<PAGE> 1
COMPUWARE CORPORATION
3,341,603 SHARES
COMMON STOCK
The 3,341,603 shares of Common Stock offered hereby are being offered by
the Selling Shareholders described in this Prospectus under "Selling
Shareholders." Compuware Corporation ("Compuware" or the "Company") will not
receive any of the proceeds from the offering. The Common Stock is quoted on the
Nasdaq National Market under the symbol "CPWR". On January 7, 1998, the last
reported sale price for the Common Stock, as reported on the Nasdaq National
Market was $36.25 per share.
After completion of this offering, Peter Karmanos, Jr., the Chairman of the
Board and Chief Executive Officer of the Company, will control approximately
12.0% of the vote of the Common Stock.
-------------------------
THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS."
-------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
===========================================================================================
UNDERWRITING PROCEEDS TO
DISCOUNTS AND SELLING
PRICE TO PUBLIC COMMISSIONS SHAREHOLDERS
- -------------------------------------------------------------------------------------------
<C> <C> <C>
Market(1) Customary(2) Net(3)(4)
===========================================================================================
</TABLE>
(1) The shares of Common Stock offered hereby may be sold from time to time by
the Selling Shareholders, or by pledges, donees, transferees or other
successors in interest of the Selling Shareholders. Such sales may be made
on the Nasdaq National Market, or otherwise, at prices and on terms then
prevailing or at prices related to the then-current market prices, or in
negotiated transactions at negotiated prices; therefore, the price to the
public cannot be determined at this time.
(2) The shares may be sold by one or a combination of the following: (a) a block
trade in which the broker or dealer so engaged will attempt to sell the
shares as agent, but may position and resell a portion of the block as
principal to facilitate the transaction; (b) purchases by a broker or dealer
as principal and resale by such broker or dealer for its account pursuant to
this Prospectus; and (c) ordinary brokerage transactions and transactions in
which the broker solicits purchasers. Brokers or dealers will receive
commissions or discounts from Selling Shareholders in amounts to be
negotiated immediately prior to the sale. The amount of any such commissions
or discounts, which will be paid by the Selling Shareholders, cannot be
determined at this time.
(3) These securities are offered on behalf of the Selling Shareholders, and,
therefore, no proceeds from the offering of such securities will be paid to
the Company.
(4) All proceeds are before deduction of the total expenses of this offering,
including legal, accounting, and printing expenses, which are estimated to
be approximately $70,000 and will be borne by the Company.
The date of this Prospectus is January 22, 1998
<PAGE> 2
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFERING DESCRIBED HEREIN AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR ANY SELLING SHAREHOLDER. THE DELIVERY OF THIS
PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION HEREIN IS CORRECT AS
OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL
OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITY OTHER THAN THE SHARES OF
COMMON STOCK TO WHICH IT RELATES, OR AN OFFER OR SOLICITATION TO ANY PERSON IN
ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL, OR TO
ANY PERSON TO WHOM IT IS UNLAWFUL.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and in accordance therewith files
reports and other information with the Securities and Exchange Commission (the
"Commission") relating to its business, financial position, results of
operations and other matters. Such reports and other information can be
inspected and copied at the Public Reference Section maintained by the
Commission at Room 1024 Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549 and its Regional Offices located at Citicorp Center, 500 West Madison
Street, 14th Floor, Suite 1400, Chicago, Illinois 60661, and 7 World Trade
Center, 13th Floor, Suite 1300 New York, New York 10048. Copies of such material
can also be obtained from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Such material
may also be accessed electronically by means of the Commission's home page on
the Internet at http://www.sec.gov.
The Company has filed with the Commission in Washington, D.C., a
Registration Statement on Form S-3 under the Securities Act of 1933 (the
"Securities Act") with respect to the securities offered hereby. As permitted by
the rules and regulations of the Commission, this Prospectus omits certain
information contained in the Registration Statement. For further information
with respect to the Company and the securities offered hereby, reference is
hereby made to the Registration Statement and to the exhibits and schedules
filed therewith. Statements contained in this Prospectus regarding the contents
of any documents filed with, or incorporated by reference in, the Registration
Statement as exhibits are not necessarily complete, and each such statement is
qualified in all respects by reference to the copy of the applicable documents
filed with the Commission. The Registration Statement, including the exhibits
and schedules thereto, may be inspected at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, and copies of all or any part thereof may be obtained from such
office upon payment of the prescribed fees.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company with the Commission
(File No. 0-20900) pursuant to the Exchange Act are incorporated by reference in
this Prospectus:
(1) Registration Statement on Form 8-A dated November 27, 1992;
(2) Annual Report on Form 10-K for the fiscal year ended March 31,
1997;
(3) Proxy Statement with respect to Annual Meeting of Shareholders
held August 26, 1997; and
(4) Quarterly Reports on Form 10-Q for the quarters ended June 30,
1997 and September 30, 1997.
Also incorporated by reference in this Prospectus is the Company's
Registration Statement, dated September 21, 1994, filed with the Commission
(File No. 33-82734) pursuant to the Securities Act.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of this offering shall be deemed to be incorporated by reference
in this Prospectus and to be a part hereof from the date of filing such
documents. Any statement contained herein or in a document incorporated or
deemed to be incorporated by reference
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<PAGE> 3
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein, or in any
subsequently filed document which also is or is deemed to be incorporated by
reference herein, modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus. Copies of the documents incorporated
herein by reference (excluding exhibits unless such exhibits are specifically
incorporated by reference into such documents) may be obtained upon written or
oral request without charge by persons, including beneficial owners, to whom
this Prospectus is delivered. Requests should be made to Christopher M.F.
Norris, Director, Corporate Communications, 31440 Northwestern Hwy., Farmington
Hills, MI 48334-2564, (248) 737-7300.
THE COMPANY
Compuware provides software products and professional services designed to
increase the productivity of the information systems departments of the 15,000
largest users worldwide deploying data processing technology. The Company
focuses on the run-time, application development and system management
environments for the mainframe and client/server markets where it has extensive
experience and has established long-term customer relationships and where its
products and services yield the most benefit.
Compuware's integrated line of run-time software products improve
programmer productivity in testing, debugging and maintaining large-scale
application software. The Company's target market for its current run-time
products includes users of all major IBM and IBM-compatible mainframe
programming environments, including the MVS and VSE operating systems, the CICS
communications system and the IMS and DB2 database management systems.
The Company also develops, markets and supports client/server application
development and system management products that assist software developers in
creating, deploying and maintaining client/server applications, as well as
managing these complex environments. Compuware's application development
software toolset, UNIFACE, enables software developers to create applications
that are not tied to any specific hardware platform, operating system, database
management system or graphical user interface. The Company's client/server
system management products help diagnose and correct system problems as they
occur, optimize system performance and manage various hardware and software
configurations across the network from a single location.
The Company also offers a broad range of data processing professional
services including business systems analysis, design and programming, software
conversion and systems planning and consulting. The increase in the adoption of
client/server systems has accelerated the growth of the market for professional
services and consulting to assist customers in application development and
systems management. Compuware has trained its professional services staff in
UNIFACE technology so that it can assign a significant portion of such personnel
to fulfill client/server-oriented consulting and implementation requirements.
The Company was incorporated in Michigan in 1973. Unless the context
otherwise requires, references in this Prospectus to the "Company" and
"Compuware" refer to Compuware Corporation and its consolidated subsidiaries.
The Company's executive offices are located at 31440 Northwestern Highway,
Farmington Hills, Michigan 48334-2564, and its telephone number is (248)
737-7300.
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<PAGE> 4
RISK FACTORS
The following risk factors should be considered carefully in evaluating the
Company and its business before purchasing shares of the Common Stock offered
hereby.
FLUCTUATIONS IN QUARTERLY PERFORMANCE
The Company's revenues vary from quarter to quarter, with the largest
portion of revenues historically recognized in the third and fourth quarters of
each fiscal year. The Company believes that these quarterly patterns are partly
attributable to the Company's sales commission policies on its software
products, which compensate sales personnel for meeting or exceeding annual
quotas, and to the budgeting and purchasing cycles of customers. The Company
typically does not have a material backlog of unfilled orders, and revenues in
any quarter are substantially dependent on orders booked in the quarter. The
Company's professional services revenues may fluctuate quarterly due to the
completion or commencement of significant assignments, the number of working
days in a quarter and the utilization rate of professional services personnel.
The Company's quarterly operating results may fluctuate due to numerous
factors, including the demand for the Company's products and professional
services, the size and timing of customers' orders, the introduction of new
products and product enhancements by the Company or its competitors, price
changes by the Company, changes in the proportion of revenues attributable to
licenses versus service fees, product mix, commencement or conclusion of
significant services contracts, changes in foreign currency exchange rates,
timing of acquisitions and associated costs, and competitive conditions in the
industry. Net income may be disproportionately affected by a reduction in
revenues because only a small portion of the Company's expenses varies with
revenues.
The Company's operating plan has traditionally been based on products and
professional services for the mainframe market. If the proportion of the
Company's revenues derived from the client/server market increases, the
Company's operating margins could be lower as a percentage of total revenues.
Professional services have traditionally been less profitable than products,
with professional services generally more profitable in the client/server market
than in the mainframe market. On the other hand, the market for client/ server
products is more competitive than the Company's traditional mainframe product
market and, therefore, may not be as profitable. Although the proportion of the
Company's net income derived from the client/server market has remained
relatively constant over the past three years, the proportion of net income
derived from the client/server and mainframe markets may change in the immediate
future. The Company cannot predict the extent to which the above factors will
lead to changes in its overall operating results.
TECHNOLOGICAL CHANGE
The Company's success will depend in part on its ability to develop product
enhancements and new products which keep pace with continuing changes in
technology and customer preferences. There can be no assurance that the Company
will be successful in developing product enhancements or new products to address
changing technologies adequately, that it can introduce such products on a
timely basis, or that any such products or enhancements will be successful in
the marketplace. The Company's failure to develop technological improvements or
to adapt its products to technological change may, over time, have a material
adverse effect on the Company's business. In addition, the majority of the
Company's products are purchased by customers using IBM and IBM-compatible
mainframe computing platforms and, to a much lesser extent, workstations and
personal computers. Worldwide, computing power is increasingly provided by
alternative computing platforms, including mid-range computers, client/server
networks, workstations and personal computers ("PCs"). A significant shift in
the way the Company's customers use computing platforms may have a material
adverse effect on the Company's business.
INTERNATIONAL SALES
The Company derived approximately $253.8 million, $208.8 million and $189.6
million of revenues from foreign operations and export sales in fiscal 1997,
1996 and 1995, respectively, which constituted approximately 31.2%, 34.0% and
35.5% of total revenues for those periods. The Company expects that such sales
will
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<PAGE> 5
continue to generate a significant percentage of its total revenues. Products
are priced in the currency of the country in which they are sold. Although the
Company seeks to reduce this risk by hedging, changes in the exchange rates of
foreign currencies or exchange controls may adversely affect the Company's
results of operations. The international business is also subject to other
risks, including the need to comply with foreign and U.S. export laws and the
greater difficulty of managing business overseas. In addition, the Company's
foreign operations are affected by general economic conditions in the
international markets in which the Company does business. A prolonged economic
downturn in Europe or Asia Pacific may have a material adverse effect on the
Company's business.
RELIANCE ON ACQUISITIONS
Substantially all of the Company's products have been developed from
acquired technology and products. To date, the Company has been successful in
developing acquired products and technologies into marketable software suitable
for its distribution channels. The Company believes that its future growth lies,
in part, in continuing to identify, acquire and then develop promising
technologies and products. While the Company is continually searching for
acquisition opportunities, there are presently no agreements, arrangements or
understandings with respect to any material acquisition and there can be no
assurance that the Company will continue to be successful in identifying,
acquiring and developing products and technology. If any potential acquisition
opportunities are identified, there can be no assurance that the Company will
consummate and successfully integrate any such acquisitions and there can be no
assurance as to the timing or effect on the business of the Company of any such
acquisitions.
IBM MAINFRAME DEPENDENCE
The Company's currently available run-time software products, which
comprise the majority of the Company's revenues for software products, are
designed for use with IBM and IBM-compatible mainframe computers. Specifically,
these software products target users of the MVS and VSE operating systems, the
CICS communications subsystem and the IMS and DB2 database management systems.
As a result, future sales of the Company's existing run-time products and
associated recurring maintenance revenues are dependent upon continued use of
IBM and IBM-compatible mainframes and their related systems software. In
addition, because the Company's run-time products operate in conjunction with
IBM systems software, changes to IBM systems software may require the Company to
adapt its run-time products to these changes. An inability to do so, or any
delay in doing so, may adversely affect the Company's operating results.
COMPETITION
The markets for Compuware's software products are highly competitive and
characterized by continual change and improvement in technology. Compuware's
competitors include BMC Software, Inc., Computer Associates International, Inc.,
Centura Software Corporation, Forte Software, Inc., Informix Corporation, Oracle
Corporation, PLATINUM Technology, Inc., Sybase, Inc., and VIASOFT, Inc. None of
the competitors competes in all of the same product lines as Compuware. In
addition, although Compuware believes its products are generally complementary
to those marketed by IBM, IBM does offer some products that are directly
competitive and there can be no assurance that IBM will not choose to offer
significant competing products in the future. The principal competitive factors
affecting the market for the Company's software products include: responsiveness
to customer needs, functionality, performance, reliability, ease of use, quality
of customer support, vendor reputation and price. The Company believes, based on
its current market position, that it has competed effectively in the software
products marketplace to date. Nevertheless, a variety of external and internal
events and circumstances could adversely affect the Company's competitive
capacity. The Company's ability to remain competitive will depend, to a great
extent, upon its performance in product development and customer support. To be
successful in the future, the Company must respond promptly and effectively to
the challenges of technological change and its competitors' innovations by
continually enhancing its own product offerings.
The market for data processing professional services is highly competitive,
fragmented and characterized by low barriers to entry. Compuware's principal
competitors in professional services include Andersen
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<PAGE> 6
Consulting, Electronic Data Systems Corporation, IBM's Integrated Systems
Solutions Corp. and numerous small regional and local firms in the markets in
which Compuware has professional services offices. Several of these competitors
have substantially greater financial, marketing, recruiting and training
resources than Compuware. The principal competitive factors affecting the market
for Compuware's professional services include responsiveness to customer needs,
breadth and depth of technical skills offered, availability and productivity of
personnel, ability to demonstrate achievement of results and price. Due to the
continued increase in revenues in professional services, Compuware believes that
it has competed effectively to date in all these areas. There is no assurance
that the Company will be able to compete as successfully in the future.
PROFESSIONAL SERVICES CUSTOMER CONCENTRATION
A substantial portion of the Company's data processing professional
services revenues in any one year has historically been derived from a small
number of clients. In fiscal 1997, 1996 and 1995, approximately 9.4%, 9.0% and
11.4%, respectively, of the Company's professional services revenues were
attributable to The Ford Motor Company ("Ford"). The Company believes that Ford
will continue to represent a significant portion of the revenues of the
professional services business for at least the next twelve months. The loss of,
or reduced demand for services from, any of the Company's major services clients
could have an adverse effect on the results of operations.
PROPRIETARY RIGHTS
The Company regards its software as proprietary and attempts to protect it
with copyrights, trademarks, trade secret laws and restrictions on disclosure,
copying and transferring title. Despite these precautions, it may be possible
for unauthorized third parties to copy certain portions of the Company's
products or to obtain and use information that the Company regards as
proprietary. The Company has no patents, and existing copyright laws afford only
limited practical protection. In addition, the laws of some foreign countries do
not protect the Company's proprietary rights to the same extent as do the laws
of the United States. Furthermore, as the number of software products in the
industry increases and the functionality of these products further overlaps, the
Company believes that software developers will become increasingly subject to
infringement claims. Any such claims, with or without merit, can be time
consuming and expensive to defend.
During the due diligence stage of any software acquisition, the Company
researches and investigates the title to the software it will be acquiring from
the seller. This investigation generally includes without limitation, litigation
searches, copyright and trademark searches, review of development documents and
interviews with key employees of the seller regarding development, title and
ownership of the software products being acquired. The acquisition document
itself generally contains representations, warranties and covenants concerning
the title and ownership of the software products as well as indemnification and
remedy provisions in the event the representations, warranties and covenants are
breached by the seller. New hires of the Company sign an offer letter which
states that the new employee is being hired for his or her talent and skill
rather than for any trade secrets or proprietary information of others of which
he or she may have knowledge. Further, employees of the Company execute an
employee agreement that provides that work developed for the Company or clients
of the Company belong to the Company or its clients, respectively. Although
Compuware has not received any claims that its products infringe on the
proprietary rights of third parties, there can be no assurance that third
parties will not assert infringement claims against Compuware in the future with
respect to current and future products or that any such assertion may not
require Compuware to enter into royalty arrangements or result in costly
litigation.
DEPENDENCE ON KEY EMPLOYEES AND TECHNICAL PERSONNEL
The Company's success will depend in part upon the continued service of its
key senior management and technical personnel. All executive officers are
subject to employment contracts and the Company maintains key man life insurance
on all such personnel in amounts ranging from $0.5 million to $7.2 million. The
Company's future success also depends on its continuing ability to attract and
retain highly qualified technical, managerial and marketing personnel. The
market for professional services and software products personnel has
historically been, and the Company expects that it will continue to be,
intensely competitive. To date, the
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Company has been successful in attracting and retaining qualified technical
personnel. There can be no assurance, however, that the Company will continue to
be successful in attracting or retaining such personnel. The loss of certain key
employees or the Company's inability to attract and retain other qualified
employees could have a material adverse effect on the Company's business.
CONTROL BY CERTAIN PRINCIPAL SHAREHOLDERS
As of the date of this Prospectus, Peter Karmanos, Jr., Chairman of the
Board, Chief Executive Officer and a Director of the Company, had the power to
vote 12.0% of the outstanding shares of Common Stock of the Company. Certain
shareholders who had owned, as of the date of this Prospectus, an aggregate of
18,927,586 shares of Common Stock (not including 1,758,600 shares subject to
options) have granted Mr. Karmanos proxies, expiring in November 2002, to vote
their shares, including shares subject to such options, in all matters coming
before the shareholders. A proxy granted by Mr. Karmanos' wife, Debra Glendening
Karmanos, does not bear an expiration date. Such shareholders are permitted to
sell their shares free of the proxies in bona fide open market transactions.
Except for the proxy granted by Debra Glendening Karmanos, the proxies will be
exercisable by Thomas Thewes, if he survives Mr. Karmanos. As a result, Mr.
Karmanos has and, in the future, Mr. Thewes may have, significant influence over
the affairs of the Company, including any merger, consolidation, or sale of all
or substantially all of the Company's assets.
MICHIGAN LAW; ANTI-TAKEOVER EFFECT OF CERTAIN CHARTER PROVISIONS
Certain provisions of the Company's Restated Articles of Incorporation and
Bylaws and of Michigan law could delay or make more difficult a merger, tender
offer or proxy contest involving the Company. Michigan law provides that certain
business combinations between covered Michigan corporations and a holder of 10%
or more of the corporation's stock can only be consummated if approved by a 90%
shareholder vote and by a two-thirds vote of unaffiliated shareholders, unless
five years have elapsed since the acquisition by the 10% shareholder of its
stock and unless certain other conditions are satisfied. Although such
provisions are not applicable to the Company at this time, Michigan law allows
the Board of Directors to choose to be subject to such provisions at any time.
As a result, these provisions could discourage a third party from paying to the
shareholders a premium in a tender offer or other change of control transaction.
In addition, the Board of Directors has authority to issue up to 5,000,000
shares of Class A Preferred Stock and to fix the rights, preferences, privileges
and restrictions, including voting rights, of those shares without any further
vote or action by the shareholders. The rights of the holders of the Common
Stock will be subject to, and may be adversely affected by, the rights of the
holders of any Preferred Stock that may be issued in the future. While the
Company believes that the ability to issue Preferred Stock provides desirable
flexibility in connection with possible acquisitions and other corporate
purposes, the issuance of Preferred Stock could have the effect of making it
more difficult for a third party to acquire a majority of the outstanding voting
stock of the Company.
POTENTIAL VOLATILITY OF STOCK PRICE
The Company believes that factors such as quarterly fluctuations in results
of operations and announcements of acquisitions or new products by the Company
or by its competitors may cause the market price of the Common Stock to
fluctuate. Moreover, in recent years the stock market in general, and the shares
of technology companies in particular, have experienced extreme price
fluctuations. These broad market and industry fluctuations may adversely affect
the market price of the Company's Common Stock.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Common Stock offered hereby by the Selling Shareholders.
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DIVIDEND POLICY
The Company has not paid any cash dividends on its Common Stock since
fiscal 1986. The Company's loan agreement expressly prohibits the payment of any
cash dividends on Common Stock. The Company currently expects that it will
retain any earnings for use in the operation and expansion of its business and
does not anticipate paying any cash dividends on its Common Stock in the
foreseeable future.
DETERMINATION OF OFFERING PRICE
The offering price of the securities offered hereby by Selling Shareholders
may be based either on the market price of such securities on the Nasdaq
National Market as it may exist from day to day during the offering period or
may reflect a negotiated price.
SELLING SHAREHOLDERS
The persons listed in the first column of the table below are the "Selling
Shareholders." The Selling Shareholders are the former shareholders of Nu-Mega
Technologies, Inc. a New Hampshire corporation ("NuMega"), acquired by Compuware
pursuant to an Agreement and Plan of Merger, dated as of December 2, 1997 (the
"Merger Agreement"). In connection with the acquisition of NuMega by Compuware,
the Selling Shareholders received an aggregate of 3,341,603 shares of Compuware
Common Stock for their stock in NuMega. Of the 3,341,603 shares received by the
Selling Shareholders,up to 334,150 may be held in escrow to secure the
indemnification obligations of the Selling Shareholders as provided in the
Merger Agreement.
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The following table shows for each Selling Shareholder, as of the date of
this Prospectus, certain information with regard to beneficial ownership of
Common Stock of the Company:
<TABLE>
<CAPTION>
AMOUNT OF AMOUNT OF AMOUNT AND PERCENT
BENEFICIAL OWNERSHIP COMMON OF BENEFICIAL OWNERSHIP
OF COMMON STOCK STOCK OF COMMON STOCK
NAME PRIOR TO OFFERING HEREBY OFFERED AFTER OFFERING(1)
---- -------------------- -------------- -----------------------
<S> <C> <C> <C>
Franklin C. Grossman(2).................... 1,419,264 1,419,264 0(0)%
Jonathan Jesse
Irrevocable Trust of 1996................ 3,593 3,593 0(0)%
Suzi M. Grossman
Irrevocable Trust........................ 3,804 3,804 0(0)%
Jenny R. Grossman
Irrevocable Trust........................ 3,804 3,804 0(0)%
Thomas Guinther............................ 950 950 0(0)%
Thomas A. Herring(2)(3).................... 256,814 30,437 226,377(*)
Henry L. Hillman Trust..................... 63,200 63,200 0(0)%
William Talbott Hillman Trust.............. 11,849 11,849 0(0)%
Audrey Hilliard Hillman Trust.............. 11,849 11,849 0(0)%
Henry Lea Hillman, Jr. Trust............... 11,849 11,849 0(0)%
Juliet Lea Hillman Trust................... 11,849 11,849 0(0)%
Mercury Investments L.L.C.................. 31,600 31,600 0(0)%
James P. Moskun(2)......................... 1,224,761 1,224,761 0(0)%
Meghan A. Moskun
Irrevocable Trust of 1996................ 3,593 3,593 0(0)%
Lucas J. Moskun
Irrevocable Trust of 1996................ 3,593 3,593 0(0)%
Catherine Moskun
Irrevocable Trust of 1996................ 3,593 3,593 0(0)%
Paul J. Moskun
Irrevocable Trust of 1996................ 3,593 3,593 0(0)%
Patricia A. Jesse
Irrevocable Trust of 1996................ 3,593 3,593 0(0)%
Linda Jesse
Irrevocable Trust of 1996................ 3,593 3,593 0(0)%
P. Matthew Pietrek(2)(4)................... 16,966 760 16,206(*)
Rho Management Trust I..................... 189,600 189,600 0(0)%
TCV II, V.O.F.(5).......................... 4,452 3,928 524(*)
TCV II (Q), L.P.(5)........................ 105,405 92,975 12,430(*)
TCV II Strategic Partners, L.P.(5)......... 18,706 16,500 2,206(*)
Technology Crossover Ventures II,
C.V.(5).................................. 20,934 18,464 2,470(*)
Technology Crossover Ventures II,
L.P.(5).................................. 137,103 120,933 16,170(*)
Venhill Limited Partnership................ 47,400 47,400 0(0)%
William Wong............................... 676 676 0(0)%
</TABLE>
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* Represents less than 1% of outstanding Common Stock.
(1) Based on the number of shares outstanding at the date of this Prospectus;
assumes all of the shares offered hereby are sold by the Selling
Shareholders.
(2) Employed by NuMega prior to the NuMega merger and currently employed by the
Company.
(3) "Beneficial Ownership" includes 226,377 shares of Common Stock subject to
options which may be exercised within 60 days of the date of this
Prospectus.
(4) "Beneficial Ownership" includes 16,206 shares of Common Stock subject to
options which may be exercised within 60 days of the date of this
Prospectus.
(5) Technology Crossover Management II, L.L.C.("TCM II"), is the sole General
Partner of Technology Crossover Ventures II, L.P., TCV II(Q), L.P. and TCV
II Strategic Partners, L.P., and the sole Investment General Partner of TCV
II, V.O.F. and Technology Crossover Ventures II, C.V. As such, TCM II has
sole investment control with respect to 286,600 shares of the Common Stock
owned in the aggregate by these partnerships.
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PLAN OF DISTRIBUTION
The shares offered hereby may be sold from time to time by the Selling
Shareholders, or by pledgees, donees, transferees or other successors in
interest of the Selling Shareholders. Such sales may be made on the Nasdaq
National Market, or otherwise, at prices and on terms then prevailing or at
prices related to the then-current market prices, or in negotiated transactions
at negotiated prices. The shares may be sold by one or a combination of the
following: (a) a block trade in which the broker or dealer so engaged will
attempt to sell the shares as agent, but may position and resell a portion of
the block as principal to facilitate the transaction; (b) purchases by a broker
or dealer as principal and resale by such broker or dealer for its account
pursuant to this Prospectus; and (c) ordinary brokerage transactions and
transactions in which the broker solicits purchasers. In effecting sales,
brokers or dealers engaged by the Selling Shareholders may arrange for other
brokers or dealers to participate. Brokers or dealers will receive commissions
or discounts from Selling Shareholders in amounts to be negotiated immediately
prior to the sale. The Selling Shareholders and any broker-dealers that
participate in the distribution may be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Acts, and any commission received by
them and any profit on the resale of shares sold by them may be deemed to be
underwriting discounts and commissions.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Honigman Miller Schwartz and Cohn, Detroit, Michigan.
EXPERTS
The consolidated financial statements and related financial statement
schedules of Compuware Corporation and subsidiaries incorporated by reference
from the Company's Annual Report on Form 10-K for the fiscal year ended March
31, 1997, have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their reports which are incorporated herein by reference, and have
been so incorporated in reliance upon such reports given upon the authority of
that firm as experts in accounting and auditing.
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TABLE OF CONTENTS
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PAGE
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<S> <C>
Available Information....................................... 2
Incorporation of Certain Documents By Reference............. 2
The Company................................................. 3
Risk Factors................................................ 4
Use of Proceeds............................................. 7
Dividend Policy............................................. 8
Determination of Offering Price............................. 8
Selling Shareholders........................................ 8
Plan of Distribution........................................ 10
Legal Matters............................................... 10
Experts..................................................... 10
</TABLE>
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