VRTU Virtusa Corporation

Item 2.01 Completion of Acquisition or Disposition of Assets

Merger Agreement

The information set forth in the Introduction to this Current Report on Form 8-K is incorporated by reference into this item 2.01.

At the effective time of the Merger (the “Effective Time”), each share of Company common stock, par value $0.01 per share (the “Company Common Stock”) issued and outstanding (other than (i) shares held by the Company as treasury stock or owned by Parent or Sub and (ii) shares held by stockholders who have properly and validly exercised their statutory rights of appraisal in respect of such shares (collectively, the “Excluded Shares”)) were cancelled and automatically converted into the right to receive cash in an amount equal to $51.35 per share, without interest and net of any withholding of taxes thereon (the “Merger Consideration”). Pursuant to the Merger Agreement, immediately prior to the Effective Time, all issued and outstanding shares of Series A Convertible Preferred Stock, par value $0.01 per share, of the Company (the “Company Series A Preferred Stock”) were converted into shares of Company Common Stock at the then applicable Conversion Rate (as defined in the Certificate of Powers, Designations, Preferences and Rights of the Company Series A Preferred Stock (the “Preferred Stock Certificate of Designation”)) and the shares of Company Common Stock into which such shares of Company Series A Preferred Stock were converted were cancelled and automatically converted into the right to receive the Merger Consideration.

I. Closing Stock Award Payments: At the Effective Time by virtue of the consummation of the Merger and without any action required on the part of the holders thereof, the Closing Company Stock Awards (as defined in the Merger Agreement) (i.e., certain Company Stock Options, Company RSU Awards, Company Five-Year PSU Awards, and Company PRSU Awards (each as defined in the Merger Agreement), which are vested or will be subject to accelerated vesting in connection with the Merger) shall, immediately prior to the Effective Time, be cancelled and extinguished and, in exchange therefor, each holder of such Closing Company Stock Award shall have the right to receive an amount in cash equal to the product of (x) the aggregate number of shares of Company Common Stock subject to the Closing Company Stock Awards held by such holder (it being agreed that for each Closing Company Stock Award subject to performance-based vesting conditions, the aggregate number of shares of Company Common Stock subject to such award will be deemed to be the target number of shares set forth in the applicable award agreement) immediately prior to the Effective Time and (y) the Merger Consideration, less any per share exercise or purchase price of such Closing Company Stock Award immediately prior to such cancellation, net of applicable withholding taxes and without interest.

II. Cash Replacement Award Payments:

At the Effective Time by virtue of the Merger and without any action on the part of the holders thereof, each Assumed Company Stock Award (as defined in the Merger Agreement) (i.e., any Company Stock Options, Company RSU Awards, Company Five-Year PSU Awards, and Company PRSU Awards that are not Closing Company Stock Awards) shall, immediately prior to the Effective Time, be cancelled and replaced with a conditional right for the applicable holder (each, a “Cash Replacement Award”) to receive an amount in cash equal to the product of (x) the aggregate number of shares of Company Common Stock subject to the Assumed Company Stock Award held by such holder (it being agreed that for each Assumed Company Stock Award subject to performance-based vesting conditions, the aggregate number of shares of Company Common Stock subject to such award will be deemed to be the target number of shares set forth in the applicable award agreement and such awards will no longer be subject to any performance-based vesting conditions) immediately prior to the Effective Time and (y) the Merger Consideration, less any per share exercise or purchase price of such Assumed Company Stock Award immediately prior to such cancellation, net of applicable withholding taxes and without interest (such amounts, the “Cash Replacement Award Payments”).

Each Cash Replacement Award will be subject to the same terms and conditions (including time-based vesting terms) that apply to the Assumed Company Stock Award that it has replaced (other than terms that are no longer applicable by virtue of the Merger, as determined by Parent in its reasonable judgment); provided, however, that any outstanding Cash Replacement Award will accelerate and vest in full (and the corresponding Cash Replacement Award Payment will become payable) upon the earliest of (i) the original applicable time-based vesting date, (ii) the date that is twelve (12) months following the Closing Date (the “Retention Date”), subject to the applicable holder’s continued employment with the Company or the applicable Company Subsidiary through the Retention Date and (iii) the date that such holder’s employment is terminated by the Company or the applicable Company subsidiary without Cause (as defined in the Merger Agreement) or by such holder for Good Reason (as defined in the Merger Agreement), if applicable, in either case prior to the Retention Date (in either case, a “Qualifying Termination”).

In the event that a Cash Replacement Award holder’s employment with the Company or its applicable Company Subsidiary terminates for any reason prior to the original time-based vesting date or the Retention Date, as applicable, and such termination does not constitute a Qualifying Termination, any then-outstanding portion of such holder’s Cash Replacement Award will be automatically forfeited for no consideration.

The foregoing description of the Merger Agreement and the transactions contemplated thereby does not purport to be complete, and is qualified in its entirety by reference to, the full text of the Merger Agreement, a copy of which is filed as Exhibit 2.1 to this Current Report on Form 8-K and incorporated herein by reference.