17. BENEFIT PLANS

Employee Stock Ownership Plan (ESOP/401(K))

In July 1986, the Company established an Employee Stock Ownership Plan ("ESOP"). Under the terms of the ESOP, the Company may elect to make annual contributions to the Plan for the benefit of substantially all U.S. employees. The contribution may be in the form of cash or Company common stock. The Board of Directors authorizes contributions between a maximum of 25% of eligible annual compensation and a minimum sufficient to cover current obligations of the Plan. This is a non-leveraged ESOP plan.

Effective April 1, 2012, the Company implemented a matching program for the 401(k) component of the ESOP/401(k). The Company provides cash matches of 33% of employees' 401(k) contributions up to 2% of eligible earnings. Matching contributions by the Company vest 100% when an employee attains three years of service with the Company. During the year ended March 31, 2013, the Company expensed $4.3 million related to this program. There have been no other contributions to the ESOP/401(K) plan in the past three fiscal years.

Employee Stock Purchase Plan

During fiscal 2002, the shareholders approved international and domestic employee common stock purchase plans under which the Company was authorized to issue up to 15 million shares of common stock to eligible employees. Under the terms of the plan, employees can elect to have up to 10% of their compensation withheld to purchase Company common stock at the close of the offering period. The value of the common stock purchased in any calendar year cannot exceed $25,000 per employee. The purchase price is 95% of the closing market sales price on the market date immediately preceding the last day of the offering period. Effective December 1, 2007, the Company discontinued the plan for employees outside the U.S. and Canada. During fiscal 2013, 2012 and 2011, the Company sold approximately 295,000, 351,000 and 292,000 shares, respectively, to eligible employees under the plan.

Employee Equity Incentive Plans

In June 2007, the Company's Board of Directors adopted the 2007 Long Term Incentive Plan (the "LTIP") that was approved by the Company's shareholders in August 2007. The Compensation Committee may grant stock options, stock appreciation rights, restricted stock, restricted stock units, performance-based cash or stock awards and cash incentive awards under the LTIP. During the 2011 annual meeting of shareholders, shareholders approved an increase of 13.5 million in the number of common shares authorized for issuance under the 2007 LTIP, which increased the aggregate number of common shares reserved by the Company for issuance under the 2007 LTIP to 41.5 million as of March 31, 2013 (less shares previously issued).

Prior to the LTIP, the Company had seven stock option plans ("Plans") dating back to 1991. All but one of the Plans, the 2001 Broad Based Stock Option Plan ("BBSO"), were approved by the Company's shareholders. The BBSO was approved by the Board of Directors in March 2001, but was not submitted to the shareholders for approval, as shareholder approval was not required at the time. These Plans have been terminated as to future grants.

In August 2009, Covisint Corporation ("Covisint"), a subsidiary of the Company, established a 2009 Long-Term Incentive Plan ("2009 Covisint LTIP") allowing the Board of Directors of Covisint to grant stock options, stock appreciation rights, restricted stock, restricted stock units, performance-based cash or restricted stock unit awards and annual cash incentive awards to employees and directors of Covisint. The 2009 Covisint LTIP reserves 150,000 common shares of Covisint for issuance under this plan.

Stock Options Activity

Options that Vest Based on Service Conditions Only

A summary of activity for options that vest based on service conditions only under the Company's stock-based compensation plans as of March 31, 2013, and changes during the year then ended is presented below (shares and intrinsic value in thousands):

	Twelve Months Ended
	March 31, 2013
							Weighted
					Weighted		Average
					Average		Remaining		Aggregate
	Number of				Exercise		Contractual		Intrinsic
	Options			Price			Term in Years		Value
Options outstanding as of March 31, 2012		21,620			$	8.06
Granted		2,336				10.29
Exercised		(3,488	)			6.74			$	12,295
Forfeited		(1,193	)			10.03
Cancelled/expired		(199	)			10.10
Options outstanding as of March 31, 2013		19,076			$	8.44		6.53	$	77,311

Options vested and expected to vest, net of estimated forfeitures, as of March 31, 2013		18,296			$	8.40		6.44	$	74,840

Options exercisable as of March 31, 2013		10,871			$	8.17		5.36	$	46,955

During fiscal 2013, stock option holders of approximately 217,000 stock options elected to make a cashless stock option exercise and received approximately 66,000 shares of common stock net of shares retained for the purchase price and tax obligations. During fiscal 2012, stock option holders of approximately 690,000 stock options elected to make a cashless stock option exercise and received 176,000 shares of common stock net of shares retained for the purchase price and tax obligations.

The vesting schedule of options has varied over the years with the following vesting terms being the most common: (1) 50% of shares vest on the third anniversary date and 25% on the fourth and fifth anniversary dates; (2) 25% of shares vest on each annual anniversary date over four years; (3) 40% of shares vest on the first anniversary date and 30% vest on the second and third anniversary dates; (4) 30% of shares vest on the first and second anniversary dates and 40% vest on the third anniversary date; or (5) 20% of shares vest on each annual anniversary date over five years.

All options were granted with exercise prices at or above fair market value on the date of grant and expire ten years from the date of grant. Option expense is recognized on a straight-line basis over the vesting period unless the options vest more quickly than the expense would be recognized. In this case, additional expense is taken to ensure the expense is proportionate to the percent of options vested at any point in time.

The average fair value of option shares vested during fiscal 2013, 2012 and 2011 was $4.14, $4.69 and $4.55 per share, respectively, and the total intrinsic value of options exercised were $12.3 million, $4.3 million and $24.7 million, respectively.

Options that Vest Based on both Performance and Service Conditions ("Performance Options")

During fiscal 2013, stock options that vest based on both service and performance conditions were granted to certain employees of the Company. The performance conditions are based on company-wide revenue and earnings targets and, as of March 31, 2013, it was not deemed probable that these targets will be achieved. If the revenue or earnings targets are achieved, substantially all of the earned stock options will vest in May 2015. As the performance conditions based on fiscal 2013 operating results were not met, approximately 781,000 of the performance options outstanding as of March 31, 2013 will cancel in May 2013. If the service and performance conditions for the remaining options are met, approximately $11.4 million in expense related to these options would be taken over the remaining vest period.

A summary of activity for options that vest based on the achievement of both service and performance conditions under the Company's stock-based compensation plans as of March 31, 2013, and changes during the year then ended is presented below (shares and intrinsic value in thousands):

	Twelve Months Ended
	March 31, 2013
						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
	Number of			Exercise		Contractual		Intrinsic
	Options			Price		Term in Years		Value
Options outstanding as of March 31, 2012		-		$	-
Granted		3,838			9.79
Forfeited		(190	)		9.73
Options outstanding as of March 31, 2013		3,648		$	9.79		9.49	$	9,854

Options vested and expected to vest, net of estimated forfeitures, as of March 31, 2013		-		$	-		-	$	-

Options exercisable as of March 31, 2013		-		$	-		-	$	-

Restricted Stock Units and Performance-Based Stock Awards Activity

A summary of non-vested restricted stock units ("RSUs") and performance-based stock awards ("PSAs" and collectively "Non-vested RSU") activity under the Company's LTIP as of March 31, 2013, and changes during the year then ended is presented below (shares and intrinsic value in thousands):

	Twelve Months Ended
	March 31, 2013
				Weighted
				Average		Aggregate
				Grant-Date		Intrinsic
	Shares			Fair Value		Value
Non-vested RSU outstanding at March 31, 2012		4,553
Granted		1,191		$	9.92
Released		(815	)			$	7,409
Forfeited		(79	)
Non-vested RSU outstanding at March 31, 2013		4,850

Approximately 42,000 PSAs were granted during fiscal 2013. The performance vesting conditions for these awards are based on company-wide revenue and earnings targets and it was not deemed probable that these targets will be achieved as of March 31, 2013. If the revenue or earnings targets are achieved, the earned PSAs will vest in May 2015. As the performance conditions based on fiscal 2013 operating results were not met, approximately 10,000 of the PSAs outstanding as of March 31, 2013 will cancel in May 2013.

RSUs have various vesting terms related to the purpose of the award. The following vesting terms are the most common: (1) 25% of shares vest on each annual anniversary date over four years; (2) 40% of shares vest on the first anniversary date and 30% vest on the second and third anniversary dates; or (3) 50% of shares vest on the first anniversary date and 50% vest on the second anniversary date.

The RSUs and PSAs are settled by the issuance of one common share for each unit upon vesting and vesting accelerates upon death, disability or a change in control.

Stock Awards Compensation

For the years ended March 31, 2013, 2012 and 2011, stock awards compensation expense was allocated as follows (dollars in thousands):

	Year Ended March 31,
	2013		2012		2011
Stock awards compensation classified as:

Cost of license fees	$	1	$	4	$	1
Cost of maintenance fees		775		812		464
Cost of subscription fees		46		23		62
Cost of professional services		293		349		525
Cost of application services		1,629		1,623		2,269
Technology development and support		2,337		2,205		1,273
Sales and marketing		6,664		6,279		5,553
Administrative and general		15,360		13,429		8,621
Restructuring costs		4,572

Total stock awards compensation expense before income taxes	$	31,677	$	24,724	$	18,768

As of March 31, 2013, total unrecognized compensation cost of $29.0 million, net of estimated forfeitures, related to nonvested Compuware equity awards is expected to be recognized over a weighted-average period of approximately 1.84 years.

Covisint Corporation 2009 Long-Term Incentive Plan

As of March 31, 2013, there were 143,000 stock options outstanding from the 2009 Covisint LTIP. The majority of these options will vest only if, prior to August 26, 2015, Covisint completes an initial public offering ("IPO") or if there is a change in control of the Covisint segment ("Covisint"). The Company has determined that options granted prior to December 31, 2012, may not satisfy certain requirements of Section 409A of the Internal Revenue Code ("Code"), and therefore offered recipients of these options an amendment which provides for fixed exercise dates for options that are so amended. The amendment is intended to cure any failure of the options to comply with Section 409A of the Code without incurring penalties thereunder. In December 2012, 110,100 of the outstanding options were amended. The compensation cost will be based on the fair value of the modified award. In connection with the modification of the options, the Company has also agreed to reimburse the option holders who have accepted the amendment for certain negative personal tax implications incurred as a result of any violation of Section 409A of the Code that may later be found to have occurred. Any such reimbursement would also include a tax gross-up, resulting in the net reimbursement equaling any penalties incurred based on Section 409A of the Code.

Most individuals who received stock options from the 2009 Covisint LTIP were also awarded PSAs from the Company's 2007 LTIP. There were 1.4 million PSAs outstanding as of March 31, 2013. These PSAs will vest only if Covisint does not complete an IPO or a change in control transaction by August 25, 2015, and the Covisint business meets a pre-defined revenue target for any four consecutive calendar quarters ending prior to August 26, 2015.

During the fourth quarter of fiscal 2011, we determined that Covisint's ability to meet the pre-defined revenue targets prior to August 26, 2015 was probable based on Covisint's revenue and billing growth in fiscal 2011 and Covisint's projected future revenue growth estimates. Previously, we considered the revenue targets improbable of being met. As a result, we recorded a charge of $1.9 million to "cost of application services" in the consolidated statement of comprehensive income (loss) during the fourth quarter of fiscal 2011. This charge represents the compensation cost that had accumulated from the grant date through March 31, 2011 based on the straight-line method.

As of March 31, 2013, unrecognized compensation cost related to Covisint stock options totaled approximately $24.7 million. This expense will be recognized over the requisite service period including a cumulative catch-up related to service provided through the date an IPO or change in control of Covisint occurs. It is expected that approximately 70 percent of this expense will be incurred in the fiscal year an IPO or change in control of Covisint occurs. If an IPO or change in control occurs prior to August 26, 2015, the PSAs granted to employees with Covisint stock options will be cancelled. As a result, expense will be recognized for the Covisint stock options, but all prior expense taken for the PSAs for employees with Covisint stock options will be reversed.