A silicon nitride layer (110) is formed over a transistor gate (40) and source and drain regions (70). The as-formed silicon nitride layer (110) comprises a first tensile stress and a high hydrogen concentration. The as-formed silicon nitride layer (110) is thermally annealed converting the first tensile stress into a second tensile stress that is larger than the first tensile stress. Following the thermal anneal, the hydrogen concentration in the silicon nitride layer (110) is greater than 12 atomic percent.