Compuware (CPWR)

 

In April 2008, the Committee approved grants independent of the EIP to the NEOs and certain other management and key personnel. The purpose of this special grant was to add a significant equity-based incentive for the Company’s executives to drive the transformation of our business as set out in our Compuware 2.0 strategy, exceed corporate performance expectations by sustaining long-term growth, and increase shareholder value. The CEO, President/COO and the CFO received 500,000 options each. The former CTO, Mr. Bockhausen, and CAO received 200,000 options each. Mr. Czarnik, now the current CTO, received 50,000 options. The amounts were recommended by the CEO based on the level of responsibility and influence individuals are expected to contribute to the business transformation and strategy initiatives. These options were granted on April 17, 2008 under the Company’s LTIP, have an exercise price equal to the fair market value of the common stock on that date as

 

In fiscal 2008, the number of options granted to each NEO and Mr. Costello was determined according to the formula set forth in the EIP. These options were granted under the Company’s Long Term Incentive Plan, or “LTIP”, on November 8, 2007, the date of the first Compensation Committee and Board meetings following the annual shareholders meeting at which the LTIP was approved. The options vest as follows: zero percent on the first anniversary of the grant date, zero percent on the second anniversary, 50 percent on the third anniversary, 25 percent on the fourth anniversary, and the remaining 25 percent on the fifth anniversary. The options will become immediately exercisable if the Company is acquired or if the NEO dies or becomes disabled. The options expire ten years after grant or earlier if the NEO’s employment is terminated.

 

In April 2008, the Committee approved grants independent of the EIP to the NEOs and certain other management and key personnel. The purpose of this special grant was to add a significant equity-based incentive for the Company’s executives to drive the transformation of our business as set out in our Compuware 2.0 strategy, exceed corporate performance expectations by sustaining long-term growth, and increase shareholder value. The CEO, President/COO and the CFO received 500,000 options each. The CTO and CAO received 200,000 options each. These options were granted on April 17, 2008 under the Company’s LTIP, have an exercise price equal to the fair market value of the common stock on that date as determined under the LTIP and vest as follows: 30 percent on the first anniversary of the grant date, 30 percent on the second anniversary, and 40 percent on the third anniversary. This three-year vesting schedule retains the long-term element of equity-based incentives, while enabling earlier rewards if achievements result in increased share price. The options will become immediately exercisable if the Company is acquired or if the NEO dies or becomes disabled. The options expire ten years after grant or earlier if the NEO’s employment is terminated.

 

It is anticipated that two of the NEOs (the CTO and CAO) will be granted options in fiscal 2009 using the EIP formula and terms. The CEO, President/COO, and the CFO will not receive option grants under the EIP for fiscal 2009 since they received 500,000 options in April 2008 as discussed previously and the LTIP limits the number of option grants to individual participants to 500,000 options in any one fiscal year.