAP diluted earnings per share increased by 10.4% to $3.39. 1

As we noted last year, our customers have been facing a dual mandate. They must run better – operating with greater efficiency, productivity and flexibility. At the same time, they must run different – embracing innovation and reinventing their business to compete in today’s dynamic digital world. To address these seismic changes, we realigned the Company’s horizontal teams in the second half of 2016 into three digital practice areas that span the various business segments – Digital Business, Digital Operations and Digital Systems and Technology.

Our many talented associates around the world continue to work with clients to help them win in the digital economy by applying technology and analytics to drive sustainable growth, deploying systems of intelligence to automate and improve core business processes, and improving technology systems by deploying cloud and cyber security solutions and as-a-service models to make them simpler, more modern and secure. Digital revenue in 2016 grew well above Company average. We fully anticipate this trend – growth weighted toward digital – to accelerate in 2017 and beyond.

In the last year we have also been actively engaged with many of our stockholders, particularly focused on driving long-term stockholder value. Within this context, we developed and announced in February 2017 a comprehensive plan to accelerate our shift to digital services and solutions and further enhance stockholder value. Key elements of the plan are:

| ● | Accelerating our investments to
scale digital capabilities across geographies and industry segments
through both organic investments and acquisitions. We plan to continue to
invest extensively in training and re-skilling our team, and in
substantially expanding our local workforces in the U.S. and other local
markets where we operate. We accelerated the pace of acquisitions during
2016 and intend to continue that strategy into 2017 with a focus primarily
on tuck-in acquisitions that expand our intellectual property, industry
expertise, geographic reach and platform and technology
capabilities. |
| --- | --- |
| ● | Improving the Company’s non-GAAP
operating margin by accelerating the pursuit of high-value digital
transformation work, driving leverage in the cost structure, executing on
opportunities to improve operational efficiency and aggressively employing
automation to optimize traditional services. In connection with this
effort, we announced a move away from our historical 19-20% targeted
non-GAAP operating margin toward a target of 22% in
2019. 1 |
| ● | Returning $3.4 billion of capital to
our stockholders in 2017 and 2018 through a combination of share
repurchases and dividends. The Company commenced the first stage of this
capital return program, a $1.5 billion accelerated share repurchase
program, in March 2017, and intends to initiate a regular quarterly
dividend of $0.15 per share in the second quarter of
2017. |

Our commitment to good corporate governance has also never been stronger. Following the addition of one new director in each of 2015 and 2016, our ongoing Board refreshment continued with the welcoming of two new directors, Betsy S. Atkins and John M. Dineen, in April 2017. Ms. Atkins brings extensive leadership, corporate governance and digitization experience from her years leading several successful companies, including Baja Corp., a venture capital investment firm she co-founded in 1994, and serving on numerous boards across a range of global industries. Mr. Dineen brings operating and leadership experience from his 28 years in senior and executive roles with General Electric, most recently as CEO of GE Healthcare. We also thank directors Lakshmi Narayanan and Thomas M. Wendel, who are not standing for reelection this year, for their many years of service and strategic counsel and their roles in helping make Cognizant the leader it is today.

We hope you will take the time to read further about the above and other matters, including those to be voted on at the annual meeting, in the enclosed Notice of Meeting and Proxy Statement. These materials include instructions on how to vote your shares by proxy and/or attend the meeting and vote in person. Whether or not you plan to attend the meeting in person, we urge you to promptly vote and submit your vote by proxy following the instructions provided in the Notice of Meeting and Proxy Statement.

We thank you for your continued support.

Sincerely,

●	●
John E.
Klein	Francisco
D’Souza
Chairman of
the Board of Directors	Chief
Executive Officer

1 See “Non-GAAP Financial Measures and Forward-Looking Statements” on page 57 of the Proxy Statement.

Table of Contents

COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION NOTICE OF 2017 ANNUAL MEETING

To Our Stockholders:

You are invited to attend the 2017 Annual Meeting of Stockholders (the “Annual Meeting”) of Cognizant Technology Solutions Corporation (“Cognizant” or the “Company”). This notice includes important information about the meeting.

AGENDA

| 1. | Elect Zein Abdalla, Betsy S. Akins,
Maureen Breakiron-Evans, Jonathan Chadwick, John M. Dineen, Francisco
D’Souza, John N. Fox, Jr., John E. Klein, Leo S. Mackay, Jr., Michael
Patsalos-Fox and Robert E. Weissman as Directors to serve until the 2018
Annual Meeting of Stockholders. See page 10. | |
| --- | --- | --- |
| | ● | The Board recommends a vote FOR each
Director nominee. |
| 2. | Approve, on an advisory
(non-binding) basis, the compensation of the Company’s named executive
officers. See page 22. | |
| | ● | The
Board recommends a vote FOR this proposal. |
| 3. | Approve, on an advisory
(non-binding) basis, the frequency of future advisory votes on the
compensation of the Company’s named executive officers. See page
22. | |
| | ● | The Board recommends that you vote 1 YEAR on this proposal. |
| 4. | Approve the Cognizant Technology Solutions Corporation
2017 Incentive Award Plan. See page 40. | |
| | ● | The
Board recommends a vote FOR this proposal. |
| 5. | Ratify the appointment of
PricewaterhouseCoopers LLP as the Company’s independent registered public
accounting firm for the year ending December 31, 2017. See page
47. | |
| | ● | The
Board recommends a vote FOR this proposal. |
| 6. | Consider a stockholder proposal
requesting that the Board of Directors take the steps necessary to
eliminate the supermajority voting provisions of the Company’s Certificate
of Incorporation and By-laws, if properly presented at the Annual Meeting.
See page 50. | |
| | ● | The
Board recommends a vote FOR this proposal. |
| 7. | Consider a stockholder proposal
requesting that the Board of Directors take the steps necessary to permit
stockholder action by written consent, if properly presented at the Annual
Meeting. See page 51. | |
| | ● | The Board recommends a vote AGAINST this
proposal. |

Stockholders also will transact such other business as may properly come before the Annual Meeting.

By Order of the Board of Directors,

Harry Demas Assistant Corporate Secretary Teaneck, New Jersey April 20, 2017

LOGISTICS

Date:	Tuesday, June 6, 2017
Time:	9:30 a.m. Eastern Time
Place:	Teaneck Marriott at Glenpointe 100 Frank
W. Burr Blvd. Teaneck, NJ 07666

| HOW TO
VOTE Your vote is very important. You may
vote using any one of the following methods: | |
| --- | --- |
| ● | Use the
Internet Vote over the Internet at
www.proxyvote.com. |
| ● | Call
Toll-Free Vote by telephone by
calling 800-690-6903. |
| ● | Mail Your Proxy
Card Vote by signing, dating and
returning the proxy card. |
| ● | In Person Follow the advance registration instructions under “Who
can attend the Annual Meeting of Stockholders” on page
55. |
| Q&A Who can vote at the Annual
Meeting? Stockholders as of our record
date, April 10, 2017. How many shares are entitled to
vote? 588,995,145 shares of common
stock. May I change my vote? Yes, by delivering a new proxy with a later date,
revoking your proxy, or voting in person at the Annual Meeting. How many votes do I
get? One vote on each proposal for each
share you held as of April 10, 2017. Where can I find more
information? See “Additional
Information” on page 54. | |

Our Proxy Statement and 2016 Annual Report are available at www.proxyvote.com.

PART 02

Table of Contents

PROXY STATEMENT SUMMARY

This summary highlights certain information in this proxy statement. Please read the entire proxy statement carefully before voting. We intend to make this proxy statement available to our stockholders on or about April 20, 2017.

VOTING ROADMAP

●	PROPOSAL 1
	● Elect the 11 Director nominees named below to serve as
Directors until the 2018 Annual Meeting.
●	● Our nominees are experienced professionals who have the
right mix of skills, qualifications and business acumen to lead the
Company.	●	See page 10 for further information
	The Board recommends a vote FOR each Director nominee named
below.

Director Nominees

| | Name and Primary
Occupation | | Independent Director | Other Public Boards | Committee
Membership — AC | CC | GC |
| --- | --- | --- | --- | --- | --- | --- | --- |
| ● | Zein Abdalla | ● | | | | | |
| | Retired President of PepsiCo, Inc. | 2015 | ● | 1 | ● | | ● |
| ● | Betsy S. Atkins | ● | | | | | |
| | CEO and Founder of Baja Corp. | 2017 NEW | ● | 3 | | | |
| ● | Maureen
Breakiron-Evans | ● | | | | | |
| | Former CFO of Towers Perrin | 2009 | ● | 2 | ● | | ● |
| ● | Jonathan
Chadwick | ● | | | | | |
| | Former CFO and COO of VMware, Inc. | 2016 | ● | 2 | ● | | |
| ● | John M. Dineen | ● | | | | | |
| | Former President and CEO of GE Healthcare | 2017 NEW | ● | 1 | | | |
| ● | Francisco
D’Souza | ● | | | | | |
| | CEO of Cognizant | 2007 | | 1 | | | |
| ● | John N. Fox,
Jr. | ● | | | | | |
| | Former Vice Chairman of Deloitte
& Touche, LLP and Global Director, Strategic Clients of Deloitte
Consulting | 2007 | ● | 1 | | ● | ● |
| ● | John E. Klein | ● | | | | | |
| | Chairman of Cognizant and President and CEO of Polarex,
Inc. | 1998 | ● | 0 | ● | ● | ● |
| ● | Leo S. Mackay,
Jr. | ● | | | | | |
| | SVP, Internal Audit, Ethics and Sustainability of Lockheed
Martin Corporation | 2012 | ● | 0 | ● | | |
| ● | Michael
Patsalos-Fox | ● | | | | | |
| | Former CEO of Stroz Friedberg and Former Chairman, the
Americas and Senior Partner of McKinsey & Company | 2012 | ● | 0 | | ● | ● |
| ● | Robert E.
Weissman | ● | | | | | |
| | Chairman of Shelburne Investments and Retired Chairman and
CEO of The Dun & Bradstreet Corporation | 2001 | ● | 0 | | ● | ● |

| AC | Audit Committee | ● | Committee
Chair |
| --- | --- | --- | --- |
| CC | Compensation Committee | ● | Committee
Member |
| GC | Governance Committee | ● | AC Financial
Expert |

2017 Proxy Statement 1

Table of Contents

Proxy Statement Summary

Board Snapshot

Director Nominee Experience

●	●	●
11 (100%) Leadership	11 (100%) Global Business Experience	4 (36%) Consulting
●	●	●
10 (91%) Technology	10 (91%) Financial	10 (91%) Operational

Cognizant Policy: Create an experienced Board with expertise in areas relevant to the Company.

Director Nominee Tenure

Cognizant Policy: Have a balanced mix of both deep Company and industry knowledge and fresh perspective.

Strong Director Engagement

Overall attendance at 2016 meetings

Board Refreshment

Corporate Governance Highlights

| Board of
Directors | |
| --- | --- |
| ● | Majority of independent directors
(10 of 11) |
| ● | Separate Chairman and CEO positions
since 2003 |
| ● | Majority voting in director
elections |
| ● | Directors limited to service on 5
public company boards (3 for a public company CEO), including the
Company |
| ● | Annual review of skills, expertise
and characteristics of individual Board members as part of overall
analysis of Board composition |
| ● | A director who experiences a
material change in job responsibilities (other than retirement) is
required to offer to resign |

| ● | Regular executive sessions of
independent directors |
| --- | --- |
| ● | Annual Board and committee
self-assessments |
| ● | Consideration of Board diversity in
director selection |

| Stockholder Rights and
Engagement | |
| --- | --- |
| ● | Annual director
elections |
| ● | No classified
Board |
| ● | Proxy access |
| ● | Stockholders right to call special
meeting |
| ● | Annual vote to ratify selection of
independent registered public accounting firm |
| ● | No poison pill |
| ● | Board support for stockholder
proposal regarding elimination of supermajority voting
provisions |

| Strategy and
Risk | |
| --- | --- |
| ● | Board actively reviews the
development and execution of Company strategy |
| ● | Board oversight and responsibility
for risk management, including |

| ● | Enterprise risks, including cyber
security, overall risk management framework and risks related to the
financial statements overseen by the Audit
Committee |
| --- | --- |
| ● | Risks related to compensation
policies and practices overseen by the Compensation
Committee |
| ● | CEO succession planning and other
corporate governance risks overseen by the Board with the assistance of
the Governance Committee |

2 Cognizant Technology Solutions Corporation

Table of Contents

Proxy Statement Summary

●	PROPOSALS 2 AND 3
	ADVISORY VOTES
ON EXECUTIVE COMPENSATION (SAY-ON-PAY) AND FREQUENCY OF FUTURE SAY-ON-PAY
VOTES (SAY-ON-FREQUENCY)
●	● Our executive compensation program reflects our commitment to paying for performance. Holding
the vote annually gives stockholders the opportunity to provide direct and frequent feedback on our
compensation philosophy, policies and procedures.	●	See page 22 for further information
	The Board unanimously
recommends a vote FOR the approval, on an advisory (non-binding)
basis, of our executive compensation. The Board also unanimously
recommends that you vote 1 YEAR on the frequency of future advisory votes on executive
compensation.

Executive Compensation Program Highlights

Key Program Features

	What We Do	See Page No.
✓	Pay for performance	25
✓	Use appropriate
peer groups when establishing compensation	24
✓	Retain an independent external
compensation consultant	24
✓	Set significant
stock ownership guidelines for executives	30
✓	Include a clawback policy in our
incentive plans	31
✓	Utilize “double
trigger” provisions for plans that contemplate a change in
control	38

	What We Don’t Do	See Page No.
✕	No hedging or speculation with
respect to Cognizant securities	30
✕	No short sales of Cognizant
securities	30
✕	No margin accounts with Cognizant
securities	30
✕	No tax “gross ups” on severance
benefits	32

Program Objectives

The Compensation Committee has designed the executive compensation program for our NEOs to meet the following objectives:

| ● | Ensure executive compensation is
aligned with our corporate strategies and business objectives and that
potential realizable compensation is set relative to each executive’s
level of responsibility and potential impact on our
performance; |
| --- | --- |
| ● | A substantial portion of an
executive officer’s compensation is subject to achieving both short-term
and long-term performance objectives that enhance stockholder
value; |
| ● | Reinforce the importance of meeting
and exceeding identifiable and measurable goals through superior awards
for superior performance; |

| ● | Provide total direct compensation
that is competitive in markets in which we compete for management talent
in order to attract, retain and motivate the best possible executive
talent; |
| --- | --- |
| ● | Provide an incentive for long-term
continued employment with our Company; and |
| ● | Reinforce our desired culture and
unique corporate environment by fostering a sense of ownership, urgency
and overall entrepreneurial spirit. |

2017 Proxy Statement 3

Table of Contents

Proxy Statement Summary

2016 Compensation Structure

■
Stable source of cash income at
competitive levels

| ■ |
| --- |
| Annual cash incentive for Mr.
D’Souza, Mr. Mehta and Ms. McLoughlin to motivate and reward achievement
of Company financial and operational
objectives |

| Weighting | | Measurement
Period | Target
Compensation |
| --- | --- | --- | --- |
| ● | Revenue | 1 year | 85% of base
salary |
| | | Payout Range | |
| ● | Non-GAAP Income from
Operations | ● | |
| ● | Days Sales Outstanding
(DSO) | | |

Historical Annual Cash Incentive award achievements by year	2015	2016
96.2%	142.0%	79.8%

Cash bonus for Mr. Chintamaneni and Mr. Sinha based on achievement of business unit and/or overall business goals and expanded responsibilities in 2016

| ■ |
| --- |
| Annual grant of performance stock
units that reward achievement of Company financial objectives, continued
service and long-term performance of our common
stock |

| Weighting 1 | | Measurement
Period | Vesting |
| --- | --- | --- | --- |
| ● | Revenue | 2 years | 1/3 rd at 30
months |
| | | Vesting
Range | 2/3 rds at 36
months |
| ● | Non-GAAP EPS | ● | |

Historical PSU achievements by performance measurement period	2015 1	2016
86.1%	122.9%	38.2%

Weighting for 2017 awards – 50% Revenue; 50% non-GAAP EPS

| ■ |
| --- |
| Annual grants of restricted stock
units to reward continued service and long-term performance of our common
stock |

Vesting Quarterly over 3 years

Q4 2016 to Q1 2017 RSU grant timing change – The Company moved the timing of annual RSU grants for Mr. D’Souza, Mr. Mehta and Ms. McLoughlin from the fourth quarter of 2016 to the first quarter of 2017 to align with the timing of the Company’s other annual equity grants and other annual compensation decisions by the Compensation Committee. As such, to present the intended target total direct compensation in a more meaningful manner, the RSU percentages shown for 2016 include the value of the RSU grants made to such executives in the first quarter of 2017.

| 1 | Weighting was 100% revenue for the 2014 and 2015 performance
measurement periods. |
| --- | --- |
| 2 | Excludes Mr. Coburn, who resigned
from the Company during 2016. |

| 2016 Target Annual
Compensation | |
| --- | --- |
| ● | ● |
| CEO | Other
NEOs 2 (on
average) |

■	Base Salary
■	Annual Cash Incentive / Cash Bonus
■	Performance Stock Units (PSUs)
■	Restricted Stock Units
(RSUs)

4 Cognizant Technology Solutions Corporation

PART 03

Table of Contents

Proxy Statement Summary

2016 Compensation (in thousands)

Name and Principal Position	Year	Salary	Cash Bonus	Annual Cash Incentive	PSU	RSU	All Other Pension and Deferred Comp.	All Other Comp.	SEC Total	Adjusted SEC Total 1
Francisco D’Souza	2016	$664	–	$450	$7,019	– 1	–	$123	$8,257	$12,031
CEO	2015	$645	–	$778	$6,814	$3,669	–	$45	$11,951	$11,951
Rajeev Mehta	2016	$574	–	$389	$3,584	– 1	–	$6	$4,554	$7,099
President 2	2015	$539	–	$650	$3,480	$1,874	–	$2	$6,544	$6,544
Gordon J. Coburn	2016	$467	–	–	$3,751	–	$184	$93	$4,495	$4,495
Former President 2	2015	$614	–	$740	$3,641	$1,961	–	$89	$7,045	$7,045
Karen
McLoughlin	2016	$427	–	$289	$1,876	– 1	–	$8	$2,599	$3,638
CFO	2015	$406	–	$490	$1,821	$981	–	$8	$3,706	$3,706
Ramakrishna Prasad Chintamaneni	2016 3	$417	$566	–	$831	$1,615	–	$8	$3,437	$3,437
EVP and
President, Global Industries and Consulting
Dharmendra Kumar Sinha	2016 3	$357	$168	–	$714	$1,762	–	$8	$3,009	$3,009
EVP
and President, Global Client Services

| 1 | The Company moved the timing of
annual RSU grants for certain NEOs from the fourth quarter of 2016 to the
first quarter of 2017 to align with the timing of the Company’s other
annual equity grants and other annual compensation decisions by the
Compensation Committee. The Adjusted SEC Total represents the SEC Total
plus, for 2016, the target value of the RSU grants made in the first
quarter of 2017 (using a March 2, 2017 grant date fair value) to Mr.
D’Souza ($3,774), Mr. Mehta ($2,545) and Ms. McLoughlin ($1,038) to
provide stockholders annual compensation numbers that are more comparable
to past years and more indicative of the targeted annual compensation to
the NEOs. These amounts are not a substitute for the amounts reported
under the SEC Total. |
| --- | --- |
| 2 | Mr. Mehta was appointed President
of Cognizant on September 28, 2016, following the resignation of Mr.
Coburn on September 27, 2016. |
| 3 | 2015 compensation not presented
for Mr. Chintamaneni and Mr. Sinha as they were not NEOs in that
year. |

Aligning Pay with Performance

The following graphs show Company performance across revenue, profitability and cash flow metrics for the last three years as compared to the performance targets for the annual cash incentives and PSUs with performance measurement periods corresponding to such years. In addition, the Company’s share price performance, which impacts the performance of long-term equity grants to the NEOs and holdings of our common stock, is set forth below for the last five years.

Revenue

Revenue (in billions)

Annual Cash Incentive PSUs 1

Strong, consistent revenue growth 8.6% Year-over-year revenue growth (2015 to 2016)

Compensation Impacts

| ● | Significant weighting in both
performance-based compensation elements |
| --- | --- |
| ● | Aggressive targets have helped drive
revenue growth |

For 2017 awards: Revenue reduced to 50% weighting for PSUs to reflect increased Company focus on non-GAAP Operating Margin.

1 Applies to PSUs with a 2016 performance measurement period. PSUs with a 2014 or 2015 performance measurement period are weighted 100% to revenue. PSUs issued in 2016 have a 2-year performance measurement period covering 2016 and 2017 and are not shown.

2017 Proxy Statement 5

Table of Contents

Proxy Statement Summary

Profitability

Non-GAAP Operating Margin 1

Non-GAAP Operating Margin
19% –
20%
Historical target consistently
maintained, with excess reinvested in the Company for future growth,
resulting in steadily increasing non-GAAP Income from Operations and
non-GAAP EPS as the Company’s revenue has increased.
2019 Goal 1,2 22%	by accelerating the
pursuit of high-value digital transformation work, driving leverage in the
cost structure, executing on opportunities to improve operational
efficiency and aggressively employing automation to optimize
tradition al services.

Non-GAAP Income from Operations 1 (in millions)

Annual Cash Incentive

Non-GAAP Diluted Earnings Per Share (EPS) 1

PSUs 3

Non-GAAP Income from Operations	Non-GAAP EPS
7.6%	10.4%
(2015-2016)

Compensation Impacts

| ● | Targets have historically been
designed to achieve 19-20% non-GAAP Operating Margin, with targets
increased each year to maintain that margin as revenue growth is
encouraged |
| --- | --- |
| ● | Profitability has been an
increasingly important component of the Company’s performance-based
compensation with the addition of the non-GAAP EPS metric for PSUs in
2016 |

For 2017 awards:

| ● | Targets designed around planned
increases in non-GAAP Operating Margin for future years (see 2019 Goal
above) |
| --- | --- |
| ● | Non-GAAP EPS increased to 50%
weighting for PSUs; target accounts for $1.5 billion accelerated share
repurchase program initiated in March
2017 |

| 1 | See “Non-GAAP Financial Measures
and Forward-Looking Statements” on page 57. |
| --- | --- |
| 2 | 2019 goal excludes any changes to
the regulatory environment, including with respect to immigration and
taxes. See our Annual Report for these and other risk factors that may
impact our ability to achieve this goal. |
| 3 | Applies to PSUs with a 2016
performance measurement period. PSUs with a 2014 or 2015 performance
measurement period do not use non-GAAP EPS as a performance metric. PSUs
issued in 2016 have a 2-year performance measurement period covering 2016
and 2017 and are not shown. |

6 Cognizant Technology Solutions Corporation

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Proxy Statement Summary

Cash Flow

Days Sales Outstanding (DSO)

Annual Cash Incentive

| Consistent DSO year-to-year |
| --- |
| ● |
| Collection of receivables from
customers has remained steady over the past three
years. |

Compensation Impact

● Target established to ensure management is incentivized to maintain collection of receivables at a healthy level for the business

Stockholder Return

5-Year Cumulative Total Stockholder Return 1

| 1 | Comparison assumes $100 was
invested, from December 31, 2011 through December 31, 2016, in Cognizant
common stock, the S&P 500 Index, the NASDAQ 100 Index and our peer
group (capitalization weighted), and that all dividends were
reinvested. |
| --- | --- |
| 2 | Consists of the following
information technology consulting firms: Accenture plc, Computer Sciences
Corporation, Computer Task Group, Incorporated, ExlService Holdings Inc.,
Genpact Limited, Infosys Limited, Syntel, Inc., Wipro Limited and WNS
(Holdings) Limited. |

| 5-year Compound Average Growth in Share
Price |
| --- |
| 11.7% |
| (2012-2016) |

Compensation Impact

● A substantial percentage of NEO compensation is in the form of long-term equity compensation (RSUs and PSUs), aligning management incentives with those of stockholders

| ● | RSUs vest quarterly over three
years |
| --- | --- |
| ● | PSUs issued in 2011 through 2015
vest at 18 months and 36 months and have a 1-year performance measurement
period |
| ● | PSUs issued in 2016 vest at 30
months and 36 months and have a 2-year performance measurement
period |

| ● | All of our NEOs hold substantial ownership interests in our
common stock, in excess of the requirements under our stock ownership
guidelines, further aligning their interests with those of
stockholders |
| --- | --- |
| ● | Reduced stockholder return in the
last three years has reduced realized compensation to NEOs from their
equity grants and stockholdings |

2017 Proxy Statement 7

Table of Contents

Proxy Statement Summary

●	PROPOSAL 4
	APPROVE THE
2017 INCENTIVE AWARD PLAN
●	● Providing long-term incentive compensation is important
to attracting and retaining executive talent and other key personnel and
to incentivizing them to maximize stockholder value.
	● The 2017 Incentive Award Plan (the “Plan”) will allow us
to make equity-based compensation awards to employees, consultants and
directors. If approved, it will replace our 2009 Incentive Compensation
Plan (the “2009 Plan”) and no further awards will be made under the 2009
Plan. Our Board adopted the Plan on March 27, 2017 and it will become
effective as of June 6, 2017, subject to stockholder
approval.	●	See page 40 for further information
	The Board unanimously recommends a vote FOR approval of the Cognizant Technology Solutions Corporation 2017 Incentive
Award Plan.

What Would the Plan Do?

| ● | Allow for the issuance of up to
46,000,000 new shares , in addition to
the approximately 7,000,000 remaining available for issuance under the
2009 Plan that will be transferred to the Plan, bringing the total number
of shares available for new grants under the Plan to approximately
53,000,000, which we expect to last us approximately six
years; |
| --- | --- |
| ● | Provide for the number of shares
reserved for issuance to be reduced by two shares for each share of stock
issued pursuant to a full-value award ,
including a PSU or an RSU, which would replace the 1.55 share reduction
for each share of stock issued pursuant to a full-value award under the
2009 Plan; |
| ● | Provide for a term through March
27, 2027 ; |
| ● | Clarify that all awards are
subject to the provisions of any clawback policy we
implement ; |
| ● | Establish an annual dollar figure
limit for director compensation of $900,000 ,
which applies to both cash and equity compensation and would replace the
100,000 share limit for director equity compensation under the 2009
Plan; |
| ● | Provide for an annual per-person
dollar figure limit for cash awards of $10,000,000 , which represents an increase from the $5,000,000
per-person cash award limit under the 2009 Plan;
and |
| ● | Establish an annual per-person
share limit of (i) 3,000,000 for stock option and stock appreciation right
awards and (ii) 2,000,000 for PSUs and RSUs , which would replace the annual per-person share limit for all
awards of 5,000,000 under the 2009
Plan. |

Key Information About Plan Features and Our Equity Compensation Share Usage 1

	What this measures	How we manage
Burn Rate	How
rapidly we are using an equity plan’s share pool	Over the last three years, our burn rate, which we calculate
on a gross basis, averaged 0.78%. The burn rates for the last three years
were 1.02%, 0.46% and 0.86% for 2014, 2015 and 2016, respectively. The
Board believes that such burn rates are acceptable.
Overhang	Potential stockholder dilution from outstanding equity award
shares available for grant	If this proposal is adopted, our overhang, calculated using a
simple overhang measurement, will be 10.4%. The Board believes that the
requested number of shares of common stock under the Plan represents a
reasonable amount of potential equity
dilution.

Good Governance Features of the Plan

| What the Plan
Does | |
| --- | --- |
| ● | Limits on authorized shares |
| ● | No evergreen provision |
| ● | All
awards subject to clawback |
| ● | 10-year maximum stock option
term |
| ● | Certain shares surrendered, withheld or
repurchased may not again be made available for issuance |
| What the Plan
Doesn’t Do | |
| ● | No
stock option repricing |
| ● | No discounted stock option
grants |
| ● | No automatic change in control
benefits |

Our Current Equity Grant Practices

What We Do
●	Mix of PSUs and RSUs with an emphasis on PSUs for
senior executives
●	Long-term vesting such that PSUs have a 2-year
performance measurement period and, for executive officers, vest
1/3 rd at 30 months and 2/3 rds at 36 months and, for
other employees, fully vest at 29 months following the start of such
period; RSUs vest quarterly over three years from grant
What We Don’t Do
●	No dividend equivalent payments on unearned PSUs or
RSUs (accumulated dividend equivalents paid only on
vesting)

1 Cognizant data covers 2014-2016. Please see “Key Data About our Grant Practices” on page 42 for more information about these metrics and how we calculate them.

8 Cognizant Technology Solutions Corporation

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Table of Contents

Proxy Statement Summary

●	PROPOSAL 5
	RATIFY THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE
COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR
2017
●	● The Audit Committee believes that the engagement of
PricewaterhouseCoopers LLP is in the best interests of the Company and its
stockholders.	●	See page 47 for further
information
	The Board unanimously
recommends a vote FOR the Ratification of the Appointment
of PricewaterhouseCoopers LLP as our Independent Registered Public
Accounting Firm for 2017.

●	PROPOSAL 6
	CONSIDER A STOCKHOLDER PROPOSAL REQUESTING THAT THE BOARD TAKE
THE STEPS NECESSARY TO ELIMINATE THE SUPERMAJORITY VOTING PROVISIONS OF
THE COMPANY’S CERTIFICATE OF INCORPORATION AND
BY-LAWS
●	The Board unanimously recommends a vote FOR this proposal.	●	See page 50 for further
information

●	PROPOSAL 7
	CONSIDER A STOCKHOLDER PROPOSAL REQUESTING THAT THE BOARD TAKE THE STEPS
NECESSARY TO PERMIT STOCKHOLDER ACTION BY WRITTEN
CONSENT
●	The
Board unanimously recommends a vote AGAINST this
proposal.	●	See page 51 for further
information

2017 Proxy Statement 9

Table of Contents

CORPORATE GOVERNANCE

●	PROPOSAL 1
	ELECTION OF
DIRECTORS
	What are you voting
on?	At the Annual Meeting, 11 Directors are to be elected to hold
office until the 2018 Annual Meeting and until their successors have been
duly elected and qualified. All nominees are current Directors and all
except Ms. Atkins and Mr. Dineen were elected by stockholders at the 2016
Annual Meeting.
●	The Board unanimously recommends a vote FOR all the Director nominees listed
below.

Director Nominees

| Director Since 2015 Age 58 Birthplace Sudan | Committees ● Audit ● Governance | Skills and
Qualifications |
| --- | --- | --- |
| Career
Highlights ● President of PepsiCo, Inc., a multinational food, snack
and beverage company (2012 – 2014) ● Executive positions with PepsiCo Europe
Region ● CEO (2009 – 2012) ● President (2006 – 2009) ● Various senior positions with PepsiCo (1995 –
2006) | Current Public
Company Boards ● The TJX Companies, Inc., a retailer of apparel and home
fashions ● Corporate Governance Committee ● Finance Committee | Other Positions ● Member of the Imperial College Business School Advisory
Board ● Board Advisor, Mars, Incorporated Education ● B.S., Imperial College, London
University |

| Director Since 2017 Age 63 Birthplace United
States | Committees ● None | Skills and
Qualifications |
| --- | --- | --- |
| Career
Highlights ● CEO and Founder of Baja Corp., a venture capital
investment firm (since 1994) ● CEO of Clear Standards, Inc., a provider of energy
management and sustainability software and solutions (2009 –
2010) ● Chair and CEO of NCI, Inc., a neutraceutical functional
food company (1991 – 1993) ● Co-Founder of Ascend Communications, Inc., a
manufacturer of communications equipment, and Director (1989 –
1999) ● EVP of Sales Marketing, Professional Services and
International Operations | Current Public
Company Boards ● HD Supply Holdings, Inc., a wholesaler of electrical,
plumbing and hardware products ● Lead Independent Director ● Compensation Committee ● Nominating and Corporate Governance Committee
(Chair) ● Schneider Electric SE, a manufacturer of motors and
generators ● Strategy Committee ● SL Green Realty Corporation, a fully integrated real
estate investment trust (REIT) ● Audit Committee | Other Positions ● Member of advisory board of SAP SE, an enterprise
software company ● Member of board of directors of privately-held Volvo Car
AB, an automobile manufacturer Past Director
Positions ● Ascend Communications, Inc. ● Chico’s FAS, Inc. ● Vonage Holdings Corp. ● Clear Standards, Inc. ● Darden Restaurants, Inc. ● NASDAQ LLC ● Polycom, Inc. Education ● B.A., University of Massachusetts,
Amherst |

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Corporate Governance

| Director Since 2009 Age 62 Birthplace United
States | Committees ● Audit (Chair) ● Governance | Skills and
Qualifications |
| --- | --- | --- |
| Career
Highlights ● CFO of Towers Perrin, a global professional services
company (2007 – 2008) ● VP and General Auditor of CIGNA Corporation, a health
services organization (2005 – 2006) ● EVP and CFO of Inovant, LLC, VISA’s captive technology
development and transaction processing company (2001 – 2004) ● 16 years in public accounting, ultimately as a partner
at Arthur Andersen LLP through 1994 | Current Public
Company Boards ● Ally Financial Inc., a provider of payment processing
services ● Audit Committee ● Digital Transformation Committee ● Cubic Corporation, a provider of systems and services to
transportation and defense markets worldwide ● Audit Committee ● Nominating and Corporate Governance
Committee | Past Director Positions ● Federal Home Loan Bank of Pittsburgh, a private
government-sponsored enterprise ● ING Direct, an Internet bank ● Heartland Payment Systems, Inc. Education ● B.B.A., Stetson University ● M.B.A., Harvard Business School ● M.L.A., Stanford University Certifications ● CPA in California |

| Director Since 2016 Age 51 Birthplace United
Kingdom | Committees ● Audit | Skills and
Qualifications |
| --- | --- | --- |
| Career
Highlights ● Executive positions with VMware, Inc., a virtualization
and cloud infrastructure solutions company ● COO (2014 – 2016) ● EVP and CFO (2012 – 2016) ● CFO of Skype Technologies S.A., an Internet
communications company, and Corporate VP of Microsoft Corporation (2011 –
2012) ● EVP and CFO of McAfee, Inc., a security technology
company (2010 – 2011) | ● Various executive positions with Cisco Systems, Inc.
(1997 – 2010) ● Various positions with Coopers & Lybrand, an
accounting firm (1993 – 1997) Current Public
Company Boards ● F5 Networks, Inc. ● Audit Committee (Chair) ● ServiceNow, Inc. ● Audit Committee ● Leadership Development and Compensation
Committee | Education ● B.Sc., University of Bath, U.K. Certifications ● Chartered Accountant in England and
Wales |

| Director Since 2017 Age 54 Birthplace United
States | Committees ● None | Skills and
Qualifications |
| --- | --- | --- |
| Career
Highlights ● Operating Advisor of Clayton, Dubilier & Rice LLC,
an investment firm (since 2015) ● Executive positions with General Electric Company, a
global digital industrial company ● CEO, GE Healthcare (2008 – 2014) ● CEO, GE Infrastructure and GE Transportation (2005 –
2008) ● Other leadership positions (1986 – 2005) | Current Public
Company Boards ● Merrimack Pharmaceuticals, Inc., a pharmaceutical
company specializing in the development of drugs for the treatment of
cancer ● Organization and Compensation Committee
(Chair) | Education ● B.S., University of
Vermont |

2017 Proxy Statement 11

Table of Contents

Corporate Governance

| Director Since 2007 Age 48 Birthplace Kenya | Committees ● None | Skills and
Qualifications |
| --- | --- | --- |
| Career
Highlights ● Executive positions at Cognizant ● CEO (since 2007) ● President (2007 – 2012) ● COO (2003 – 2006) ● SVP, North American Operations and Business Development
(1999 – 2003) ● VP, North American Operations and Business Development
(1998 – 1999) ● Director - North American Operations and Business
Development (1997 – 1998) | ● Joined Cognizant as a co-founder in 1994, the year it
was started as a division of The Dun & Bradstreet Corporation Current Public
Company Boards ● General Electric Company ● Technology and Industrial Risk Committee | Other Positions ● Member of the Board of Trustees of Carnegie Mellon
University ● Co-Chairman of the Board of Trustees of The New York
Hall of Science ● Member of the Board of Directors of the U.S.–India
Business Council Education ● B.B.A., University of Macau (formerly University of East
Asia) ● M.B.A., Carnegie Mellon
University |

| Director Since 2007 Age 74 Birthplace United
States | Committees ● Compensation (Chair) ● Governance | Skills and
Qualifications |
| --- | --- | --- |
| Career
Highlights ● Vice Chairman of Deloitte & Touche LLP, a global
professional services firm, and Global Director, Strategic Clients for
Deloitte Consulting (1998 – 2003) ● Member of Deloitte Touche Tohmatsu Board of Directors
and the Board’s Governance (Executive) Committee (1998 –
2003) ● Various senior positions with Deloitte Consulting (1968
– 2003) | Current Public
Company Boards ● VASCO Data Security International, Inc., an information
technology security company ● Audit Committee ● Compensation Committee (Chair) ● Nominating and Corporate Governance
Committee | Other Positions ● Trustee for Wabash College ● Trustee for Steppenwolf Theatre Company Education ● B.A., Wabash College ● M.B.A., University of Michigan |

| Director Since 1998 Age 75 Birthplace United
States | Committees ● Audit ● Compensation ● Governance | Skills and
Qualifications |
| --- | --- | --- |
| Career
Highlights ● Chairman of Cognizant (since 2003) ● President and CEO of Polarex, Inc., a technology
consulting firm (employed since 1994) ● Previously President and CEO of MDIS Group, PLC, a UK
listed software and services company | ● VP at International Business Machines Corporation, or
IBM ● VP at Digital Equipment Corporation | Education ● B.S., U.S. Merchant Marine Academy ● M.B.A., New York University |

12 Cognizant Technology Solutions Corporation

PART 05

Table of Contents

Corporate Governance

| Director Since 2012 Age 55 Birthplace United
States | Committees ● Audit | Skills and
Qualifications |
| --- | --- | --- |
| Career
Highlights ● Executive positions at Lockheed Martin Corporation, a
global security and aerospace company ● SVP, Internal Audit, Ethics and Sustainability (since
2016) ● VP, Ethics and Sustainability (2011 – 2016) ● VP, Corporate Business Development and various other
positions (2007 – 2011) | ● President, Integrated Coast Guard Systems LLC and VP and
General Manager, Coast Guard Systems (2005 – 2007) ● Chief Operations Officer of ACS State Healthcare LLC, a
services company serving the healthcare industry (2003 – 2005) ● Various positions with Bell Helicopter, a helicopter and
tiltrotor craft manufacturer | Past Director
Positions ● Chair of the Board of Visitors of the Graduate School of
Public Affairs at the University of Maryland ● Center for a New American Century Education ● B.S., United States Naval Academy ● M.P.P., Harvard University ● Ph.D., Harvard
University |

| Director Since 2012 Age 64 Birthplace Cyprus | Committees ● Compensation ● Governance (Chair) | Skills and
Qualifications |
| --- | --- | --- |
| Career
Highlights ● CEO of Stroz Friedberg, a global investigation and cyber
security firm (2013 – 2016) ● Senior Partner and various other positions with McKinsey
& Company, a global management consulting company (1981 –
2013) ● Board of Directors (1998 – 2010) ● Chairman, the Americas (2003 –
2009) | ● Member of Operating Committee ● Managing Partner of New York and New Jersey offices,
North American Corporate Finance and Strategy practice and European
Telecoms practice ● Leader of new business growth opportunities around data,
analytics and software | Education ● B.S., University of Sydney ● M.B.A., International Institute for Management
Development |

| Director Since 2001 Age 76 Birthplace United
States | Committees ● Compensation ● Governance | Skills and
Qualifications |
| --- | --- | --- |
| Career
Highlights ● Chairman and CEO of IMS Health, a provider of
information to the pharmaceutical and healthcare industries (1998 –
1999) ● Chairman and CEO of Cognizant (1996 – 1997) ● Executive positions at The Dun & Bradstreet
Corporation, a data, analytics and insights company ● Chairman and CEO (1995 – 1996) ● President and COO (1985 – 1995) ● Other positions since 1979 | ● President and CEO of National CSS, a computer
time-sharing company acquired by The Dun & Bradstreet Corporation in
1979 Past Public Company
Boards ● State Street Corporation, a global financial services
company ● Pitney Bowes, Inc., a global technology company ● Information Services Group, a technology insights,
market intelligence and advisory services company | Other Positions ● Chairman of Shelburne Investments, a private investment
company that works with emerging companies in the United States and Europe ● Board of Trustees of Babson College Education ● B.S., Babson College ● Honorary Doctor of Laws, Babson College |

2017 Proxy Statement 13

Table of Contents

Corporate Governance

Directors Not Standing for Reelection

Lakshmi Narayanan and Thomas M. Wendel, two of our current Directors, have not been nominated for re-election as Directors at the Annual Meeting following the end of their current terms.

BOARD COMPOSITION

Director Independence

Board Member Independence

Each of our Director nominees, other than our CEO, Mr. D’Souza, has been determined by the Board to be an “independent director” under our Corporate Governance Guidelines and the rules of The NASDAQ Stock Market LLC (“NASDAQ”), which require that, in the opinion of the Board, such person not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a Director.

Committee Member Independence

The Board has determined that all of the members of the Audit Committee, Compensation Committee and Governance Committee are independent as defined under NASDAQ rules and, where applicable, also satisfy the committee-specific requirements set forth below.

| HEIGHTENED COMMITTEE
STANDARDS | |
| --- | --- |
| Audit
Committee | Compensation
Committee |
| All members of the Audit Committee
are required to satisfy the independence requirements contemplated by Rule
10A-3 under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) and NASDAQ rules, specifically that Audit Committee members may not
accept any direct or indirect consulting, advisory or other compensatory
fee from the Company or any of its subsidiaries, except for their
compensation for Board service, and that Audit Committee members may not
be affiliated with the Company or any of its subsidiaries. | Under NASDAQ rules, the Board must
affirmatively determine the independence of each member of the
Compensation Committee after considering all sources of compensation of
the director, including any consulting, advisory or other compensation
paid by the Company or any of its subsidiaries, and whether the
Compensation Committee member is affiliated with the Company or any of its
subsidiaries. |

Director Candidates

Finding Directors

The Governance Committee seeks recommendations from Board members and others, engages search firms from time-to-time to assist in the identification and evaluation of director candidates, meets periodically to evaluate biographical information and background material relating to potential candidates and has selected candidates interviewed by members of the Governance Committee and the Board.

In 2016 and 2017, the Company engaged a third party director search firm to assist the Governance Committee in identifying and evaluating director candidates. In February 2017, the Company and Elliott Management agreed to each identify and propose one new independent director for election to the Board, subject to the consent of the other, prior to the filing of this proxy statement. Ms. Atkins and Mr. Dineen were each identified with the assistance of a third party search firm, and Ms. Atkins was approved by Elliott.

Director Selection

The Governance Committee strives to maintain an engaged, independent Board with broad and diverse experience and judgment that is committed to representing the long-term interests of our stockholders. In considering whether to recommend any particular candidate for inclusion in the Board’s slate of recommended Director nominees, the Governance Committee applies the criteria in our Corporate Governance Guidelines. These criteria include the candidate’s integrity, business acumen, knowledge of our business and industry, experience, diligence, absence of conflicts of interest, capacity to serve in light of commitments to other public company boards, and the ability to act in the interests of all stockholders, and includes consideration of the value of Board diversity. In evaluating Director candidates, the Governance Committee does not assign specific weights to particular criteria and no particular criterion is a prerequisite for each prospective nominee. We believe that the backgrounds, qualifications and diversity of our Directors, considered as a group, should provide a composite mix of experience, knowledge and abilities that will allow the Board to fulfill its responsibilities.

14 Cognizant Technology Solutions Corporation

Table of Contents

Corporate Governance

The Governance Committee’s Director candidate selection includes the following considerations:

● Ensuring an experienced, qualified Board with expertise in areas relevant to the Company. We seek directors who have held significant leadership positions and have global business experience, especially in the consulting and technology industries in which we compete. In addition, we seek directors with the financial reporting, operational, corporate governance and compliance experience appropriate for a large, global, publicly traded company.

| Leadership 11 (100%) | We believe that directors who have
held significant leadership positions over an extended period, especially
CEO positions, possess extraordinary leadership qualities, and the ability
to identify and develop those qualities in others. They demonstrate a
practical understanding of organizations, processes, strategy and risk
management, and know how to drive change and growth. |
| --- | --- |
| Global
Business Experience 11 (100%) | With nearly 22% of our revenue
currently coming from, and our continued success dependent, in part, on
continued growth in, our business outside the United States, and with the
extensive international aspects of our business operations, we believe
that global business experience is an important quality for many of our
Directors to possess. |
| Consulting 4 (36%) | Consulting, including as to
information technology, strategy, business and operations, is one of our
key areas of business focus. It is an important component of the
continuing growth of our business and permeates other important growth
areas for us. As consulting is a critical component of our efforts to
develop ever more strategic relationships with clients, it is important to
have directors with consulting experience. |
| Technology 10 (91%) | As a leading information technology
company, developing and investing in new technologies and ideas is at the
heart of our business. Our current investments include building
capabilities to enable clients to drive digital transformation at scale
and create next generation information technology infrastructures, and
building platform-based solutions and industry utilities to enable clients
to achieve new levels of efficiency. As such, having directors with
technology experience is as important as ever. |
| Financial 10 (91%) | We use a broad set of financial
metrics to measure our operating and strategic performance and stockholder
value creation. Accurate financial reporting and strong internal controls
are also critical to our success. It is therefore important for us to have
directors with an understanding of financial statements and financial
reporting processes and a track record of stockholder value
creation. |
| Operational 10 (91%) | We consider operational experience
to be a valuable trait. Directors with this experience provide insight
into best practices for the efficient administration and operation of a
complex business to achieve growth and margin
objectives. |

| ● | Enhancing the Board’s
Diversity. Our Corporate Governance
Guidelines provide that the value of director diversity, including as to
race, gender, age, national origin and cultural background, should be
considered in the selection of directors. The Governance Committee seeks
out qualified women and individuals from minority groups to include in the
pool from which Board nominees are chosen. |
| --- | --- |
| ● | Achieving a Balanced Mix of
Tenures. The Governance Committee
believes it is important that the Board have an appropriately balanced mix
of experienced directors with a deep understanding of the Company and its
industry and new directors who bring a fresh perspective and valuable new
experience and insights. |
| ● | Maintaining Director
Engagement. The Governance Committee
considers each Director’s continuation on the Board on an annual basis. As
part of the process, the Committee evaluates the Director’s other
positions and obligations in order to assess the Director’s ability to
continue to devote sufficient time to Company matters. Any Director who
experiences a change in employment status or job responsibilities, other
than retirement, is required to notify the Chairman and the Governance
Committee and offer to resign from the Board. |
| ● | Avoiding conflicts of
interest. The Governance Committee
looks at other positions a director candidate has held or holds (including
other board memberships) and any potential conflicts of interest to ensure
the continued independence of the Board and its committees. There are no
family relationships among any of our executive officers, directors and
key employees. |

As part of the Governance Committee’s annual self-assessment process, it assesses its performance as to all aspects of the selection and nomination process for directors, including diversity.

Based on the experience, qualifications, attributes and skills of our Director nominees as highlighted herein, our Governance Committee has concluded that such Director nominees should continue to serve on the Board.

2017 Proxy Statement 15

Table of Contents

Corporate Governance

Majority Voting Standard in Director Elections

Our By-laws provide that the voting standard for the election of directors in uncontested elections is a majority of votes cast. Any director who does not receive a majority of the votes cast for their election must tender an irrevocable resignation that will become effective upon acceptance by the Board. The Governance Committee will recommend to the Board whether to accept the Director’s resignation within 90 days following the certification of the stockholder vote. The Board will promptly disclose whether it has accepted or rejected the Director’s resignation, and the reasons for its decision, in a Form 8-K. The Governance Committee and the Board may consider any factors they deem relevant in deciding whether to accept a Director’s resignation. Our Corporate Governance Guidelines contain additional specifics regarding our Director resignation policy. See “Helpful Resources” on page 78.

How Stockholders Can Propose Director Candidates

Recommendations to Governance Committee. Stockholders may recommend individuals to the Governance Committee for consideration as potential director candidates by submitting the names of the recommended individuals, together with appropriate biographical information and background materials and a statement as to whether the stockholder or group of stockholders making the recommendation has beneficially owned more than 5% of the Company’s common stock for at least a year as of the date such recommendation is made. Such recommendations should be sent to the Corporate Secretary. See “Helpful Resources” on page 78. The Governance Committee evaluates stockholder-recommended candidates by following substantially the same process, and applying substantially the same criteria, as it follows for candidates submitted by others.

Nominations by Proxy Access. Our By-laws provide that stockholders satisfying certain ownership and holding period requirements with respect to our common stock and other requirements may nominate directors for inclusion in our proxy statement. See “Director Nominees via Proxy Access” on page 53.

THE BOARD’S ROLE AND RESPONSIBILITIES

Board Leadership Structure

The Company’s board leadership structure has separated the Chairman and CEO roles since December 2003. Currently, Mr. Klein serves as Chairman and Mr. D’Souza as CEO. The Board evaluates its leadership structure on an ongoing basis based on factors such as the experience of the applicable individuals and the current business environment of the Company. After considering these factors, the Board determined that continuing to separate the positions of Chairman and CEO is the appropriate board leadership structure at this time.

Board Role in Risk Oversight

Our business faces various risks, including strategic, financial, legal, regulatory, operational, accounting, cyber security and reputational risks. While management is responsible for the day-to-day management of the various risks facing the Company, the Board plays an active role in the oversight of the Company’s risk management practices and business risks. We believe this division of responsibilities is the most effective approach for addressing the risks facing the Company.

The Board exercises its oversight responsibility for risk management both directly and through its standing committees:

| ● | The Audit
Committee reviews and discusses with
management the Company’s enterprise risk and risk management framework and
the process for identifying, assessing, and monitoring key business risks.
In addition, the Audit Committee reviews with the Company’s independent
auditor significant risks and uncertainties with respect to the quality,
accuracy or fairness of presentation of the Company’s financial
statements; |
| --- | --- |
| ● | The Compensation Committee annually reviews and determines whether any of the
Company’s compensation policies and practices for employees create risks
that are reasonably likely to have a material adverse effect on the
Company, and generally oversees risks relating to the Company’s
compensation practices; and |
| ● | The Governance Committee oversees risks related to the Company’s governance
structure and processes, and assists the Board in succession planning for
its CEO and other senior executives, including an emergency succession
plan for the CEO. |

In carrying out its oversight responsibilities, the entire Board:

| ● | Receives reports from management and
the Board committees regarding the most significant risks facing the
Company and their potential impact, including strategic, financial, and
execution risks and exposures associated with our business strategy,
policy matters, significant litigation and regulatory exposures, and other
current matters that may present material risk to our financial
performance, operations, infrastructure, plans, prospects or reputation,
acquisitions or divestitures; |
| --- | --- |
| ● | Evaluates any such risks and the
steps management is taking to manage those
risks; |
| ● | Reviews and discusses with
management the practices the Company has
implemented to assess and mitigate risk and possible enhancement to these
practices; |
| ● | Evaluates what level of risk is
appropriate for the Company; and |
| ● | Encourages management to promote a
corporate culture that integrates risk management into the Company’s
corporate strategy and day-to-day business operations in a way that is
consistent with the Company’s targeted risk
profile. |

16 Cognizant Technology Solutions Corporation

PART 06

Table of Contents

Corporate Governance

We believe that our approach to risk oversight optimizes our ability to assess inter-relationships among the various risks we face, make informed cost-benefit decisions and approach emerging risks in a proactive manner. The Board believes that its role in the oversight of the Company’s risks complements our current Board structure as our structure allows our independent Directors, through our three fully independent Board committees, to exercise effective oversight of the actions of management in identifying risks and implementing effective risk management policies and controls.

Corporate Governance Policies and Practices

Corporate Governance Guidelines

The Board has adopted Corporate Governance Guidelines to assist it in the exercise of its duties and responsibilities to the Company and its stockholders. The Guidelines provide a framework for the conduct of the Board’s business and are integral to an effective corporate governance program. See “Helpful Resources” on page 78.

Code of Ethics

We have a Code of Ethics that applies to all of our Directors, officers and employees. See “Helpful Resources” on page 78. We will post on our website all disclosures that are required by law or NASDAQ listing standards concerning any amendments to, or waivers from, any provision of our Code of Ethics.

Limits on Director Service on Other Public Company Boards

Under our Corporate Governance Guidelines, service by Company Directors on public company boards is limited to no more than five, including the Cognizant Board. For any Director who is also a public company CEO, the limit is three (including the Cognizant Board). This practice is to ensure that our Directors have sufficient time to devote to Cognizant matters.

Certain Relationships and Related Person Transactions

Review of Related Person Transactions

The Audit Committee of the Company is responsible for reviewing and approving all transactions between us and any related person that are required to be disclosed pursuant to Item 404 of Regulation S-K. Related persons can include any of our Directors or executive officers, certain of our stockholders, and any of their immediate family members. The Audit Committee will approve a related person transaction when, in its good faith judgment, the transaction is in the best interests of the Company. The Company’s legal staff is primarily responsible for monitoring and obtaining information from our Directors and executive officers with respect to potential related person transactions, and for then determining, based on the facts and circumstances, whether the related person has a direct or indirect material interest in any transaction with us. Each year, to help our legal staff identify related person transactions, we require each of our Directors, Director nominees and executive officers to complete a disclosure questionnaire identifying any transactions with us in which the officer or Director or their family members have an interest.

In addition, our Code of Ethics requires all Directors, officers and employees who may have a potential or apparent conflict of interest to, in the case of employees, notify our Chief Compliance Officer or General Counsel, or in the case of executive officers and Directors, notify our General Counsel or the Board. See “Helpful Resources” on page 78.

2016 Transactions with Related Persons

Brackett B. Denniston III, who became our Interim General Counsel and an executive officer of the Company on December 2, 2016, is also a Senior Counsel at the law firm of Goodwin Procter LLP (“Goodwin”). During the year ended December 31, 2016, Goodwin performed legal services for the Company for which it was paid approximately $2.0 million in the aggregate. Goodwin has continued to perform such legal services during 2017 for which it has been or will be paid approximately $1.4 million for legal services through March 31, 2017. Fees for the services of Goodwin attorneys, including Mr. Denniston, will be paid by us at rates that are generally consistent with rates regularly charged by the firm to other clients. Mr. Denniston does not have a direct interest in the payment of such fees, but has an indirect interest in such fees as an employee of the law firm. Mr. Denniston does not review or approve any invoices for payments to Goodwin. The provision of legal services by Goodwin was reviewed and approved by our Audit Committee at the time Mr. Denniston was appointed an executive officer of the Company.

Other than the matter described above and such other matters disclosed herein under “Compensation” starting on page 22, there have been no related person transactions since January 1, 2016.

Communications to the Board from Stockholders

Under procedures approved by a majority of the independent Directors, our Chairman, Corporate Secretary and General Counsel are primarily responsible for monitoring communications from stockholders and, if they relate to important substantive matters and include suggestions or comments that our Chairman, Corporate Secretary and General Counsel consider to be important for the Directors to know, providing copies or summaries to the other Directors. In general, communications relating to corporate governance and long-term corporate strategy are more likely to be forwarded than communications relating to ordinary business affairs, personal grievances and matters as to which we tend to receive repetitive or duplicative communications.

The Board will give appropriate attention to written communications that are submitted by stockholders, and will respond if and as appropriate. Stockholders who wish to send communications on any topic to the Board should address such communications to the Board, our Corporate Secretary or our General Counsel. See “Helpful Resources” on page 78.

2017 Proxy Statement 17

Table of Contents

Corporate Governance

COMMITTEES OF THE BOARD

The Board has three standing committees-the Audit Committee, Compensation Committee and Governance Committee-each of which operates under a charter that has been approved by the Board. See “Helpful Resources” on page 78.

Audit Committee
No. of Meetings in
2016: 15
Composition Zein Abdalla Maureen Breakiron-Evans (Chair) Jonathan Chadwick John E. Klein Leo S. Mackay, Jr. Thomas M. Wendel	Key
Responsibilities ● Directly overseeing our independent registered public
accounting firm, including appointment, termination, qualifications and
independence, and pre-approval of the scope and fees of the annual audit
and any other services, including review, attest and non-audit
services; ● Reviewing and discussing the contents of our quarterly
and annual consolidated financial statements and earnings releases with
management and the independent registered public accounting
firm; ● Recommending to the Board inclusion of our audited
financial statements in our Annual Report on Form 10-K; ● Monitoring our internal control over financial
reporting, disclosure controls and procedures, and Code of
Ethics; ● Reviewing and discussing the internal audit process,
scope of activities and audit results with our internal audit department;
and ● Reviewing and discussing with management our risk
management framework and processes.
Audit Committee Financial
Experts The Board has determined that each
of Ms. Breakiron-Evans and Mr. Chadwick is an “audit committee financial
expert” as defined in Item 407(d)(5)(ii) of Regulation S-K.

Compensation Committee
No. of Meetings in
2016: 5
Composition John N. Fox, Jr. (Chair) John E.
Klein Michael Patsalos-Fox Robert E. Weissman	Key
Responsibilities ● Making recommendations to the Board with respect to the
compensation of our CEO; ● Reviewing and approving, or making recommendations to
the Board with respect to, the compensation of our other executive
officers; ● Overseeing evaluations of our senior
executives; ● Reviewing and making recommendations to the Board with
respect to our incentive compensation arrangements, including an annual
review to ensure that such compensation arrangements do not encourage
unnecessary risk taking; ● Reviewing and making recommendations to the Board with
respect to Director compensation; and ● Assisting the Board in the discharge of any other
responsibilities relating to the compensation of our executive
officers.

Governance Committee
No. of Meetings in
2016: 5
Composition Zein Abdalla Maureen
Breakiron-Evans John N. Fox, Jr. John E. Klein Michael
Patsalos-Fox (Chair) Robert E. Weissman Thomas M.
Wendel	Key
Responsibilities ● Recommending to the Board the persons to be nominated
for election as Directors and to be appointed to each of the Board’s
committees; ● Reviewing the Directors’ other positions and obligations
annually to ensure they have sufficient time to devote to Company
matters; ● Assisting the Board in succession planning for the CEO
(including emergency succession plans), other senior executives and Board
positions; ● Developing and recommending to the Board revisions to
our Corporate Governance Guidelines; and ● Overseeing an annual evaluation of the
Board.

18 Cognizant Technology Solutions Corporation

Table of Contents

Corporate Governance

DIRECTOR ATTENDANCE

There were 16 meetings of the Board during 2016. Each Director attended at least 80% of the aggregate of (i) all meetings of the Board held during the period in which he or she served as a Director and (ii) the total number of meetings held by the committees on which he or she served during the period, if applicable.

Our Corporate Governance Guidelines provide that Directors are expected to attend the annual meeting of stockholders. For the 2016 Annual Meeting, Mr. D’Souza acted as Chairman and all but two of the 11 then current Directors attended (participating by teleconference).

Strong Director Engagement

Overall attendance at 2016 meetings

DIRECTOR COMPENSATION

Discussion and Analysis

The Company uses cash and stock-based compensation to attract and retain qualified individuals to serve on the Board. The Company sets compensation for directors who are not our employees or the employees of any of our subsidiaries (“non-employee Directors”) in light of the time commitment and experience level expected of its Directors. A Director who is an employee of the Company or any of its subsidiaries receives no cash or stock-based compensation for serving as a Director.

Engagement of Compensation Consultant

For purposes of establishing non-employee Director compensation, the Compensation Committee engaged Pay Governance, LLC (“Pay Governance”), an independent executive compensation advisory firm, in 2015 to review all elements of non-employee Director compensation, benchmark such compensation in relation to other comparable companies with which we compete for Board talent and provide recommendations to ensure that our non-employee Director compensation program remains competitive. Pay Governance benchmarked our non-employee Director compensation against the same group of technology-related firms used by Pay Governance in preparing its recommendations to the Compensation Committee in determining stock-based awards for executive officers. See “Compensation Committee and Engagement of Compensation Consultant” and “Peer Group” on page 24. The Compensation Committee considered the benchmarking data and recommendations of Pay Governance in setting the 2016 cash and stock-based compensation of non-employee Directors set forth below.

Director Compensation Structure

| Annual Retainer
/ Equity Grants to All Non-Employee Directors 1 | |
| --- | --- |
| Annual Cash Retainer | $90,000 |
| Stock Options | $105,000 |
| ● | Fair market value on date of
grant |
| ● | 50% vesting on each of 1 st and 2 nd anniversaries
of grant date |
| RSUs | $105,000 |
| ● | Fair market value on date of
grant |
| ● | 1/3 rd vesting on each of 1 st , 2 nd and 3 rd anniversaries
of grant date |
| | $300,000 |

| Additional Annual Board and Committee Chair
Retainers 1 — Board | Audit | Compensation | Governance |
| --- | --- | --- | --- |
| $150,000 | $25,000 | $15,000 | $15,000 |
| Recognize the increased
workload and responsibilities associated with these
positions. | | | |

Meeting Fees
Board
Meetings	Committee
Meetings
No meeting fees	$1,500 per meeting
(excluding telephonic meetings of 30 minutes or
less)

1 Paid in advance following annual meeting of stockholders. Directors joining mid-year receive pro-rated amounts.

Upon a Director’s retirement while in good standing, the Board’s intent is to utilize its discretion to accelerate the vesting of such Director’s outstanding stock-based awards. The Directors will have a limited period in which to exercise their vested options following cessation of Board service.

2017 Proxy Statement 19

Table of Contents

Corporate Governance

Director Stock Ownership Guidelines

Directors
($450,000 in
shares of common stock)

The Company adopted revised stock ownership guidelines in March 2017 to further align Director interests with those of stockholders. Under the revised guidelines, each non-employee Director is required to hold a number of shares with a value, measured as of the time the revised guidelines were put in place or, for later joining Directors, the time a Director joins the Board, equal to five times the annual cash retainer received by non-employee Directors (i.e., $450,000 in shares of common stock). Compliance with the guidelines is required within five years of a Director joining the Board.

Hedging, Short Sale, Margin Account and Pledging Prohibitions

All Directors are subject to the same insider trading policies of the Company that apply to employees that provide for:

| ● | No hedging or speculation with
respect to Cognizant securities; |
| --- | --- |
| ● | No short sales of Cognizant
securities; |
| ● | No margin accounts with Cognizant
securities; and |
| ● | Limited pledging of Cognizant
securities. |

See “Hedging, Short Sale, Margin Account and Pledging Prohibitions” on page 30 for additional information on these restrictions.

Deferral of Restricted Stock Units

Non-employee Directors may on a yearly basis elect to defer settlement of RSUs that are granted in the subsequent year. The following table sets forth the two deferral options available, and the Directors that elected such deferral options, in 2016.

	RSUs Deferred Until Earliest to Occur of — Company Change in Control	Director’s Death or Permanent Disability	Director Leaves the Board	Directors Electing Option
Option 1	●	●	100% settles on next July
1	Weissman
Option 2	●	●	1/3 rd settles on each
of next three July 1 sts	Breakiron-Evans, Fox, Klein,
Wendel

= immediate settlement

Director Tables

The following tables set forth certain information regarding the compensation of each of our Directors who served during 2016 and the aggregate number of stock awards and the aggregate number of stock options held by each of our Directors at December 31, 2016.

| Name | 2016 Director Compensation — Fees Earned or Paid in Cash | Stock Awards 1 | Option Awards 1 | All Other Compensation | Total | Director Stock and Option Awards
Outstanding — Aggregate Number of Stock Awards 3 | Aggregate Number of Stock Options |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Zein Abdalla | $114,000 | $104,949 | $104,998 | — | $323,947 | 2,554 | 11,294 |
| Maureen
Breakiron-Evans | $140,500 | $104,949 | $104,998 | — | $350,447 | 20,255 | 93,324 |
| Jonathan Chadwick 2 | $118,315 | $120,470 | $120,517 | — | $359,302 | 2,018 | 7,924 |
| John N. Fox,
Jr. | $103,500 | $104,949 | $104,998 | — | $313,447 | 3,514 | 93,324 |
| John E. Klein | $285,000 | $104,949 | $104,998 | — | $494,947 | 8,505 | 33,324 |
| Leo S. Mackay,
Jr. | $106,500 | $104,949 | $104,998 | — | $316,447 | 8,020 | 27,544 |
| Lakshmi Narayanan | $90,000 | $104,949 | $104,998 | — | $299,947 | 3,514 | 43,324 |
| Michael
Patsalos-Fox | $103,500 | $104,949 | $104,998 | — | $313,447 | 9,092 | 53,324 |
| Robert E. Weissman | $118,500 | $104,949 | $104,998 | — | $328,447 | 8,505 | 93,324 |
| Thomas M. Wendel | $115,500 | $104,949 | $104,998 | — | $325,447 | 8,505 | 58,324 |

| 1 | Represents the aggregate grant
date fair value of RSUs and stock options granted in the 2016 fiscal year
under the 2009 Plan, determined in accordance with FASB ASC Topic 718. All
Directors listed received an award of 1,760 RSUs with a grant date fair
value of $59.63 per share and an award of 6,926 stock options with a grant
date fair value of $15.16 per share. Mr. Chadwick also received an award
of 258 RSUs with a grant date fair value of $60.16 per share and an award
of 998 stock options with a grant date fair value of $15.55 per share. See
Footnote 2 below. The reported dollar amounts do not take into account any
estimated forfeitures related to continued service vesting requirements.
For information regarding assumptions underlying the valuation of equity
awards, see Note 15 of the Consolidated Financial Statements in our Annual
Report on Form 10-K for the fiscal year ended December 31,
2016. |
| --- | --- |
| 2 | Mr. Chadwick was elected to the
Board on April 9, 2016 and, as such, he received additional pro-rated fees
and equity awards for the portion of 2016 that he served prior to our 2016
Annual Meeting. |
| 3 | Includes the RSUs granted in 2015
and 2016, with respect to which the settlement has been deferred for some
directors, as described above. Also includes deferred stock units held by
Ms. Breakiron-Evans (11,750), Mr. Mackay, Jr. (4,506) and Mr. Patsalos-Fox
(5,578) to be settled upon the Director’s termination of service on the
Board. |

20 Cognizant Technology Solutions Corporation

PART 07

Table of Contents

STOCK OWNERSHIP INFORMATION

COMMON STOCK AND TOTAL STOCK-BASED HOLDINGS TABLE

The following table sets forth the Cognizant stock-based holdings of our Directors, NEOs, and Directors and executive officers as a group as of March 31, 2017 (September 27, 2016 for Mr. Coburn 1 ), as well as the stock-based holdings of beneficial owners of more than 5% of our common stock as of December 31, 2016. Unless otherwise indicated, the address for the individuals below is our address. Each of our Directors and NEOs owns less than 1% of the total outstanding shares of our common stock.

Directors	Common Stock — Stock	Options	Total
Zein Abdalla	277	2,184	14,125
Betsy S.
Atkins	—	—	—
Maureen Breakiron-Evans	1,075	83,212	114,654
Jonathan
Chadwick	86	499	9,942
John M. Dineen	—	—	—
John N. Fox,
Jr.	19,721	83,212	116,559
John E. Klein	609,192	23,212	651,021
Leo S. Mackay,
Jr.	4,991	17,432	40,555
Lakshmi Narayanan	87,950	33,212	134,788
Michael
Patsalos-Fox	14,991	43,212	77,407
Robert E. Weissman	1,026,236	11,652	1,056,505
Thomas M.
Wendel	76,000	48,212	142,829
Total	1,840,519	346,039	2,358,385
	Common Stock
Named Executive Officers	Stock	Options	Total
Francisco D’Souza	624,627	480,000	1,605,119
Rajeev
Mehta	417,955	—	699,059
Gordon Coburn 1	64,572	—	64,572
Karen
McLoughlin	37,883	20,000	191,313
Ramakrishna Prasad Chintamaneni	70,231	10,000	160,517
Dharmendra Kumar
Sinha	23,448	—	96,839
Total	1,238,716	510,000	2,817,419

| Current Directors and Executive
Officers | Common Stock — Stock | Options | Total |
| --- | --- | --- | --- |
| As a group (30 people) | 3,683,694 | 896,039 | 6,368,927 |

| 5%
Beneficial Owners | Common Stock | %
Outstanding |
| --- | --- | --- |
| The Vanguard
Group | 39,165,838 | 6.5% |
| BlackRock, Inc. | 37,927,303 | 6.3% |

1 Mr. Coburn resigned from the Company on September 27, 2016.

Common Stock. This column shows beneficial ownership of our common stock as calculated under SEC rules. Except to the extent noted below, everyone included in the table has sole voting and investment power over the shares reported. None of the shares is pledged as security by the named person, although standard brokerage accounts may include non-negotiable provisions regarding set-offs or similar rights. The Stock subcolumn includes shares directly or indirectly held and shares underlying RSUs that will vest within 60 days. The Options subcolumn includes shares that may be acquired under stock options that are currently exercisable or will become exercisable within 60 days.

Total. This column shows the individual’s total Cognizant stock-based holdings, including securities shown in the Common Stock column (as described above), plus non-voting interests that cannot be converted into shares of Cognizant common stock within 60 days, including, as appropriate, PSUs, RSUs and stock options.

Common Stock and Total. Both columns include the following shares over which the named individual has shared voting and investment power through family trusts or other accounts: D’Souza (242,000), Klein (137,872), Mehta (207,714) and Wendel (16,000).

Current Directors and Executives. This row includes: (1) 2,452 RSUs that vest within 60 days, (2) 896,039 shares that may be acquired under stock options that are or will become exercisable within 60 days, and (3) 604,386 shares of common stock over which there is shared voting and investment power. Current Directors and executive officers as a group do not own more than 1% of the total outstanding shares.

5% Beneficial Owners . This table shows shares beneficially owned by BlackRock, Inc., 55 East 52nd Street, New York, NY 10055, and The Vanguard Group, 100 Vanguard Blvd., Malvern, PA 19355, as follows:

(# of shares)	BlackRock	Vanguard
Sole voting
power	32,685,036	952,461
Shared voting power	37,916	107,233
Sole dispositive
power	37,889,387	38,121,165
Shared dispositive power	37,916	1,044,673

The foregoing information is based solely on a Schedule 13G/A filed by BlackRock with the SEC on January 23, 2017, and a Schedule 13G/A filed by Vanguard with the SEC on February 10, 2017, as applicable.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires our Directors, executive officers and stockholders who beneficially own more than 10% of any class of our equity securities registered pursuant to Section 12 of the Exchange Act (collectively, the “Reporting Persons”) to file initial statements of beneficial ownership of securities and statements of changes in beneficial ownership of securities with respect to our equity securities with the SEC. All Reporting Persons are required by SEC regulation to furnish us with copies of all reports that such Reporting Persons file with the SEC pursuant to Section 16(a). Based solely on our review of the copies of such forms received by us and upon written representations of the Reporting Persons received by us, we believe that there has been compliance with all Section 16(a) filing requirements applicable to such Reporting Persons with respect to the year ended December 31, 2016, except that one Form 4 for Mr. Klein reporting one transaction was not timely filed.

2017 Proxy Statement 21

Table of Contents

Compensation

●	PROPOSALS 2 AND 3
	ADVISORY VOTES
ON EXECUTIVE COMPENSATION (SAY-ON-PAY) AND FREQUENCY OF FUTURE SAY-ON-PAY
VOTES (SAY-ON-FREQUENCY)
		In
accordance with Section 14A of the Exchange Act, we are asking
stockholders to vote on an advisory basis on:
	What are you voting
on?	● Say-on-Pay. Approval of the compensation paid to our
NEOs, as described in this proxy statement. (Proposal 2) ● Say-on-Frequency. Approval of the frequency of
future say-on-pay votes. (Proposal 3)
●	The Board unanimously recommends a vote FOR the
approval, on an advisory (non-binding) basis, of our executive
compensation. Resolution
Stockholders are being asked to
Approve

RESOLVED, that the stockholders of Cognizant Technology Solutions Corporation approve, on an advisory basis, the compensation of the Company’s named executive officers, disclosed pursuant to Item 402 of Regulation S-K in the Company’s definitive proxy statement for the 2017 Annual Meeting of Stockholders.

The Board unanimously recommends that stockholders vote **1 YEAR**** on the frequency of future advisory votes on our executive compensation.

| Stockholders have four options for voting on Proposal
3: | |
| --- | --- |
| 1 year; | 3 years; or |
| 2
years; | Abstain. |

Background

The Dodd-Frank Act requires that our stockholders have the opportunity to cast an advisory vote on executive compensation at annual meetings, commonly referred to as a “Say-on-Pay” vote, at least once every three years. At the 2011 Annual Meeting, the Company’s stockholders voted, on an advisory basis, commonly referred to as a “Say-on-Frequency” vote, that the Say-on-Pay vote occur every year. A Say-on-Pay vote has been held at each subsequent annual meeting.

The Say-on-Pay vote is a non-binding vote on the compensation of our NEOs, as described in the Compensation Discussion and Analysis section, the tabular disclosure regarding such compensation, and the accompanying narrative disclosure, set forth in this proxy statement. Please read the “Compensation Discussion and Analysis” section starting on page 23 for a detailed discussion about our executive compensation programs and compensation philosophy, including information about the fiscal 2016 compensation of our NEOs.

We are holding a Say-on-Frequency vote this year as the last such vote was at the 2011 Annual Meeting and the Dodd-Frank Act requires that stockholders have the opportunity to hold such a vote at least once every six years. The Board recommends continuing to hold the Say-on-Pay vote every year to give stockholders the opportunity to provide direct and frequent feedback on our compensation philosophy, policies and procedures.

The votes solicited by these Proposals 2 and 3 are advisory, and therefore are not binding on the Company, the Board or the Compensation Committee. The outcomes of the votes will not require the Company, the Board or the Compensation Committee to take any actions, and will not be construed as overruling any decision by the Company or the Board. Furthermore, because Proposal 2 primarily relates to the compensation of our NEOs that has already been paid or contractually committed, there is generally no opportunity for us to revisit these decisions. However, the Board, including the Compensation Committee, values the opinions of our stockholders and, to the extent there is any significant vote against the NEO compensation as disclosed in this proxy statement, we will consider our stockholders’ concerns and evaluate what actions, if any, may be appropriate to address those concerns.

22 Cognizant Technology Solutions Corporation

Table of Contents

Compensation

COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis section describes the general objectives, principles and philosophy of the Company’s executive compensation program, focused primarily on the compensation of our NEOs.

Overview of Executive Compensation Program

Compensation Committee

The Compensation Committee oversees and administers our executive compensation program, including the evaluation and approval of compensation plans, policies and programs offered to our NEOs. The Compensation Committee operates under a written charter adopted by the Board and is comprised entirely of independent, non-employee directors as determined in accordance with various NASDAQ, SEC and IRC rules. The Compensation Committee has the authority to engage its own independent advisor to assist in carrying out its responsibilities under its charter.

Key Program Features

The following tables summarize key elements of our executive compensation program and where they are described in the Compensation Discussion and Analysis section.

| | What We Do | See Page
No. |
| --- | --- | --- |
| ● | Pay for
performance | 25 |
| ● | Use appropriate peer groups when
establishing compensation | 24 |
| ● | Retain an independent
external compensation consultant | 24 |
| ● | Set significant stock ownership guidelines
for executives | 30 |
| ● | Include a clawback policy
in our incentive plans | 31 |
| ● | Utilize “double trigger” provisions for
plans that contemplate a change in control | 38 |

| | What We Don’t
Do | See Page
No. |
| --- | --- | --- |
| ● | No hedging or speculation
with respect to Cognizant securities | 30 |
| ● | No short sales of Cognizant
securities | 30 |
| ● | No margin accounts with
Cognizant securities | 30 |
| ● | No tax “gross ups” on severance
benefits | 32 |

Program Objectives

The Compensation Committee has designed the executive compensation program for our NEOs to meet the following objectives:

| ● | Ensure executive
compensation is aligned with our corporate strategies and business
objectives and that potential realizable compensation is set relative to
each executive’s level of responsibility and potential impact on our
performance; |
| --- | --- |
| ● | A substantial portion
of an executive officer’s compensation is subject to achieving both
short-term and long-term performance objectives that enhance stockholder
value; |
| ● | Reinforce the
importance of meeting and exceeding identifiable and measurable goals
through superior awards for superior performance; |
| ● | Provide total direct
compensation that is competitive in markets in which we compete for
management talent in order to attract, retain and motivate the best
possible executive talent; |
| ● | Provide an incentive
for long-term continued employment with our Company;
and |
| ● | Reinforce our desired
culture and unique corporate environment by fostering a sense of
ownership, urgency and overall entrepreneurial
spirit. |

2016 Company Performance and Impact on Compensation Program

The Company demonstrated continued strong performance for 2016 with year-over-year revenue growth of 8.6%. Key drivers of that growth were:

● Solid performance across all of our business segments:

| Business Segment | Year-over-Year Revenue
Growth | % of
2016 Revenue |
| --- | --- | --- |
| Financial Services | 7.3% | 39.8% |
| Healthcare | 5.5% | 28.7% |
| Manufacturing/Retail/ | | |
| Logistics | 13.5% | 19.7% |
| Other | 13.5% | 11.8% |

| | The
performance in Financial Services was negatively impacted by macroeconomic
conditions that reduced demand from banking customers, while the
Healthcare segment was adversely impacted by reduced demand caused by
uncertainties in the regulatory environment and potential
consolidation. |
| --- | --- |
| ● | Sustained strength in
the North American market with year-over-year revenue growth of
8.1%. |
| ● | Continued penetration
of the European market with year-over-year revenue growth of 6.8% after a
negative currency impact of 6.5%. |
| ● | Continued penetration
of the Rest of World (primarily the Asia Pacific) market with
year-over-year revenue growth of 22.7% after a negative currency impact of
2.5%. |
| ● | Increased customer
spending on discretionary projects. |
| ● | Expansion of our
service offerings, including consulting and in our three digital practice
areas (Digital Business, Digital Operations and Digital Systems and
Technology). |
| ● | Continued expansion of
the market for global delivery of technology and business process
services. |
| ● | Increased
penetration at existing customers, including strategic
clients. |

The Company’s GAAP operating margin in 2016 decreased to 17.0% from 17.3% in 2015, while non-GAAP Operating Margin decreased to 19.5% from 19.7% in 2015. 1

The Compensation Committee took into account the above factors and the Company’s performance, including relative to the industry, during 2016 and in previous years in its compensation decisions. See “Proxy Statement Summary” starting on page 1 for more information about the performance-based compensation targets set for, and the Company’s actual performance in, previous years.

1 See “Non-GAAP Financial Measures and Forward-Looking Statements” on page 57.

2017 Proxy Statement 23

Table of Contents

Compensation

Role of Stockholder Say-on-Pay Votes

The Company provides its stockholders with the opportunity to cast an annual, non-binding advisory vote on executive compensation. At the 2016 Annual Meeting, approximately 96.0% of the votes cast on the Say-on-Pay proposal were voted “FOR” the proposal. In making its decisions regarding executive compensation for 2016, the Compensation Committee considered the significant level of stockholder support for our compensation program and chose to generally retain the 2015 structure of the executive compensation program, including the ratio of performance-based compensation to all other compensation and the ratio of performance-based equity compensation to time-based equity compensation, while making quantitative adjustments to reflect the performance of the Company and our NEOs in 2016. Nevertheless, there were two notable changes to the compensation structure for NEOs made by the Compensation Committee in 2016:

| ● | Move to 2-year
PSUs. The Company granted PSUs in 2016
with a 2-year performance measurement period (versus 1-year previously),
with vesting of 1/3 rd at 30 months and 2/3 rds at 36
months, to provide a longer time-horizon to the substantial portion of the
performance-based compensation for the NEOs represented by the
PSUs. |
| --- | --- |
| ● | RSU grant
timing change. The Company moved the
timing of annual RSU grants for certain NEOs from the fourth quarter of
2016 to the first quarter of 2017 to align with the timing of the
Company’s other annual equity grants and other annual compensation
decisions by the Compensation
Committee. |

See “Direct Compensation of NEOs” starting on page 25. The Compensation Committee will continue to consider the outcome of the Company’s Say-on-Pay votes when making future compensation decisions for the NEOs.

The Compensation-Setting Process

Compensation Committee and Engagement of Compensation Consultant

To achieve the objectives of our executive compensation program, the Compensation Committee evaluates our executive compensation program with the goal of setting compensation at levels the Compensation Committee believes are competitive with those of other technology-related growth companies that compete with us for executive talent. The Compensation Committee has periodically engaged an independent compensation consultant to provide additional assurance that the Company’s executive compensation program is reasonable and consistent with its objectives. The consultant reports directly to the Compensation Committee, periodically participates in Committee meetings, and advises the Compensation Committee with respect to compensation trends and best practices, plan design, and the reasonableness of individual compensation awards. Although the Compensation Committee reviews the compensation practices of our peer companies as described below, the Compensation Committee does not adhere to strict formulas or survey data to determine the mix of compensation elements. Instead, as described below, the Compensation Committee considers various factors in exercising its discretion to determine compensation, including the experience, responsibilities and performance of each NEO as well as the Company’s overall financial performance. This flexibility is particularly important in designing compensation arrangements to attract and retain executives in a highly-competitive, rapidly changing market.

Since 2010, the Compensation Committee has engaged Pay Governance, an independent executive compensation advisory firm, to review all elements of executive compensation, benchmark such compensation in relation to other comparable companies with which we compete for executive talent, and provide recommendations to ensure that our executive compensation program continues to enable us to attract and retain qualified executives through competitive compensation packages which will result in the attainment of our short-term and long-term strategic objectives. As part of the compensation-setting processes for 2014, 2015 and 2016, the Compensation Committee asked Pay Governance to provide benchmark compensation data and/or review management’s recommendations for year-over-year compensation adjustments, including review for general market competitiveness and competitiveness with the Company’s peer group.

The Compensation Committee has assessed the independence of Pay Governance and concluded that no conflict of interest exists that would prevent Pay Governance from providing independent advice to the Compensation Committee regarding executive and director compensation matters.

Role of Executive Officers in Determining Executive Compensation

Our CEO, aided by our President and our Chief People Officer, among others, provides statistical data and makes recommendations to the Compensation Committee to assist it in determining compensation levels. In addition, our CEO provides the Compensation Committee with a review of the performance of the other executive officers. While the Compensation Committee utilizes this information and values management’s observations with regard to compensation, the ultimate decisions regarding executive compensation are made by the Compensation Committee.

Peer Group

The Compensation Committee, with assistance from Pay Governance, establishes the Company’s peer group that is used for market comparisons and benchmarking. The peer group is comprised of a group of technology-related firms selected based on revenue, headcount and market capitalization.

| ● | Accenture
Plc |
| --- | --- |
| ● | Automatic Data
Processing, Inc. |
| ● | CA Technologies,
Inc. |
| ● | Computer Sciences
Corporation |
| ● | Convergys
Corporation |
| ● | Fidelity National
Information Services, Inc. |
| ● | Fiserv,
Inc. |
| ● | Leidos
Holdings, Inc. |
| ● | Mastercard Incorporated |
| ● | NetApp,
Inc. |
| ● | Symantec
Corporation |
| ● | Visa,
Inc. |
| ● | Yahoo!
Inc. |

24 Cognizant Technology Solutions Corporation

PART 08

Table of Contents

Compensation

Direct Compensation of NEOs

Primary Compensation Elements for 2016 – Overview

Our executive compensation program is designed to motivate, retain and engage our executive leadership and appropriately reward them for their contributions to the achievement of our business strategies and goals. In order to achieve our compensation objectives, the Company provides its executives with a total direct compensation package consisting of the elements listed in the table below. The Compensation Committee makes decisions on executive compensation from a total direct compensation perspective. Each element is considered by the Committee to be important in meeting one or more of the compensation program objectives. The following chart illustrates the balance of the elements of 2016 target total direct compensation (using grant date share prices for RSUs and PSUs and target values for the annual cash incentive and PSUs) for our CEO and other NEOs.

■
Stable source of cash income at
competitive levels

| ■ |
| --- |
| Annual cash incentive for Mr.
D’Souza, Mr. Mehta and Ms. McLoughlin to motivate and reward achievement
of Company financial and operational
objectives |

| Weighting | | Measurement Period | Target
Compensation |
| --- | --- | --- | --- |
| ● | Revenue | 1 year | 85% of base
salary |
| ● | Non-GAAP Income from
Operations | Payout Range | |
| ● | Days Sales Outstanding
(DSO) | ● | |

Historical Annual Cash Incentive award achievements by year	2015	2016
96.2%	142.0%	79.8%

Cash bonus for Mr. Chintamaneni and Mr. Sinha based on achievement of business unit and/or overall business goals and expanded responsibilities in 2016

| ■ |
| --- |
| Annual grant of performance stock
units that reward achievement of Company financial objectives, continued
service and long-term performance of our common
stock |

Weighting 1		Measurement Period	Vesting
●	Revenue	2 years	1/3 rd at 30
months
●	Non-GAAP EPS	Vesting Range	2/3 rds at 36
months
		●

Historical PSU achievements by performance measurement period	2015 1	2016
86.1%	122.9%	38.2%

Weighting for 2017 awards – 50% Revenue; 50% non-GAAP EPS

| ■ |
| --- |
| Annual grants of restricted stock
units to reward continued service and long-term performance of our common
stock |

Vesting Quarterly over 3 years

Q4 2016 to Q1 2017 RSU grant timing change – The Company moved the timing of annual RSU grants for Mr. D’Souza, Mr. Mehta and Ms. McLoughlin from the fourth quarter of 2016 to the first quarter of 2017 to align with the timing of the Company’s other annual equity grants and other annual compensation decisions by the Compensation Committee. As such, to present the intended target total direct compensation in a more meaningful manner, the RSU percentages shown for 2016 include the value of the RSU grants made to such executives in the first quarter of 2017.

| 1 | Weighting was 100% revenue for the 2014 and 2015 performance
measurement periods. |
| --- | --- |
| 2 | Excludes Mr. Coburn, who resigned
from the Company during 2016. |

| 2016 Target Annual
Compensation | |
| --- | --- |
| ● | ● |
| CEO | Other NEOs 2 (on
average) |

■	Base Salary
■	Annual Cash Incentive / Cash
Bonus
■	Performance Stock Units
(PSUs)
■	Restricted Stock Units
(RSUs)

2017 Proxy Statement 25

Table of Contents

Compensation

Base salary

The Compensation Committee reviews the base salaries of our NEOs on an annual basis. The primary objective of the base salary component of an executive’s total direct compensation is to provide financial stability and certainty through market-competitive salary levels, recognizing each NEO’s experience, knowledge, skills, relative value and sustained contribution to the Company. The Compensation Committee makes periodic adjustments to base salary based on individual performance and contributions, market trends, increases in the cost of living, competitive position and our financial situation. Consideration is also given to relative responsibility, seniority, experience and performance of each individual NEO. No specific weight is assigned to any of the above criteria relative to the others, but rather the Compensation Committee uses its judgment in combination with market and other data provided by Pay Governance and the Company. The Compensation Committee does not attempt to set compensation components to meet specific benchmarks relative to our peers because the Compensation Committee believes that excessive reliance on benchmarking is detrimental to stockholder interests as it can result in compensation that is unrelated to the value delivered by the NEOs.

Annual Cash Incentive

2016 Annual Cash Incentive

| Component | Threshold | Target | Maximum | Increase in 2016 Targets
vs. 2015 Actuals | 2016
Award Achievement by Component |
| --- | --- | --- | --- | --- | --- |
| Revenue (in billions) | ● | | ● | 11% | Overall
2016 Annual Cash Incentive Achievement 79.8% |
| Non-GAAP Income from
Operations (in
millions) | ● | | ● | 10% | |
| Days sales outstanding
(DSO) | ● | | ● | – | |
| Payout as percentage of
target | 50% | 100% | 200% | | |

The Compensation Committee has designed our annual cash incentive program to stimulate and support a high-performance environment by tying such incentive compensation to the attainment of organizational financial goals and by recognizing superior performance. The annual cash incentives are intended to compensate individuals for the achievement of these goals. The Committee determines actual cash incentives after the end of the fiscal year based upon the Company’s performance.

For 2016, the Compensation Committee based the annual cash incentive awards for Mr. D’Souza, Mr. Mehta and Ms. McLoughlin on the achievement of financial goals tied to metrics that it believes are valued by our stockholders. The Compensation Committee believes that our stockholders value and measure the performance of these executives based principally on the growth of Company revenue, earnings and cash flow. Consequently, as in past years the Compensation Committee believed it appropriate to establish three components to the annual cash incentive: revenue, non-GAAP Income from Operations (see “Non-GAAP Financial Measures and Forward-Looking Statements” on page 57) and days sales outstanding (“DSO”). All three components were subject to adjustment for any acquisitions over the course of the year.

For 2016, the Compensation Committee determined a target for each component (revenue, non-GAAP Income from Operations and DSO) and a weighting for the various components as a percentage of the total award such that achievement of the targeted level of performance for all three components would result in the executives receiving their target awards. The Committee set threshold, or minimum, levels for each of the components below which no annual cash incentive would be paid for the particular component. The Committee also set maximum levels for each of the components above which no additional annual cash incentive would be paid for the particular component and which collectively result in a maximum possible annual cash incentive equal to 200% of the target awards for the executives. Achievement for performance between threshold and target levels or between the target and maximum levels for any of the components was calculated using straight-line interpolation. In addition, during 2016, the revenue and non-GAAP Income from Operations targets were adjusted for acquisitions over the course of the year.

The Compensation Committee established revenue and non-GAAP Income from Operations targets at levels 11% and 10% above the Company’s 2015 revenue and non-GAAP Income from Operations, respectively. These targets were established to incentivize the Company’s management to prioritize a continued high level of growth in the Company’s revenue while maintaining a targeted level of non-GAAP Operating Margin. Meanwhile, the DSO component remained at the same targeted levels as prior years as the Compensation Committee viewed those targets as appropriately incentivizing maintenance of a healthy cash flow level. As a result of these targets, there was substantial uncertainty at the time the Compensation Committee established the performance goals for 2016 as to the likelihood of the Company’s attainment of the targeted levels of performance.

Cash Bonus

Neither Mr. Chintamaneni nor Mr. Sinha was an NEO at the time the above-described annual cash incentive award program was established by the Compensation Committee for 2016 for the then current NEOs. Mr. Chintamaneni and Mr. Sinha received cash bonus awards for 2016 determined by the Compensation Committee based on the following:

| ● | Mr. Chintamaneni had a bonus target
for 2016 based on the performance of the Company’s Banking and Financial
Services business unit, with 65% to be based on achievement of revenue and
margin targets for the business and 35% tied to various other objectives
for the business. In determining his final bonus payout to be 75% of his
target, consideration was given by the Compensation Committee to the
achievement of the business unit performance and his expanded commercial
role across all of the Company’s business units following his promotion
during 2016 to EVP and President, Global Industries and
Consulting. |
| --- | --- |
| ● | Mr. Sinha, as EVP and President,
Global Client Services, manages the Company’s global sales and marketing
across all of its business units. In determining his final bonus payout to
be 75%, the Compensation Committee considered the performance
of |

26 Cognizant Technology Solutions Corporation

Table of Contents

Compensation

the Company as a whole and his individual performance and determined that it was appropriate to set his final bonus payout at the Company’s average bonus payout level for 2016.

Stock-Based Awards

Overview We provide long-term incentive compensation through stock-based awards in the form of PSUs and RSUs. The Committee believes that PSUs and RSUs are a valuable component of our long-term incentive program for several reasons, including concerns over the dilutive effect option grants may have on our outstanding shares, our desire to make a portion of our NEOs’ compensation less subject to market volatility, and our desire to create a retention mechanism which creates the incentive to maximize stockholder value.

The Compensation Committee currently plans to use a combination of PSUs and RSUs in future years. We believe that stock-based grants provide our executive officers with a strong incentive to manage the Company from the perspective of an owner with an equity stake in the long-term success of the business, create an ownership culture, and help align the interests of our executives and our stockholders. In addition, the vesting feature of our equity grants should further our goal of executive retention because this feature provides an incentive to our executive officers to remain in our employ during the vesting period.

In considering the number of long-term incentives to grant, the Compensation Committee first establishes a target compensation value that it wants to deliver to the NEOs through long-term equity awards. In doing so, the Committee generally takes into account various factors, including the value of PSUs and RSUs that each of our executive officers has previously been awarded, the base salary of the executive officer, the heavy weight placed on equity in the mix of total compensation, and the perceived retention value of the total compensation package in light of the competitive environment. The Committee also generally takes into account increases in the cost of living, the size of comparable awards made to individuals in similar positions within the industry, the scope, responsibility and business impact of the officer’s position, the individual’s potential for increased responsibility and promotion over the award term, and the individual’s personal experience and performance in recent periods. Once the target value is established, the Compensation Committee determines the number of PSUs and RSUs to be granted by reference to the current value of the Company’s common stock.

PSUs

PSUs granted in 2016 have a 2-year performance measurement period (fiscal years 2016 and 2017) over which the Company’s performance across two performance metrics is measured: revenue and non-GAAP EPS. See “Non-GAAP Financial Measures and Forward-Looking Statements” on page 57. Revenue determines 75% of the award and non-GAAP EPS determines the remaining 25% of the award. Both metrics are subject to adjustment by the Compensation Committee for any acquisitions over the course of the performance measurement period.

For each metric, the Compensation Committee established at the time of the award:

| ● | Threshold – 50% vesting, with 0% vesting for
performance below the threshold. |
| --- | --- |
| ● | Target – 100% vesting. |
| ● | Maximum – 200% vesting, and maximum possible
number of PSUs that may vest. |

Whether and to what extent the performance as to either metric has been achieved will be determined by the Compensation Committee in its sole discretion based upon the audited financials for the 2016 and 2017 fiscal years. To the extent the level of achievement falls between the threshold and target levels or between the target and maximum levels for either metric, straight-line interpolation is utilized to calculate the payout level for the component.

Performance across the two metrics determines the total number of PSUs that may vest, with actual vesting of the awards as follows and contingent upon the NEO continuing in the service of the Company through such dates:

| ● | 1/3 rd will vest 30 months following
the start of the performance measurement period. |
| --- | --- |
| ● | 2/3 rds will vest 36 months following
the start of the performance measurement period. |

2017 Proxy Statement 27

Table of Contents

Compensation

RSUs

RSUs vest in quarterly installments over a 3-year period from the date of grant.

The Company has historically made annual RSU grants to Mr. D’Souza, Mr. Mehta and Ms. McLoughlin during the fourth quarter of each year. During 2016, however, the Compensation Committee determined that it was in the best interests of the Company and its stockholders to move the timing of their annual RSU grants from the fourth quarter of 2016 to the first quarter of 2017 to align with the timing of the Company’s other annual equity grants and other annual compensation decisions by the Compensation Committee. Consequently, while Mr. D’Souza, Mr. Mehta and Ms. McLoughlin did not receive RSU awards in 2016, they did receive them in March 2017. The Compensation Committee will next consider an annual RSU award for these three officers in the first quarter of 2018.

Mr. Chintamaneni and Mr. Sinha, on the other hand, received their annual RSU awards in February 2016. They also received RSU awards in December 2016 in connection with their promotions to EVP and President, Global Industries and Consulting and EVP and President, Global Client Services, respectively.

2016 Compensation for our named executive officers

| Francisco
D’Souza — Age 48 Education BBA,
University of Macau MBA, Carnegie Mellon University Cognizant
tenure 23 years | Current
Role CEO Committee
assessment ● 3% overall compensation increase effective January 1 to
reflect cost of living increases and general market trends; same
compensation mix | Compensation Decisions
for 2016 ● Base salary – increased 3% to $664,300, effective January 1,
2016 ● Annual cash
incentive – target of $564,655 (85% of
base salary); actual payout of $450,332 (79.8% of target) based on Company
performance ● Annual PSU grant – $7,018,671 fair value as of grant date (February
16, 2016) ● Annual RSU grant (moved to
early 2017) – $3,774,223 fair value as
of grant date (March 2, 2017) |
| --- | --- | --- |

| Rajeev
Mehta — Age 50 Education BS,
University of Maryland MBA, Carnegie Mellon University Cognizant
tenure 20 years | Current
Role President Committee
assessment ● 3% overall compensation increase effective January 1 to
reflect cost of living increases and general market trends; same
compensation mix ● 14% increase in base salary and target annual cash
incentive upon promotion from CEO-IT Services to President to reflect
additional responsibilities | Compensation Decisions
for 2016 ● Base salary – increased 3% to $554,700, effective January 1, 2016,
and increased 14% to $630,000, upon promotion to President on September
28, 2016 ● Annual cash
incentive – initial target of $471,495
(85% of base salary), increased to $488,108 upon his promotion (85% of
base salary, pro-rated); actual payout of $389,284 (79.8% of target) based
on Company performance ● Annual PSU grant – $3,584,397 fair value as of grant date (February
16, 2016) ● Annual RSU grant (moved to
early 2017) – $2,545,432 fair value as
of grant date grant (March 2,
2017) |
| --- | --- | --- |

| Gordon
Coburn — Age 53 Education BA,
Wesleyan University MBA, Dartmouth College Cognizant
tenure 20 years | Former
Role President (resigned
September 27, 2016) Committee
assessment ● 3% overall compensation increase effective January 1 to
reflect cost of living increases and general market trends; same
compensation mix | Compensation Decisions
for 2016 ● Base salary – increased 3% to $631,900, effective January 1,
2016 ● Annual cash
incentive – initial target of $537,115
(85% of base salary); no payout as he resigned from the Company during
2016 ● Annual PSU grant – $3,750,637 fair value as of grant date (February
16, 2016) ● Annual RSU grant – None |
| --- | --- | --- |

28 Cognizant Technology Solutions Corporation

PART 09

Table of Contents

Compensation

| Karen
McLoughlin — Age 52 Education BA,
Wellesley College MBA, Columbia University Cognizant
tenure 13 years | Current
Role CFO Committee
assessment ● 5% overall compensation increase effective January 1 to
reflect cost of living increases and general market trends, including with
respect to CFO pay; same compensation mix | Compensation Decisions
for 2016 ● Base salary –
increased 5% to $426,500, effective January 1, 2016 ● Annual cash incentive – target of $362,525 (85% of base salary); actual payout of $289,126
(79.8% of target) based on Company performance ● 2016 annual PSU grant – $1,875,841 fair value as of grant date (February 16, 2016) ● Annual RSU grant (moved to early 2017) – $1,038,113 fair value as of grant date (March 2,
2017) |
| --- | --- | --- |

| Ramakrishna
Prasad Chintamaneni — Age 47 Education B.
Tech, Indian Institute of Technology, Kanpur Postgraduate Diploma, XLRI – Xavier School of Management Cognizant
tenure 17 years | Current
Role EVP and President, Global
Industries and Consulting Committee
assessment ● 3% overall compensation increase effective January 1 to
reflect cost of living increases and general market trends; same
compensation mix ● Following promotion to his current role, to reflect the
additional responsibilities ● 15% increase in base salary and targeted cash bonus ● One-time cash bonus of $300,000 ● 31% increase in annual PSU and RSU grants ● Overall target total annual compensation of approximately $3
million | Compensation Decisions
for 2016 ● Base salary –
increased 3% to $412,000, effective January 1, 2016, and increased 15% to
$475,000, effective December 1, 2016, following promotion to his current
role ● Cash bonus – initial
target of $350,200, increased to $403,750 (85% of base salary) following
promotion to his current role; actual payout of $266,052 (75% of target,
pro-rated), based on performance of the Company’s Banking and Financial
Services business unit with consideration given for his expanded
commercial role across all of the Company’s business units; additional
one-time cash bonus of $300,000 paid in connection with his expanded
responsibilities ● Annual PSU grant –
$693,016 fair value as of grant date (February 16, 2016) ● Additional PSU grant – $137,472 fair value as of grant date (December 1, 2016),
following promotion to his current role ● Annual RSU grant –
$259,317 fair value as of grant date (February 16, 2016) ● Additional RSU grant – $1,355,624 fair value as of grant date (December 1, 2016), following
promotion to his current role and as a reload of RSUs issued three years
prior |
| --- | --- | --- |

| Dharmendra
Kumar Sinha — Age 54 Education BS,
Patna Science College MBA, Birla Institute of Technology Cognizant
tenure 19 years | Current
Role EVP and President, Global
Client Services Committee
assessment ● 3% overall compensation increase effective January 1 to
reflect cost of living increases and general market trends; same
compensation mix ● Following promotion to his current role, to reflect the
additional responsibilities ● 6% increase in base salary ● 58% increase in targeted cash bonus (to 85% of base salary,
consistent with other executive officers) ● One-time cash bonus of $10,000 ● 27% increase in annual PSU and RSU grants ● Overall target total annual compensation of approximately $2.4
million | Compensation Decisions
for 2016 ● Base salary –
increased 3% to $354,823, effective January 1, 2016, and increased 6% to
$375,000, effective December 1, 2016, following promotion to his current
role ● Cash bonus – initial
target of $201,349 (57% of base salary), increased to $318,750 (85% of
base salary) following promotion to his current role; actual payout of
$158,470 (75% of target, pro-rated), based on the Company average bonus
payout based on his role in managing global sales and field marketing
across all of the Company’s business units; additional one-time cash bonus
of $10,000 paid in connection with his expanded responsibilities ● Annual PSU grant –
$684,269 fair value as of grant date (February 16, 2016) ● Additional PSU grant – $29,474 fair value as of grant date (December 1, 2016), following
promotion to his current role ● Annual RSU grant –
$259,317 fair value as of grant date (February 16, 2016) ● Additional RSU grant – $1,502,883 fair value as of grant date (December 1, 2017), following
promotion to his current role and as a reload of RSUs issued three years
prior |
| --- | --- | --- |

2017 Proxy Statement 29

Table of Contents

Compensation

Other Elements of Compensation

Supplemental Retirement Programs

We do not have any nonqualified deferred compensation programs, pension plans or pre-tax supplemental executive retirement plans for our executive officers, except for the CSRP described under “Broad-Based Programs” below and a nonqualified deferred compensation program established for Mr. Coburn. We established the program for Mr. Coburn to provide him with the equivalent economic value of the retirement plan in which he participated while the Company was majority-owned by IMS Health. Accordingly, Mr. Coburn was entitled to an annual Company contribution to his nonqualified deferred compensation account equal to 6% of his base salary and earned annual cash incentive while he was employed by the Company.

Broad-Based Programs

Our U.S.-based executive officers are eligible to participate in our broad-based medical, dental and vision insurance, life and accidental death insurance, 401(k) savings plan, CSRP and 2004 Amended and Restated Employee Stock Purchase Plan (“2004 ESPP”) on the same basis as all other regular employees.

Under the 401(k) savings plan, we match employee contributions at the rate of 50% for each dollar contributed during each pay period, up to the first 6% of eligible compensation contributed during each pay period, subject to applicable U.S. Internal Revenue Service (“IRS”) limits. The matching contributions immediately vest.

Our U.S.-based executive officers who are subject to contribution restrictions under our 401(k) savings plan due to statutory limits that apply to highly-compensated employees are eligible to participate in the Cognizant Technology Solutions Supplemental Retirement Plan (the “CSRP”) on the same basis as all other regular U.S.-based employees. The CSRP is a nonqualified savings plan in which the employee’s contributions are made on a post-tax basis to an individually owned, portable and flexible retirement plan held with a life insurance company. The CSRP works alongside established qualified retirement plans such as our 401(k) savings plan or can be the basis for a long-term stand-alone retirement savings plan. We provide a fully vested incentive match following the same formula as our 401(k) savings plan. Because the CSRP is not subject to the same IRS non-discrimination rules as our 401(k) savings plan, employees that face limitations on their 401(k) contributions due to these rules can avail themselves of the CSRP without foregoing the Company match. Although there is a limit in the amount of employer contributions, there is no limit to the amount an employee may contribute to the CSRP and it can be used in concert with other retirement strategies that may be available outside of the Company.

The 401(k) savings plan, CSRP and other generally available benefit programs allow us to remain competitive for employee talent. We believe that the availability of the aforementioned broad-based benefit programs generally enhances employee morale and loyalty.

Perquisites

We seek to maintain an egalitarian culture in our facilities and operations. The Company’s philosophy is to provide a minimal amount of personal benefits and perquisites to its executives and generally only when such benefits have a strong business purpose.

We incur expenses to ensure that our employees, including our executive officers, are accessible to us and our customers at all times and to promote our commitment to provide our employees and executives with the necessary resources and items of technology to allow them to operate “around the clock” in a “virtual office” environment. However, we do not view these expenses as executive perquisites because they are essential to the efficient performance of their duties and are comparable to the benefits provided to a broad-based group of our employees. We also provide personal security services to certain of our executive officers where we believe the provision of such services is in the interest of the Company.

In addition, the Company may reimburse executives for approved travel expenses where an immediate family member accompanies an executive to attend a business function at which such family member is generally expected to attend.

In addition, the Company provides Mr. D’Souza with limited access to an administrative assistant of the Company and vehicle rentals for his personal business purposes. Mr. D’Souza does not reimburse the Company for its cost of providing the administrative services and vehicle rentals and the Company pays him an additional amount to help offset any income taxes associated with the receipt of such services.

Executive Stock Ownership Guidelines

CEO	●	6x annual base salary
Other NEOs	●	4x annual base salary

The Company adopted revised stock ownership guidelines in March 2017 to further align the interests of our NEOs with those of stockholders. Under the revised guidelines, each NEO is required to hold a number of shares with a value, as of the time the revised guidelines were put in place or, for later identified NEOs, the time an executive becomes an NEO, equal to the applicable multiple of annual base salary. The annual base salary utilized in the calculation is the annual base salary applicable under the prior guidelines at the time the revised guidelines were adopted or, for later identified NEOs, the annual base salary when an officer becomes an NEO. As with the prior guidelines, compliance is required within five years of an officer becoming an NEO, subject to limited exceptions for hardship or other personal circumstances as determined by the Compensation Committee.

Hedging, Short Sale, Margin Account and Pledging Prohibitions

The Company’s insider trading policies include the following prohibitions:

| ● | No hedging or speculation with
respect to Cognizant securities . All of
the Company’s directors, officers and other employees are prohibited from
purchasing or selling puts, calls and other derivative securities of the
Company or any other derivative security that provides the equivalent of
ownership of any of the Company’s securities or an opportunity, direct or
indirect, to profit from the change in value of the Company’s
securities. |
| --- | --- |
| ● | No short sales of Cognizant
securities. All of the Company’s
directors, officers and other employees are prohibited from engaging in
short sales of Cognizant securities, preventing such persons from
profiting from a decline in the trading price of the Company’s common
stock. |
| ● | No margin accounts with Cognizant
securities. The Company’s directors and
certain of its senior officers and other specified “insiders,” including
the NEOs, are prohibited from using Company securities as collateral in a
margin account. |
| ● | Limited pledging of Cognizant
securities. The Company’s directors and
certain of its senior officers and other specified “insiders,” including
the NEOs, are prohibited from pledging the Company’s securities as
collateral for a loan, or modifying an existing pledge, without
pre-approval from the Audit Committee. |

30 Cognizant Technology Solutions Corporation

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Compensation

Clawback Policy

The Company maintains a Clawback Policy which applies to all NEOs and certain other members of management.

| When Clawback Policy May
Apply — ● | Company is required to prepare
an accounting
restatement due to material
noncompliance by the Company with any financial reporting requirement
under the securities laws that is caused directly or indirectly by any
current or former employee’s gross negligence, willful fraud or failure to
act that affects the performance measures or the payment, award or value
of any compensation which is based in whole or in part on the achievement
of financial results by the Company (“incentive
compensation”) | | Compensation Subject to Clawback — Incentive compensation actually
received during the preceding three years less amount that would have
been received based on restated financial results |
| --- | --- | --- | --- |
| | ● | and
to the extent the restatement is
caused by an employee’s willful fraud or intentional manipulation of
performance measures that affect
incentive compensation, for such employee | Same as above, but clawback may
cover the entire period the employee was subject to the clawback
policy |
| ● | Employee engages in illegal or improper
conduct that causes significant
financial or reputational harm to the Company | | Any portion of incentive
compensation |
| ● | Employee has knowledge of and fails to report to the Board of
Directors the conduct of any other
employee or agent of the Company who engages in any of the conduct
described above | | Any portion of incentive
compensation |
| ● | Employee is grossly negligent in fulfilling his or her supervisory
responsibilities to prevent any
employee or agent of the Company from engaging in any of the conduct
described above | | Any portion of incentive
compensation |

Equity Grant Practices

The Compensation Committee or the Board approves the grant of stock-based equity awards, such as options, PSUs and RSUs, at its regularly scheduled meetings or by written consent (to be effective on the date of the meeting or receipt of all signed consents, or a later date specified). In addition, the Board has authorized an executive committee comprised of members of the executive management team to grant options to newly hired and existing employees, other than employees subject to Section 16 reporting as defined by the SEC.

The Compensation Committee and the Board do not engage in any market timing of the stock-based equity awards made to executive officers or other award recipients. It is our policy that all stock option grants, whether made by the Board, the Compensation Committee or the executive committee, have an exercise price per share equal to the fair market value of our common stock based on the closing market price per share on the grant date.

Risk Assessment

We believe our approach to goal setting and setting of targets with payouts at multiple levels of performance assists in mitigating excessive risk-taking that could harm our value or reward poor judgment by our executives. Several features of our programs reflect sound risk management practices. We believe we have allocated our compensation among base salary and short and long-term compensation target opportunities in such a way as to not encourage excessive risk-taking, but rather to reward meeting strategic Company goals that enhance stockholder value. In addition, we believe that the mix of equity award instruments used under our long-term incentive program that includes full value awards as well as the multi-year vesting of our equity awards also mitigates risk and properly accounts for the time horizon of risk.

We do not believe that any of our compensation policies create risks that are reasonably likely to have a material adverse effect on the Company.

Tax Considerations – Deductibility of Executive Compensation

IRC Section 162(m) imposes a $1 million limit on the amount that a public company may deduct for compensation paid to the company’s CEO or any of the company’s three other most highly compensated executive officers (other than the CFO) who are employed as of the end of the year. This limitation does not apply to compensation that meets the requirements under IRC Section 162(m) for “qualifying performance-based” compensation. One of the requirements for compensation to qualify is that the material terms of the performance goals for such compensation be approved by stockholders every five years.

For purposes of IRC Section 162(m), the material terms of the performance goals include the following:

| ● | which employees would be subject to
the goals; |
| --- | --- |
| ● | the business measurements on which
the performance goals would be based; and |
| ● | the formula that would be used to
calculate the maximum amount of compensation that can be paid to an
employee under the arrangement. |

2017 Proxy Statement 31

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Compensation

Ongoing and Post-Employment Compensation

The Company recognizes that a change in control can create uncertainty for its employees that may result in loss or distraction of executives during a critical period. As a result we entered into Amended and Restated Executive Employment and Non-Disclosure, Non-Competition and Invention Assignment Agreements (collectively, the “Employment Agreements”) with each of the NEOs under which certain payments and benefits would be provided should the NEO’s employment terminate under certain circumstances, including in connection with a change in control.

We believe that the Employment Agreements continue to achieve two important goals crucial to our long-term financial success, namely, the long-term retention of the NEOs and their commitment to the attainment of our strategic objectives. These agreements will allow our NEOs to continue to focus their attention on our business operations and strategic plans without undue concern over their own financial situations during periods when substantial disruptions and distractions might otherwise prevail. We believe that these severance packages are also fair and reasonable in light of the years of service our NEOs have rendered us (average tenure of over 15 years), the level of dedication and commitment they have rendered us over that period, the contribution they have made to our growth and financial success and the value we expect to receive from retaining their services, including during challenging transition periods following a change in control.

None of the NEOs is entitled to any tax gross-up payments for the tax liability they incur with respect to such severance benefits.

The material terms of the NEOs’ Employment Agreements and post-employment compensation are described in “Potential Payments upon Termination or Change in Control” starting on page 38.

Compensation Committee

Compensation Committee Report

The Compensation Committee has furnished the report set forth below. The information contained in this report shall not be deemed to be “soliciting material” or “filed” with the SEC or subject to the liabilities of Section 18 of the Exchange Act, except to the extent that the Company specifically incorporates it by reference into a document filed under the Securities Act of 1933 or the Exchange Act.

To the Board of Directors of Cognizant Technology Solutions Corporation: The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis set forth in the Company’s proxy statement for the 2017 Annual Meeting of Stockholders. The Compensation Committee has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in such proxy statement for filing with the Securities and Exchange Commission and incorporated by reference into the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. By the Compensation Committee of the Board of Directors of Cognizant Technology Solutions Corporation John N. Fox, Jr. John E. Klein Michael Patsalos-Fox Robert E. Weissman

Compensation Committee Interlocks and Insider Participation

During the year ended December 31, 2016, Messrs. Fox, Klein, Patsalos-Fox and Weissman served on the Compensation Committee. No member of the Compensation Committee was or is a current or former officer or employee of the Company or any of its subsidiaries.

None of our executive officers serve as a member of the board of directors or compensation committee of any entity which has one or more of its executive officers serving as a member of the Board or the Compensation Committee of the Company.

32 Cognizant Technology Solutions Corporation

PART 10

Table of Contents

Compensation

EXECUTIVE COMPENSATION TABLES

2016 Summary Compensation Table

The following 2016 Summary Compensation Table provides certain summary information concerning the compensation earned for services rendered in all capacities to us and our subsidiaries for the years ended December 31, 2014, 2015 and 2016 by our CEO, CFO, each of our three other most highly compensated executive officers who were serving as executive officers at the end of the 2016 fiscal year, and Mr. Coburn, who would have been one of the three most highly compensated executive officers for 2016 had he not resigned as the Company’s President on September 27, 2016 (collectively, the “NEOs”). No other executive officers who would have otherwise been includable in such table on the basis of total compensation for the 2016 fiscal year have been excluded by reason of their termination of employment or change in executive status during that year.

| Name and Principal Position | Year | | Salary | Bonus | Stock Awards 1,
2 | Option Awards | Non-Equity Incentive Plan Comp. 3 | All Other Pension
and Nonqualified Deferred Comp. | | All Other Comp. | | SEC Total 4 | Adjusted SEC Total 5 |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Francisco D’Souza | 2016 | | $664,300 | – | $7,018,671 | – | $450,332 | – | | $123,337 | 6 | $8,256,640 | $12,030,863 |
| CEO | 2015 | | $645,000 | – | $10,483,400 | – | $778,306 | – | | $44,677 | | $11,951,383 | $11,951,383 |
| | 2014 | | $626,000 | – | $10,178,101 | – | $511,705 | – | | $17,257 | | $11,333,063 | $11,333,063 |
| Rajeev
Mehta | 2016 | | $574,100 | – | $3,584,397 | – | $389,284 | – | | $5,750 | 8 | $4,553,531 | $7,098,962 |
| President 7 | 2015 | | $538,500 | – | $5,353,875 | – | $649,795 | – | | $1,500 | | $6,543,670 | $6,543,670 |
| | 2014 | | $508,000 | – | $5,197,934 | – | $415,249 | – | | $1,500 | | $6,122,683 | $6,122,683 |
| Gordon J. Coburn | 2016 | | $467,039 | – | $3,750,637 | – | – | $183,891 | 9 | $93,416 | 10 | $4,494,983 | $4,494,983 |
| Former President 7 | 2015 | | $613,500 | – | $5,602,186 | – | $740,296 | – | 9 | $89,178 | | $7,045,160 | $7,045,160 |
| | 2014 | | $595,500 | – | $5,438,997 | – | $486,773 | $129,043 | 9 | $72,736 | | $6,723,049 | $6,723,049 |
| Karen
McLoughlin | 2016 | | $426,500 | – | $1,875,841 | – | $289,126 | – | | 7,950 | 11 | $2,599,417 | $3,637,530 |
| CFO | 2015 | | $406,000 | – | $2,801,868 | – | $489,910 | – | | 7,950 | | $3,705,728 | $3,705,728 |
| | 2014 | | $372,000 | – | $2,594,346 | – | $304,080 | – | | 7,800 | | $3,278,226 | $3,278,226 |
| Ramakrishna Prasad Chintamaneni | 2016 | 12 | $417,250 | $566,052 | $2,445,428 | – | – | – | | 7,950 | 13 | $3,436,680 | $3,436,680 |
| EVP
and President, Global Industries and Consulting | | | | | | | | | | | | | |
| Dharmendra
Kumar Sinha | 2016 | 12 | $356,504 | $168,470 | $2,475,943 | – | – | – | | 7,950 | 14 | $3,008,867 | $3,008,867 |
| EVP and President, Global Client Services | | | | | | | | | | | | | |

| 1 | Represents the
aggregate grant date fair value of RSUs and PSUs determined in accordance
with FASB ASC Topic 718 granted in each respective year. The reported
dollar amounts do not take into account any estimated forfeitures related
to continued service vesting requirements. See “Stock-Based Awards”
starting on page 27 for a description of the terms of the RSUs and PSUs
granted during 2016. |
| --- | --- |
| 2 | These amounts do not
necessarily represent the actual value that will be recognized by the NEOs
upon vesting of shares. The amounts reported in the columns assume
settlement of PSUs at target levels; however, PSUs may vest at a maximum
of 200% of target, depending on the Company’s revenue and/or non-GAAP EPS.
For PSUs granted in 2016, if the maximum level of performance is achieved,
the grant date fair value for the PSUs will be approximately $14,037,342
for Mr. D’Souza, $7,168,793 for Mr. Mehta, $7,501,274 for Mr. Coburn
(award has been forfeited), $3,751,682 for Ms. McLoughlin, $1,660,975 for
Mr. Chintamaneni and $1,427,486 for Mr. Sinha. None of the NEOs forfeited
any stock awards during the 2016, 2015, or 2014 fiscal years, except for
Mr. Coburn, who forfeited 40,729 RSUs and 220,156 PSUs, including all of
the PSUs granted in 2016, upon his resignation from the Company on
September 27, 2016. For information regarding assumptions underlying the
valuation of stock-based awards, see Note 15 of the Consolidated Financial
Statements in our Annual Report on Form 10-K for the applicable fiscal
year. |
| 3 | Amounts shown in this
column represent cash incentive awards earned for each respective fiscal
year and paid in the first quarter of the following year under our annual
cash incentive program. |
| 4 | Total compensation, as
determined under SEC rules. |
| 5 | The Company moved the
timing of annual RSU grants for certain NEOs from the fourth quarter of
2016 to the first quarter of 2017 to align with the timing of the
Company’s other annual equity grants and other annual compensation
decisions by the Compensation Committee. The Adjusted SEC Total represents
the SEC Total plus, for 2016, the target value of the RSU grants made in
the first quarter of 2017 (using a March 2, 2017 grant date fair value) to
Mr. D’Souza ($3,774,223), Mr. Mehta ($2,545,431) and Ms. McLoughlin
($1,038,113) to provide stockholders annual compensation numbers that are
more comparable to past years and more indicative of the targeted annual
compensation to the NEOs. These amounts are not a substitute for the
amounts reported under the SEC Total. |
| 6 | Includes a 401(k)
savings plan matching contribution in the amount of $806, travel expenses
for Mr. D’Souza’s spouse to attend business functions that she was
generally expected to attend, home security services, provision of secure
vehicles/transport in the amount of $86,686, use of an administrative
assistant of the Company for personal matters, which is valued at $1,900,
plus a gross-up for taxes related thereto equal to $2,046, and vehicle
rentals, which is valued at $1,375, plus a gross-up for taxes related
thereto equal to $1,481. |
| 7 | Mr. Mehta was
appointed President of Cognizant on September 28, 2016, following the
resignation of Mr. Coburn on September 27, 2016. |
| 8 | Represents a 401(k)
savings plan matching contribution. |

2017 Proxy Statement 33

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Compensation

| 9 | Amount represents
investment earnings on Mr. Coburn’s nonqualified deferred compensation
account. The earnings correspond to the actual market earnings on a select
group of investment funds utilized to track the notional investment return
on the account balance for the respective fiscal year. The Company has not
made any determination as to which portion of such earnings may be
considered above market and has elected to report the entire amount of
such earnings. Mr. Coburn’s nonqualified deferred compensation account
incurred an investment loss of $76,165 in 2015; however, $0 is shown in
the table for such year per SEC rules. |
| --- | --- |
| 10 | Includes a 401(k)
savings plan matching contribution in the amount of $5,750, a CSRP
matching contribution in the amount of $2,967, a contribution in the
amount of $31,230, which the Company was required to make to a
nonqualified deferred compensation account, and $53,469 in lieu of earned
vacation. |
| 11 | Represents a 401(k)
savings plan matching contribution in the amount of $2,551 and a CSRP
matching contribution in the amount of $5,399. |
| 12 | 2014 and 2015
compensation not presented for Mr. Chintamaneni and Mr. Sinha as they were
not NEOs in such years. |
| 13 | Represents a 401(k)
savings plan matching contribution in the amount of $2,750 and a CSRP
matching contribution in the amount of $5,200. |
| 14 | Represents a 401(k)
savings plan matching contribution in the amount of $5,750 and a CSRP
matching contribution in the amount of $2,200. |

2016 Grants of Plan-Based Awards Table

The following table provides certain summary information concerning each grant of an award made to an NEO in the 2016 fiscal year under a compensation plan.

| Name | Grant Date | Estimated
Future Payouts Under Non-Equity Incentive Plan Awards 1 — Threshold | Target | Maximum | Estimated Future Payouts
Under Equity Incentive Plan Awards 2 — Threshold | Target | Maximum | All
Other Option Awards: Number
of Securities Underlying Options | Exercise or Base
Price of Option Awards ($/Sh) | Grant Date Fair Value of
Equity Awards 4 |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Francisco
D’Souza | 02/16/16 | | | | 63,795 | 127,589 | 255,178 | – | – | $7,018,671 |
| | 02/16/16 | $282,328 | $564,655 | $1,129,310 | | | | | | |
| Rajeev Mehta | 02/16/16 | | | | 32,580 | 65,159 | 130,318 | – | – | $3,584,397 |
| | 02/16/16 | $244,054 | $488,108 | $976,216 | | | | | | |
| Gordon J. Coburn 5 | 02/16/16 | | | | 34,091 | 68,181 | 136,362 | – | – | $3,750,637 |
| | 02/16/16 | $268,557 | $537,115 | $1,074,230 | | | | | | |
| Karen
McLoughlin | 02/16/16 | | | | 17,050 | 34,100 | 68,200 | – | – | $1,875,841 |
| | 02/16/16 | $181,262 | $362,525 | $725,050 | | | | | | |
| Ramakrishna Prasad Chintamaneni | 02/16/16 | | | | 6,299 | 12,598 | 25,196 | – | – | $693,016 |
| | 02/16/16 | | | | | | 4,714 | – | – | $259,317 |
| | 12/01/16 | | | | 1,271 | 2,542 | 5,084 | – | – | $137,471 |
| | 12/01/16 | | | | | | 25,067 | – | – | $1,355,624 |
| Dharmendra Kumar Sinha | 02/16/16 | | | | 6,220 | 12,439 | 24,878 | – | – | $684,269 |
| | 02/16/16 | | | | | | 4,714 | – | – | $259,317 |
| | 12/01/16 | | | | 273 | 545 | 1,090 | – | – | $29,474 |
| | 12/01/16 | | | | | | 27,790 | – | – | $1,502,883 |

| 1 | Represents the range
of annual cash incentive that can be earned by the NEO if the minimum
threshold, target and maximum performance targets are achieved. The annual
cash incentive is prorated if performance levels are achieved between the
threshold and target levels or between the target and maximum levels.
Performance below the minimum threshold results in no annual cash
incentive payout to the NEO. See “Annual Cash Incentive” starting on page
26 for information regarding the methodology and performance criteria
applied in determining these potential cash incentive amounts. The actual
annual cash incentive paid to each NEO for his or her 2016 performance is
reported as Non-Equity Incentive Plan Compensation in the 2016 Summary
Compensation Table on page 33. |
| --- | --- |
| 2 | Represents the range
of shares that could vest pursuant to PSUs. See “Stock-Based Awards”
starting on page 27 for a description of the terms of the
PSUs. |
| 3 | Represents RSUs. See
“Stock-Based Awards” starting on page 27 for a description of the terms of
the RSUs. |
| 4 | Represents the grant
date fair value of the RSUs and PSUs determined in accordance with FASB
ASC Topic 718, assuming target achievement for PSUs. For information
regarding assumptions underlying the valuation of stock-based awards, see
Note 15 of the Consolidated Financial Statements in our Annual Report on
Form 10-K for the fiscal year ended December 31, 2016. |
| 5 | Mr. Coburn resigned
from the Company during 2016 and, as a result, forfeited the annual cash
incentive and PSU awards set forth in this table that were granted to him
during 2016. |

34 Cognizant Technology Solutions Corporation

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Compensation

Outstanding Equity Awards at Fiscal Year-End 2016 Table

The following table provides certain summary information concerning outstanding equity awards held by the NEOs as of December 31, 2016.

| | Option Awards 1 — Number of Securities
Underlying Unexercised Options | | Equity Incentive Plan Awards; Number
of Securities Underlying Unexercised Unearned Options | Option Exercise Price | Option Expiration Date | Stock Awards — Number of Shares
or Units of Stock That Have Not Vested | | Market Value of Shares or Units
of Stock That Have Not Vested 2 | Equity Incentive Plan
Awards; Number of Unearned Shares, Units or Other Rights
That Have Not Vested | | Equity Incentive Plan Awards; Market
or Payout Value of Unearned Shares, Units or Other Rights
That Have Not Vested 2 |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Name | Exercisable | Unexercisable | | | | | | | | | |
| Francisco D’Souza | 480,000 | – | – | $9.11 | 12/08/18 | – | | – | – | | – |
| | – | – | – | – | – | 21,970 | 3 | $1,230,979 | – | | – |
| | – | – | – | – | – | 100,263 | 5 | $5,617,736 | – | | – |
| | – | – | – | – | – | 37,878 | 3 | $2,122,304 | – | | – |
| | – | – | – | – | – | 40,307 | 6 | $2,258,401 | – | | – |
| | – | – | – | – | – | – | | – | 127,589 | 7 | $7,148,812 |
| Rajeev Mehta | – | – | – | – | – | 11,220 | 3 | $628,657 | – | | – |
| | – | – | – | – | – | 51,204 | 5 | $2,868,960 | – | | – |
| | – | – | – | – | – | 19,344 | 3 | $1,083,844 | – | | – |
| | – | – | – | – | – | 20,584 | 6 | $1,153,322 | – | | – |
| | – | – | – | – | – | – | | – | 65,159 | 7 | $3,650,859 |
| Gordon J. Coburn | – | – | – | – | – | – | | – | – | | – |
| Karen McLoughlin | 20,000 | – | – | $15.53 | 08/13/18 | – | | – | – | | – |
| | – | – | – | – | – | 5,600 | 3 | $313,768 | – | | – |
| | – | – | – | – | – | 25,556 | 5 | $1,431,903 | – | | – |
| | – | – | – | – | – | 10,124 | 3 | 567,248 | – | | – |
| | – | – | – | – | – | 10,772 | 6 | $603,555 | – | | – |
| | – | – | – | – | – | – | | – | 34,100 | 7 | $1,910,623 |
| Ramakrishna
Prasad Chintamaneni | 10,000 | – | – | $15.53 | 08/13/18 | – | | – | – | | – |
| | – | – | – | – | – | 10,444 | 4 | $585,177 | – | | – |
| | – | – | – | – | – | 9,900 | 5 | $554,697 | – | | – |
| | – | – | – | – | – | 3,536 | 4 | $198,122 | – | | – |
| | – | – | – | – | – | 25,067 | 4 | $1,404,504 | – | | – |
| | – | – | – | – | – | 3,980 | 6 | $222,999 | – | | – |
| | – | – | – | – | – | – | | – | 12,598 | 7 | $705,866 |
| | – | – | – | – | – | – | | – | 2,542 | 7 | $142,428 |
| Dharmendra Kumar Sinha | – | – | – | – | – | 7,311 | 4 | $409,635 | – | | – |
| | – | – | – | – | – | 9,775 | 5 | $547,693 | – | | – |
| | – | – | – | – | – | 3,536 | 4 | $198,122 | – | | – |
| | – | – | – | – | – | 27,790 | 4 | $1,557,074 | – | | – |
| | – | – | – | – | – | 3,929 | 6 | $220,142 | – | | – |
| | – | – | – | – | – | – | | – | 12,439 | 7 | $696,957 |
| | – | – | – | – | – | – | | – | 545 | 7 | $30,536 |

| 1 | Each stock option
grant included in this table has a term of 10 years measured from the
grant date, and all outstanding options granted to the NEOs as of December
31, 2016 have fully vested pursuant to their terms. |
| --- | --- |
| 2 | Market value was
determined based on a closing price of a share of our common stock of
$56.03 as of December 30, 2016. |
| 3 | Awards shown are
time-based RSUs that were granted on December 1, 2014 and November 30,
2015 and vest on specified dates if the individual is still employed by
the Company: |

| ● | Mr. D’Souza: Approximately 5,493
shares are scheduled to vest on March 1, June 1, September 1 and December
1 of 2017; and approximately 4,734 shares are scheduled to vest on each
March 1, June 1, September 1 and December 1 of 2017 and
2018. |
| --- | --- |
| ● | Mr. Mehta: Approximately 2,805
shares are scheduled to vest on March 1, June 1, September 1 and December
1 of 2017 and approximately 2,418 shares are scheduled to vest on each
March 1, June 1, September 1 and December 1 of 2017 and
2018. |
| ● | Ms. McLoughlin: Approximately 1,400
shares are scheduled to vest on each March 1, June 1, September 1 and
December 1 of 2017 and approximately 1,266 shares are scheduled to vest on
each March 1, June 1, September 1 and December 1 of 2017 and
2018. |

4 Awards shown are time-based RSUs that were granted on December 1, 2014, February 16, 2016 and December 1, 2016 and vest on specified dates if the individual is still employed by the Company:

● Mr. Chintamaneni: Approximately 2,611 shares are scheduled to vest on March 1, June 1, September 1, and December 1 of 2017; approximately 393 shares are scheduled to vest on each March 1, June 1, September 1 and December 1 of 2017 and 2018 and also on March 1, 2019; and approximately 2,088 shares are scheduled to vest on each March 1, June 1, September 1 and December 1 of 2017, 2018 and 2019.

2017 Proxy Statement 35

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Compensation

● Mr. Sinha: Approximately 1,828 shares are scheduled to vest on March 1, June 1, September 1, and December 1 of 2017; approximately 393 shares are scheduled to vest on each March 1, June 1, September 1 and December 1 of 2017 and 2018 and also on March 1, 2019; and approximately 2,316 shares are scheduled to vest on each March 1, June 1, September 1 and December 1 of 2017, 2018 and 2019.

5 2015 PERFORMANCE MEASUREMENT PERIOD PSUs. Represents the number of shares that are eligible to vest based on PSUs with a 2015 performance measurement period. 1/3 rd vested on June 1, 2016 and the remaining 2/3 rds vest on December 1, 2017 (subject to continued employment through such date). Performance for such awards was calculated and achieved as set forth below. See “Stock-Based Awards” starting on page 27 for additional information.

6 2016 PERFORMANCE MEASUREMENT PERIOD PSUs. Represents the number of shares that are eligible to vest based on PSUs with a 2016 performance measurement period. 1/3 rd vest on May 31, 2017 and the remaining 2/3 rds vest on November 30, 2018 (subject to continued employment through such dates). Performance for such awards was calculated and achieved as set forth below. See “Stock-Based Awards” starting on page 27 for additional information.

7 2016 – 2017 PERFORMANCE MEASUREMENT PERIOD PSUs. Represents the number of unearned shares of stock not vested equal to the target award for PSUs with a 2016 – 2017 performance measurement period. The actual number of shares of stock that may vest will be determined by the Company’s cumulative fiscal 2016 and 2017 performance versus target levels on two metrics: revenue (75% of the award) and non-GAAP EPS (25% of the award). For the shares subject to each of the metrics, the number that may vest may be zero, if a threshold level of performance is not achieved as to the metric, or between 50% and 200% of the target number of shares. After the Compensation Committee determines, based on the cumulative performance for the fiscal 2016 and 2017 measurement period, the number of shares that may vest, such shares will vest as follows: 1/3 rd on July 1, 2018 and the remaining 2/3 rds on January 1, 2019 (subject to continued employment through such dates). See “Stock-Based Awards” starting on page 27 for additional information.

2016 Option Exercises and Stock Vested Table

The following table provides additional information about the value realized by the NEOs on option award exercises and stock award vestings during the year ended December 31, 2016.

| Name | Option Awards — Number of Shares Acquired on
Exercise | Value Realized on Exercise 1 | Stock Awards — Number of Shares Acquired on
Vesting Date 2 | Value Realized on Vesting 3 |
| --- | --- | --- | --- | --- |
| Francisco D’Souza | 500,000 | $20,605,930 | 194,221 | $11,088,285 |
| Rajeev
Mehta | – | – | 97,458 | $5,567,834 |
| Gordon J. Coburn | – | – | 53,030 | $3,183,085 |
| Karen
McLoughlin | 40,000 | $1,470,246 | 44,039 | $2,527,064 |
| Ramakrishna Prasad Chintamaneni | – | – | 27,068 | $1,556,334 |
| Dharmendra Kumar Sinha | – | – | 23,796 | $1,367,439 |

| 1 | Value realized on
exercise is calculated based upon the number of options exercised and the
fair market value or sale price of the shares on the date of exercise less
the exercise price, before any applicable tax withholding. |
| --- | --- |
| 2 | The number of shares
shown in the table reflects the gross number of shares received by each
NEO upon vesting of the stock awards. The Company reduced the number of
shares issued to each NEO by automatically withholding a number of shares
with a fair market value as of the vesting date sufficient to satisfy
required tax withholdings. Each NEO actually received the following net
number of shares of Company stock following such share withholding: Mr.
D’Souza, 96,064; Mr. Mehta, 57,761; Mr. Coburn, 28,714; Ms. McLoughlin,
24,103; Mr. Chintamaneni, 14,874; and Mr. Sinha, 12,992. |
| 3 | Value realized on
vesting is calculated by multiplying the number of shares acquired on
vesting by the fair market value of the shares on the respective vesting
date. |

36 Cognizant Technology Solutions Corporation

PART 11

Table of Contents

Compensation

2016 Pension Benefits Table

None of the NEOs participated in any defined benefit pension plans in 2016.

2016 Nonqualified Deferred Compensation Table

The following table sets forth information with respect to the nonqualified deferred compensation arrangements in effect during 2016 for the NEOs.

| Name | Executive Contributions in Last
FY | Registrant Contributions in Last FY | | Aggregate Earnings/(Losses) in Last FY | | Aggregate Withdrawals/ Distributions | Aggregate Balance at
Last FYE | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Francisco
D’Souza | – | – | | – | | – | – | |
| Rajeev
Mehta | – | – | | – | | – | – | |
| Gordon J.
Coburn | – | $31,230 | 1 | $183,891 | 2 | – | $1,463,026 | 3 |
| Karen
McLoughlin | – | – | | – | | – | – | |
| Ramakrishna Prasad
Chintamaneni | – | – | | – | | – | – | |
| Dharmendra Kumar
Sinha | – | – | | – | | – | – | |

| 1 | This amount is reported as
compensation and is included in the “All Other Compensation” column of the
2016 Summary Compensation Table on page 33. |
| --- | --- |
| 2 | This amount is reported as
compensation and is included in the “All Other Pension and Nonqualified
Deferred Comp.” column of the 2016 Summary Compensation Table on page 33.
Earnings are broken down between funds as
follows: |

Investment Fund
Mass Mutual Select Focused
Value	$165,004
Mass Mutual Select Mid Cap Growth Equity II
A	$18,887
Total	$183,891

3 Includes the amounts reported in the other columns of this table plus such amounts previously reported in the Company’s Summary Compensation Table in previous years if such compensation was required to be disclosed.

The Company established this nonqualified deferred compensation arrangement for Mr. Coburn to serve as the economic equivalent of the retirement plan in which he participated while the Company was majority owned by IMS Health. Pursuant to such arrangement, the Company, while Mr. Coburn was an employee, credited his deferred compensation account with an annual contribution in a dollar amount equal to 6% of his base salary and earned annual cash incentive for the year. Mr. Coburn could select from the 16 investment funds sponsored by Mass Mutual available to the plan to serve as the measures of the investment return on his account for each year. Mr. Coburn could change his investment elections up to six times per year. Under the terms of the arrangement with Mr. Coburn, the balance of Mr. Coburn’s account became due and payable in a lump sum six months following his resignation from the Company. Accordingly, the Company made a lump sum payment to Mr. Coburn in the amount of $1,558,679 on April 3, 2017.

2017 Proxy Statement 37

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Compensation

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

Overview of Potential Payments

We have entered into Employment Agreements with our NEOs that provide certain benefits upon such employees being terminated without Cause or leaving for Good Reason (a “Qualifying Termination”). Such benefits are adjusted in the event the Qualifying Termination occurs within the 12 months following a change in control.

| Termination Event | Salary and Bonus | Benefits | Unvested RSUs
/ Time-Based Awards | Unvested PSUs / Performance-Based
Awards — Performance Measurement Period Ended;
Performance Objectives Satisfied | Performance Measurement Period Not
Ended |
| --- | --- | --- | --- | --- | --- |
| Qualifying Termination – no Change
in Control | 22 months base salary, payable in
installments | 12 months of reimbursement for COBRA
premiums | One year’s acceleration of
vesting | One year’s acceleration of
vesting | Unvested portion of award
forfeited |
| Qualifying Termination – within 12
months of Change in Control | 12 months base salary, payable in
installments, and annual cash incentive payout at 100% of target, payable
in a lump sum | 12 months of reimbursement for COBRA
premiums | Acceleration of entire
award | Acceleration of entire
award | Acceleration of prorated portion
based on performance as of change in control
date |

| What is a “Qualifying
Termination”? | |
| --- | --- |
| Termination without “Cause” | Leaving for “Good Reason” |
| “Cause” is defined
as: ● Willful malfeasance or willful misconduct in connection
with employment; ● Continuing failure to perform duties requested by the
Board; ● Failure to observe material policies of the
Company; ● Commission of any felony or any misdemeanor involving
moral turpitude; ● Engaging in any fraudulent act or embezzlement;
or ● Any material breach of an employment
agreement. | “Good Reason” is defined
as: ● A material diminution of authority, duties or
responsibilities; ● A material diminution in overall compensation package
that is not broadly applied to other executives; ● The Company’s failure to obtain from its successor the
express assumption of an Employment Agreement; or ● The Company’s change, without the NEO’s consent, in the
principal place of his or her work to a location more than 50 miles from
the primary work location, but only if the change is after a change in
control. |

The Employment Agreements also provide that in the event any payments under the Employment Agreements would constitute parachute payments under IRC Section 280G, then the payments under the Employment Agreements will be reduced by the minimum amount necessary so that no amounts paid will be non-deductible to the Company or subject to the excise tax imposed under IRC Section 4999.

Cash severance payments are contingent on the NEO executing a waiver and release of claims in favor of the Company and complying with one-year post-termination non-competition and non-solicitation covenants, a six-month post-termination intellectual property covenant and a perpetual confidentiality covenant.

Upon any termination of employment, each NEO will also be entitled to any amounts earned, accrued and owed but not yet paid to such NEO as of the termination date and any benefits accrued and earned in accordance with the terms of any benefits plans or programs, and these amounts are not conditioned upon the release becoming effective. No additional amounts will be paid on termination due to death or disability.

38 Cognizant Technology Solutions Corporation

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Compensation

Calculation of Potential Payments

The following table shows potential payments to our NEOs under the Employment Agreements in the event of a Qualifying Termination prior to or within 12 months following a change in control. After the period of 12 months following a change in control, the potential payments upon a Qualifying Termination, absent another change in control, revert to those prior to a change in control as set forth below. Potential payments are calculated assuming a December 31, 2016 Qualifying Termination date and, where applicable, using the closing price of our common stock of $56.03 on December 30, 2016, as reported on NASDAQ.

Name	Trigger	Salary and Bonus	Benefits		Total
Francisco D’Souza	Qualifying Termination
Prior to Change in Control	$1,217,883	$11,379	$8,662,630	$9,891,893
	Qualifying Termination
Following Change in Control	$1,228,955	$11,379	$11,229,421	$12,469,755
	Death or
Disability	–	–	–	–
	Retirement	–	–	–	–
	Termination for Other
Reasons	–	–	–	–
Rajeev Mehta	Qualifying Termination Prior to Change in
Control	$1,155,000	$15,527	$4,423,961	$5,594,488
	Qualifying Termination Following Change in
Control	$1,165,500	$15,527	$5,734,783	$6,915,809
	Death or Disability	–	–	–	–
	Retirement	–	–	–	–
	Termination for Other Reasons	–	–	–	–
Karen McLoughlin	Qualifying Termination
Prior to Change in Control	$781,917	$11,233	$2,230,442	$3,023,592
	Qualifying Termination
Following Change in Control	$789,025	$11,233	$2,916,474	$3,716,732
	Death or
Disability	–	–	–	–
	Retirement	–	–	–	–
	Termination for Other
Reasons	–	–	–	–
Ramakrishna Prasad	Qualifying Termination Prior to Change in
Control	$870,833	$15,527	$1,807,528	$2,693,888
Chintamaneni	Qualifying Termination Following Change in
Control	$878,750	$15,527	$2,965,500	$3,859,777
	Death or Disability	–	–	–	–
	Retirement	–	–	–	–
	Termination for Other Reasons	–	–	–	–
Dharmendra Kumar	Qualifying Termination
Prior to Change in Control	$687,500	$11,232	$1,674,401	$2,373,133
Sinha	Qualifying Termination
Following Change in Control	$693,750	$11,232	$2,932,666	$3,637,648
	Death or
Disability	–	–	–	–
	Retirement	–	–	–	–
	Termination for Other Reasons	–	–	–	–

2017 Proxy Statement 39

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Compensation

●	PROPOSAL 4
	APPROVAL OF 2017
INCENTIVE AWARD PLAN
	What are you voting
on?	We are asking stockholders to approve the Cognizant Technology
Solutions Corporation 2017 Incentive Award Plan (the “Plan”), which would
replace the Cognizant Technology Solutions Corporation Amended and
Restated 2009 Incentive Compensation Plan (the “2009 Plan”). If our
stockholders approve this proposal, no new awards will be granted under
the 2009 Plan. If, however, our stockholders do not approve this proposal,
the Plan will not become effective and the 2009 Plan will remain in effect
in accordance with its current terms and conditions until the remaining
share pool is exhausted. In either case, awards outstanding under the 2009
Plan and its predecessor plans will remain subject to the terms of the
2009 Plan and such predecessor plans, as applicable.
●	The Board unanimously recommends a vote FOR the approval of the Cognizant Technology Solutions
Corporation 2017 Incentive Award
Plan.

Resolution Stockholders are being asked to Approve

RESOLVED, that the stockholders of Cognizant Technology Solutions Corporation approve the adoption of the Cognizant Technology Solutions Corporation 2017 Incentive Award Plan.

The Board recommends a vote FOR the Plan so that the Company has enough shares of common stock available to grant to maintain its compensation structure and achieve the purposes of the Plan, which are to: ● Provide incentives to our employees, consultants and non-employee directors, including the employees of our subsidiaries, in the form of equity and other incentive awards to ● Motivate them to perform well and generate superior returns for our stockholders and ● Induce them to remain in our service. In determining to approve the Plan, the Compensation Committee and the Board reviewed the terms of the Plan and an analysis prepared by Pay Governance, the Compensation Committee’s independent compensation consultant, both of which are summarized in this proposal.

Background

Our stockholders approved the 2009 Plan in June 2009. Since that time, we have periodically granted stock options, RSUs and PSUs under the plan. We believe that long-term compensation through stock-based compensation in the form of stock options, RSUs and PSUs is important in attracting and retaining executive talent and other key personnel. Such equity awards align the interests of the individuals with those of our stockholders and incentivize them to maximize stockholder value.

At the Annual Meeting, stockholders are being asked to vote on a proposal to approve the adoption of the Plan. If the Plan is approved, the maximum aggregate number of shares of our common stock that may be issued under the Plan will be equal to the sum of (i) the approximately 7,000,000 shares remaining available for awards under the 2009 Plan which will be transferred to the Plan, (ii) 46,000,000 new shares and (iii) the number of shares subject to outstanding awards under the 2009 Plan that, after the effective date of the Plan, terminate, are forfeited, are converted into awards of another entity in connection with a spin-off or similar event, or are settled for cash. The number of shares of common stock reserved for issuance under the Plan will be reduced on a one-for-one basis for each share of stock issued under the Plan pursuant to a stock option or stock appreciation right (“SAR”) and will be reduced by two shares for each share of stock issued under the Plan pursuant to an RSU or PSU (“full-value awards”). Therefore, the 46,000,000 new shares being requested would actually represent only 23,000,000 actual shares if only full-value awards are granted under the Plan, which is consistent with our recent practices for employees. The Plan was adopted by our Board on March 27, 2017, subject to stockholder approval at the Annual Meeting. A copy of the Plan is attached hereto as Appendix A. The Plan is intended to serve as a successor to the 2009 Plan. No further awards will be made under the 2009 Plan following the earlier of (i) the plan termination date or (ii) stockholder approval of the Plan. Stockholder approval of the Plan will not affect any options or stock issuances outstanding under 2009 Plan.

Our Current Equity Grant Practices

What We Do
●	Mix of PSUs and RSUs with an emphasis on PSUs for senior executives
●	Long-term vesting such that PSUs have a 2-year performance
measurement period and, for executive officers, vest 1/3 rd at
30 months and 2/3 rds at 36 months and, for other employees,
fully vest at 29 months following the start of such period; RSUs vest
quarterly over three years from grant

What We Don’t Do
●	No dividend equivalent payments on unearned PSUs or RSUs (accumulated dividend equivalents paid only on
vesting)

40 Cognizant Technology Solutions Corporation

PART 12

Table of Contents

Compensation

Overview of the Plan

On March 27, 2017, the Board adopted, subject to stockholder approval, the Plan. If approved by stockholders, the Plan would replace the 2009 Plan. The key differences between the Plan and the 2009 Plan are:

| ● | As of December 31, 2016, there were
approximately 7,000,000 shares available for future awards under the 2009
Plan, which, based on our three-year average burn rate of 0.78%, would
last for only approximately one year assuming current grant practices. If
the Plan is approved, the maximum aggregate number of shares of our common
stock that may be issued under the Plan will be equal to the sum of (i)
the approximately 7,000,000 shares remaining available for awards under
the 2009 Plan that will be transferred to the Plan, (ii) 46,000,000 new
shares and (iii) the number of shares subject to outstanding awards under
the 2009 Plan that, after the effective date of the Plan, terminate, are
forfeited, are converted into awards of another entity in connection with
a spin-off or similar event, or are settled for cash. Such a share reserve
would be sufficient for approximately six years of awards, assuming
current grant practices. However, these timelines may change based on
future circumstances that require a change to expected grant practices,
such as changes in the price of the shares of our common stock, grant
amounts provided by our competitors, hiring activity and
promotions. |
| --- | --- |
| ● | The number of shares of common stock
reserved for issuance under the Plan will be reduced on a one-for-one
basis for each share of stock issued under the Plan pursuant to a stock
option or SAR and will be reduced by two shares for each share of stock
issued under the Plan pursuant to a full-value award. Under the 2009 Plan,
shares subject to full-value awards count as 1.55
shares. |
| ● | The 2009 Plan is currently set to
expire on April 15, 2019. The Plan would have a term of ten years from the date
of Board adoption through March 27, 2027. |
| ● | The 2009 Plan provides that the
maximum annual limit on the number of shares that can be granted to any
one person is 5,000,000 and the maximum annual limit on the amount of cash
that can be granted to any one person is $4,000,000. The Plan decreases the per-person share
limit to 3,000,000 for stock options
and SARs and 2,000,000 for RSUs and PSUs and other full-value awards, and increases the per-person cash
limit to $10,000,000. |
| ● | While the 2009 Plan provides for a
maximum seven-year term for stock options, the Plan provides that stock options may have a term of up to
ten years . |
| ● | The 2009 Plan provides for a maximum
limit on director awards of 100,000 shares per year. The Plan changes the per year limit on director
awards to $900,000 in the aggregate for
cash and equity awards. |
| ● | The Plan clarifies that all awards
will be subject to the provisions of any clawback policy implemented by
the Company. |

How Long We Expect the Share Pool to Last

We expect that the proposed share pool for new grants under the Plan, if stockholders approve this proposal, will last six years.

How the Plan is Designed to Protect Stockholders’ Interests

The following features of the Plan will protect the interests of our stockholders:

| ● | Limits on authorized shares – no
evergreen provision. If the Plan is
approved, the maximum aggregate number of shares of our common stock that
may be issued under the Plan will be equal to the sum of (i) the
approximately 7,000,000 shares remaining available for awards under the
2009 Plan that will be transferred to the Plan, (ii) 46,000,000 new shares
and (iii) the number of shares subject to outstanding awards under the
2009 Plan that, after the effective date of the Plan, terminate, are
forfeited, are converted into awards of another entity in connection with
a spin-off or similar event, or are settled for cash. The number of shares
of common stock reserved for issuance under the Plan will be reduced on a
one-for-one basis for each share of stock issued under the Plan pursuant
to a stock option or SAR and will be reduced by two shares for each share
of stock issued under the Plan pursuant to a full-value award. The Plan
does not have an “evergreen” feature. |
| --- | --- |
| ● | Limits on term of stock
options. The maximum term of each stock
option and SAR that can be granted under the Plan is ten
years. |
| ● | Limits on share
counting. Shares surrendered or
withheld for the payment of the exercise price or taxes under stock
options or SARs, shares surrendered or withheld for the payment of taxes
on RSUs, PSUs and other full-value awards, shares repurchased in the open
market with the proceeds of an option exercise, and shares subject to SARs
that are not issued in connection with the stock settlement of the SARs
may not again be made available for issuance under the
Plan. |
| ● | No stock option
repricing. The Plan prohibits the
repricing of “underwater” options and SARs, whether by amending an
existing award, substituting a new award at a lower price or executing a
cash buyout. |
| ● | No discounted stock option
grants. The Plan prohibits granting
stock options or SARs with an exercise price less than the fair market
value of Cognizant common stock on the date of
grant. |
| ● | No automatic change in control
benefits. The Plan does not provide any
automatic benefits upon a change in control or any excise tax
gross-ups. |
| ● | Clawback Policy. The Plan requires all awards to be subject to our
clawback policy. |
| ● | No dividend equivalents on
unvested awards. The Plan prohibits the
payment of dividends and dividend equivalents on unvested
awards. |

2017 Proxy Statement 41

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Compensation

Key Data About Our Grant Practices

Pay Governance’s analysis highlighted the following key data points regarding the Plan and our grant practices.

Burn Rate

Burn rate measures how rapidly we are using an equity plan’s share pool. We measure burn rate on a gross basis, calculated as follows:

(total shares granted)
(weighted average Cognizant shares outstanding
(undiluted))

Over the last three years, our burn rate averaged 0.78%, The burn rates for the last three years were 1.02%, 0.46%, and 0.86% for 2014, 2015 and 2016, respectively. The Board believes that these are acceptable burn rates.

Overhang

Overhang measures the potential stockholder dilution from outstanding equity awards and shares available for grant. We use a “simple overhang” measurement, calculated as follows:

| (awards outstanding) + (shares available for
grant) |
| --- |
| (weighted average Cognizant shares outstanding
(undiluted)) |

If this proposal is adopted, our overhang will be 10.4%.

The Board believes that the requested number of shares of common stock under the Plan represents a reasonable amount of potential equity dilution.

Historical Grant Information

| Grant
information | 2014 | 2015 | 2016 |
| --- | --- | --- | --- |
| Options granted | 67,736 | 55,336 | 70,258 |
| Full-value awards granted 1 | 6,148,143 | 2,731,757 | 5,145,594 |
| Cognizant shares outstanding 2 | 608,125,852 | 609,129,517 | 606,828,543 |

| 1 | Assumes maximum performance for
PSUs. See “PSUs” on page 27. |
| --- | --- |
| 2 | Number outstanding at
year-end. |

Equity Compensation Plan Information

The following table provides information regarding the total share authorization under the Plan and the 2009 Plan if this proposal is approved.

| Shares available for new
Plan awards under 2009 Plan as of December 31, 2016 | Shares — 7,000,000 | 1 |
| --- | --- | --- |
| Shares subject to outstanding 2009 Plan and
predecessor plan awards as of December 31, 2016 | 9,900,000 | 2 |
| Total new authorized Plan
shares requested in this Proposal | 46,000,000 | |
| Total authorized Plan shares if this Proposal is
approved (including shares subject to outstanding 2009 Plan and
predecessor awards) | 62,900,000 | |

| 1 | Will be transferred to the Plan
and no longer available under the 2009 Plan. |
| --- | --- |
| 2 | Includes 7,500,000 for
outstanding full-value awards (RSUs and PSUs (assuming target
performance)) and 2,400,000 for outstanding stock options, with a weighted
average exercise price of $21.08 and weighted average remaining
contractual term of 1.6 years. |

The following table provides information as of December 31, 2016 with respect to the shares of our common stock that may be issued under our existing equity compensation plans, which include the 2009 Plan and the 2004 ESPP, and one of our prior equity compensation plans, the Amended and Restated 1999 Incentive Compensation Plan (the “1999 Plan”). The 2009 Plan succeeded the 1999 Plan and was approved by stockholders. Awards granted under the 1999 Plan remain valid, though no additional awards may be granted from such plan. For additional information on our equity compensation plans, see Note 15 of the Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016.

| Plan Category | Number of
Securities to be Issued Upon Exercise of Outstanding Options,
Warrants and Rights | Weighted-Average Exercise Price
of Outstanding Options, Warrants and Rights | Number of
Securities Available for Future Issuance Under
Equity Compensation Plans (excludes securities Reflected in
first column) |
| --- | --- | --- | --- |
| Equity compensation plans
approved by security holders 1 | 9,994,865 2 | $21.08 3 | 12,204,665 4 |
| Equity compensation plans not approved by
security holders | – | N/A | – |
| Total | 9,994,865 | $21.08 3 | 12,204,665 |

| 1 | Consists of the 1999 Plan, the
2009 Plan and the 2004 ESPP. |
| --- | --- |
| 2 | Excludes purchase rights
outstanding under the 2004 ESPP. Under such plan, employees may purchase
whole shares of common stock at a price per share equal to 90% of the
lower of the fair market value per share on the first day of the purchase
period or the fair market value per share on the last day of the purchase
period. As of December 31, 2016, 2,384,043 shares of common stock may be
issued pursuant to stock options upon exercise, 4,863,988 shares of common
stock may be issued pursuant to RSUs upon vesting and 2,746,834 shares of
common stock may be issued pursuant to PSUs upon vesting. The number of
shares of common stock that may be issued under the outstanding and
unvested PSUs for which the performance measurement period has not ended
is based on vesting of the maximum number of award shares. The actual
number of shares of common stock that may vest will generally range from
0% to 200% of the target number based on the level of achievement of the
applicable performance metric(s) and the continued service vesting
requirements. |
| 3 | As of December 31, 2016, the
weighted-average exercise price of outstanding options to purchase common
stock was $21.08 and no weighting was assigned to RSUs or PSUs as no
exercise price is applicable to RSUs or PSUs. |
| 4 | Includes 7,016,658 shares of
common stock available for future issuance under the 2009 Plan and
5,188,007 shares of common stock available for future issuance under the
2004 ESPP. As of December 31, 2016, there were no outstanding purchase
periods under the 2004 ESPP. |

42 Cognizant Technology Solutions Corporation

Table of Contents

Compensation

Frequently Asked Questions About the Plan

This summary is qualified by reference to the complete text of the Plan, which can be found in Appendix A on page 59.

Who will be eligible to participate in the Plan?

All officers, employees, consultants and directors of Cognizant and its subsidiaries — approximately 270,000 persons (approximately eighteen executive officers, ten non-employee Directors, approximately 260,000 other employees and approximately 10,000 consultants or advisors) — will be eligible to participate in the Plan.

Who will administer the Plan?

Generally. The Plan will be administered by the Compensation Committee, an independent committee of the Board. The Compensation Committee will have the authority to make any determination or take any action that it deems necessary or desirable to administer the Plan, and also will have the sole discretion to interpret the Plan and all award agreements. With limited exceptions, the Compensation Committee will be able to delegate its authority under the Plan to a subcommittee consisting of one or more members of the Board or one or more of the Company’s officers.

As it Relates to Director Compensation. The Board will administer the Plan as it relates to director compensation.

How many shares will be available for Plan awards?

If the Plan is approved, the maximum aggregate number of shares of our common stock that may be issued under the Plan will be equal to the sum of (i) the approximately 7,000,000 shares remaining available for awards under the 2009 Plan that will be transferred to the Plan, (ii) 46,000,000 new shares and (iii) the number of shares subject to outstanding awards under the 2009 Plan that, after the effective date of the Plan, terminate, are forfeited, are converted into awards of another entity in connection with a spin-off or similar event, or are settled for cash. The number of shares of common stock reserved for issuance under the Plan will be reduced on a one-for-one basis for each share of stock issued under the Plan pursuant to a stock option or SAR and will be reduced by two shares for each share of stock issued under the Plan pursuant to a full-value award. Therefore, the 46,000,000 new shares being requested would actually represent only 23,000,000 actual shares if only full-value awards are granted under the Plan, which is consistent with our recent practices for employees. Shares delivered pursuant to an award may consist of authorized and unissued shares or treasury shares.

| ● | What Will Reduce the Share Pool. Awards under the Plan settled in shares
and dividend equivalents denominated in shares. |
| --- | --- |
| ● | What Will Not Reduce the Share
Pool. Awards made upon the assumption
of or in substitution for outstanding grants made by a company that we
acquire (except as may be required for purposes of incentive stock
options). |
| ● | Which Shares Can Return to the
Share Pool. Shares covered by an award
under the Plan or, after the effective date of the Plan, the 2009 Plan
that is terminated or forfeited because payout conditions are not met or
that is converted into an award of another entity in connection with a
spin-off or similar event, or that is settled for
cash. |
| ● | Which Shares Cannot Return to the
Share Pool. Shares surrendered to pay
the exercise price or withholding taxes for stock options or SARs, shares
repurchased in the open market with the proceeds of an option exercise,
shares that were subject to a stock-settled SAR that were not issued upon
its net settlement, and shares withheld to pay withholding taxes on RSUs,
PSUs and other full-value awards. |

The last sales price of Cognizant’s shares of common stock, $0.01 par value, on April 10, 2017 was $58.97 per share, as reported on NASDAQ.

What kind of awards will the Compensation Committee be able to grant under the Plan?

Stock Options and SARs. The maximum term for stock options and SARs will be ten years. Options may be either nonqualified stock options or incentive stock options. The exercise price per share subject to each option and SAR may not be less than the fair market value per share on the date of grant. The administrator will establish the vesting schedule and the method for paying the exercise price of these awards. Unless otherwise specified by the administrator or as otherwise directed by a participant in writing to the Company, vested options and SARs with an exercise price per share that is less than the fair market value of the underlying share as of the last day of their respective terms will be automatically exercised on the last day of the term.

Restricted Stock and RSUs (including PSUs). The administrator will establish the applicable restrictions and vesting schedule of these awards. Recipients of restricted stock will have voting rights and will have the right to receive dividends, but such dividends will generally be paid out only to the extent the restricted stock vests. Recipients of RSUs generally will have no voting or dividend rights prior to settlement unless dividend equivalents are granted along with the RSUs.

Other Stock or Cash-Based Awards. The administrator may grant other stock or cash-based awards, including awards entitling a holder to receive shares or cash to be delivered immediately or in the future, including cash payments, cash bonus awards, stock payments, stock bonus awards, incentive awards, deferred stock, deferred stock units, retainers, committee fees and meeting-based fees, under such terms as it determines.

In addition, the administrator will determine (1) whether an award includes dividends or dividend equivalents (other than stock options or SARs) and (2) what happens if a participant terminates employment. Awards generally are not transferable.

Will there be minimum vesting periods for Plan awards?

The Plan will not include minimum vesting periods for awards. The Company currently grants PSUs that have a two-year performance measurement period with vesting for executive officers of 1/3 rd at 30 months and 2/3 rds at 36 months and for other employees 100% at 29 months. In addition, the Company currently grants RSUs that vest quarterly over three years.

Will Plan awards be subject to a clawback policy?

Plan awards granted to executive officers and Directors will be subject to the Company’s clawback policy. See “Clawback Policy” on page 31.

What will be the material terms of the performance goals for awards intended to qualify under Section 162(m)?

Section 162(m) of the Internal Revenue Code (“Section 162(m)”) imposes a $1,000,000 limit on the amount that a public company may deduct for compensation paid to a company’s CEO or any of a company’s three other most highly compensated executive officers (other than the CFO) who are employed as of the end of the year. This limitation does not apply to compensation that meets the requirements under Section 162(m) for “qualifying performance-based” compensation. One of the requirements for compensation to qualify is that the material terms of the performance goals for such compensation be approved by stockholders every five years.

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Compensation

For purposes of Section 162(m), the material terms of the performance goals include the following:

| ● | which employees would be subject to
the goals; |
| --- | --- |
| ● | the business measurements on which
the performance goals would be based; and |
| ● | the formula that would be used to
calculate the maximum amount of compensation that can be paid to an
employee under the arrangement. |

Each of these aspects is discussed below, and stockholder approval of this proposal constitutes approval of each of these aspects for purposes of Section 162(m).

Employees Covered The Company’s NEOs would be subject to the performance goals described in this section. We may apply the performance goals to all executive officers in the event that any of them becomes a covered employee under Section 162(m).

Business Measurements The business measurements that may be used to establish performance goals are limited to the following: (i) revenue or revenue growth, (ii) operating or net income, (iii) operating or net income before acquisition related charges, net non-operating foreign currency exchange gains or losses and/or charges for stock-based compensation and any taxes or fringe benefits incurred by the Company in settlement of stock-based awards, (iv) operating or net income before interest, taxes, depreciation, amortization and/or charges for stock-based compensation and any taxes or fringe benefits incurred by the Company in settlement of stock-based awards, (v) gross, operating or net profit margin, (vi) gross, operating or net profit margin before acquisition related charges, net non-operating foreign currency exchange gains or losses and/or charges for stock-based compensation and any taxes or fringe benefits incurred by the Company in settlement of stock-based awards, (vii) earnings per share, either before or after acquisition related charges, net non-operating foreign currency exchange gains or losses and/or charges for stock-based compensation and any taxes or fringe benefits incurred by the Company in settlement of stock-based awards, (viii) return on assets, capital or stockholder equity, (ix) total stockholder return, (x) cash flow, (xi) measures in terms of days sales outstanding or accounts receivable outstanding, (xii) working capital, (xiii) market share, (xiv) increases in customer base, (xv) cost reductions or other expense control objectives, (xvi) market price of the common stock, whether measured in absolute terms or in relationship to earnings or operating income or in relation to various stock market or industry indices, (xvii) budget objectives, (xviii) working capital, (xix) mergers, acquisitions or divestitures, (xx) measures of customer satisfaction, (xxi) productivity measures, (xxii) funds from operations, (xxiii) operating efficiency, or (xxiv) economic value-added models.

Committee Authority to Measure Performance Goals. The Compensation Committee may establish performance goals that are measured either in absolute terms or as compared to any incremental increase or decrease or as compared to results of a peer group or to market performance indicators or indices, in each case as specified by the Compensation Committee in the award.

Committee Authority to Adjust Performance Goals. The Compensation Committee may adjust the performance goals to remove the effect of (i) items related to a change in applicable accounting standards; (ii) items relating to financing activities; (iii) expenses for restructuring or productivity initiatives; (iv) other non-operating items; (v) items related to acquisitions; (vi) items attributable to the business operations of any entity acquired by the Company during the performance period; (vii) items related to the sale or disposition of a business or segment of a business; (viii) items related to discontinued operations that do not qualify as a segment of a business under applicable accounting standards; (ix) items attributable to any stock dividend, stock split, combination or exchange of stock occurring during the performance period; (x) any other items of significant income or expense which are determined to be appropriate adjustments; (xi) items relating to unusual or infrequent corporate transactions, events or developments, (xii) items related to amortization of acquired intangible assets; (xiii) items that are outside the scope of the Company’s core, on-going business activities; (xiv) items related to acquired in-process research and development; (xv) items relating to changes in tax laws; (xvi) items relating to major licensing or partnership arrangements; (xvii) items relating to asset impairment charges; (xviii) items relating to gains or losses for litigation, arbitration and contractual settlements; (xix) items attributable to expenses incurred in connection with a reduction in force or early retirement initiative; (xx) items relating to foreign exchange or currency transactions and/or fluctuations; or (xxi) items relating to any other unusual or nonrecurring events or changes in applicable law, applicable accounting standards or business conditions.

Per-Person Maximum Amounts Subject to any adjustments that the administrator makes (as described below), the Plan limits the number of shares and the amount of cash that can be granted to an individual in any one-year period as follows:

	1-year per-person limit
Stock options &
SARs	3 million
shares
Other awards	2 million shares
Cash	$10,000,000

In addition, there will be a limit of $900,000 on the sum of the grant date fair value of equity-based awards and the amount of any cash compensation that may be granted to a non-employee Director during any calendar year.

If approved by stockholders, this proposal would not limit Cognizant’s right to condition payment of annual bonuses or equity awards on achievement of additional quantitative or qualitative performance goals or to award or pay other or additional forms of compensation (including, but not limited to, salary, other incentive-based cash compensation or other stock-based awards under the Plan). These other forms of compensation may be paid regardless of whether the performance goals described in this proposal are achieved in any future year, and whether or not payment of such other forms of compensation would be tax deductible, but will be designed so as not to affect the deductibility of arrangements intended to qualify as performance-based compensation under Section 162(m). However, there can be no guarantee that amounts payable under these programs and awards will be treated as qualified performance-based compensation under Section 162(m).

What adjustments will the administrator be permitted to make under the Plan?

Anti-Dilution Adjustments. In the event of certain corporate transactions affecting Cognizant’s outstanding common stock – such as a stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution of the Company’s assets to stockholders (other than normal cash dividends) – the administrator may make adjustments as it deems appropriate to prevent dilution or enlargement of Plan benefits. This could include changes to the number and type of shares to be issued under the Plan and outstanding awards, the exercise price of outstanding awards, Plan and per-person limits on the number of shares that can be granted and the manner in which shares subject to full-value awards will be counted. If such an event constitutes an “equity restructuring” for purposes of applicable accounting guidance, certain adjustments will be mandatory.

Corporate Events and Change in Control. In the case of any event described under “Anti-Dilution Adjustments” above or any unusual or nonrecurring transactions or events affecting the Company or any subsidiary or the financial statements of the Company or any subsidiary, or of changes in applicable law or applicable accounting standards, the administrator may take any of the following actions

44 Cognizant Technology Solutions Corporation

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Compensation

with respect to any award to prevent dilution or enlargement of plan benefits, to facilitate such events or to give effect to changes in law or accounting standards:

| ● | Terminate the award for a cash
payment with a value equal to the
amount that would have been attained upon the exercise of the award or the
realization of the holder’s rights; |
| --- | --- |
| ● | Provide that the award may be
assumed by the successor or survivor corporation or substituted for by
similar awards , with appropriate
adjustments; |
| ● | Adjust the number and type of
shares subject to the award or the terms and conditions of the
award ; |
| ● | Provide that the award will be
exercisable or payable or fully vested ; |
| ● | Replace the award with other rights or
property; |
| ● | Provide that the award cannot
vest, be exercised or become payable after the event; or |
| ● | Refuse to permit the exercise of
any award during a limited period up to
30 days prior to the event. |

The Plan provides for double-trigger vesting in that if an award continues in effect or is assumed or an equivalent award substituted in connection with a change in control, and a holder incurs a termination of service without “cause” (as defined in the sole discretion of the administrator, or as set forth in the award agreement) upon or within 12 months following the change in control, then the holder will be fully vested in such award.

What will be the duration of the Plan?

The Plan became effective on March 27, 2017, the date it was adopted by the Board, subject to the approval of stockholders. The Plan will expire on the tenth anniversary of such date, such that no award may be granted under the Plan after March 27, 2027.

How can the Plan or awards be amended?

Amendments to the Plan. The Board may amend, suspend or terminate the Plan, but will seek stockholder approval of any amendment that would:

| ● | Increase the number of authorized
shares under the Plan (except in
connection with anti-dilution adjustments as discussed above);
or |
| --- | --- |
| ● | Permit underwater stock options
or SARs to be repriced, replaced or exchanged . |

Amendments to Awards. The administrator may amend, modify or terminate any outstanding award.

No amendment, suspension or termination of the Plan or amendment of any award may materially and adversely affect the rights or obligations of a holder without his or her consent.

Other Information About the Plan

Summary of U.S. Federal Income Tax Consequences

The following summary of tax consequences to Cognizant and to Plan participants is intended to be used solely by stockholders in considering how to vote on this proposal and not as tax guidance to participants in the Plan. It relates only to federal income tax and does not address state, local or foreign income tax rules or other U.S. tax provisions, such as estate or gift taxes. Different tax rules may apply to specific participants and transactions under the Plan, particularly in jurisdictions outside the United States. In addition, this summary is as of the date of this proxy statement; federal income tax laws and regulations are frequently revised and may be changed again at any time. Therefore, each recipient is urged to consult a tax advisor before exercising any award or before disposing of any shares acquired under the Plan.

Stock Options and SARs. The grant of an option or SAR will create no tax consequences for the participant or the Company. A participant will have no taxable income upon exercise of an incentive stock option, except that the alternative minimum tax may apply. Upon exercise of an option other than an incentive stock option, a participant generally must recognize ordinary income equal to the fair market value of the shares acquired minus the exercise price. When disposing of shares acquired by exercise of an incentive stock option before the end of the applicable incentive stock option holding periods, the participant generally must recognize ordinary income equal to the lesser of (1) the fair market value of the shares at the date of exercise minus the exercise price and (2) the amount realized upon the disposition of the shares minus the exercise price. Otherwise, a participant’s disposition of shares acquired upon the exercise of an option (including an incentive stock option for which the incentive stock option holding periods are met) generally will result in only capital gain or loss.

Other Awards. Other awards under the Plan generally will result in ordinary income to the participant at the later of the time of delivery of cash, shares, or other awards, or the time that either the risk of forfeiture or restriction on transferability lapses on previously delivered cash, shares or other awards.

Section 409A. Certain types of awards under the Plan may constitute, or provide for, a deferral of compensation subject to Section 409A of the Code (“Section 409A”). Unless certain requirements set forth in Section 409A are complied with, holders of such awards may be taxed earlier than would otherwise be the case (e.g., at the time of vesting instead of the time of payment) and may be subject to an additional 20% penalty tax (and, potentially, certain interest penalties). To the extent applicable, the Plan and awards granted under the Plan will be structured and interpreted in a manner that is intended to be exempt from or comply with Section 409A and the Department of Treasury regulations and other interpretive guidance that may be issued under Section 409A. In the event the administrator determines that any award may be subject to Section 409A, the administrator may (but is not obligated to), without a holder’s consent, adopt amendments to the Plan and applicable award agreements or adopt policies and procedures that the administrator determines are necessary or appropriate to exempt the applicable awards from Section 409A or to comply with the requirements of Section 409A.

Company Deduction. Except as discussed below, the Company is generally entitled to a tax deduction equal to the amount recognized as ordinary income by the participant in connection with options, SARs or other awards, but not for amounts the participant recognizes as capital gain. Thus, the Company will not be entitled to any tax deduction with respect to an incentive stock option if the participant holds the shares for the incentive stock option holding periods.

Impact of Section 162(m) Deduction Limitation. The Plan is designed to provide for awards that are exempt from the requirements of Section 162(m), which generally provides that income tax deductions of publicly held companies may be limited to the extent total compensation for certain executive officers exceeds $1,000,000 in any taxable year of the company, but provides that the deduction limit will not apply to certain “performance-based compensation” that is granted or vests based upon pre-established objective performance goals and is established by an independent compensation committee and the material terms of which are adequately disclosed to and approved by stockholders. Cognizant intends that options, SARs and PSUs granted under the Plan will qualify as performance-based compensation not subject to a deductibility cap. However, a number of requirements must

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Compensation

be met in order for particular compensation to so qualify, so there can be no assurance that these types of compensation under the Plan will be fully deductible under all circumstances. In addition, other types of compensation provided under the Plan may not qualify as performance-based compensation under Section 162(m) and therefore may not be deductible. For more information, see “What will be the material terms of the performance goals for awards intended to qualify under Section 162(m)?” on page 43.

Impact of Section 280G Deduction Limitation. Our ability to obtain a deduction for payments under the Plan could also be limited by the golden parachute rules of IRC Section 280G, which prevents the deductibility of certain excess parachute payments made in connection with a change in control of a company.

Plan Benefits

New Plan Benefits. Our Directors and executive officers may benefit from the grant of equity-based awards under the Plan. Grants of stock options and RSUs that will be awarded to non-employee Directors serving on the Board on the date of the Annual Meeting are shown in the table below. The number of awards that our NEOs, other executive officers and other employees may receive under the Plan will be determined in the discretion of the Compensation Committee in the future, and the Compensation Committee has not made any determination to make future grants to any persons under the Plan as of the date of this proxy statement. Therefore, it is not possible to determine the benefits that will be received in the future by such participants in the Plan or the benefits that would have been received by such participants if the Plan had been in effect in the year ended December 31, 2016.

| Name and Position | Dollar Value
of Shares Underlying Options Granted | Dollar Value
of Shares Subject to Stock Awards |
| --- | --- | --- |
| Francisco
D’Souza Chief Executive Officer | $0 | $0 |
| Rajeev
Mehta President | $0 | $0 |
| Gordon J.
Coburn Former President | $0 | $0 |
| Karen
McLoughlin Chief Financial Officer | $0 | $0 |
| Ramakrishna Prasad
Chintamaneni EVP and President, Global Industries and
Consulting | $0 | $0 |
| Dharmendra Kumar
Sinha EVP and President, Global Client Services | $0 | $0 |
| All current executive
officers as a group | $0 | $0 |
| All current non-employee Directors as
a group 1 | $1,050,000 | $1,050,000 |
| All employees except current executive officers as a
group | $0 | $0 |

1 At the Annual Meeting, each non-employee Director will each receive a grant of stock options with a modified Black-Scholes value (using the assumptions utilized in preparing the Company’s most recent audited financial statements) as of the date of grant of $105,000 and a grant of RSUs with a fair market value as of the date of grant of $105,000, unless such member is not elected at the Annual Meeting. The number of shares subject to such awards will be determined based on the fair market value of our common stock on the date of grant and, therefore, is not determinable at this time. Each such option will have an exercise price per share equal to the fair market value per share of our common stock on the grant date and a maximum term of seven years measured from the grant date and will vest ratably, 50% per year on each of the first two anniversaries of the date of grant, subject to the Director’s continued service on the Board through each applicable vesting date. Each such RSU award will vest ratably, one-third on each of the first three anniversaries of the date of grant, subject to the Director’s continuous service on the Board through each applicable vesting date.

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AUDIT MATTERS

●	PROPOSAL 5
	RATIFICATION OF
APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
	What are you voting
on?	Our Audit Committee has appointed PricewaterhouseCoopers LLP
(“PwC”) as the independent registered public accounting firm to audit our
consolidated financial statements and our internal control over financial
reporting for 2017. We are asking our stockholders to ratify this
appointment of PwC. Although ratification is not required by our By-laws
or otherwise, the Board values the opinions of our stockholders and
believes that stockholder ratification of the Audit Committee’s selection
is a good corporate governance practice. If the selection is not ratified,
the Audit Committee will take this fact into consideration in determining
whether it is appropriate to select another independent auditor for 2017
or future years. Even if the selection is ratified, the Audit Committee
may select a different independent auditor at any time during the year if
it determines that this would be in the best interests of the Company and
its stockholders.
●	The Board unanimously recommends a vote FOR the Ratification of the Appointment of
PricewaterhouseCoopers LLP as our Independent Registered Public Accounting
Firm for 2017.

Our Auditor Review and Engagement Process

The Audit Committee is directly responsible for the appointment, compensation (including negotiation and approval of the audit fee), retention and oversight of the independent registered public accounting firm that audits our financial statements and our internal control over financial reporting. Our Audit Committee and its chairperson are directly involved in the selection of the lead audit partner at the start of each rotation.

To ensure continuing audit independence:

| ● | The Audit Committee periodically
considers whether there should be a change of the accounting firm that is
retained, and considers the advisability and potential impact of selecting
a different accounting firm; |
| --- | --- |
| ● | Neither the accounting firm nor any
of its members is permitted to have any direct or indirect financial
interest in or any connection with us in any capacity other than as our
auditors, providing audit and non-audit related services;
and |
| ● | In accordance with SEC rules and PwC
policies, audit partners are subject to rotation requirements to limit the
number of consecutive years an individual partner may provide services to
our Company. For lead and concurring audit partners, the maximum number of
consecutive years of service in that capacity is five
years. |

The members of the Audit Committee and the Board believe that the continued retention of PwC to serve as the Company’s independent registered public accounting firm is in the best interests of the Company and its stockholders.

We Expect PricewaterhouseCoopers LLP to Attend the 2017 Annual Meeting

PwC representatives are expected to attend the Annual Meeting. They will have an opportunity to make a statement if they wish and are expected to be available to respond to appropriate questions from stockholders.

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Audit Matters

AUDIT COMMITTEE REPORT

The Audit Committee has furnished the following report:

To the Board of Directors of Cognizant Technology Solutions Corporation: The Audit Committee of the Board of Directors acts under a written charter, which is available in the “Company Overview” section of the “About Cognizant” page of the Company’s website located at www.cognizant.com , under the “Corporate Governance” tab. The members of the Audit Committee are independent Directors, as defined in its charter and the rules of The NASDAQ Stock Market LLC. The Audit Committee held 15 meetings during 2016. Management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s independent registered public accounting firm (“auditor”) is responsible for performing an independent integrated audit of the Company’s annual financial statements and management’s assessment of the effectiveness of the Company’s internal control over financial reporting. The Audit Committee is responsible for providing independent, objective oversight of these processes. The Audit Committee has reviewed the Company’s audited financial statements for the fiscal year ended December 31, 2016 and has discussed these financial statements with management and the Company’s auditor. The Audit Committee has also received from, and discussed with, the Company’s auditor various communications that such auditor is required to provide to the Audit Committee, including the matters required to be discussed by Statement on Auditing Standards No. 1301, Communications with Audit Committees, as adopted by the Public Company Accounting Oversight Board (PCAOB), as may be modified or supplemented. The Company’s auditor also provided the Audit Committee with formal written statements required by PCAOB Rule 3526 (Communications with Audit Committees Concerning Independence) describing all relationships between the auditor and the Company, including the disclosures required by the applicable requirements of the PCAOB regarding the auditor’s communications with the Audit Committee concerning independence. In addition, the Audit Committee discussed with the auditor its independence from Cognizant Technology Solutions Corporation. The Audit Committee also considered whether the auditor’s provision of certain other non-audit related services to the Company is compatible with maintaining such firm’s independence. Based on its discussions with management and the auditor, and its review of the representations and information provided by management and the auditor, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016. By the Audit Committee of the Board of Directors of Cognizant Technology Solutions Corporation Zein Abdalla Maureen Breakiron-Evans Jonathan Chadwick John E. Klein Leo S. Mackay, Jr. Thomas M. Wendel

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Audit Matters

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEES AND OTHER MATTERS

Fees

The following table summarizes the fees of PwC, our independent registered public accounting firm, for each of the last two fiscal years.

| Fee
Category | 2015 | 2016 |
| --- | --- | --- |
| Audit Fees | $4,122,200 | $7,681,100 |
| Audit-Related Fees | $1,575,300 | $3,486,100 |
| Tax Fees | $1,080,600 | $879,400 |
| All Other Fees | $335,400 | $238,000 |
| Total Fees | $7,113,500 | $12,284,600 |

Audit Fees

Audit fees consist of fees for the audit of our consolidated financial statements (including services necessary for rendering an opinion under Section 404 of the Sarbanes-Oxley Act), the review of our interim quarterly financial statements and other professional services provided in connection with statutory and regulatory filings or engagements. The increase in audit fees from 2015 to 2016 was principally due to increased audit work in connection with matters that are the subject of the Company’s ongoing internal investigation that is being conducted under the oversight of the Audit Committee, with the assistance of outside counsel, focused on whether certain payments relating to Company-owned facilities in India were made improperly and in possible violation of the U.S. Foreign Corrupt Practices Act and other applicable laws.

Audit-Related Fees

Audit-related fees consist of fees for assurance and related services that are reasonably related to the performance of the audit and the review of our financial statements and which are not reported under “Audit Fees”, including financial due diligence services related to business combinations. These services relate to attest services that are not required by statute or regulation, consultations concerning financial accounting and reporting matters, and independent assessment of controls related to outsourcing services. The increase in audit-related fees from 2015 to 2016 was principally due to an increase in financial due diligence services related to the Company’s mergers and acquisitions activities.

Tax Fees

Tax fees comprise fees for a variety of permissible services relating to tax compliance, tax planning and tax advice. These services include assistance in complying with local transfer pricing requirements, assistance with local tax audits and assessments, withholding tax and indirect tax matters, preparation and filing of local tax returns, and technical advice relating to local and international tax matters.

All Other Fees

For 2016, other fees primarily relate to advisory fees for immigration services. For 2015, other fees primarily relate to advisory fees for immigration and IT security services.

Audit Committee Pre-Approval Policy and Procedures

The Audit Committee has adopted policies and procedures relating to the approval of all audit and non-audit services that are to be performed by our independent registered public accounting firm. This policy generally provides that we will not engage our independent registered public accounting firm to render audit or non-audit services unless the service is specifically approved in advance by the Audit Committee or the engagement is entered into pursuant to one of the pre-approval procedures described below.

From time to time, the Audit Committee may pre-approve specified types of services that are expected to be provided to us by our independent registered public accounting firm during the next 12 months. Any such pre-approval is detailed as to the particular service or type of services to be provided.

The Audit Committee has also delegated to Maureen Breakiron-Evans, the current Audit Committee Chair, the authority to approve any audit or non-audit services to be provided to us by our independent registered public accounting firm. Any such approval of services pursuant to this delegated authority is reported on at the next meeting of the Audit Committee. During 2015 and 2016, the Audit Committee approved all services provided to us by PwC that are subject to the pre-approval policies and procedures described above.

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STOCKHOLDER PROPOSALS

●	PROPOSAL 6
	STOCKHOLDER
PROPOSAL REQUESTING THAT THE BOARD TAKE THE STEPS NECESSARY TO ELIMINATE
THE SUPERMAJORITY VOTING PROVISIONS IN THE COMPANY’S CERTIFICATE OF
INCORPORATION AND BY-LAWS
	What are you voting
on?	The following stockholder proposal will be voted on at the 2017
Annual Meeting only if properly presented by or on behalf of the
stockholder proponent. We are asking stockholders to vote to approve the
stockholder proposal requesting that the Board take the steps necessary to
eliminate the supermajority voting provisions in the Company’s Certificate
of Incorporation and By-laws.
●	The Board unanimously recommends a vote FOR this proposal.

The Company has been advised that John Chevedden, 2215 Nelson Avenue, No. 205, Redondo Beach, California 90278, beneficial owner of 100 shares of the Company’s common stock, intends to submit the proposal set forth below at the Annual Meeting.

PROPOSAL 6 — SIMPLE MAJORITY VOTE

RESOLVED, Shareholders request that our board take each step necessary so that each voting requirement in our charter and bylaws that calls for a greater than simple majority vote be eliminated, and replaced by a requirement for a majority of the votes cast for and against applicable proposals, or a simple majority in compliance with applicable laws. If necessary this means the closest standard to a majority of the votes cast for and against such proposals consistent with applicable laws. It is important that our company take each step necessary to adopt this proposal topic. It is important that our company take each step necessary to avoid a failed vote on this proposal topic. Shareowners are willing to pay a premium for shares of companies that have excellent corporate governance. Supermajority voting requirements have been found to be one of 6 entrenching mechanisms that are negatively related to company performance according to “What Matters in Corporate Governance” by Lucien Bebchuk, Alma Cohen and Allen Ferrell of the Harvard Law School. Supermajority requirements are used to block initiatives supported by most shareowners but opposed by a status quo management. This proposal topic won from 74% to 88% support at Weyerhaeuser, Alcoa, Waste Management, Goldman Sachs, FirstEnergy, McGraw-Hill and Macy’s. The proponents of these proposals included Ray T. Chevedden and William Steiner. Currently a 1%-minority can frustrate the will of our 66%-shareholder majority. In other words a 1%-minority could have the power to prevent shareholders from improving our corporate governance. Please vote to enhance shareholder value: Simple Majority Vote - Proposal 6

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Stockholder Proposals

●	PROPOSAL 7
	STOCKHOLDER
PROPOSAL REGARDING STOCKHOLDER ACTION BY WRITTEN
CONSENT
	What are you voting
on?	The following stockholder proposal will be voted on at the 2017
Annual Meeting only if properly presented by or on behalf of the
stockholder proponent. The Board unanimously recommends a vote AGAINST the
proposal for the reasons set forth following the
proposal.
●	The
Board unanimously recommends a vote AGAINST this
proposal.

The Company has been advised that James McRitchie and Myra K. Young, 9295 Yorkship Court, Elk Grove, California 95758, beneficial owners of 100 shares of the Company’s common stock, intend to submit the proposal set forth below at the Annual Meeting. Mr. McRitchie and Ms. Young have delegated John Chevedden to act on their behalf regarding the proposal.

PROPOSAL 7 — RIGHT TO ACT BY WRITTEN CONSENT

Resolved, Shareholders request that our board of directors undertake such steps as may be necessary to permit written consent by shareholders entitled to cast the minimum number of votes that would be necessary to authorize the action at a meeting at which all shareholders entitled to vote thereon were present and voting. This written consent is to be consistent with applicable law and consistent with giving shareholders the fullest power to act by written consent consistent with applicable law. This includes shareholder ability to initiate any topic for written consent consistent with applicable law. A shareholder right to act by written consent and to call a special meeting are two complimentary ways to bring an important matter to the attention of both management and shareholders outside the annual meeting cycle. Both are associated with increased governance quality and shareholder value. A shareholder right to act by written consent is one method to equalize our limited provisions for shareholders to call a special meeting. For instance, it takes 25% of Cognizant Technology Solutions Corporation shares outstanding to call a special meeting. Delaware law would allow 10% of shares outstanding to call a special meeting. With a requirement of 25%, a significant percentage of Cognizant shares outstanding could be disenfranchised from having any voice whatsoever on calling a special meeting. This proposal topic won 67% support at Duke Energy Corp. and majority shareholder support at 13 major companies in a single year. Hundreds of major companies enable shareholders to act by written consent. Our proposal on this topic won 49% support at Cognizant last year; 1% more this year could put it over the top. Please vote FOR our Right to Act by Written Consent to protect shareholder value.

The Board’s Statement of Opposition

The Board UNANIMOUSLY recommends that stockholders vote AGAINST this proposal for the following reasons:

● Written consent can result in an unfair, secret and unsound process and is unnecessary given the ability of stockholders to call special meetings. The Board believes that action by written consent, where there is no open meeting, disclosure and debate, is an unfair, secretive and unsound process. Further, implementation of this proposal is unnecessary given the Company’s other governance practices, including the ability of stockholders to call special meetings. At meetings of stockholders, stockholders have the opportunity to express views on proposed actions, participate in deliberations and vote. Such meetings occur at a time and date announced publicly in advance of the meeting. These and other provisions ensure that stockholders can raise matters for consideration and that all stockholders receive notice of, and have an opportunity to voice concerns about, proposed actions affecting the Company. In contrast, the proposal would allow a limited group of stockholders to act on potentially significant matters, without a meeting, without prior notice to all stockholders, and without an opportunity for fair and open discussion among stockholders.

●
●	Stockholder Engagement . We
regularly solicit input from our stockholders and take appropriate actions
where the long-term interests of all our stockholders are best served. For
example, following engagement with Elliott Management and a number of
other large stockholders and in conjunction with an agreement with
Elliott, in 2017 we announced plans to return capital to stockholders and
increase our non-GAAP Operating
Margins.

2017 Proxy Statement 51

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Stockholder Proposals

| | ● | Regular Board Refreshment .
The Board evaluates its composition on an ongoing basis to ensure that it
has the right mix of skills and perspectives. Following the addition of a
new director in each of 2015 and 2016, as part of an agreement reached
with Elliott, two new directors have been added in 2017 to replace two
retiring directors, and an additional director will be added by 2018 to
replace another retiring director. |
| --- | --- | --- |
| | ● | Proxy Access By-law . In 2016,
the Board adopted a 3/3/25 proxy access By-law provision, with no limit on
the number of stockholders who can work together to reach the 3%
threshold. See “Director Nominees via Proxy Access” on page
53. |
| | ● | Majority Voting in Director
Elections . The Company’s By-laws provide that, in an uncontested
election of directors, a director nominee must receive more “for” votes
than “against” votes to be elected. See ”Majority Voting Standard in
Director Elections” on page 16. |
| | ● | Board Declassification . In 2013, the
Board recommended and the stockholders approved an amendment to the
Company’s Certificate of Incorporation to declassify the Board. Each of
our directors is now subject to re-election at each annual meeting of
stockholders. |
| | We believe that these and our other
corporate governance practices and policies enable stockholders to act in
support of their interests, while avoiding the risks associated with the
proposal. | |
| ● | Substantially identical proposals
were rejected by the Company’s stockholders in 2013, 2015 and
2016. Substantially the same proposal
has been submitted, considered by the Board and rejected by stockholders
three times, including at the last two annual meetings. The Board
continues to believe that this proposal is not in the best interests of
all stockholders, and urges our stockholders to reject this proposal for
the fourth time. | |

52 Cognizant Technology Solutions Corporation

PART 15

Table of Contents

Stockholder Proposals

STOCKHOLDER PROPOSALS AND NOMINEES FOR THE 2018 ANNUAL MEETING

Stockholder Proposals

SEC rules permit stockholders to submit proposals for inclusion in our proxy statement if the stockholder and the proposal meet the requirements specified in Rule 14a-8 under the Exchange Act (“Rule 14a-8”).

| ● | When to send these
proposals. Any stockholder proposals
submitted in accordance with Rule 14a-8 must be received at our principal
executive offices no later than the close of business on December 21,
2017. |
| --- | --- |
| ● | Where to send these
proposals. Proposals should be sent to
our Corporate Secretary. See “Helpful Resources” on page
78. |
| ● | What to include. Proposals must conform to and include the information
required by Rule 14a-8. |

Director Nominees via Proxy Access

Our By-laws permit a group of stockholders who have owned a significant amount of the Company’s common stock (at least 3%) for a significant amount of time (at least three years) to submit director nominees (up to 25% of the Board and in any event not less than two directors) for inclusion in our proxy statement if the stockholder(s) and the nominee(s) satisfy the requirements specified in our By-laws.

| ● | When to send these
proposals. Notice of director nominees
under these By-law provisions must be received no earlier than November
21, 2017 and no later than the close of business on December 21, 2017. In
the event that the date of the 2018 Annual Meeting is more than 30 days
before or more than 70 days after June 6, 2018, then our Corporate
Secretary must receive such written notice
not earlier than the close of business on the 150 th day prior to the 2018 Annual Meeting
and not later than the close of business on the later of the
120 th day prior to the 2018 Annual Meeting or the
10 th day following the day on which public announcement of the
date of such meeting is first made by the
Company. |
| --- | --- |
| ● | Where to send these proposals. Notice should be addressed to our Corporate Secretary. See “Helpful
Resources” on page 78. |
| ● | What to include. Notice must
include the information required by our By-laws, a copy of which is
available upon request to our Corporate Secretary. See “Helpful Resources”
on page 78. |

Other Proposals or Director Nominees

Our By-laws require that any stockholder proposal, including a director nomination, that is not submitted for inclusion in next year’s proxy statement (either under Rule 14a-8 or our proxy access By-laws), but is instead sought to be presented directly at such meeting, must be received by our Corporate Secretary in writing not earlier than the close of business on the 120 th day and not later than the close of business on the 90 th day prior to the anniversary of the preceding year’s annual meeting.

| ● | When to send these
proposals. Stockholder proposals or
director nominations submitted under these By-law provisions must be
received no earlier than the close of business on February 6, 2018 and no
later than the close of business on March 8, 2018. In the event that the
date of the 2018 Annual Meeting is more than 30 days before or more than 70 days after June 6, 2018, then our
Corporate Secretary must receive any such proposal not earlier than the
close of business on the 120 th day prior to the 2018 Annual
Meeting and not later than the close of business of the later of the
90 th day prior to the 2018 Annual Meeting or the
10 th day following the day on which public announcement of the
date of such meeting is first made by the
Company. |
| --- | --- |
| ● | Where to send these proposals. Proposals should be sent to our Corporate Secretary. See “Helpful
Resources” on page 78. |
| ● | What to include. Proposals must
include the information required by our By-laws, a copy of which is
available upon request to our Corporate Secretary. See “Helpful Resources”
on page 78. |

Management Discretion to Vote Proxies on These Proposals

SEC rules permit management to vote proxies in its discretion in certain cases if the stockholder does not comply with the above deadlines and, in certain other cases, notwithstanding the stockholder’s compliance with these deadlines.

Non-Compliant Proposals

The Company reserves the right to reject, rule out of order, or take other appropriate action with respect to any proposal that does not comply with the requirements set forth above or other applicable requirements.

2017 Proxy Statement 53

Table of Contents

ADDITIONAL INFORMATION

PROXY STATEMENT AND PROXY SOLICITATION

About this Proxy Statement

This proxy statement is furnished in connection with the solicitation by the Board of proxies to be voted at our Annual Meeting be held on Tuesday, June 6, 2017, at 9:30 a.m. Eastern Time, at the Teaneck Marriott at Glenpointe, 100 Frank W. Burr Blvd., Teaneck, New Jersey 07666, and at any continuation, postponement or adjournment thereof. Holders of record of shares of common stock as of the Record Date will be entitled to notice of and to vote at the Annual Meeting and any continuation, postponement or adjournment thereof. As of the Record Date, there were approximately 588,995,145 shares of common stock issued and outstanding and entitled to vote at the Annual Meeting. Each share of common stock is entitled to one vote on any matter presented to stockholders at the Annual Meeting.

This proxy statement and the Company’s 2016 Annual Report will be released on or about April 20, 2017 to our stockholders on the Record Date.

Management Discretion Proposals and Board Recommendations

At the Annual Meeting, our stockholders will be asked to vote on the proposals and other stockholder actions set forth below. The Board recommends that you vote your shares as indicated below. If you return a properly completed proxy card, or vote your shares by telephone or over the Internet, your shares of common stock will be voted on your behalf as you direct. If not otherwise specified, the shares of common stock represented by the proxies will be voted in accordance with the Board’s recommendations.

| Proposals and Other Stockholder
Actions | | Board Recommendation | See Page No. |
| --- | --- | --- | --- |
| 1. | Elect the 11 Director nominees named
in this proxy statement to serve until the 2018 Annual Meeting of
Stockholders; | FOR EACH DIRECTOR NOMINEE | 10 |
| 2. | Approve, on an advisory
(non-binding) basis, the Company’s executive compensation; | FOR | 22 |
| 3. | Approve, on an advisory
(non-binding) basis, the frequency of future advisory votes on the
Company’s executive compensation; | 1
YEAR | 22 |
| 4. | Approve the 2017 Incentive Award
Plan; | FOR | 40 |
| 5. | Ratify the appointment of
PricewaterhouseCoopers LLP as the Company’s independent registered public
accounting firm for the year ending December 31, 2017; | FOR | 47 |
| 6. | Consider a stockholder proposal
requesting that the Board take the steps necessary to eliminate the
supermajority voting provisions in the Company’s Certificate of
Incorporation and By-laws, if properly presented at the Annual
Meeting; | FOR | 50 |
| 7. | Consider a stockholder proposal
requesting that the Board take the steps necessary to permit stockholder
action by written consent, if properly presented at the Annual Meeting;
and | AGAINST | 51 |

We know of no other business that will be presented at the Annual Meeting. If any other matter properly comes before the stockholders for a vote at the Annual Meeting, however, the proxy holders named on the Company’s proxy card will vote your shares in accordance with their best judgment.

Additional Information About This Proxy Statement

Why You Received This Proxy Statement

You are viewing or have received these proxy materials because the Board is soliciting your proxy to vote your shares at the Annual Meeting. This proxy statement includes information that we are required to provide to you under SEC rules and that is designed to assist you in voting your shares.

Notice of Internet Availability of Proxy Materials

As permitted by SEC rules, Cognizant is making this proxy statement and its 2016 Annual Report available to certain of its stockholders electronically via the Internet. On or about April 20, 2017, we mailed to these stockholders a Notice of Internet Availability of Proxy Materials (the “Internet Notice”) containing instructions on how to access this proxy statement and our 2016 Annual Report and vote online. If you received an Internet Notice by mail, you will not receive a printed copy of the proxy materials in the mail unless you specifically request them. Instead, the Internet Notice instructs you on how to access and review all of the important information contained in this proxy statement and 2016 Annual Report. The Internet Notice also instructs you on how you may submit your proxy over the Internet. If you received an Internet Notice by mail and would like to receive a printed copy of our proxy materials, you should follow the instructions for requesting such materials contained on the Internet Notice.

Printed Copies of Our Proxy Materials

Some of our stockholders received printed copies of our proxy statement, 2016 Annual Report and proxy card. If you received printed copies of our proxy materials, then instructions regarding how you can vote are contained on the proxy card included in the materials.

54 Cognizant Technology Solutions Corporation

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Additional Information

Householding

The SEC’s rules permit us to deliver a single Internet Notice or set of proxy materials to one address shared by two or more of our stockholders. This delivery method is referred to as “householding” and can result in significant cost savings. To take advantage of this opportunity, we have delivered only one Internet Notice or one set of proxy materials to multiple stockholders who share an address, unless we received contrary instructions from the impacted stockholders prior to the mailing date. We agree to deliver promptly, upon written or oral request, a separate copy of the Internet Notice or proxy materials, as requested, to any stockholder at the shared address to which a single copy of those documents was delivered. If you prefer to receive separate copies of the Internet Notice or proxy materials, contact Broadridge Financial Solutions, Inc. (“Broadridge”) at 800-542-1061 or in writing at Broadridge, Householding Department, 51 Mercedes Way, Edgewood, New York 11717.

If you are currently a stockholder sharing an address with another stockholder and wish to receive only one copy of future Internet Notices or proxy materials for your household, please contact Broadridge at the above phone number or address.

Solicitation of Proxies

The accompanying proxy is solicited by and on behalf of the Board, whose Notice of Annual Meeting is included with this proxy statement, and the entire cost of such solicitation will be borne by us. In addition to the use of mail, proxies may be solicited by personal interview, telephone, e-mail and facsimile by our Directors, officers and other employees who will not be specially compensated for these services. We have engaged Innisfree M&A Incorporated, to assist us with the solicitation of proxies.

We expect to pay Innisfree a fee of $25,000 plus reimbursement for out-of-pocket expenses for its services. We will also request that brokers, nominees, custodians and other fiduciaries forward soliciting materials to the beneficial owners of shares held by such brokers, nominees, custodians and other fiduciaries. We will reimburse such persons for their reasonable expenses in connection therewith.

ANNUAL MEETING Q&A

Questions and Answers About the 2017 Annual Meeting

Who is entitled to vote at the Annual Meeting?

The Record Date for the Annual Meeting is April 10, 2017. You are entitled to vote at the Annual Meeting only if you were a stockholder of record at the close of business on that date, or if you hold a valid proxy for the Annual Meeting. The only class of stock entitled to be voted at the Annual Meeting is our common stock. Each outstanding share of common stock is entitled to one vote for all matters before the Annual Meeting. At the close of business on the Record Date, there were 588,995,145 shares of common stock issued and outstanding and entitled to vote at the Annual Meeting.

What is the difference between being a “record holder” and holding shares in “street name”?

A record holder holds shares in his or her name. Shares held in “street name” means shares that are held in the name of a bank or broker on a person’s behalf.

Am I entitled to vote if my shares are held in “street name”?

Yes. If your shares are held by a bank or a brokerage firm, you are considered the “beneficial owner” of those shares held in “street name”. If your shares are held in street name, these proxy materials are being provided to you by your bank or brokerage firm, along with a voting instruction card if you received printed copies of our proxy materials. As the beneficial owner, you have the right to direct your bank or brokerage firm how to vote your shares, and the bank or brokerage firm is required to vote your shares in accordance with your instructions. If your shares are held in street name, you may not vote your shares in person at the Annual Meeting unless you obtain a legal proxy from your bank or brokerage firm.

How many shares must be present to hold the Annual Meeting?

A quorum must be present at the Annual Meeting for any business to be conducted. The presence at the Annual Meeting, in person or by proxy, of the holders of a majority of the shares of common stock outstanding on the Record Date will constitute a quorum.

Who can attend the Annual Meeting of Stockholders?

You may attend the Annual Meeting only if you are a Cognizant stockholder who is entitled to vote at the Annual Meeting, or if you hold a valid proxy for the Annual Meeting. If you plan to attend the Annual Meeting, you must call the Company’s investor relations staff at 201-498-8840 or email David.Nelson@cognizant.com no later than 5:00 p.m. Eastern Time on June 5, 2017 to have your name placed on the attendance list. In order to be admitted into the Annual Meeting, your name must appear on the attendance list and you must present government-issued photo identification (such as a driver’s license). If your bank or broker holds your shares in street name, you will also be required to present proof of beneficial ownership of our common stock on the Record Date, such as the Internet Notice you received from your bank or broker, a bank or brokerage statement, or a letter from your bank or broker showing that you owned shares of our common stock at the close of business on the Record Date.

What if a quorum is not present at the Annual Meeting?

If a quorum is not present at the scheduled time of the Annual Meeting, a majority of the outstanding shares represented at the Annual Meeting, by proxy or in person, and entitled to vote may adjourn the Annual Meeting.

What does it mean if I receive more than one Internet Notice or more than one set of proxy materials?

It means that your shares are held in more than one account at the transfer agent and/or with banks or brokers. Please vote all of your shares. To ensure that all of your shares are voted, for each Internet Notice or set of proxy materials, please submit your proxy by phone, via the Internet, or, if you received printed copies of the proxy materials, by signing, dating and returning the enclosed proxy card in the enclosed envelope.

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Additional Information

How do I vote?

We recommend that stockholders vote by proxy even if they plan to attend the Annual Meeting and vote in person. If you are a stockholder of record, there are three ways to vote by proxy:

| ● | by telephone–You can vote by
telephone by calling 800-690-6903 and following the instructions on the
proxy card; |
| --- | --- |
| ● | by Internet–You can vote over the
Internet at www.proxyvote.com by following the instructions on the Internet
Notice or proxy card; or |
| ● | by mail–You can vote by mail by
signing, dating and mailing the proxy card, which you may have received by
mail. |

Telephone and Internet voting facilities for stockholders of record will be available 24 hours a day and will close at 11:59 p.m. Eastern Time on June 5, 2017.

If your shares are held in street name through a bank or broker, you will receive instructions on how to vote from the bank or broker. You must follow their instructions in order for your shares to be voted. Telephone and Internet voting also will be offered to stockholders owning shares through certain banks and brokers. If your shares are not registered in your own name and you would like to vote your shares in person at the Annual Meeting, you should contact your bank or broker to obtain a legal proxy and bring it to the Annual Meeting in order to vote.

Can I change my vote after I submit my proxy?

Yes. If you are a registered stockholder, you may revoke your proxy and change your vote:

| ● | by submitting a duly executed proxy
bearing a later date; |
| --- | --- |
| ● | by granting a subsequent proxy
through the Internet or telephone; |
| ● | by giving written notice of
revocation to the Corporate Secretary of Cognizant prior to or at the
Annual Meeting; or |
| ● | by voting in person at the Annual
Meeting. |

Your most recent proxy card or telephone or Internet proxy is the one that is counted. Your attendance at the Annual Meeting itself will not revoke your proxy unless you give written notice of revocation to the Corporate Secretary before your proxy is voted or you vote in person at the Annual Meeting.

If your shares are held in street name, you may change or revoke your voting instructions by following the specific directions provided to you by your bank or broker, or you may vote in person at the Annual Meeting by obtaining a legal proxy from your bank or broker and submitting the legal proxy along with your ballot.

Whom should I contact if I have questions or need assistance voting?

Please contact Innisfree M&A Incorporated, our proxy solicitor assisting us in connection with the Annual Meeting. Stockholders may call toll free at 888-750-5834. Banks and brokers may call collect at 212-750-5833.

Who will count the votes?

Representatives of Broadridge Financial Solutions, Inc., our inspector of election, will tabulate and certify the votes.

What if I do not specify how my shares are to be voted?

If you submit a proxy but do not indicate any voting instructions, the persons named as proxies will vote in accordance with the recommendations of the Board. The Board’s recommendations for each proposal are set forth on page 54, as well as with the description of each proposal in this proxy statement.

Will any other business be conducted at the Annual Meeting?

We know of no other business that will be presented at the Annual Meeting. If any other matter properly comes before the stockholders for a vote at the Annual Meeting, however, the proxy holders named on the Company’s proxy card will vote your shares in accordance with their best judgment.

How many votes are required for the approval of the proposals to be voted upon and how will abstentions and broker non-votes be treated?

| Proposal | Votes required | Effect of Abstentions and Broker
Non-Votes |
| --- | --- | --- |
| Proposal 1 : Election of
Directors 1 | Votes cast “for” exceed votes cast
“against”. | No effect. |
| Proposal 2 : Advisory
(Non-Binding) Vote on Executive Compensation (Say-on-Pay) | Majority of votes
cast. | No effect. |
| Proposal 3 : Advisory
(Non-Binding) Vote on Frequency of Advisory (Non-Binding) Vote on
Executive Compensation | Majority of votes cast. If no
frequency receives the foregoing vote, then we will consider the frequency
that receives the highest number of votes cast to be the frequency
recommended by stockholders. | No effect. |
| Proposal 4 : Approval of 2017
Incentive Award Plan | Majority of votes
cast. | No effect. |
| Proposal 5 : Ratification of
Appointment of Independent Registered Public Accounting Firm | Majority of votes
cast. | Abstentions will have no effect; no
broker non-votes expected. |
| Proposal 6 : Stockholder
Proposal Regarding Elimination of Supermajority Voting Provisions in the
Company’s Certificate of Incorporation and By-laws | Majority of votes
cast. | No effect. |
| Proposal 7 : Stockholder
Proposal Regarding Stockholder Action by Written Consent | Majority of votes
cast. | No
effect. |

1 There are 11 Director nominees named in Proposal 1. Proxies cannot be voted for a greater number of persons than the number of nominees named in this proposal.

56 Cognizant Technology Solutions Corporation

PART 16

Table of Contents

Additional Information

What is an abstention and how will abstentions be treated?

An “abstention” represents a stockholder’s affirmative choice to decline to vote on a proposal. Abstentions are counted as present and entitled to vote for purposes of determining a quorum. Shares voting “abstain” have no effect on any of the proposals before the Annual Meeting.

What are broker non-votes and do they count for determining a quorum?

Generally, broker non-votes occur when shares held by a broker in “street name” for a beneficial owner are not voted with respect to a particular proposal because the broker (1) has not received voting instructions from the beneficial owner and (2) lacks discretionary voting power to vote those shares. A broker is entitled to vote shares held for a beneficial owner on routine matters, such as the ratification of the appointment of PwC as our independent registered public accounting firm, without instructions from the beneficial owner of those shares. On the other hand, absent instructions from the beneficial owner of such shares, we expect that a broker will not be entitled to vote shares held for a beneficial owner on all of the other proposals to be voted on at the Annual Meeting. Broker non-votes count for purposes of determining whether a quorum is present.

Where can I find the voting results of the Annual Meeting of Stockholders?

We plan to announce preliminary voting results at the Annual Meeting and we will report the final results in a Current Report on Form 8-K, which we intend to file with the SEC shortly after the Annual Meeting.

Where do I direct requests for materials mentioned in this proxy statement and how do I contact Cognizant’s Corporate secretary?

Please direct requests for materials mentioned in this proxy statement or other inquiries to our Corporate Secretary. See “Helpful Resources” on page 78 for how to contact our Corporate Secretary.

Other Matters at the 2017 Annual Meeting

The Board is not aware of any matter to be presented for action at the Annual Meeting other than the matters referred to above and does not intend to bring any other matters before the Annual Meeting. However, if other matters should come before the Annual Meeting, it is intended that holders of the proxies will vote thereon in their discretion.

COGNIZANT’S ANNUAL REPORT ON FORM 10-K

A copy of Cognizant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016, including financial statements and schedules thereto but not including exhibits, as filed with the SEC, will be sent to any stockholder of record on April 10, 2017, without charge, upon written request addressed to our Corporate Secretary. A reasonable fee will be charged for copies of exhibits. You also may access this proxy statement and our Annual Report on Form 10-K at www.proxyvote.com . Our Annual Report on Form 10-K for the year ended December 31, 2016 is also available at www.cognizant.com .

NON-GAAP FINANCIAL MEASURES AND FORWARD-LOOKING STATEMENTS

Non-GAAP Financial Measures

Portions of our disclosure, including the table under “Reconciliation to GAAP Financial Measures,” include non-GAAP Income from Operations, non-GAAP Operating Margin, and non-GAAP EPS. These non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles and should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures should be read in conjunction with our financial statements prepared in accordance with GAAP. The reconciliations of Cognizant’s non-GAAP financial measures to the corresponding GAAP measures should be carefully evaluated.

Our non-GAAP Income from Operations and non-GAAP Operating Margin exclude stock-based compensation expense and acquisition-related charges. Our definition of non-GAAP EPS excludes net non-operating foreign currency exchange gains or losses and, for the year ended December 31, 2016, the impact of a one-time incremental income tax expense related to our principal operating subsidiary in India repurchasing its shares from its shareholders, which are non-Indian Cognizant entities, valued at $2.8 billion (the “India Cash Remittance”), in addition to excluding stock-based compensation expense and acquisition-related charges. Our non-GAAP EPS is additionally adjusted for the income tax impact of the above items, as applicable. The income tax impact of each item is calculated by applying the statutory rate and local tax regulations in the jurisdiction in which the item was incurred.

We believe providing investors with an operating view consistent with how we manage the Company provides enhanced transparency into the operating results of the Company. For our internal management reporting and budgeting purposes, we use non-GAAP financial information that does not include, as applicable, stock-based compensation expense, acquisition-related charges, net non-operating foreign currency exchange gains or losses, and the impact of a one-time incremental income tax expense related to the India Cash Remittance for financial and operational decision making, to evaluate period-to-period comparisons, to determine portions of the compensation for our executive officers and for making comparisons of our operating results to those of our competitors. Therefore, it is our belief that the use of non-GAAP financial measures excluding these costs provides a meaningful supplemental measure for investors to evaluate our financial performance. Accordingly, we believe that the presentation of non-GAAP Income from Operations, non-GAAP Operating Margin and non-GAAP EPS, when read in conjunction with our reported GAAP results, can provide useful supplemental information to our management and investors regarding financial and business trends relating to our financial condition and results of operations.

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Additional Information

A limitation of using non-GAAP financial measures versus financial measures calculated in accordance with GAAP is that non-GAAP measures do not reflect all of the amounts associated with our operating results as determined in accordance with GAAP and exclude costs that are recurring, namely stock-based compensation expense, certain acquisition-related charges, and net non-operating foreign currency exchange gains or losses. In addition, other companies may calculate non-GAAP financial measures differently than us, thereby limiting the usefulness of these non-GAAP financial measures as a comparative tool. We compensate for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP Income from Operations, non-GAAP Operating Margin and non-GAAP EPS to allow investors to evaluate such non-GAAP financial measures.

Reconciliation to GAAP Financial Measures

The following table presents a reconciliation of each non-GAAP financial measure to the most comparable GAAP measure for the years ended December 31.

| ($ in millions, except per share
data) — GAAP income from operations and operating
margin | 2014 — $1,885 | 18.4% | 2015 — $2,142 | 17.3% | 2016 — $2,289 | 17.0% |
| --- | --- | --- | --- | --- | --- | --- |
| Add:
Stock-based compensation expense | $135 | 1.3% | $192 | 1.5% | $217 | 1.6% |
| Add: Acquisition-related
charges 1 | $48 | 0.5% | $116 | 0.9% | $130 | 0.9% |
| Non-GAAP Income from Operations and non-GAAP Operating
Margin | $2,068 | 20.2% | $2,450 | 19.7% | $2,636 | 19.5% |
| GAAP diluted earnings per share | $2.35 | | $2.65 | | $2.55 | |
| Effect of above operating
adjustments, net of tax 2 | $0.23 | | $0.35 | | $0.41 | |
| Effect of
non-operating foreign currency exchange losses, net of tax 3 | $0.02 | | $0.07 | | $0.04 | |
| Effect of incremental
income tax expense related to the India Cash Remittance 4 | — | | — | | $0.39 | |
| Non-GAAP diluted earnings per
share | $2.60 | | $3.07 | | $3.39 | |

| 1 | Acquisition-related charges
include, when applicable: amortization of intangible assets included in
the depreciation and amortization expense line on our consolidated
statements of operations, external deal costs, acquisition-related
retention payments, integration costs, changes in the fair value of
contingent consideration liabilities, charges for impairment of acquired
intangible assets and other acquisition-related costs. |
| --- | --- |
| 2 | The non-GAAP income tax benefits
related to stock-based compensation expense were $31 million, $46 million
and $49 million for the years ended December 31, 2014, 2015, and 2016,
respectively. The non-GAAP income tax benefits related to
acquisition-related charges were $13 million, $43 million and $46 million
for the years ended December 31, 2014, 2015 and 2016,
respectively. |
| 3 | Non-operating foreign currency
exchange gains and losses are inclusive of gains and losses on related
foreign exchange forward contracts not designated as hedging instruments
for accounting purposes. The non-GAAP pre-tax non-operating foreign
currency exchange losses were $20 million, $43 million and $30 million for
the years ended December 31, 2014, 2015 and 2016, respectively, with
related non-GAAP tax benefits of $4 million, $2 million and $5 million,
respectively. The effective tax rate related to the reported non-operating
foreign currency exchange gains and losses varies depending on the
jurisdictions in which such gains and losses are generated and the
statutory rates applicable in those jurisdictions. |
| 4 | In May 2016, our principal
operating subsidiary in India repurchased shares from its shareholders,
which are non-Indian Cognizant entities, valued at $2.8 billion. As a
result of this transaction, we incurred an incremental 2016 income tax
expense of $238 million. |

Forward-Looking Statements

This proxy statement, and the letter to stockholders included with this proxy statement, include statements that may constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, expectations regarding growth trends and enhancing stockholder value, plans to accelerate our investments and improve non-GAAP Operating Margin, and anticipated share repurchases and dividends, the accuracy of which are necessarily subject to risks, uncertainties, and assumptions as to future events that may not prove to be accurate. These statements are neither promises nor guarantees, but are subject to a variety of risks and uncertainties, many of which are beyond the Company’s control, which could cause actual results to differ materially from those contemplated in these forward-looking statements. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Factors that could cause actual results to differ materially from those expressed or implied include general economic conditions, changes in the regulatory environment, including with respect to immigration and taxes, and the other factors discussed in the Company’s most recent Annual Report on Form 10-K and other filings with the SEC. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required under applicable securities law.

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APPENDIX A

COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION 2017 INCENTIVE AWARD PLAN

ARTICLE 1. PURPOSE

The purpose of the Cognizant Technology Solutions 2017 Incentive Award Plan (as it may be amended or restated from time to time, the “ Plan ”) is to promote the success and enhance the value of Cognizant Technology Solutions Corporation (the “ Company ”) by linking the individual interests of the members of the Board, Employees, and Consultants to those of Company stockholders and by providing such individuals with an incentive for outstanding performance to generate superior returns to Company stockholders. The Plan is further intended to provide flexibility to the Company in its ability to motivate, attract, and retain the services of members of the Board, Employees, and Consultants upon whose judgment, interest, and special effort the successful conduct of the Company’s operation is largely dependent.

ARTICLE 2. DEFINITIONS AND CONSTRUCTION

Wherever the following terms are used in the Plan they shall have the meanings specified below, unless the context clearly indicates otherwise. The singular pronoun shall include the plural where the context so indicates.

| 2.1 | “ Administrator ” shall mean the entity that conducts the
general administration of the Plan as provided in Article 12. With
reference to the duties of the Committee under the Plan which have been
delegated to one or more persons pursuant to Section 12.6, or as to which
the Board has assumed, the term “Administrator” shall refer to such
person(s) unless the Committee or the Board has revoked such delegation or
the Board has terminated the assumption of such duties. |
| --- | --- |
| 2.2 | “ Applicable Accounting Standards ” shall mean Generally
Accepted Accounting Principles in the United States, International
Financial Reporting Standards or such other accounting principles or
standards as may apply to the Company’s financial statements under United
States federal securities laws from time to time. |
| 2.3 | “ Applicable Law ” shall mean any applicable law,
including without limitation: (a) provisions of the Code, the Securities
Act, the Exchange Act and any rules or regulations thereunder; (b)
corporate, securities, tax or other laws, statutes, rules, requirements or
regulations, whether federal, state, local or foreign; and (c) rules of
any securities exchange or automated quotation system on which the Shares
are listed, quoted or traded. |
| 2.4 | “ Automatic Exercise Date ” shall mean, with respect to an
Option or a Stock Appreciation Right, the last business day of the
applicable Option Term or Stock Appreciation Right Term that was initially
established by the Administrator for such Option or Stock Appreciation
Right ( e.g., the last business day prior to the tenth anniversary of the date of
grant of such Option or Stock Appreciation Right if the Option or Stock
Appreciation Right initially had a ten-year Option Term or Stock
Appreciation Right Term, as applicable). |
| 2.5 | “ Award ” shall mean an Option, a Stock Appreciation
Right, a Restricted Stock award, a Restricted Stock Unit award, an Other
Stock or Cash Based Award or a Dividend Equivalent award, which may be
awarded or granted under the Plan. |
| 2.6 | “ Award Agreement ” shall mean any written notice,
agreement, terms and conditions, contract or other instrument or document
evidencing an Award, including through electronic medium, which shall
contain such terms and conditions with respect to an Award as the
Administrator shall determine consistent with the Plan. |

| 2.7 — 2.8 | “ Award Limit ” shall mean with
respect to Awards that shall be payable in Shares or in cash, as the case
may be, the respective limit set forth in Section 3.2. — “ Board ” shall mean the Board of
Directors of the Company. | | |
| --- | --- | --- | --- |
| 2.9 | “ Change in Control ” shall mean and
includes each of the following: | | |
| | (a) | A transaction or series of
transactions (other than an offering of Common Stock to the general public
through a registration statement filed with the Securities and Exchange
Commission) whereby any “person” or related “group” of “persons” (as such
terms are used in Sections 13(d) and 14(d)(2) of the Exchange Act)
directly or indirectly acquires beneficial ownership (within the meaning
of Rules 13d-3 and 13d-5 under the Exchange Act) of securities of the
Company possessing more than 35% of the total combined voting power of the
Company’s securities outstanding immediately after such acquisition; provided , however , that the following acquisitions shall not constitute a
Change in Control: (i) any acquisition by the Company or any of its
Subsidiaries; (ii) any acquisition by an employee benefit plan maintained
by the Company or any of its Subsidiaries, (iii) any acquisition which
complies with Sections 2.9(c)(i), 2.9(c)(ii) and 2.9(c)(iii); or (iv) in
respect of an Award held by a particular Holder, any acquisition by the
Holder or any group of persons including the Holder (or any entity
controlled by the Holder or any group of persons including the Holder);
or | |
| | (b) | The Incumbent Directors cease for
any reason to constitute a majority of the Board; | |
| | (c) | The consummation by the Company
(whether directly involving the Company or indirectly involving the
Company through one or more intermediaries) of (x) a merger,
consolidation, reorganization, or business combination, (y) a sale or
other disposition of all or substantially all of the Company’s assets in
any single transaction or series of related transactions or (z) the
acquisition of assets or stock of another entity, in each case other than
a transaction: | |
| | | (i) | which results in the Company’s voting securities
outstanding immediately before the transaction continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the Company or the person that, as a result of the
transaction, controls, directly or indirectly, the Company or owns,
directly or indirectly, all or substantially all of the Company’s assets
or otherwise succeeds to the business of the Company (the Company or such
person, the “ Successor Entity ”)) directly or indirectly, at least a
majority of the combined voting power of the Successor Entity’s
outstanding voting securities immediately after the transaction,
and |

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		(ii) — (iii)
	(d)	Consummation of a completion of a liquidation or dissolution of the
Company.
	Notwithstanding the foregoing, if a Change in Control constitutes a
payment event with respect to any Award (or any portion of an Award) that
provides for the deferral of compensation that is subject to Section 409A,
to the extent required to avoid the imposition of additional taxes under
Section 409A, the transaction or event described in subsection (a), (b),
(c) or (d) with respect to such Award (or portion thereof) shall only
constitute a Change in Control for purposes of the payment timing of such
Award if such transaction also constitutes a “change in control event,” as
defined in Treasury Regulation Section 1.409A-3(i)(5).
	The Board
shall have full and final authority, which shall be exercised in its sole
discretion, to determine conclusively whether a Change in Control has
occurred pursuant to the above definition, the date of the occurrence of
such Change in Control and any incidental matters relating thereto;
provided that any exercise of authority in conjunction with a
determination of whether a Change in Control is a “change in control
event” as defined in Treasury Regulation Section 1.409A-3(i)(5) shall be
consistent with such regulation.
2.10	“ Code ”
shall mean the Internal Revenue Code of 1986, as amended from time to
time, together with the regulations and official guidance promulgated
thereunder, whether issued prior or subsequent to the grant of any
Award.
2.11	“ Committee ” shall mean the Compensation Committee of the Board, or
another committee or subcommittee of the Board or the Compensation
Committee of the Board described in Article 12 hereof.
2.12	“ Common
Stock ” shall mean the Class A common stock of the Company, par value $0.01
per share.
2.13	“ Company ”
shall have the meaning set forth in Article 1.
2.14	“ Consultant ” shall mean any consultant or adviser engaged to
provide services to the Company or any Subsidiary who qualifies as a
consultant or advisor under the applicable rules of the Securities and
Exchange Commission for registration of shares on a Form S-8 Registration
Statement.
2.15	“ Covered
Employee ” shall mean any Employee who is, or could become, a “covered
employee” within the meaning of Section 162(m) of the Code.
2.16	“ Director ” shall mean a member of the Board, as constituted from
time to time.
2.17	“ Director
Limit ” shall have the meaning set forth in Section 4.6.
2.18	“ Dividend
Equivalent ” shall mean a right to receive the equivalent value (in cash or
Shares) of dividends paid on Shares, awarded under Section
10.2.

| 2.19 | “ DRO ” shall mean a
“domestic relations order” as defined by the Code or Title I of the
Employee Retirement Income Security Act of 1974, as amended from time to
time, or the rules thereunder. | |
| --- | --- | --- |
| 2.20 | “ Effective Date ” shall
mean the date the Plan is adopted by the Board, subject to approval of the
Plan by the Company’s stockholders. | |
| 2.21 | “ Eligible Individual ”
shall mean any person who is an Employee, a Consultant or a Non-Employee
Director, as determined by the Administrator. | |
| 2.22 | “ Employee ” shall mean
any officer or other employee (as determined in accordance with Section
3401(c) of the Code and the Treasury Regulations thereunder) of the
Company or of any Subsidiary. | |
| 2.23 | “ Equity Restructuring ”
shall mean a nonreciprocal transaction between the Company and its
stockholders, such as a stock dividend, stock split, spin-off, rights
offering or recapitalization through a large, nonrecurring cash dividend,
that affects the number or kind of Shares (or other securities of the
Company) or the share price of Common Stock (or other securities) and
causes a change in the per-share value of the Common Stock underlying
outstanding Awards. | |
| 2.24 | “ Exchange Act ” shall
mean the Securities Exchange Act of 1934, as amended from time to
time. | |
| 2.25 | “ Expiration Date ” shall
have the meaning given to such term in Section 13.1(c). | |
| 2.26 | “ Fair Market Value ”
shall mean, as of any given date, the value of a Share determined as
follows: | |
| | (a) | If the Common Stock is (i) listed
on any established securities exchange (such as the New York Stock
Exchange, the NASDAQ Capital Market, the NASDAQ Global Market and the
NASDAQ Global Select Market), (ii) listed on any national market system or
(iii) quoted or traded on any automated quotation system, its Fair Market
Value shall be the closing sales price for a Share as quoted on such
exchange or system for such date or, if there is no closing sales price
for a Share on the date in question, the closing sales price for a Share
on the last preceding date for which such quotation exists, as reported in The Wall Street Journal or such other source as the Administrator deems
reliable; |
| | (b) | If the Common Stock is not listed
on an established securities exchange, national market system or automated
quotation system, but the Common Stock is regularly quoted by a recognized
securities dealer, its Fair Market Value shall be the mean of the high bid
and low asked prices for such date or, if there are no high bid and low
asked prices for a Share on such date, the high bid and low asked prices
for a Share on the last preceding date for which such information exists,
as reported in The Wall Street Journal or such other source as the
Administrator deems reliable; or |
| | (c) | If the Common Stock is neither
listed on an established securities exchange, national market system or
automated quotation system nor regularly quoted by a recognized securities
dealer, its Fair Market Value shall be established by the Administrator in
good faith. |
| 2.27 | “ Full Value Award ”
shall mean any Award that is settled in Shares other than: (a) an Option,
(b) a Stock Appreciation Right or (c) any other Award for which the Holder
pays the intrinsic value existing as of the date of grant (whether
directly or by forgoing a right to receive a payment from the Company or
any Subsidiary). | |

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| 2.28 | “ Greater Than 10% Stockholder ” shall mean an
individual then owning (within the meaning of Section 424(d) of the Code)
more than 10% of the total combined voting power of all classes of stock
of the Company or any subsidiary corporation (as defined in Section 424(f)
of the Code) or parent corporation thereof (as defined in Section 424(e)
of the Code). |
| --- | --- |
| 2.29 | “ Holder ” shall mean a person who has been granted
an Award. |
| 2.30 | “ Incentive Stock Option ” shall mean an Option that is
intended to qualify as an incentive stock option and conforms to the
applicable provisions of Section 422 of the Code. |
| 2.31 | “ Incumbent Directors ” shall mean for any period of 12
consecutive months, individuals who, at the beginning of such period,
constitute the Board together with any new Director(s) (other than a
Director designated by a person who shall have entered into an agreement
with the Company to effect a transaction described in Section 2.9(a) or
2.9(c)) whose election or nomination for election to the Board was
approved by a vote of at least a majority (either by a specific vote or by
approval of the proxy statement of the Company in which such person is
named as a nominee for Director without objection to such nomination) of
the Directors then still in office who either were Directors at the
beginning of the 12-month period or whose election or nomination for
election was previously so approved. No individual initially elected or
nominated as a director of the Company as a result of an actual or
threatened election contest with respect to Directors or as a result of
any other actual or threatened solicitation of proxies by or on behalf of
any person other than the Board shall be an Incumbent
Director. |
| 2.32 | “ Non-Employee Director ” shall mean a Director of the
Company who is not an Employee. |
| 2.33 | “ Non-Employee Director Equity Compensation Policy ” shall
have the meaning set forth in Section 4.6. |
| 2.34 | “ Non-Qualified Stock Option ” shall mean an Option that
is not an Incentive Stock Option or which is designated as an Incentive
Stock Option but does not meet the applicable requirements of Section 422
of the Code. |
| 2.35 | “ Option ” shall mean a right to purchase Shares at a
specified exercise price, granted under Article 6. An Option shall be
either a Non-Qualified Stock Option or an Incentive Stock Option; provided , however , that Options granted to Non-Employee Directors and
Consultants shall only be Non-Qualified Stock Options. |
| 2.36 | “ Option Term ” shall have the meaning set forth in
Section 6.4. |
| 2.37 | “ Organizational Documents ” shall mean, collectively, (a)
the Company’s articles of incorporation, certificate of incorporation,
bylaws or other similar organizational documents relating to the creation
and governance of the Company, and (b) the Committee’s charter or other
similar organizational documentation relating to the creation and
governance of the Committee. |
| 2.38 | “ Other Stock or Cash Based Award ” shall mean a cash
payment, cash bonus award, stock payment, stock bonus award, performance
award or incentive award that is paid in cash, Shares or a combination of
both, awarded under Section 10.1, which may include, without limitation,
deferred stock, deferred stock units, retainers, committee fees, and
meeting-based fees. |
| 2.39 | “ Performance-Based Compensation ” shall mean any
compensation that is intended to qualify as “performance-based
compensation” as described in Section 162(m)(4)(C) of the
Code. |
| 2.40 | “ Performance Criteria ” shall mean the criteria (and
adjustments) that the Administrator selects for an Award for purposes of
establishing the Performance Goal or Performance Goals for a Performance
Period, determined as follows: |

| (a) | The Performance Criteria that shall
be used to establish Performance Goals are limited to the following: (i)
revenue or revenue growth, (ii) operating or net income, (iii) operating
or net income before acquisition related charges, net non-operating
foreign currency exchange gains or losses and/or charges for stock-based
compensation and any taxes or fringe benefits incurred by the Company in
settlement of stock-based awards, (iv) operating or net income before
interest, taxes, depreciation, amortization and/or charges for stock-based
compensation and any taxes or fringe benefits incurred by the Company in
settlement of stock-based-awards, (v) gross, operating or net profit
margin, (vi) gross, operating or net profit margin before acquisition
related charges, net non-operating foreign currency exchange gains or
losses and/or charges for stock-based compensation and any taxes or fringe
benefits incurred by the Company in settlement of stock-based awards,
(vii) earnings per share, either before or after acquisition related
charges, net non-operating foreign currency exchange gains or losses
and/or charges for stock-based compensation and any taxes or fringe
benefits incurred by the Company in settlement of stock-based awards,
(viii) return on assets, capital or stockholder equity, (ix) total
stockholder return, (x) cash flow, (xi) measures in terms of days sales
outstanding or accounts receivable outstanding, (xii) working capital,
(xiii) market share, (xiv) increases in customer base, (xv) cost
reductions or other expense control objectives, (xvi) market price of the
Common Stock, whether measured in absolute terms or in relationship to
earnings or operating income or in relation to various stock market or
industry indices, (xvii) budget objectives, (xviii) working capital, (xix)
mergers, acquisitions or divestitures, (xx) measures of customer
satisfaction, (xxi) productivity measures, (xxii) funds from operations,
(xxiii) operating efficiency, or (xxiv) economic value-added models, any
of which may be measured either in absolute terms or as compared to any
incremental increase or decrease or as compared to results of a peer group
or to market performance indicators or indices. |
| --- | --- |
| (b) | The Administrator, in its sole
discretion, may provide that one or more objectively determinable
adjustments shall be made to one or more of the Performance Goals. Such
adjustments may include, but are not limited to, one or more of the
following: (i) items related to a change in Applicable Accounting
Standards; (ii) items relating to financing activities; (iii) expenses for
restructuring or productivity initiatives; (iv) other non-operating items;
(v) items related to acquisitions; (vi) items attributable to the business
operations of any entity acquired by the Company during the Performance
Period; (vii) items related to the sale or disposition of a business or
segment of a business; (viii) items related to discontinued operations
that do not qualify as a segment of a business under Applicable Accounting
Standards; (ix) items attributable to any stock dividend, stock split,
combination or exchange of stock occurring during the Performance Period;
(x) any other items of significant income or expense which are determined
to be appropriate adjustments; (xi) items relating to unusual or
infrequent corporate transactions, events or developments, (xii) items
related to amortization of acquired intangible assets; (xiii) items that
are outside the scope of the Company’s core, on-going business activities;
(xiv) items related to acquired in-process research and development; (xv)
items relating to changes in tax laws; (xvi) items relating to major
licensing or partnership arrangements; |

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| 2.41 | “ Performance Goals ”
shall mean, for a Performance Period, one or more goals established in
writing by the Administrator for the Performance Period based upon one or
more Performance Criteria. Depending on the Performance Criteria used to
establish such Performance Goals, the Performance Goals may be expressed
in terms of overall Company performance or the performance of a
Subsidiary, division, business unit, or an individual. The achievement of
each Performance Goal shall be determined, to the extent applicable, with
reference to Applicable Accounting Standards. |
| --- | --- |
| 2.42 | “ Performance Period ”
shall mean one or more periods of time, which may be of varying and
overlapping durations, as the Administrator may select, over which the
attainment of one or more Performance Goals will be measured for the
purpose of determining a Holder’s right to, vesting of, and/or the payment
in respect of, an Award. |
| 2.43 | “ Permitted Transferee ”
shall mean, with respect to a Holder, any “family member” of the Holder,
as defined in the General Instructions to Form S-8 Registration Statement
under the Securities Act (or any successor form thereto), or any other
transferee specifically approved by the Administrator after taking into
account Applicable Law. |
| 2.44 | “ Plan ” shall have the
meaning set forth in Article 1. |
| 2.45 | “ Prior Plan ” shall mean
the Cognizant Technology Solutions Corporation Amended and Restated 2009
Incentive Compensation Plan, as such plan may be amended from time to
time. |
| 2.46 | “ Program ” shall mean
any program adopted by the Administrator pursuant to the Plan containing
the terms and conditions intended to govern a specified type of Award
granted under the Plan and pursuant to which such type of Award may be
granted under the Plan. |
| 2.47 | “ Restricted Stock ”
shall mean Common Stock awarded under Article 8 that is subject to certain
restrictions and may be subject to risk of forfeiture or
repurchase. |
| 2.48 | “ Restricted Stock
Units ” shall mean the right to receive Shares awarded under Article
9. |
| 2.49 | “ Section 409A ” shall
mean Section 409A of the Code and the Department of Treasury regulations
and other interpretive guidance issued thereunder, including, without
limitation, any such regulations or other guidance that may be issued
after the Effective Date. |
| 2.50 | “ Securities Act ” shall
mean the Securities Act of 1933, as amended. |
| 2.51 | “ Shares ” shall mean
shares of Common Stock. |
| 2.52 | “ Stock Appreciation
Right ” shall mean an Award entitling the Holder (or other person entitled
to exercise pursuant to the Plan) to exercise all or a specified portion
thereof (to the extent then exercisable pursuant to its terms) and to
receive from the Company an amount determined by multiplying the
difference obtained by subtracting the exercise price per share of such
Award from the Fair Market Value on the date of exercise of such Award by
the number of Shares with respect to which such Award shall have been
exercised, subject to any limitations the Administrator may
impose. |

| 2.53 | “ SAR
Term ” shall have the meaning set forth in Section 6.4. | |
| --- | --- | --- |
| 2.54 | “ Subsidiary ” shall mean any entity (other than the Company),
whether domestic or foreign, in an unbroken chain of entities beginning
with the Company if each of the entities other than the last entity in the
unbroken chain beneficially owns, at the time of the determination,
securities or interests representing at least fifty percent (50%) of the
total combined voting power of all classes of securities or interests in
one of the other entities in such chain. | |
| 2.55 | “ Substitute Award ” shall mean an Award granted under the Plan in
connection with a corporate transaction, such as a merger, combination,
consolidation or acquisition of property or stock, in any case, upon the
assumption of, or in substitution for, outstanding equity awards
previously granted by a company or other entity; provided , however , that
in no event shall the term “Substitute Award” be construed to refer to an
award made in connection with the cancellation and repricing of an Option
or Stock Appreciation Right. | |
| 2.56 | “ Termination of Service ” shall mean: | |
| | (a) | As to a Consultant, the time when
the engagement of a Holder as a Consultant to the Company or a Subsidiary
is terminated for any reason, with or without cause, including, without
limitation, by resignation, discharge, death or retirement, but excluding
terminations where the Consultant simultaneously commences or remains in
employment or service with the Company or any Subsidiary. |
| | (b) | As to a Non-Employee Director,
the time when a Holder who is a Non-Employee Director ceases to be a
Director for any reason, including, without limitation, a termination by
resignation, failure to be elected, death or retirement, but excluding
terminations where the Holder simultaneously commences or remains in
employment or service with the Company or any Subsidiary. |
| | (c) | As to an Employee, the time when
the employee-employer relationship between a Holder and the Company or
any Subsidiary is terminated for any reason, including, without
limitation, a termination by resignation, discharge, death, disability or
retirement; but excluding terminations where the Holder simultaneously
commences or remains in employment or service with the Company or any
Subsidiary. |
| | The Administrator, in
its sole discretion, shall determine the effect of all matters and
questions relating to any Termination of Service, including, without
limitation, whether a Termination of Service has occurred, whether a
Termination of Service resulted from a discharge for cause and all
questions of whether particular leaves of absence constitute a Termination
of Service; provided, however, that, with respect to Incentive Stock
Options, unless the Administrator otherwise provides in the terms of any
Program, Award Agreement or otherwise, or as otherwise required by
Applicable Law, a leave of absence, change in status from an employee to
an independent contractor or other change in the employee-employer
relationship shall constitute a Termination of Service only if, and to the
extent that, such leave of absence, change in status or other change
interrupts employment for the purposes of Section 422(a)(2) of the Code
and the then-applicable regulations and revenue rulings
under | |

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said Section. For purposes of the Plan, a Holder’s employee-employer relationship or consultancy relations shall be deemed to be terminated in the event that the Subsidiary employing or contracting with such Holder ceases to remain a Subsidiary following any merger, sale of stock or other corporate transaction or event (including, without limitation, a spin-off).

ARTICLE 3. SHARES SUBJECT TO THE PLAN

3.1
(a)	Subject to adjustment as provided in Section 3.1(b) and
Section 13.2, a total of 53,000,000 Shares shall be authorized for grant
under the Plan (including, without limitation, pursuant to Incentive Stock
Options). Any Shares that are subject to Awards other than Full Value
Awards shall be counted against this limit as one (1) Share for every one
(1) Share granted. Any Shares that are subject to Full Value Awards shall
be counted against this limit as two (2) Shares for every one (1) Share
granted. After the Effective Date, no awards may be granted under the
Prior Plan, however, any awards under the Prior Plan that are outstanding
as of the Effective Date shall continue to be subject to the terms and
conditions of such Prior Plan. Any Shares distributed pursuant to an Award
may consist, in whole or in part, of authorized and unissued Common Stock,
treasury Common Stock or Common Stock purchased on the open
market.
(b)	If (i) any Shares subject to an Award are forfeited or
expire or are converted to shares of another Person in connection with a
spin-off or other similar event, or an Award is settled for cash (in whole
or in part), or (ii) after the Effective Date, any Shares subject to an
award under the Prior Plan are forfeited or expire or are converted to
shares of another Person in connection with a spin-off or other similar
event, or an award under the Prior Plan is settled for cash (in whole or
in part) (including in each case Shares repurchased by the Company under
Section 8.4 at the same price paid by the Holder), the Shares subject to
such Award or award under the Prior Plan shall, to the extent of such
forfeiture, expiration, conversion or cash settlement, again be available
for future grants of Awards under the Plan, in accordance with Section
3.1(d) below. Notwithstanding anything to the contrary contained herein,
the following Shares shall not be added to the Shares authorized for grant
under Section 3.1(a) and shall not be available for future grants of
Awards: (i) Shares tendered by a Holder or withheld by the Company in
payment of the exercise price of an Option; (ii) Shares tendered by the
Holder or withheld by the Company to satisfy any tax withholding obligation
with respect to an Award; (iii) Shares subject to a Stock Appreciation
Right that are not issued in connection with the stock settlement of the
Stock Appreciation Right on exercise thereof; and (iv) Shares purchased by
the Company on the open market with the cash proceeds received from the
exercise of Options. The payment of Dividend Equivalents in cash in
conjunction with any outstanding Awards shall not be counted against the
Shares available for issuance under the Plan. Notwithstanding the
provisions of this Section 3.1(b), no Shares may again be optioned,
granted or awarded if such action would cause an Incentive Stock Option to
fail to qualify as an incentive stock option under Section 422 of the
Code.
(c)	Substitute Awards shall not reduce the Shares authorized
for grant under the Plan, except as may be required by reason of Section
422 of the Code. Additionally, in the event that a company acquired by the Company or any Subsidiary or with which the
Company or any Subsidiary combines has shares available under a
pre-existing plan approved by stockholders and not adopted in
contemplation of such acquisition or combination, the shares available for
grant pursuant to the terms of such pre-existing plan (as adjusted, to the
extent appropriate, using the exchange ratio or other adjustment or
valuation ratio or formula used in such acquisition or combination to
determine the consideration payable to the holders of common stock of the
entities party to such acquisition or combination) may be used for Awards
under the Plan and shall not reduce the Shares authorized for grant under
the Plan; provided that Awards using such available Shares shall not be
made after the date awards or grants could have been made under the terms
of the pre-existing plan, absent the acquisition or combination, and shall
only be made to individuals who were not employed by or providing services
to the Company or its Subsidiaries immediately prior to such acquisition
or combination.

	(d)
3.2	Limitation on Number of
Shares Subject to Awards . Notwithstanding any provision in the Plan to the
contrary, and subject to Section 13.2, the maximum aggregate number of
Shares with respect to one or more Awards other than Full Value Awards
that may be granted to any one person during any calendar year shall be
3,000,000; the maximum aggregate number of Shares with respect to one or
more Full Value Awards that may be granted to any one person during any
calendar year shall be 2,000,000; and the maximum aggregate amount of cash
that may be paid in cash to any one person during any calendar year with
respect to one or more Awards payable in cash shall be $10,000,000. To the
extent required by Section 162(m) of the Code, Shares subject to Awards
which are canceled shall continue to be counted against the Award
Limit.

ARTICLE 4. GRANTING OF AWARDS

| 4.1 | Participation . The Administrator
may, from time to time, select from among all Eligible Individuals, those
to whom an Award shall be granted and shall determine the nature and
amount of each Award, which shall not be inconsistent with the
requirements of the Plan. Except for any Non-Employee Director’s right to
Awards that may be required pursuant to the Non-Employee Director Equity
Compensation Policy as described in Section 4.6, no Eligible Individual or
other Person shall have any right to be granted an Award pursuant to the
Plan and neither the Company nor the Administrator is obligated to treat
Eligible Individuals, Holders or any other persons uniformly.
Participation by each Holder in the Plan shall be voluntary and nothing in
the Plan or any Program shall be construed as mandating that any Eligible
Individual or other Person shall participate in the Plan. |
| --- | --- |
| 4.2 | Award Agreement . Each Award shall
be evidenced by an Award Agreement that sets forth the terms, conditions
and limitations for such Award as determined by the Administrator in its
sole discretion (consistent with the requirements of the Plan and any
applicable Program). Award Agreements evidencing Awards intended to
qualify as Performance-Based Compensation shall contain such terms and
conditions as may be necessary to meet the applicable provisions of
Section 162(m) of the Code. Award |

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| 4.3 | Agreements evidencing Incentive
Stock Options shall contain such terms and conditions as may be necessary
to meet the applicable provisions of Section 422 of the
Code. — Limitations Applicable to Section 16 Persons . Notwithstanding any
other provision of the Plan, the Plan, and any Award granted or awarded to
any individual who is then subject to Section 16 of the Exchange Act,
shall be subject to any additional limitations set forth in any applicable
exemptive rule under Section 16 of the Exchange Act (including Rule 16b-3
of the Exchange Act and any amendments thereto) that are requirements for
the application of such exemptive rule. To the extent permitted by
Applicable Law, the Plan and Awards granted or awarded hereunder shall be
deemed amended to the extent necessary to conform to such applicable
exemptive rule. | |
| --- | --- | --- |
| 4.4 | No Impact
on Employment Rights . Nothing in the Plan or in any Program or Award
Agreement hereunder shall confer upon any Holder any right to continue in
the employ of, or as a Director or Consultant for, the Company or any
Subsidiary, or shall interfere with or restrict in any way the rights of
the Company and any Subsidiary, which rights are hereby expressly
reserved, to discharge any Holder at any time for any reason whatsoever,
with or without cause, and with or without notice, or to terminate or
change all other terms and conditions of employment or engagement, except
to the extent expressly provided otherwise in a written agreement between
the Holder and the Company or any Subsidiary. | |
| 4.5 | Foreign
Holders . Notwithstanding any provision of the Plan or applicable Program
to the contrary, in order to comply with the laws in countries other than
the United States in which the Company and its Subsidiaries operate or
have Employees, Non-Employee Directors or Consultants, or in order to
comply with the requirements of any foreign securities exchange or other
Applicable Law, the Administrator, in its sole discretion, shall have the
power and authority to: (a) determine which Subsidiaries shall be covered
by the Plan; (b) determine which Eligible Individuals outside the United
States are eligible to participate in the Plan; (c) modify the terms and
conditions of any Award granted to Eligible Individuals outside the United
States to comply with Applicable Law (including, without limitation,
applicable foreign laws or listing requirements of any foreign securities
exchange); (d) establish sub-plans and modify exercise procedures and
other terms and procedures, to the extent such actions may be necessary or
advisable; provided , however , that no such sub-plans and/or modifications
shall increase the share limitation contained in Section 3.1, the Award
Limit or the Director Limit; and (e) take any action, before or after an
Award is made, that it deems advisable to obtain approval or comply with
any necessary local governmental regulatory exemptions or approvals or
listing requirements of any foreign securities exchange. | |
| 4.6 | Non-Employee Director Awards . | |
| | (a) | Non-Employee Director
Equity Compensation Policy . The Administrator, in its sole discretion, may
provide that Awards granted to Non-Employee Directors shall be granted
pursuant to a written nondiscretionary formula established by the
Administrator (the “ Non-Employee Director Equity Compensation Policy ”),
subject to the limitations of the Plan. The Non-Employee Director Equity
Compensation Policy shall set forth the type of Award(s) to be granted to
Non-Employee Directors, the number of Shares to be subject to Non-Employee
Director Awards, the conditions on which such Awards shall be granted,
become exercisable and/or payable and expire, and such other terms and
conditions as the Administrator shall determine in its sole discretion.
The Non-Employee Director Equity Compensation Policy may be modified by
the Administrator from time to time in its sole discretion. |

(b) Director Limit . Notwithstanding any provision to the contrary in the Plan or in the Non-Employee Director Equity Compensation Policy, the sum of the grant date fair value of equity-based Awards and the amount of any cash-based Awards granted to a Non-Employee Director during any calendar year shall not exceed $900,000 (the “ Director Limit ”).

ARTICLE 5. PROVISIONS APPLICABLE TO AWARDS INTENDED TO QUALIFY AS PERFORMANCE-BASED COMPENSATION

| 5.1 | Purpose . The
Administrator may, in its sole discretion, (a) determine whether an Award
is intended to qualify as Performance-Based Compensation and (b) at any
time after any such determination, alter such intent for any or no reason.
If the Administrator, in its sole discretion, decides to grant an Award
that is intended to qualify as Performance-Based Compensation (other than
an Option or Stock Appreciation Right), then the provisions of this
Article 5 shall control over any contrary provision contained in the Plan
or any applicable Program; provided that, if after such decision the
Administrator alters such intention for any reason, the provisions of this
Article 5 shall no longer control over any other provision contained in
the Plan or any applicable Program. The Administrator, in its sole
discretion, may (i) grant Awards to Eligible Individuals that are based on
Performance Criteria or Performance Goals or any such other criteria and
goals as the Administrator shall establish, but that do not satisfy the
requirements of this Article 5 and that are not intended to qualify as
Performance- Based Compensation and (ii) subject any Awards intended to
qualify as Performance-Based Compensation to additional conditions and
restrictions unrelated to any Performance Criteria or Performance Goals
(including, without limitation, continued employment or service
requirements) to the extent such Awards otherwise satisfy the requirements
of this Article 5 with respect to the Performance Criteria and Performance
Goals applicable thereto. Unless otherwise specified by the Administrator
at the time of grant, the Performance Criteria with respect to an Award
intended to be Performance-Based Compensation payable to a Covered
Employee shall be determined on the basis of Applicable Accounting
Standards. |
| --- | --- |
| 5.2 | Procedures with Respect
to Performance-Based Awards . To the extent necessary to comply with the
requirements of Section 162(m)(4)(C) of the Code, with respect to any
Award which is intended to qualify as Performance-Based Compensation, no
later than 90 days following the commencement of any Performance Period or
any designated fiscal period or period of service (or such earlier time as
may be required under Section 162(m) of the Code), the Administrator
shall, in writing, (a) designate one or more Eligible Individuals, (b)
select the Performance Criteria applicable to the Performance Period, (c)
establish the Performance Goals, and amounts of such Awards, as
applicable, which may be earned for such Performance Period based on the
Performance Criteria, and (d) specify the relationship between Performance
Criteria and the Performance Goals and the amounts of such Awards, as
applicable, to be earned by each Covered Employee for such Performance
Period. Following the completion of each Performance Period, the
Administrator shall certify in writing whether and the extent to which the
applicable Performance Goals have been achieved for such Performance
Period. In determining the amount earned under such Awards, the
Administrator (i) shall, unless otherwise provided in an Award Agreement,
have the right to reduce or eliminate the amount payable at a given level
of performance to take into account additional factors that the
Administrator may deem relevant, including the assessment of individual or
corporate |

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| | performance for the Performance
Period, but (ii) shall in no event have the right to increase the amount
payable for any reason. |
| --- | --- |
| 5.3 | Payment of Performance-Based
Awards . Unless otherwise provided in the applicable Program or Award
Agreement and only to the extent otherwise permitted by Section 162(m) of
the Code, as to an Award that is intended to qualify as Performance-Based
Compensation, the Holder must be employed by the Company or a Subsidiary
throughout the Performance Period. Unless otherwise provided in the
applicable Program or Award Agreement, a Holder shall be eligible to
receive payment pursuant to such Awards for a Performance Period only if
and to the extent the Performance Goals for such Performance Period are
achieved. |
| 5.4 | Additional Limitations .
Notwithstanding any other provision of the Plan and except as otherwise
determined by the Administrator, any Award which is granted to an Eligible
Individual and is intended to qualify as Performance-Based Compensation
shall be subject to any additional limitations set forth in Section 162(m)
of the Code or any regulations or rulings issued thereunder that are
requirements for qualification as Performance-Based Compensation, and the
Plan and the applicable Program and Award Agreement shall be deemed
amended to the extent necessary to conform to such
requirements. |

ARTICLE 6. GRANTING OF OPTIONS AND STOCK APPRECIATION RIGHTS

| 6.1 | Granting of Options and Stock
Appreciation Rights to Eligible Individuals . The Administrator is
authorized to grant Options and Stock Appreciation Rights to Eligible
Individuals from time to time, in its sole discretion, on such terms and
conditions as it may determine, which shall not be inconsistent with the
Plan. |
| --- | --- |
| 6.2 | Qualification of Incentive Stock
Options . The Administrator may grant Options intended to qualify as
Incentive Stock Options only to employees of the Company, any of the
Company’s present or future “parent corporations” or “subsidiary
corporations” as defined in Sections 424(e) or (f) of the Code,
respectively, and any other entities the employees of which are eligible
to receive Incentive Stock Options under the Code. No person who qualifies
as a Greater Than 10% Stockholder may be granted an Incentive Stock Option
unless such Incentive Stock Option conforms to the applicable provisions
of Section 422 of the Code. To the extent that the aggregate fair market
value of stock with respect to which “incentive stock options” (within the
meaning of Section 422 of the Code, but without regard to Section 422(d)
of the Code) are exercisable for the first time by a Holder during any
calendar year under the Plan, and all other plans of the Company and any
parent corporation or subsidiary corporation thereof (as defined in
Section 424(e) and 424(f) of the Code, respectively), exceeds $100,000,
the Options shall be treated as Non-Qualified Stock Options to the extent
required by Section 422 of the Code. The rule set forth in the immediately
preceding sentence shall be applied by taking Options and other “incentive
stock options” into account in the order in which they were granted and
the fair market value of stock shall be determined as of the time the
respective options were granted. Any interpretations and rules under the
Plan with respect to Incentive Stock Options shall be consistent with the
provisions of Section 422 of the Code. Neither the Company nor the
Administrator shall have any liability to a Holder, or any other Person,
(a) if an Option (or any part thereof) which is intended to qualify as an
Incentive Stock Option fails to qualify as an Incentive Stock Option or
(b) for any action or omission by the Company or the Administrator that
causes an Option not to qualify as an Incentive Stock Option, including
without limitation, the conversion of an Incentive Stock Option to a
Non- Qualified Stock Option or the grant of an
Option intended as an Incentive Stock Option that fails to satisfy the
requirements under the Code applicable to an Incentive Stock
Option. |

| 6.3 | Option and Stock
Appreciation Right Exercise Price . The exercise price per Share subject to
each Option and Stock Appreciation Right shall be set by the
Administrator, but shall not be less than 100% of the Fair Market Value of
a Share on the date the Option or Stock Appreciation Right, as applicable,
is granted (or, as to Incentive Stock Options, on the date the Option is
modified, extended or renewed for purposes of Section 424(h) of the Code).
In addition, in the case of Incentive Stock Options granted to a Greater
Than 10% Stockholder, such price shall not be less than 110% of the Fair
Market Value of a Share on the date the Option is granted (or the date the
Option is modified, extended or renewed for purposes of Section 424(h) of
the Code). Notwithstanding the foregoing, in the case of an Option or
Stock Appreciation Right that is a Substitute Award, the exercise price
per share of the Shares subject to such Option or Stock Appreciation
Right, as applicable, may be less than the Fair Market Value per share on
the date of grant; provided that the exercise price of any Substitute
Award shall be determined in accordance with the applicable requirements
of Section 424 and 409A of the Code. |
| --- | --- |
| 6.4 | Option and SAR Term .
The term of each Option (the “ Option Term ”) and the term of each Stock
Appreciation Right (the “ SAR Term ”) shall be set by the Administrator in
its sole discretion; provided , however , that the Option Term or SAR Term,
as applicable, shall not be more than (a) ten (10) years from the date the
Option or Stock Appreciation Right, as applicable, is granted to an
Eligible Individual (other than, in the case of Incentive Stock Options, a
Greater Than 10% Stockholder), or (b) five (5) years from the date an
Incentive Stock Option is granted to a Greater Than 10% Stockholder.
Except as limited by the requirements of Section 409A or Section 422 of
the Code and regulations and rulings thereunder or the first sentence of
this Section 6.4 and without limiting the Company’s rights under Section
11.7, the Administrator may extend the Option Term of any outstanding
Option or the SAR Term of any outstanding Stock Appreciation Right, and
may extend the time period during which vested Options or Stock
Appreciation Rights may be exercised, in connection with any Termination
of Service of the Holder or otherwise, and may amend, subject to Section
11.7 and 13.1, any other term or condition of such Option or Stock
Appreciation Right relating to such Termination of Service of the Holder
or otherwise. |
| 6.5 | Option and SAR Vesting .
The period during which the right to exercise, in whole or in part, an
Option or Stock Appreciation Right vests in the Holder shall be set by the
Administrator and set forth in the applicable Award Agreement. Unless
otherwise determined by the Administrator in the Award Agreement, the
applicable Program or by action of the Administrator following the grant
of the Option or Stock Appreciation Right, (a) no portion of an Option or
Stock Appreciation Right which is unexercisable at a Holder’s Termination
of Service shall thereafter become exercisable and (b) the portion of an
Option or Stock Appreciation Right that is unexercisable at a Holder’s
Termination of Service shall automatically expire thirty (30) days
following such Termination of Service. |
| 6.6 | Substitution of Stock
Appreciation Rights; Early Exercise of Options . The Administrator may
provide in the applicable Program or Award Agreement evidencing the grant
of an Option that the Administrator, in its sole discretion, shall have
the right to substitute a Stock Appreciation Right for such Option at any
time prior to or upon exercise of such Option; provided that such Stock
Appreciation Right shall be exercisable with respect to the same number of
Shares for which such substituted Option would have been exercisable, and
shall also |

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have the same exercise price, vesting schedule and remaining term as the substituted Option. The Administrator may provide in the terms of an Award Agreement that the Holder may exercise an Option in whole or in part prior to the full vesting of the Option in exchange for unvested shares of Restricted Stock with respect to any unvested portion of the Option so exercised. Shares of Restricted Stock acquired upon the exercise of any unvested portion of an Option shall be subject to such terms and conditions as the Administrator shall determine.

ARTICLE 7. EXERCISE OF OPTIONS AND STOCK APPRECIATION RIGHTS

| 7.1 | Exercise and Payment . An
exercisable Option or Stock Appreciation Right may be exercised in whole
or in part. However, an Option or Stock Appreciation Right shall not be
exercisable with respect to fractional Shares and the Administrator may
require that, by the terms of the Option or Stock Appreciation Right, a
partial exercise must be with respect to a minimum number of Shares.
Payment of the amounts payable with respect to Stock Appreciation Rights
pursuant to this Article 7 shall be in cash, Shares (based on its Fair
Market Value as of the date the Stock Appreciation Right is exercised), or
a combination of both, as determined by the Administrator. | |
| --- | --- | --- |
| 7.2 | Manner of Exercise . Except as set
forth in Section 7.3, all or a portion of an exercisable Option or Stock
Appreciation Right shall be deemed exercised upon delivery of all of the
following to the Secretary of the Company, the stock plan administrator of
the Company or such other person or entity designated by the
Administrator, or his, her or its office, as applicable: | |
| | (a) | A written or electronic notice complying with the
applicable rules established by the Administrator stating that the Option
or Stock Appreciation Right, or a portion thereof, is exercised. The
notice shall be signed or otherwise acknowledged electronically by the
Holder or other person then entitled to exercise the Option or Stock
Appreciation Right or such portion thereof; |
| | (b) | Such representations and documents as the Administrator,
in its sole discretion, deems necessary or advisable to effect compliance
with Applicable Law; |
| | (c) | In the event that the Option or Stock Appreciation Right
shall be exercised pursuant to Section 11.3 by any person or persons other
than the Holder, appropriate proof of the right of such person or persons
to exercise the Option or Stock Appreciation Right, as determined in the
sole discretion of the Administrator; and |
| | (d) | Full payment of the exercise price and applicable
withholding taxes for the Shares with respect to which the Option or Stock
Appreciation Right, or portion thereof, is exercised, in a manner
permitted by the Administrator in accordance with Sections 11.1 and
11.2. |
| 7.3 | Expiration of Option Term or SAR
Term: Automatic Exercise of In-The-Money Options and Stock Appreciation
Rights . Unless otherwise provided by the Administrator in an Award
Agreement or otherwise or as otherwise directed by an Option or Stock
Appreciation Rights Holder in writing to the Company, each vested and
exercisable Option and Stock Appreciation Right outstanding on the
Automatic Exercise Date with an exercise price per Share that is less than
the Fair Market Value per Share as of such date shall automatically and
without further action by the Option or Stock Appreciation Rights Holder
or the Company be exercised on the Automatic Exercise Date. In the sole
discretion of the Administrator, payment of the exercise price of any such
Option shall be made pursuant to Section 11.1(b) or 11.1(c) and the
Company or any Subsidiary shall be entitled to deduct or withhold an
amount sufficient to satisfy all taxes associated with such exercise in
accordance with Section 11.2. Unless otherwise determined by the
Administrator, this Section 7.3 shall not apply to an Option or Stock
Appreciation Right if the Holder of such Option or Stock Appreciation
Right incurs a Termination of Service on or before the Automatic Exercise
Date. For the avoidance of doubt, no Option or Stock Appreciation Right
with an exercise price per Share that is equal to or greater than the Fair
Market Value per Share on the Automatic Exercise Date shall be exercised
pursuant to this Section 7.3. | |

7.4 Notification Regarding Disposition . The Holder shall give the Company prompt written or electronic notice of any disposition of Shares acquired by exercise of an Incentive Stock Option which occurs within (a) two years from the date of granting (including the date the Option is modified, extended or renewed for purposes of Section 424(h) of the Code) such Option to such Holder, or (b) one year after the date of transfer of such Shares to such Holder. Such notice shall specify the date of such disposition or other transfer and the amount realized, in cash, other property, assumption of indebtedness or other consideration, by the Holder in such disposition or other transfer.

ARTICLE 8. AWARD OF RESTRICTED STOCK

| 8.1 | Award of Restricted Stock . The
Administrator is authorized to grant Restricted Stock to Eligible
Individuals, and shall determine the terms and conditions, including the
restrictions applicable to each award of Restricted Stock, which terms and
conditions shall not be inconsistent with the Plan or any applicable
Program, and may impose such conditions on the issuance of such Restricted
Stock as it deems appropriate. The Administrator shall establish the
purchase price, if any, and form of payment for Restricted Stock; provided , however , that if a purchase price is charged, such purchase price shall be no
less than the par value, if any, of the Shares to be purchased, unless
otherwise permitted by Applicable Law. In all cases, legal consideration
shall be required for each issuance of Restricted Stock to the extent
required by Applicable Law. |
| --- | --- |
| 8.2 | Rights as Stockholders . Subject
to Section 8.4, upon issuance of Restricted Stock, the Holder shall have,
unless otherwise provided by the Administrator, all the rights of a
stockholder with respect to said Shares, subject to the restrictions in
the Plan, any applicable Program and/or the applicable Award Agreement,
including the right to receive all dividends and other distributions paid
or made with respect to the Shares to the extent such dividends and other
distributions have a record date that is on or after the date on which the
Holder to whom such Shares are granted becomes the record holder of such
Restricted Stock; provided , however , that, in the sole discretion of the
Administrator, any dividends and distributions with respect to the Shares
may be subject to the restrictions set forth in Section 8.3. Without
limiting the foregoing, except in connection with a spin-off or other
similar event or as otherwise permitted in Section 13.2, dividends that
are paid prior to vesting of shares of Restricted Stock shall only be paid
to the applicable Holder to the extent that the vesting conditions are
subsequently satisfied and the shares of Restricted Stock
vest. |
| 8.3 | Restrictions . All shares of
Restricted Stock (including any shares received by Holders thereof with
respect to shares of Restricted Stock as a result of stock dividends,
stock splits or any other form of recapitalization) shall be subject to
such restrictions and vesting requirements as the Administrator shall
provide in the applicable Program or Award Agreement. By action taken
after the Restricted Stock is issued, the Administrator may, on such terms
and conditions as it may determine to be appropriate, accelerate the
vesting of such Restricted Stock by removing any or all of the
restrictions imposed by the terms of the applicable Program or Award
Agreement. |

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| 8.4 | Repurchase or Forfeiture of Restricted Stock . Except as
otherwise determined by the Administrator, if no price was paid by the
Holder for the Restricted Stock, upon a Termination of Service during the
applicable restriction period, the Holder’s rights in unvested Restricted
Stock then subject to restrictions shall lapse, and such Restricted Stock
shall be surrendered to the Company and cancelled without consideration on
the date of such Termination of Service. If a price was paid by the Holder
for the Restricted Stock, upon a Termination of Service during the
applicable restriction period, the Company shall have the right to
repurchase from the Holder the unvested Restricted Stock then subject to
restrictions at a cash price per share equal to the price paid by the
Holder for such Restricted Stock or such other amount as may be specified
in the applicable Program or Award Agreement. Notwithstanding the
foregoing, the Administrator, in its sole discretion, may provide that
upon certain events, including, without limitation, a Change in Control,
the Holder’s death, retirement or disability or any other specified
Termination of Service or any other event, the Holder’s rights in unvested
Restricted Stock then subject to restrictions shall not lapse, such
Restricted Stock shall vest and cease to be forfeitable and, if
applicable, the Company shall cease to have a right of
repurchase. |
| --- | --- |
| 8.5 | Section 83(b) Election . If a Holder makes an election
under Section 83(b) of the Code to be taxed with respect to the Restricted
Stock as of the date of transfer of the Restricted Stock rather than as of
the date or dates upon which the Holder would otherwise be taxable under
Section 83(a) of the Code, the Holder shall be required to deliver a copy
of such election to the Company promptly after filing such election with
the Internal Revenue Service along with proof of the timely filing thereof
with the Internal Revenue Service. |

ARTICLE 9. AWARD OF RESTRICTED STOCK UNITS

| 9.1 | Grant of Restricted Stock Units . The Administrator is
authorized to grant Awards of Restricted Stock Units to any Eligible
Individual selected by the Administrator in such amounts and subject to
such terms and conditions as determined by the Administrator. |
| --- | --- |
| 9.2 | Term . Except as otherwise provided herein, the term of a
Restricted Stock Unit award shall be set by the Administrator in its sole
discretion. |
| 9.3 | Purchase Price . The Administrator shall specify the
purchase price, if any, to be paid by the Holder to the Company with
respect to any Restricted Stock Unit award; provided , however , that the
value of the consideration shall not be less than the par value of a
Share, unless otherwise permitted by Applicable Law. |
| 9.4 | Vesting of Restricted Stock Units . At the time of grant,
the Administrator shall specify the date or dates on which the Restricted
Stock Units shall become fully vested and nonforfeitable, and may specify
such conditions to vesting as it deems appropriate, including, without
limitation, vesting based upon the Holder’s duration of service to the
Company or any Subsidiary, one or more Performance Criteria, Company
performance, individual performance or other specific criteria, in each
case on a specified date or dates or over any period or periods, as
determined by the Administrator. |
| 9.5 | Maturity and Payment . At the time of
grant, the Administrator shall specify the maturity date applicable to
each grant of Restricted Stock Units, which shall be no earlier than the
vesting date or dates of the Award and may be determined at the election
of the Holder (if permitted by the applicable Award Agreement); provided that, except as otherwise determined by the Administrator, and subject to
compliance with Section 409A, in no event shall the maturity date relating
to each Restricted Stock Unit occur following the later of (a) the
15 th day of the third month following the end of the calendar
year in which the applicable portion of the Restricted Stock Unit vests;
and (b) the 15 th day of the third month following the end of
the Company’s fiscal year in which the applicable portion of the
Restricted Stock Unit vests. On the maturity date, the Company shall, in
accordance with the applicable Award Agreement and subject to Section
11.4(f), transfer to the Holder one unrestricted, fully transferable Share
for each Restricted Stock Unit scheduled to be paid out on such date and
not previously forfeited, or in the sole discretion of the Administrator,
an amount in cash equal to the Fair Market Value of such Shares on the
maturity date or a combination of cash and Common Stock as determined by
the Administrator. For the avoidance of doubt, any Dividend Equivalents
granted in tandem with Restricted Stock Units subject to vesting that are
based on dividends paid prior to the vesting of such Restricted Stock
Units shall be paid out to the Holder only to the extent that the vesting
conditions are subsequently satisfied and the Restricted Stock Units
vest. |
| 9.6 | Payment upon Termination of Service . An Award of
Restricted Stock Units shall be payable only while the Holder is an
Employee, a Consultant or a member of the Board, as applicable; provided , however , that the Administrator, in its sole discretion, may provide (in
an Award Agreement or otherwise) that a Restricted Stock Unit award may be
paid subsequent to a Termination of Service in certain events, including a
Change in Control, the Holder’s death, retirement or disability or any
other specified Termination of Service. |

ARTICLE 10. AWARD OF OTHER STOCK OR CASH BASED AWARDS AND DIVIDEND EQUIVALENTS

| 10.1 | Other Stock or Cash
Based Awards . The Administrator is authorized to (a) grant Other Stock or
Cash Based Awards, including awards entitling a Holder to receive Shares
or cash to be delivered immediately or in the future, to any Eligible
Individual and (b) determine whether such Other Stock or Cash Based Awards
shall be Performance-Based Compensation. Subject to the provisions of the
Plan and any applicable Program, the Administrator shall determine the
terms and conditions of each Other Stock or Cash Based Award, including
the term of the Award, any exercise or purchase price, performance goals,
including the Performance Criteria, transfer restrictions, vesting
conditions and other terms and conditions applicable thereto, which shall
be set forth in the applicable Award Agreement. Other Stock or Cash Based
Awards may be paid in cash, Shares, or a combination of cash and Shares,
as determined by the Administrator, and may be available as a form of
payment in the settlement of other Awards granted under the Plan, as
stand-alone payments, as a part of a bonus, deferred bonus, deferred
compensation or other arrangement, and/or as payment in lieu of
compensation to which an Eligible Individual is otherwise entitled. Except
in connection with a spin-off or other similar event or as otherwise
permitted under Section 13.2, dividends that are paid prior to vesting of
a Other Stock or Cash Based Award shall only be paid to the applicable
Holder to the extent that the vesting conditions are subsequently
satisfied and the Other Stock or Cash Based Award vests. |
| --- | --- |
| 10.2 | Dividend Equivalents .
Dividend Equivalents may be granted by the Administrator, either alone or
in tandem with another Award, based on dividends declared on the Common
Stock, to be credited as of dividend payment dates during the period
between the date the Dividend Equivalents are granted to a Holder and the
date such Dividend Equivalents terminate or expire, as determined by the
Administrator. Such Dividend Equivalents shall be converted to cash or
additional Shares by such formula and at such time and subject to such
restrictions and limitations as may be determined by the
Administrator. |

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Except in connection with a spin-off or other similar event or as otherwise permitted under Section 13.2, dividend Equivalents with respect to an Award subject to vesting that are based on dividends paid prior to the vesting of such Award shall be paid out to the Holder only to the extent that the vesting conditions are subsequently satisfied and the Award vests. Notwithstanding the foregoing, no Dividend Equivalents shall be payable with respect to Options or Stock Appreciation Rights.

ARTICLE 11. ADDITIONAL TERMS OF AWARDS

| 11.1 — 11.2 | Payment . The
Administrator shall determine the method or methods by which payments by
any Holder with respect to any Awards granted under the Plan shall be
made, including, without limitation: (a) cash or check, (b) Shares
(including, in the case of payment of the exercise price of an Award,
Shares issuable pursuant to the exercise of the Award) held for any
minimum period of time as may be established by the Administrator having a
Fair Market Value on the date of delivery equal to the aggregate payments
required, (c) delivery of a written or electronic notice that the Holder
has placed a market sell order with a broker acceptable to the Company
with respect to Shares then issuable upon exercise or vesting of an Award,
and that the broker has been directed to pay a sufficient portion of the
net proceeds of the sale to the Company in satisfaction of the aggregate
payments required; provided that payment of such proceeds is then made to
the Company upon settlement of such sale, (d) other form of legal
consideration acceptable to the Administrator in its sole discretion, or
(e) any combination of the above permitted forms of payment.
Notwithstanding any other provision of the Plan to the contrary, no Holder
who is a Director or an “executive officer” of the Company within the
meaning of Section 13(k) of the Exchange Act shall be permitted to make
payment with respect to any Awards granted under the Plan, or continue any
extension of credit with respect to such payment, with a loan from the
Company or a loan arranged by the Company in violation of Section 13(k) of
the Exchange Act. — Tax Withholding . The
Company or any Subsidiary shall have the authority and the right to deduct
or withhold, or require a Holder to remit to the Company, an amount
sufficient to satisfy federal, state, local and foreign taxes (including
the Holder’s FICA, employment tax or other social security contribution
obligation) required by law to be withheld with respect to any taxable
event concerning a Holder arising as a result of the Plan or any Award.
The Administrator may, in its sole discretion and in satisfaction of the
foregoing requirement, or in satisfaction of such additional withholding
obligations as a Holder may have elected, allow a Holder to satisfy such
obligations by any payment means described in Section 11.1 hereof,
including without limitation, by allowing such Holder to elect to have the
Company or any Subsidiary withhold Shares otherwise issuable under an
Award (or allow the surrender of Shares). The number of Shares which may
be so withheld or surrendered shall be no greater than the number of
Shares which have a fair market value on the date of withholding or
repurchase equal to the aggregate amount of such liabilities based on the
maximum statutory withholding rates in such Holder’s applicable
jurisdiction for federal, state, local and foreign income tax and payroll
tax purposes that are applicable to such taxable income. The Administrator
shall determine the fair market value of the Shares, consistent with
applicable provisions of the Code, for tax withholding obligations due in
connection with a broker-assisted cashless Option or Stock Appreciation
Right exercise involving the sale of Shares to pay the Option or Stock
Appreciation Right exercise price or any tax withholding
obligation. | | |
| --- | --- | --- | --- |
| 11.3 | Transferability of
Awards . | | |
| | (a) | Except as otherwise
provided in Sections 11.3(b) and 11.3(c): | |
| | | (i) | No Award under the Plan may be
sold, pledged, assigned or transferred in any manner other than (A) by
will or the laws of descent and distribution or (B) subject to the consent
of the Administrator, pursuant to a DRO, unless and until such Award has
been exercised or the Shares underlying such Award have been issued, and
all restrictions applicable to such Shares have lapsed; |
| | | (ii) | No Award or interest or right
therein shall be liable for or otherwise subject to the debts, contracts
or engagements of the Holder or the Holder’s successors in interest or
shall be subject to disposition by transfer, alienation, anticipation,
pledge, hypothecation, encumbrance, assignment or any other means whether
such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy) unless and until such Award has been
exercised, or the Shares underlying such Award have been issued, and all
restrictions applicable to such Shares have lapsed, and any attempted
disposition of an Award prior to satisfaction of these conditions shall be
null and void and of no effect, except to the extent that such disposition
is permitted by Section 11.3(a)(i); and |
| | | (iii) | During the lifetime of the
Holder, only the Holder may exercise any exercisable portion of an Award
granted to such Holder under the Plan, unless it has been disposed of
pursuant to a DRO. After the death of the Holder, any exercisable portion
of an Award may, prior to the time when such portion becomes unexercisable
under the Plan or the applicable Program or Award Agreement, be exercised
by the Holder’s personal representative or by any person empowered to do
so under the deceased Holder’s will or under the then-applicable laws of
descent and distribution. |
| | (b) | Notwithstanding Section
11.3(a), the Administrator, in its sole discretion, may determine to
permit a Holder or a Permitted Transferee of such Holder to transfer an
Award other than an Incentive Stock Option (unless such Incentive Stock
Option is intended to become a Nonqualified Stock Option) to any one or
more Permitted Transferees of such Holder, subject to the following terms
and conditions: (i) an Award transferred to a Permitted Transferee shall
not be assignable or transferable by the Permitted Transferee other than
(A) to another Permitted Transferee of the applicable Holder or (B) by
will or the laws of descent and distribution or, subject to the consent of
the Administrator, pursuant to a DRO; (ii) an Award transferred to a
Permitted Transferee shall continue to be subject to all the terms and
conditions of the Award as applicable to the original Holder (other than
the ability to further transfer the Award to any Person other than another
Permitted Transferee of the applicable Holder); (iii) the Holder (or
transferring | |

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| | Permitted Transferee) and the
receiving Permitted Transferee shall execute any and all documents
requested by the Administrator, including, without limitation documents to
(A) confirm the status of the transferee as a Permitted Transferee, (B)
satisfy any requirements for an exemption for the transfer under
Applicable Law and (C) evidence the transfer; and (iv) no Award may be
transferred by a Holder or a Permitted Transferee for value or
consideration. In addition, and further notwithstanding Section 11.3(a),
hereof, the Administrator, in its sole discretion, may determine to permit
a Holder to transfer Incentive Stock Options to a trust that constitutes a
Permitted Transferee if, under Section 671 of the Code and other
Applicable Law, the Holder is considered the sole beneficial owner of the
Incentive Stock Option while it is held in the trust. |
| --- | --- |
| (c) | Notwithstanding Section 11.3(a), a Holder may, in the
manner determined by the Administrator, designate a beneficiary to
exercise the rights of the Holder and to receive any distribution with
respect to any Award upon the Holder’s death. A beneficiary, legal
guardian, legal representative, or other person claiming any rights
pursuant to the Plan is subject to all terms and conditions of the Plan
and any Program or Award Agreement applicable to the Holder and any
additional restrictions deemed necessary or appropriate by the
Administrator. If the Holder is married or a domestic partner in a
domestic partnership qualified under Applicable Law and resides in a
community property state, a designation of a person other than the
Holder’s spouse or domestic partner, as applicable, as the Holder’s
beneficiary with respect to more than 50% of the Holder’s interest in the
Award shall not be effective without the prior written or electronic
consent of the Holder’s spouse or domestic partner. If no beneficiary has
been designated or survives the Holder, payment shall be made to the
person entitled thereto pursuant to the Holder’s will or the laws of
descent and distribution. Subject to the foregoing, a beneficiary
designation may be changed or revoked by a Holder at any time; provided that the change or revocation is delivered in writing to
the Administrator prior to the Holder’s
death. |

| 11.4 | Conditions to Issuance
of Shares . | |
| --- | --- | --- |
| | (a) | The Administrator shall determine
the methods by which Shares shall be delivered or deemed to be delivered
to Holders. Notwithstanding anything herein to the contrary, the Company
shall not be required to issue or deliver any certificates or make any
book entries evidencing Shares pursuant to the exercise of any Award,
unless and until the Administrator has determined, with advice of counsel,
that the issuance of such Shares is in compliance with Applicable Law and
the Shares are covered by an effective registration statement or
applicable exemption from registration. In addition to the terms and
conditions provided herein, the Administrator may require that a Holder
make such reasonable covenants, agreements and representations as the
Administrator, in its sole discretion, deems advisable in order to comply
with Applicable Law. |
| | (b) | All share certificates delivered
pursuant to the Plan and all Shares issued pursuant to book entry
procedures are subject to any stop-transfer orders and other restrictions
as the Administrator deems necessary or advisable to comply with
Applicable Law. The Administrator may place legends on any share
certificate or book entry to reference restrictions applicable to the
Shares (including, without limitation, restrictions applicable to
Restricted Stock). |
| | (c) | The Administrator shall have the
right to require any Holder to comply with any timing or other
restrictions with respect to the settlement, distribution or exercise of
any Award, including a window-period limitation, as may be imposed in the
sole discretion of the Administrator. |
| | (d) | No fractional Shares shall be
issued and the Administrator, in its sole discretion, shall determine
whether cash shall be given in lieu of fractional Shares or whether such
fractional Shares shall be eliminated by rounding down. |
| | (e) | The Company, in its sole
discretion, may (i) retain physical possession of any stock certificate
evidencing Shares until any restrictions thereon shall have lapsed and/or
(ii) require that the stock certificates evidencing such Shares be held in
custody by a designated escrow agent (which may but need not be the
Company) until the restrictions thereon shall have lapsed, and that the
Holder deliver a stock power, endorsed in blank, relating to such
Shares. |
| | (f) | Notwithstanding any other
provision of the Plan, unless otherwise determined by the Administrator or
required by Applicable Law, the Company shall not deliver to any Holder
certificates evidencing Shares issued in connection with any Award and
instead such Shares shall be recorded in the books of the Company (or, as
applicable, its transfer agent or stock plan administrator). |
| 11.5 | Forfeiture and
Claw-Back Provisions . All Awards (including any proceeds, gains or other
economic benefit actually or constructively received by a Holder upon any
receipt or exercise of any Award or upon the receipt or resale of any
Shares underlying the Award and any payments of a portion of an
incentive-based bonus pool allocated to a Holder) shall be subject to the
provisions of any claw-back policy implemented by the Company, including,
without limitation, any claw-back policy adopted to comply with the
requirements of Applicable Law, including, without limitation, the
Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or
regulations promulgated thereunder, whether or not such claw-back policy
was in place at the time of grant of an Award, to the extent set forth in
such claw-back policy and/or in the applicable Award
Agreement. | |
| 11.6 | Prohibition on
Repricing . Subject to Section 13.2, the Administrator shall not, without
the approval of the stockholders of the Company, (a) authorize the
amendment of any outstanding Option or Stock Appreciation Right to reduce
its price per Share, or (b) cancel any Option or Stock Appreciation Right
in exchange for cash or another Award when the Option or Stock
Appreciation Right price per Share exceeds the Fair Market Value of the
underlying Shares. Furthermore, for purposes of this Section 11.6, except
in connection with a corporate transaction involving the Company
(including, without limitation, any stock dividend, stock split,
extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination or exchange of shares), the
terms of outstanding Awards may not be amended to reduce the exercise
price per Share of outstanding Options or Stock Appreciation Rights or
cancel outstanding Options or Stock Appreciation Rights in exchange for
cash, other Awards or Options or Stock Appreciation Rights with an
exercise price per Share that is less than the exercise price per Share of
the original Options or Stock Appreciation Rights without the approval of
the stockholders of the Company. | |
| 11.7 | Amendment of Awards .
Subject to Applicable Law, the Administrator may amend, modify or
terminate any outstanding Award, including but not limited to,
substituting therefor another Award of the same or a different type,
changing the | |

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| | date of exercise or settlement, and
converting an Incentive Stock Option to a Non-Qualified Stock Option. The
Holder’s consent to such action shall be required unless (a) the
Administrator determines that the action, taking into account any related
action, would not materially and adversely affect the Holder, or (b) the
change is otherwise permitted under the Plan (including, without
limitation, under Section 13.2 or 13.10). |
| --- | --- |
| 11.8 | Data Privacy . As a condition of receipt of any Award,
each Holder explicitly and unambiguously consents to the collection, use
and transfer, in electronic or other form, of personal data as described
in this Section 11.8 by and among, as applicable, the Company and its
Subsidiaries for the exclusive purpose of implementing, administering and
managing the Holder’s participation in the Plan. The Company and its
Subsidiaries may hold certain personal information about a Holder,
including but not limited to, the Holder’s name, home address and
telephone number, date of birth, social security or insurance number or
other identification number, salary, nationality, job title(s), any shares
of stock held in the Company or any of its Subsidiaries and details of all
Awards, in each case, for the purpose of implementing, managing and
administering the Plan and Awards (the “ Data ”). The Company and its
Subsidiaries may transfer the Data amongst themselves as necessary for the
purpose of implementation, administration and management of a Holder’s
participation in the Plan, and the Company and its Subsidiaries may each
further transfer the Data to any third parties assisting the Company and
its Subsidiaries in the implementation, administration and management of
the Plan. These recipients may be located in the Holder’s country, or
elsewhere, and the Holder’s country may have different data privacy laws
and protections than the recipients’ country. Through acceptance of an
Award, each Holder authorizes such recipients to receive, possess, use,
retain and transfer the Data, in electronic or other form, for the
purposes of implementing, administering and managing the Holder’s
participation in the Plan, including any requisite transfer of such Data
as may be required to a broker or other third party with whom the Company
or any of its Subsidiaries or the Holder may elect to deposit any Shares.
The Data related to a Holder will be held only as long as is necessary to
implement, administer, and manage the Holder’s participation in the Plan.
A Holder may, at any time, view the Data held by the Company with respect
to such Holder, request additional information about the storage and
processing of the Data with respect to such Holder, recommend any
necessary corrections to the Data with respect to the Holder or refuse or
withdraw the consents herein in writing, in any case without cost, by
contacting his or her local human resources representative. The Company
may cancel the Holder’s ability to participate in the Plan and, in the
Administrator’s discretion, the Holder may forfeit any outstanding Awards
if the Holder refuses or withdraws his or her consents as described
herein. For more information on the consequences of refusal to consent or
withdrawal of consent, Holders may contact their local human resources
representative. |

ARTICLE 12. ADMINISTRATION

| 12.1 | Administrator . The
Committee shall administer the Plan (except as otherwise permitted
herein). To the extent necessary to comply with Rule 16b-3 of the Exchange
Act, and with respect to Awards that are intended to be Performance-Based
Compensation, including Options and Stock Appreciation Rights, then the
Committee shall take all action with respect to such Awards, and the
individuals taking such action shall consist solely of two or more
Non-Employee Directors, each of whom is intended to qualify as both a
“non-employee director” as defined by Rule 16b-3 of the Exchange Act or
any successor rule and an “outside director” for purposes of Section
162(m) of the Code. Additionally, to the extent required by Applicable
Law, each of the individuals constituting the Committee shall be an
“independent director” under the rules of any securities exchange or
automated quotation system on which the Shares are listed, quoted or
traded. Notwithstanding the foregoing, any action taken by the Committee
shall be valid and effective, whether or not members of the Committee at
the time of such action are later determined not to have satisfied the
requirements for membership set forth in this Section 12.1 or the
Organizational Documents. Except as may otherwise be provided in the
Organizational Documents or as otherwise required by Applicable Law, (a)
appointment of Committee members shall be effective upon acceptance of
appointment, (b) Committee members may resign at any time by delivering
written or electronic notice to the Board and (c) vacancies in the
Committee may only be filled by the Board. Notwithstanding the foregoing,
(i) the full Board, acting by a majority of its members in office, shall
conduct the general administration of the Plan with respect to Awards
granted to Non-Employee Directors and, with respect to such Awards, the
term “Administrator” as used in the Plan shall be deemed to refer to the
Board and (ii) the Board or Committee may delegate its authority hereunder
to the extent permitted by Section 12.6. | |
| --- | --- | --- |
| 12.2 | Duties and Powers of
Administrator . It shall be the duty of the Administrator to conduct the
general administration of the Plan in accordance with its provisions. The
Administrator shall have the power to interpret the Plan, all Programs and
Award Agreements, and to adopt such rules for the administration,
interpretation and application of the Plan and any Program as are not
inconsistent with the Plan, to interpret, amend or revoke any such rules
and to amend the Plan or any Program or Award Agreement; provided that the
rights or obligations of the Holder of the Award that is the subject of
any such Program or Award Agreement are not materially and adversely
affected by such amendment, unless the consent of the Holder is obtained
or such amendment is otherwise permitted under Section 11.5 or Section
13.10. In its sole discretion, the Board may at any time and from time to
time exercise any and all rights and duties of the Committee in its
capacity as the Administrator under the Plan except with respect to
matters which under Rule 16b-3 under the Exchange Act or any successor
rule, or Section 162(m) of the Code, or any regulations or rules issued
thereunder, or the rules of any securities exchange or automated quotation
system on which the Shares are listed, quoted or traded are required to be
determined in the sole discretion of the Committee. | |
| 12.3 | Action by the
Administrator . Unless otherwise established by the Board, set forth in any
Organizational Documents or as required by Applicable Law, a majority of
the Administrator shall constitute a quorum and the acts of a majority of
the members present at any meeting at which a quorum is present, and acts
approved in writing by all members of the Administrator in lieu of a
meeting, shall be deemed the acts of the Administrator. Each member of the
Administrator is entitled to, in good faith, rely or act upon any report
or other information furnished to that member by any officer or other
employee of the Company or any Subsidiary, the Company’s independent
certified public accountants, or any executive compensation consultant or
other professional retained by the Company to assist in the administration
of the Plan. | |
| 12.4 | Authority of
Administrator . Subject to the Organizational Documents, any specific
designation in the Plan and Applicable Law, the Administrator has the
exclusive power, authority and sole discretion to: | |
| | (a) | Designate Eligible Individuals to
receive Awards; |
| | (b) | Determine the type or types of
Awards to be granted to each Eligible Individual (including, without
limitation, any Awards granted in tandem with another Award granted
pursuant to the Plan); |

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| | (c) | Determine the number of Awards to
be granted and the number of Shares to which an Award will
relate; |
| --- | --- | --- |
| | (d) | Determine the terms and
conditions of any Award granted pursuant to the Plan, including, but not
limited to, the exercise price, grant price, purchase price, any
Performance Criteria or performance criteria, any restrictions or
limitations on the Award, any schedule for vesting, lapse of forfeiture
restrictions or restrictions on the exercisability of an Award, and
accelerations or waivers thereof, and any provisions related to
non-competition and claw-back and recapture of gain on an Award, based in
each case on such considerations as the Administrator in its sole
discretion determines; |
| | (e) | Determine whether, to what
extent, and under what circumstances an Award may be settled in, or the
exercise price of an Award may be paid, in cash, Shares, other Awards, or
other property, or an Award may be canceled, forfeited, or
surrendered; |
| | (f) | Prescribe the form of each Award
Agreement, which need not be identical for each Holder; |
| | (g) | Decide all other matters that
must be determined in connection with an Award; |
| | (h) | Establish, adopt, or revise any
Programs, rules and regulations as it may deem necessary or advisable to
administer the Plan; |
| | (i) | Interpret the terms of, and any
matter arising pursuant to, the Plan, any Program or any Award
Agreement; |
| | (j) | Make all other decisions and
determinations that may be required pursuant to the Plan or as the
Administrator deems necessary or advisable to administer the Plan;
and |
| | (k) | Accelerate wholly or partially
the vesting or lapse of restrictions of any Award or portion thereof at
any time after the grant of an Award, subject to whatever terms and
conditions it selects and Section 13.2. |
| 12.5 | Decisions
Binding . The Administrator’s interpretation of the Plan, any Awards
granted pursuant to the Plan, any Program or any Award Agreement and all
decisions and determinations by the Administrator with respect to the Plan
are final, binding and conclusive on all Persons. | |
| 12.6 | Delegation of
Authority . The Board or Committee may from time to time delegate to a
committee of one or more members of the Board or one or more officers of
the Company the authority to grant or amend Awards or to take other
administrative actions pursuant to this Article 12; provided , however ,
that in no event shall an officer of the Company be delegated the
authority to grant Awards to, or amend Awards held by, the following
individuals: (a) individuals who are subject to Section 16 of the Exchange
Act, (b) Covered Employees with respect to Awards intended to constitute
Performance Based Compensation, or (c) officers of the Company (or
Directors) to whom authority to grant or amend Awards has been delegated
hereunder; provided , further , that any delegation of administrative
authority shall only be permitted to the extent it is permissible under
any Organizational Documents and Applicable Law (including, without
limitation, Section 162(m) of the Code). Any delegation hereunder shall be
subject to the restrictions and limits that the Board or Committee
specifies at the time of such delegation or that are otherwise included in
the applicable Organizational Documents, and the Board or Committee, as
applicable, may at any time rescind the authority so delegated or appoint
a new delegatee. At all times, the delegatee appointed under this Section
12.6 shall serve in such capacity at the pleasure of the Board or the
Committee, as applicable, and the Board or the Committee may abolish any
committee at any time and re-vest in itself any previously delegated
authority. | |

ARTICLE 13. MISCELLANEOUS PROVISIONS

| 13.1 | Amendment,
Suspension or Termination of the Plan. | |
| --- | --- | --- |
| | (a) | Except as otherwise provided in
Section 13.1(b), the Plan may be wholly or partially amended or otherwise
modified, suspended or terminated at any time or from time to time by the
Board; provided that, except as provided in Section 11.5 and
Section 13.10, no amendment, suspension or termination of the Plan shall,
without the consent of the Holder, materially and adversely affect any
rights or obligations under any Award theretofore granted or awarded,
unless the Award itself otherwise expressly so provides. |
| | (b) | Notwithstanding Section 13.1(a),
the Board may not, except as provided in Section 13.2, take any of the
following actions without approval of the Company’s stockholders given
within twelve (12) months before or after such action: (i) increase the
limit imposed in Section 3.1 on the maximum number of Shares which may be
issued under the Plan, the Award Limit or the Director Limit, (ii) reduce
the price per share of any outstanding Option or Stock Appreciation Right
granted under the Plan or take any action prohibited under Section 11.6,
or (iii) cancel any Option or Stock Appreciation Right in exchange for
cash or another Award in violation of Section 11.6. |
| | (c) | No Awards may be granted or
awarded during any period of suspension or after termination of the Plan,
and notwithstanding anything herein to the contrary, in no event may any
Award be granted under the Plan after the tenth (10 th )
anniversary of the earlier of (i) the date on which the Plan was adopted
by the Board or (ii) the date the Plan was approved by the Company’s
stockholders (such anniversary, the “ Expiration
Date ”). Any Awards that are outstanding
on the Expiration Date shall remain in force according to the terms of the
Plan, the applicable Program and the applicable Award
Agreement. |
| 13.2 | Changes in Common
Stock or Assets of the Company, Acquisition or Liquidation of the Company
and Other Corporate Events. | |
| | (a) | In the event of any stock
dividend, stock split, combination or exchange of shares, merger,
consolidation or other distribution (other than normal cash dividends) of
Company assets to stockholders, or any other change affecting the shares
of the Company’s stock or the share price of the Company’s stock other
than an Equity Restructuring, the Administrator may make equitable
adjustments, if any, to reflect such change with respect to: (i) the
aggregate number and kind of Shares that may be issued under the Plan
(including, but not limited to, adjustments of the limitations in Section
3.1 on the maximum number and kind of Shares which may be issued under the
Plan, adjustments of the Award Limit and the Director Limit and
adjustments of the manner in which Shares subject to Full Value Awards
will be counted); (ii) the number and kind of Shares (or other securities
or property) subject to outstanding Awards; (iii) the
terms |

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| and conditions of any
outstanding Awards (including, without limitation, any applicable
performance targets or criteria with respect thereto); and (iv) the grant
or exercise price per share for any outstanding Awards under the Plan. Any
adjustment affecting an Award intended as Performance-Based Compensation
shall be made consistent with the requirements of Section 162(m) of the
Code unless otherwise determined by the Administrator. — In the event of any
transaction or event described in Section 13.2(a) or any unusual or
nonrecurring transactions or events affecting the Company, any Subsidiary
of the Company, or the financial statements of the Company or any
Subsidiary, or of changes in Applicable Law or Applicable Accounting
Standards, the Administrator, in its sole discretion, and on such terms
and conditions as it deems appropriate, either by the terms of the Award
or by action taken prior to the occurrence of such transaction or event,
is hereby authorized to take any one or more of the following actions
whenever the Administrator determines that such action is appropriate in
order to prevent dilution or enlargement of the benefits or potential
benefits intended to be made available under the Plan or with respect to
any Award under the Plan, to facilitate such transactions or events or to
give effect to such changes in Applicable Law or Applicable Accounting
Standards: | |
| --- | --- |
| (i) | To provide for the termination of
any such Award in exchange for an amount of cash and/or other property
with a value equal to the amount that would have been attained upon the
exercise of such Award or realization of the Holder’s rights (and, for the
avoidance of doubt, if as of the date of the occurrence of the transaction
or event described in this Section 13.2 the Administrator determines in
good faith that no amount would have been attained upon the exercise of
such Award or realization of the Holder’s rights, then such Award may be
terminated by the Company without payment); |
| (ii) | To provide that such Award be
assumed by the successor or survivor corporation, or a parent or
subsidiary thereof, or shall be substituted for by similar options, rights
or awards covering the stock of the successor or survivor corporation, or
a parent or subsidiary thereof, with appropriate adjustments as to the
number and kind of shares and applicable exercise or purchase price, in
all cases, as determined by the Administrator; |
| (iii) | To make adjustments in the number
and type of Shares of the Company’s stock (or other securities or
property) subject to such Award, and/or in the terms and conditions of
(including the grant or exercise price), and the criteria included in,
outstanding Awards and Awards which may be granted in the
future; |
| (iv) | To provide that such Award shall
be exercisable or payable or fully vested with respect to all Shares
covered thereby, notwithstanding anything to the contrary in the Plan or
the applicable Program or Award Agreement; |
| (v) | To replace such Award with other
rights or property selected by the Administrator; and/or |
| (vi) | To provide that the Award cannot
vest, be exercised or become payable after such event. |

| (c) | In connection with the
occurrence of any Equity Restructuring, and notwithstanding anything to
the contrary in Sections 13.2(a) and 13.2(b): | |
| --- | --- | --- |
| | (i) | The number and type of securities
subject to each outstanding Award and the exercise price or grant price
thereof, if applicable, shall be equitably adjusted (and the adjustments
provided under this Section 13.2(c)(i) shall be nondiscretionary and shall
be final and binding on the affected Holder and the Company);
and/or |
| | (ii) | The Administrator shall make such
equitable adjustments, if any, as the Administrator, in its sole
discretion, may deem appropriate to reflect such Equity Restructuring with
respect to the aggregate number and kind of Shares that may be issued
under the Plan (including, but not limited to, adjustments of the
limitation in Section 3.1 on the maximum number and kind of Shares which
may be issued under the Plan, adjustments of the Award Limit and the
Director Limit, and adjustments of the manner in which Shares subject to
Full Value Awards will be counted). |
| (d) | In the event an Award
continues in effect or is assumed or an equivalent Award substituted in
connection with a Change in Control, and a Holder incurs a Termination of
Service without “cause” (as such term is defined in the sole discretion of
the Administrator, or as set forth in the Award Agreement relating to such
Award) upon or within twelve (12) months following the Change in Control,
then such Holder shall be fully vested in such continued, assumed or
substituted Award. | |
| (e) | In the event that the
successor corporation in a Change in Control refuses to assume or
substitute for an Award (or any portion thereof), the Administrator may
cause (i) any or all of such Award (or portion thereof) to terminate in
exchange for cash, rights or other property pursuant to Section 13.2(b)(i)
or (ii) any or all of such Award (or portion thereof) to become fully
exercisable immediately prior to the consummation of such transaction and
all forfeiture restrictions on any or all of such Award to lapse. If any
such Award is exercisable in lieu of assumption or substitution in the
event of a Change in Control, the Administrator shall notify the Holder
that such Award shall be fully exercisable for a period of fifteen (15)
days from the date of such notice, contingent upon the occurrence of the
Change in Control, and such Award shall terminate upon the expiration of
such period. | |
| (f) | For the purposes of
this Section 13.2, an Award shall be considered assumed if, following the
Change in Control, the Award confers the right to purchase or receive, for
each Share subject to the Award immediately prior to the Change in
Control, the consideration (whether stock, cash, or other securities or
property) received in the Change in Control by holders of Common Stock for
each Share held on the effective date of the transaction (and if holders
were offered a choice of consideration, the type of consideration chosen
by the holders of a majority of the outstanding Shares); provided , however , that if such consideration received in the Change in
Control was not solely common stock of the successor corporation or its
parent, the Administrator may, with the consent of the successor
corporation, provide for the consideration to be received upon the
exercise of the Award, for each Share subject to an Award, to be solely
common stock of the successor corporation or | |

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| | (g) | its parent equal in fair market value to the per-share
consideration received by holders of Common Stock in the Change in
Control. — The Administrator, in its sole discretion, may include
such further provisions and limitations in any Award, agreement or
certificate, as it may deem equitable and in the best interests of the
Company that are not inconsistent with the provisions of the
Plan. |
| --- | --- | --- |
| | (h) | Unless otherwise determined by the Administrator, no
adjustment or action described in this Section 13.2 or in any other
provision of the Plan shall be authorized to the extent it would (i) with
respect to Awards which are granted to Covered Employees and are intended
to qualify as Performance-Based Compensation, cause such Awards to fail to
so qualify as Performance- Based Compensation, (ii) cause the Plan to
violate Section 422(b)(1) of the Code, (iii) result in short-swing profits
liability under Section 16 of the Exchange Act or violate the exemptive
conditions of Rule 16b-3 of the Exchange Act, or (iv) cause an Award to
fail to be exempt from or comply with Section 409A. |
| | (i) | The existence of the Plan, any Program, any Award
Agreement and/or the Awards granted hereunder shall not affect or restrict
in any way the right or power of the Company or the stockholders of the
Company to make or authorize any adjustment, recapitalization,
reorganization or other change in the Company’s capital structure or its
business, any merger or consolidation of the Company, any issue of stock
or of options, warrants or rights to purchase stock or of bonds,
debentures, preferred or prior preference stocks the rights of which are
superior to or affect the Common Stock or the rights thereof or that are
convertible into or exchangeable for Common Stock, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of
its assets or business, or any other corporate act or proceeding, whether
of a similar character or otherwise. |
| | (j) | In the event of any pending stock dividend, stock split,
combination or exchange of shares, merger, consolidation or other
distribution (other than normal cash dividends) of Company assets to
stockholders, or any other change affecting the Shares or the share price
of the Common Stock including any Equity Restructuring, for reasons of
administrative convenience, the Administrator, in its sole discretion, may
refuse to permit the exercise of any Award during a period of up to thirty
(30) days prior to the consummation of any such transaction. |
| 13.3 | Approval of Plan by
Stockholders . The Plan shall be submitted for the approval of the
Company’s stockholders within twelve (12) months after the date of the
Board’s initial adoption of the Plan. Awards may be granted or awarded
prior to such stockholder approval; provided that such Awards shall
not be exercisable, shall not vest and the restrictions thereon shall not
lapse and no Shares shall be issued pursuant thereto prior to the time
when the Plan is approved by the Company’s stockholders; and provided , further , that if such approval has not been
obtained at the end of said twelve (12) month period, all Awards
previously granted or awarded under the Plan shall thereupon be canceled
and become null and void. | |
| 13.4 | No Stockholders Rights .
Except as otherwise provided herein or in an applicable Program or Award
Agreement, a Holder shall have none of the rights of a stockholder with
respect to Shares covered by any Award until the Holder becomes the record
owner of such Shares. | |

| 13.5 | Paperless Administration .
In the event that the Company establishes, for itself or using the
services of a third party, an automated system for the documentation,
granting or exercise of Awards, such as a system using an internet website
or interactive voice response, then the paperless documentation, granting
or exercise of Awards by a Holder may be permitted through the use of such
an automated system. |
| --- | --- |
| 13.6 | Effect of Plan upon Other
Compensation Plans . The adoption of the Plan shall not affect any
other compensation or incentive plans in effect for the Company or any
Subsidiary. Nothing in the Plan shall be construed to limit the right of
the Company or any Subsidiary: (a) to establish any other forms of
incentives or compensation for Employees, Directors or Consultants of the
Company or any Subsidiary, or (b) to grant or assume options or other
rights or awards otherwise than under the Plan in connection with any
proper corporate purpose including without limitation, the grant or
assumption of options in connection with the acquisition by purchase,
lease, merger, consolidation or otherwise, of the business, stock or
assets of any corporation, partnership, limited liability company, firm or
association. |
| 13.7 | Compliance with Laws . The
Plan, the granting and vesting of Awards under the Plan and the issuance
and delivery of Shares and the payment of money under the Plan or under
Awards granted or awarded hereunder are subject to compliance with all
Applicable Law (including but not limited to state, federal and foreign
securities law and margin requirements), and to such approvals by any
listing, regulatory or governmental authority as may, in the opinion of
counsel for the Company, be necessary or advisable in connection
therewith. Any securities delivered under the Plan shall be subject to
such restrictions, and the person acquiring such securities shall, if
requested by the Company, provide such assurances and representations to
the Company as the Company may deem necessary or desirable to assure
compliance with all Applicable Law. The Administrator, in its sole
discretion, may take whatever actions it deems necessary or appropriate to
effect compliance with Applicable Law, including, without limitation,
placing legends on share certificates and issuing stop-transfer notices to
agents and registrars. Notwithstanding anything to the contrary herein,
the Administrator may not take any actions hereunder, and no Awards shall
be granted, that would violate Applicable Law. To the extent permitted by
Applicable Law, the Plan and Awards granted or awarded hereunder shall be
deemed amended to the extent necessary to conform to Applicable
Law. |
| 13.8 | Titles and Headings,
References to Sections of the Code or Exchange Act . The titles and
headings of the Sections in the Plan are for convenience of reference only
and, in the event of any conflict, the text of the Plan, rather than such
titles or headings, shall control. References to sections of the Code or
the Exchange Act shall include any amendment or successor
thereto. |
| 13.9 | Governing Law . The Plan
and any Programs and Award Agreements hereunder shall be administered,
interpreted and enforced under the internal laws of the State of Delaware
without regard to conflicts of laws thereof or of any other
jurisdiction. |
| 13.10 | Section 409A . To the
extent that the Administrator determines that any Award granted under the
Plan is subject to Section 409A, the Plan, the Program pursuant to which
such Award is granted and the Award Agreement evidencing such Award shall
incorporate the terms and conditions required by Section 409A. In that
regard, to the extent any Award under the Plan or any other compensatory
plan or arrangement of the Company or any of its Subsidiaries is subject
to Section 409A, and such Award or other amount is payable on account of
a |

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Appendix A

| | Holder’s Termination of Service (or
any similarly defined term), then (a) such Award or amount shall only be
paid to the extent such Termination of Service qualifies as a “separation
from service” as defined in Section 409A, and (b) if such Award or amount
is payable to a “specified employee” as defined in Section 409A then to
the extent required in order to avoid a prohibited distribution under
Section 409A, such Award or other compensatory payment shall not be
payable prior to the earlier of (i) the expiration of the six-month period
measured from the date of the Holder’s Termination of Service, and (ii)
the date of the Holder’s death. To the extent applicable, the Plan, any
Program and any Award Agreements shall be interpreted in accordance with
Section 409A. Notwithstanding any provision of the Plan to the contrary,
in the event that following the Effective Date the Administrator
determines that any Award may be subject to Section 409A, the
Administrator may (but is not obligated to), without a Holder’s consent,
adopt such amendments to the Plan and the applicable Program and Award
Agreement or adopt other policies and procedures (including amendments,
policies and procedures with retroactive effect), or take any other
actions, that the Administrator determines are necessary or appropriate to
(A) exempt the Award from Section 409A and/or preserve the intended tax
treatment of the benefits provided with respect to the Award, or (B)
comply with the requirements of Section 409A and thereby avoid the
application of any penalty taxes under Section 409A. The Company makes no
representations or warranties as to the tax treatment of any Award under
Section 409A or otherwise. The Company shall have no obligation under this
Section 13.10 or otherwise to take any action (whether or not described
herein) to avoid the imposition of taxes, penalties or interest under
Section 409A with respect to any Award and shall have no liability to any
Holder or any other person if any Award, compensation or other benefits
under the Plan are determined to constitute non-compliant “nonqualified
deferred compensation” subject to the imposition of taxes, penalties
and/or interest under Section 409A. |
| --- | --- |
| 13.11 | Unfunded Status of Awards .
The Plan is intended to be an “unfunded” plan for incentive compensation.
With respect to any payments not yet made to a Holder pursuant to an
Award, nothing contained in the Plan or any Program or Award Agreement
shall give the Holder any rights that are greater than those of a general
creditor of the Company or any Subsidiary. |
| 13.12 | Indemnification . To the
extent permitted under Applicable Law and the Organizational Documents,
each member of the Administrator shall be indemnified and held harmless by
the Company from any loss, cost, liability, or expense that may be imposed
upon or reasonably incurred by such member in connection with or resulting
from any claim, action, suit, or proceeding to which he or she may be a
party or in which he or she may be involved by reason of any action or
failure to act pursuant to the Plan and against and from any and all
amounts paid by him or her in satisfaction of judgment in such action,
suit, or proceeding against him or her; provided he or she gives the
Company an opportunity, at its own expense, to handle and defend the same
before he or she undertakes to handle and defend it on his or her own
behalf. The foregoing right of indemnification shall not be exclusive of
any other rights of indemnification to which such persons may be entitled
pursuant to the Organizational Documents, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or
hold them harmless. |
| 13.13 | Relationship to other
Benefits . No payment pursuant to the Plan shall be taken into account
in determining any benefits under any pension, retirement, savings, profit
sharing, group insurance, welfare or other benefit plan of the Company or
any Subsidiary except to the extent otherwise expressly provided in
writing in such other plan or an agreement thereunder. |
| 13.14 | Expenses . The expenses of
administering the Plan shall be borne by the Company and its
Subsidiaries. |

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Appendix A

COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION 2017 INCENTIVE AWARD PLAN

SUB-PLAN FOR UK PARTICIPANTS

1. PURPOSE

Pursuant to the powers granted by the Administrator in Section 4.5(d) of the Cognizant Technology Solutions 2017 Incentive Award Plan (as it may be amended or restated from time to time, the “ Plan ”), the Administrator has adopted this UK Sub-Plan (the “ Sub-Plan ”). The purpose of the Sub-Plan is to promote the success and enhance the value of Cognizant Technology Solutions Corporation (the “ Company ”) by linking the individual interests of the Employees to those of Company stockholders and by providing the Employees with an incentive for outstanding performance to generate superior returns to Company stockholders. The Plan is further intended to provide flexibility to the Company in its ability to motivate, attract, and retain the services of Employees upon whose judgment, interest, and special effort the successful conduct of the Company’s operation is largely dependent.

The Sub-Plan forms the rules of the employee share scheme applicable to the United Kingdom based Employees of the Company and any Subsidiaries. All Awards granted to Employees of the Company or any Subsidiaries who are based in the United Kingdom will be granted on similar terms. Other service providers who are not Employees (such as Consultants or Non-Employee Directors) are not eligible to receive Awards and become participants pursuant to this Sub-Plan.

2. DEFINITIONS AND CONSTRUCTION

Capitalized terms used in the Sub-Plan which are not defined herein shall have the meaning given in the Plan, and where the context requires any references to the “Plan” in those definitions shall be a reference to the Sub-Plan. The singular pronoun shall include the plural where the context so indicates.

The defined terms set out in Article 2 of the Plan shall apply to this Sub-Plan as if references to the Plan are references to the Sub-Plan save that wherever the following terms are: (i) used in the Sub-Plan or (ii) used in the Plan but apply to Awards made under the Sub-Plan, they shall have the meanings specified below, unless the context clearly indicates otherwise.

| a) | “ Eligible Individual ” shall be
interpreted as referring only to Employees; |
| --- | --- |
| b) | “ Option ” shall mean a right to
purchase Shares at a specified exercise price, granted under Article 6 and
all Options granted to Employees based in the United Kingdom will be
Non-Qualified Stock Options; and |
| c) | “ Termination of Service ” shall be
interpreted as referring only to the date the participant ceases to be an
Employee in accordance with 2.56 (c) of the Plan when that phrase in the
Plan is used in the context of the Sub-Plan and Awards granted to
Employees based in the United Kingdom. |

3. SHARES SUBJECT TO THE PLAN

The aggregate number of Shares which may be issued or transferred pursuant to Awards under the Sub-Plan, when taken together with the number of which may be issued or transferred pursuant to Awards under the Plan or any other sub-plan shall not exceed the limit specified by Section 3 of the Plan, as amended from time to time.

The provisions of Article 3 of the Plan shall apply to this Sub-Plan as if references to the Plan are references to the Sub-Plan save that the following words in Section 3.1(b) shall be omitted:

“Notwithstanding the provisions of this Section 3.1(b), no Shares may again be optioned, granted or awarded if such action would cause an Incentive Stock Option to fail to qualify as an incentive stock option under Section 422 of the Code.”

4. GRANTING OF AWARDS

The provisions of Article 4 of the Plan shall apply to this Sub-Plan as if references to the Plan are references to the Sub-Plan save that:

| a) | In Section 4.1, the following words shall be
omitted: |
| --- | --- |
| | “Except for any Non-Employee Director’s right to Awards
that may be required pursuant to the Non-Employee Director Equity
Compensation Policy as described in Section 4.6” |
| b) | In Section 4.2, the following words shall be
omitted: |
| | “Award Agreements evidencing
Incentive Stock Options shall contain such terms and conditions as may be
necessary to meet the applicable provisions of Section 422 of the
Code”. |
| c) | Section 4.4 shall be replaced with the
following: |
| | “ Terms of Employment Nothing
in the Sub-Plan or any Program or Award Agreement hereunder shall confer
upon any Holder any right to continue in the employment of the Company or
any Subsidiary, or shall interfere with or restrict in any way the rights
of the Company and any Subsidiary, which rights are expressly reserved, to
discharge any Holder at any time for any reason whatsoever, with or
without cause, and with or without notice, or to terminate or change all
other terms and conditions of employment or engagement, except to the
extent expressly provided otherwise in a written agreement between the
Holder and the Company or any Subsidiary.” |
| d) | Section 4.6 “Non-Employee Director Awards”
shall be omitted from the Sub-Plan. |

5. PROVISIONS APPLICABLE TO AWARDS INTENDED TO QUALIFY AS PERFORMANCE-BASED COMPENSATION

The provisions of Article 5 of the Plan shall apply to this Sub-Plan as if references to the Plan are references to the Sub-Plan.

6. GRANTING OF OPTIONS AND STOCK APPRECIATION RIGHTS

The provisions of Article 6 of the Plan shall apply to this Sub-Plan as if references to the Plan are references to the Sub-Plan save that Article 6.2 “Qualification of Incentive Stock Options” and the provisions in Article 6.3 and 6.4 detailing specific requirements for Incentive Stock Options shall be omitted.

7. EXERCISE OF OPTIONS AND STOCK APPRECIATION RIGHTS

The provisions of Article 7 of the Plan shall apply to this Sub-Plan as if references to the Plan are references to the Sub-Plan save that Article 7.4 shall be omitted.

8. AWARD OF RESTRICTED STOCK

The provisions of Article 8 of the Plan shall apply to this Sub-Plan as if references to the Plan are references to the Sub-Plan save that Article 8.5 shall be replaced with the following:

“If requested by the Company the Holder will (on or within 14 days of) acquiring the Restricted Stock, join with his or her employer in electing, pursuant to Section 431(1) of the Income Tax (Earnings and Pensions) Act 2003 (“ITEPA”) that, for the relevant tax purposes, the market value of the Restricted Stock acquired will be calculated as if the Shares were not restricted and Sections 425 to 430 (inclusive) of ITEPA are not to apply to such Shares.

2017 Proxy Statement 75

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Appendix A

1. AWARD OF RESTRICTED STOCK UNITS

The provisions of Article 9 of the Plan shall apply to this Sub-Plan as if references to the Plan are references to the Sub-Plan save that Section 9.6 shall be replaced with the following:

“ Payment upon Termination of Service . An Award of Restricted Stock Units shall only be payable while the Holder is an Employee; provided , however , that the Administrator, in its sole discretion, may provide (in an Award Agreement or otherwise) that a Restricted Stock Unit award may be paid subsequent to a Termination of Service in certain events, including a Change in Control, the Holder’s death, retirement or disability or any other specified Termination of Service.”

1. AWARD OF OTHER STOCK OR CASH BASED AWARDS AND DIVIDEND EQUIVALENTS

The provisions of Article 10 of the Plan shall apply to this Sub-Plan as if references to the Plan are references to the Sub-Plan.

1. ADDITIONAL TERMS OF AWARDS

The provisions of Article 11 of the Plan shall apply to this Sub-Plan as if references to the Plan are references to the Sub-Plan save that:

| a) | Article 11.2 shall be amended so that the word “taxes” when used in
Article 11.2 shall include income tax, employee’s National Insurance
contributions and (at the discretion of the Company) employer’s National
Insurance contributions (any a “ Tax Liability ”) |
| --- | --- |
| b) | The following
words shall be added at the end of Article 11.2: |
| “The Holder will
indemnify and keep indemnified the Company and his/her employing company,
if different, from and against any liability for or obligation to pay any
Tax Liability.” | |
| c) | The provisions in
Articles 11.3(b) and 11.7 relating specifically to Incentive Stock Options
shall be omitted from the
Sub-Plan. |

1. ADMINISTRATION

The provisions of Article 12 of the Plan shall apply to this Sub-Plan as if references to the Plan are references to the Sub-Plan;

1. MISCELLANEOUS PROVISIONS

The provisions of Article 13 of the Plan shall apply to this Sub-Plan as if references to the Plan are references to the Sub-Plan save that Article 13.10 shall only apply to Awards under the Sub-Plan to the extent subject to Section 409A.

In the event of a conflict between the terms of the Sub-Plan and the Plan with respect to Awards granted to Employees based in the United Kingdom under the Sub-Plan, the terms of the Sub-Plan will control.

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2017 Proxy Statement 77

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HELPFUL RESOURCES

INDEX OF TERMS

Term	Meaning
1999 Plan	Amended and Restated 1999 Incentive Compensation
Plan
2004 ESPP	Amended and Restated 2004
Employee Stock Purchase Plan
2009 Plan	2009 Incentive Compensation Plan
2011 Annual
Meeting	2011 Annual Meeting of
Stockholders of the Company
2016 Annual Report	Company’s Annual Report to Stockholders for Year Ended
December 31, 2016
2017 Annual
Meeting	2017 Annual Meeting of
Stockholders of the Company
2017 Plan	2017 Incentive Award Plan
2018 Annual
Meeting	2018 Annual Meeting of
Stockholders of the Company
Annual Meeting	Annual Meeting of Stockholders of the Company to be held
on June 6, 2017
Board	Board of Directors of the
Company
CEO	Chief Executive Officer
CFO	Chief Financial
Officer
COO	Chief Operating Officer
Chairman	Chairman of the
Board
Cognizant	Cognizant Technology Solutions Corporation
Company	Cognizant Technology
Solutions Corporation
CSRP	Cognizant Technology Solutions Supplemental Retirement
Plan
Directors	Directors of the
Company
Dodd-Frank Act	Dodd-Frank Wall Street Reform and Consumer Protection
Act
DSO	Days Sales
Outstanding
Employment Agreements	Amended and Restated Executive Employment and
Non-Disclosure, Non-Competition and Invention Assignment
Agreements
Exchange Act	Securities Exchange Act of
1934
FASB ASC	Financial Accounting Standards Board Accounting Standards
Codification
GAAP	U.S. Generally Accepted
Accounting Principles
Governance Committee	Nominating and Corporate Governance
Committee
Internet Notice	Notice of Internet
Availability of Proxy Materials
IRC	U.S. Internal Revenue Code
IRS	U.S. Internal Revenue
Service
NEOs	The
Company’s CEO (Mr. D’Souza) and CFO (Ms. McLoughlin), each of the
Company’s three other most highly compensated executive officers (Mr.
Mehta, Mr. Chintamaneni and Mr. Sinha), and Mr. Coburn, who would have
been one of the Company’s three most highly compensated executive officers
for 2016 had he not resigned as the Company’s President on September 27,
2016
NASDAQ	The NASDAQ Stock Market
LLC
non-GAAP EPS	Non-GAAP diluted earnings per share (see “Non-GAAP
Financial Measures and Forward-Looking Statements”)
non-GAAP Income from
Operations	Non-GAAP income from
operations (see “Non-GAAP Financial Measures and Forward-Looking
Statements”)
non-GAAP Operating Margin	Non-GAAP operating margin (see “Non-GAAP Financial
Measures and Forward-Looking Statements”)
non-employee
Directors	Directors who are not
employees of the Company or any of its subsidiaries
Pay
Governance	Pay
Governance, LLC, independent compensation consultant to the Compensation
Committee
PSUs	Restricted stock units
with performance- and time-based vesting requirements
PwC	PricewaterhouseCoopers LLP, the Company’s independent
registered public accounting firm
Record Date	April 10, 2017, the record
date for the Annual Meeting
Reporting Persons	Directors, executive officers and stockholders who
beneficially own more than 10% of any class of the Company’s equity
securities registered pursuant to Section 12 of the Exchange
Act
RSUs	Restricted stock units
with time-based vesting requirements
Rule 14a-8	Rule 14a-8 under the Exchange Act
SEC	U.S. Securities and Exchange
Commission

78 Cognizant Technology Solutions Corporation

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Weblinks

Board of Directors
Cognizant Board	https://www.cognizant.com/company-overview/board-of-directors
Board
Committee Charters
Audit
Committee	https://www.cognizant.com/about-cognizant-resources/AuditCommitteeCharter.pdf
Compensation Committee	https://www.cognizant.com/about-cognizant-resources/CompensationCommitteeCharter.pdf
Governance Committee	https://www.cognizant.com/about-cognizant-resources/CorporateGovernanceCommitteeCharter.pdf
Financial Reporting
Annual
Report	http://investors.cognizant.com/#annual-report
Cognizant
Corporate website	https://www.cognizant.com/
Leaders	https://www.cognizant.com/company-overview/executive-leadership
Investor Relations	http://investors.cognizant.com/
Governance Documents
By-laws	https://www.cognizant.com/about-cognizant-resources/by-laws.pdf
Certificate of Incorporation	https://www.cognizant.com/about-cognizant-resources/certificate-of-incorporation.pdf
Code
of Ethics	https://www.cognizant.com/codeofethics.pdf
Corporate Governance Guidelines	https://www.cognizant.com/about-cognizant-resources/CorporateGovernanceGuidelines.pdf

Weblinks are provided for convenience only and the content on the referenced websites does not constitute a part of this proxy statement.

Contacts

Company Contacts Board Fax: 201-801-0243 corporategovernance@cognizant.com Corporate Secretary Fax: 201-801-0243 corporategovernance@cognizant.com General Counsel Fax: 201-801-0243 generalcounsel@cognizant.com Chief Compliance Officer Fax: 201-801-0243 chiefcomplianceofficer@cognizant.com or mail to our principal executive offices, attention to the applicable contact Our Principal Executive Offices Cognizant Technology Solutions Glenpoint Centre West 500 Frank W. Burr Blvd. Teaneck, New Jersey 07666 To Request Copies of the Internet Notice or Proxy Materials Broadridge Financial Solutions, Inc. (Tabulator/Inspector of Election) Broadridge Householding Department 51 Mercedes Way Edgewood, New York 11717 Phone: 800-542-1061 For Questions or Assistance Voting Innisfree M&A Incorporated (Proxy Solicitor for the Company) Stockholders call toll-free: 888-750-5834 Banks and brokers call collect: 212-750-5833

Table of Contents

PROXY CARD

Table of Contents

COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION GLENPOINTE CENTRE WEST 500 FRANK W. BURR BLVD. TEANECK, NJ 07666

VOTE BY INTERNET - www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Follow the instructions to obtain your records and to create an electronic voting instruction form.

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VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.

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COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
The Board of Directors recommends you vote FOR each of the
nominees:
1.	Election of Directors
	Nominees		For	Against	Abstain
	1a.	Zein
Abdalla	☐	☐	☐
	1b.	Betsy S. Atkins	☐	☐	☐
	1c.	Maureen
Breakiron-Evans	☐	☐	☐
	1d.	Jonathan Chadwick	☐	☐	☐
	1e.	John M. Dineen	☐	☐	☐
	1f.	Francisco D'Souza	☐	☐	☐
	1g.	John N. Fox, Jr.	☐	☐	☐
	1h.	John E. Klein	☐	☐	☐
	1i.	Leo S. Mackay, Jr.	☐	☐	☐
	1j.	Michael
Patsalos-Fox	☐	☐	☐
	1k.	Robert E. Weissman	☐	☐	☐

| The Board of
Directors recommends you vote FOR proposal 2. | | | For | Against | Abstain |
| --- | --- | --- | --- | --- | --- |
| 2. | Approval, on an advisory
(non-binding) basis, of the compensation of the Company's named executive
officers. | | ☐ | ☐ | ☐ |
| The Board of
Directors recommends you vote 1 YEAR on proposal 3. | | 1
Year | 2
Years | 3
Years | Abstain |
| 3. | Approval, on an advisory
(non-binding) basis, of the frequency of future advisory votes on the
compensation of the Company's named executive officers. | ☐ | ☐ | ☐ | ☐ |
| The Board of
Directors recommends you vote FOR proposals 4, 5 and 6. | | | For | Against | Abstain |
| 4. | Approval of the Company's 2017
Incentive Award Plan. | | ☐ | ☐ | ☐ |
| 5. | Ratification of the
appointment of PricewaterhouseCoopers LLP as the Company's independent
registered public accounting firm for the year ending December 31,
2017. | | ☐ | ☐ | ☐ |
| 6. | Stockholder proposal
requesting that the Board of Directors take the steps necessary to
eliminate the supermajority voting provisions of the Company's Certificate
of Incorporation and By-laws. | | ☐ | ☐ | ☐ |
| The Board of
Directors recommends you vote AGAINST proposal 7. | | | For | Against | Abstain |
| 7. | Stockholder proposal
requesting that the Board of Directors take the steps necessary to permit
stockholder action by written consent. | | ☐ | ☐ | ☐ |
| Note: To
transact such other business as may properly come before the meeting or
any continuation, postponement or adjournment thereof. | | | | | |

Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.

Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date

Table of Contents

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.

E27398-P90194

PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF STOCKHOLDERS OF COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION CLASS A COMMON STOCK JUNE 6, 2017

Please date, sign and mail your proxy card in the envelope provided as soon as possible.

The undersigned stockholder(s) of Cognizant Technology Solutions Corporation hereby appoint(s) Karen McLoughlin, Chief Financial Officer of the Company, Robert Telesmanic, Senior Vice President, Controller and Chief Accounting Officer of the Company, and Harry Demas, Vice President, Assistant General Counsel and Assistant Secretary of the Company, as proxies, with full power of substitution, to vote all shares of the Company's Class A Common Stock which the undersigned stockholder(s) is/are entitled to vote at the Company's 2017 Annual Meeting of Stockholders or any postponement, continuation or adjournment thereof.

This proxy will be voted in the manner directed herein by the undersigned stockholder. If no direction is made, this proxy will be voted in accordance with the Board of Directors' recommendations. The proxies are further authorized to vote in their discretion (1) for the election of any person to the Board of Directors if any nominee named herein becomes unable to serve or for good cause will not serve, (2) on any matter that the Board of Directors did not know would be presented at the Annual Meeting by a reasonable time before the proxy solicitation was made, and (3) on such other business as may properly come before the meeting or any continuation, postponement or adjournment thereof.

Continued and to be signed on reverse side