COMPUWARE CORPORATION
EX-10.51
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<TYPE>EX-10.51
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<FILENAME>ex10-51.txt
<DESCRIPTION>EX-10.51
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                                                                   EXHIBIT 10.51


                             COMPUWARE CORPORATION


                         FISCAL 1996 STOCK OPTION PLAN


     1.  DEFINITIONS: As used herein, the following definitions shall apply:


         (a)  "Plan" shall mean this Compuware Corporation Fiscal 1996 Stock
Option Plan.

         (b)  "Corporation" shall mean Compuware Corporation, a Michigan
corporation, or any successor thereof.

         (c)  "Committee" shall mean a committee meeting the standards of Rule
16b-3 of the Rules and Regulations under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), or any similar successor rule, appointed by
the Board of Directors of the Corporation to administer the Plan or, if no such
committee is appointed, the Board of Directors as a whole.

         (d)  "Participant" shall mean any individual designated by the
Committee under Paragraph 6, for participation in the Plan.

         (e)  "Nonqualified Option" shall mean an option to purchase Common
Stock of the Corporation which meets the requirements set forth in the Plan but
does not meet the definition of an incentive stock option set forth in Section
422A of the Internal Revenue Code of 1986, as amended.

     2.  PURPOSE OF PLAN: The purpose of the Plan is (a) to provide employees,
including officers of the Corporation and its subsidiaries, with an increased
incentive to make significant and extraordinary contributions to the long-term
performance and growth of the Corporation and its subsidiaries, (b) to join the
interests of the employees with the interests of the shareholders of the
Corporation and (c) to facilitate attracting and retaining employees of
exceptional ability. For purposes of the Plan, a "subsidiary" is any
corporation in which the Corporation owns, directly or indirectly, stock
possessing more than fifty percent of the combined voting power of all classes
of stock.

     3.  ADMINISTRATION: The Plan shall be administered by the Committee.
Subject to the provisions of the Plan, the Committee shall determine, from
those eligible to be Participants under the Plan, the persons to be granted
stock options, the amount of rights to be optioned or granted to each such
person,and the terms and conditions of any stock options. Subject to the
provisions of the Plan, the Committee is authorized to interpret the Plan, to
promulgate, amend and rescind rules and regulations relating to the Plan and to
make all other determinations

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necessary or advisable for its administration. Interpretation and construction
of any provision of the Plan by the Committee shall be final and conclusive.
Acts approved by a majority of the members present at any meeting at which a
quorum is present, or acts unanimously approved in writing by the Committee,
shall be the acts of the Committee.

     4.  INDEMNIFICATION OF COMMITTEE MEMBERS: In addition to such other rights
of indemnification as they may have, the members of the Committee shall be
indemnified by the Corporation against the reasonable expenses, including
attorneys' fees, actually and necessarily incurred in connection with the
defense of any action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the Plan or any option
granted hereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by the Board of Directors of the
Corporation) or paid by them in satisfaction of a judgement in any such action,
suit or proceeding, except in relation to matters as to which it shall be
adjudged in such action, suit or proceeding that such Committee member has
acted in bad faith; provided, however, that within sixty (60) days after
receipt of notice of institution of any such action, suit or proceeding a
Committee member shall offer the Corporation in writing the opportunity, at its
own cost, to handle and defend the same.

     5.  MAXIMUM NUMBER OF SHARES SUBJECT TO PLAN: The maximum number of shares
with respect to which stock options may be granted under the Plan shall be
3,575,000 shares in the aggregate of Common Stock of the Corporation, which may
consist in whole or in part of the authorized and unissued or reacquired Common
Stock of the Corporation. If a stock option terminates for any reason without
having been fully exercised, the number of shares with respect to which the
stock option was not exercised at the time of its expiration or termination
shall again become available for the grant of stock options under the Plan,
unless the Plan has been terminated.

         The number of shares subject to each outstanding stock option, the
option price with respect to outstanding stock options, and the aggregate
number of shares remaining available under the Plan shall be subject to such
adjustment as the Committee, in its discretion, deems appropriate to reflect
such events as stock dividends, stock splits, recapitalizations, mergers,
consolidations or reorganizations of or by the Corporation; provided, however,
that no fractional shares shall be issued pursuant to the Plan, no rights may
be granted under the Plan with respect to fractional shares and any fractional
shares resulting from such adjustments shall be eliminated from any outstanding
stock option.

     6.  PARTICIPANTS: The Committee shall determine and designate from time to
time, in its sole discretion, those employees, including officers of the
Corporation or any subsidiary, to whom stock options are to be granted or
awarded and who thereby become Participants under the Plan.

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     7.  WRITTEN AGREEMENT:  Each stock option shall be evidenced by a written
agreement between the Corporation and the Participant and shall contain such
provisions as may be approved by the Committee. Such agreements shall constitute
binding contracts between the Corporation and the Participant, and every
Participant, upon acceptance of such agreement, shall be bound by the terms and
restrictions of the Plan and of such agreement. The terms of each such agreement
shall be in accordance with the Plan, but the agreements may include such
additional provisions and restrictions determined by the Committee, provided
that such additional provisions and restrictions are not inconsistent with the
terms of the Plan.

     8.  ALLOTMENT OF SHARES:  The Committee shall determine and fix the number
of shares of stock with respect to which each Participant may be granted stock
options.

     9.  STOCK OPTIONS:  Subject to the terms of the Plan, the Committee may
grant to Participants Nonqualified Options. Each option granted under the Plan
shall designate the number of shares covered thereby with respect to which the
option is a Nonqualified Option.

     10.  STOCK OPTION PRICE:  Subject to the rules set forth in this Paragraph
10, at the time any stock option is granted, the Committee shall establish the
price per share for which the shares covered by the option may be purchased. The
option price with respect to a Nonqualified Option shall not be less than the
fair market value of the stock on the date such option is granted. Fair market
value of a share shall be determined by the Committee and may be determined by
taking the mean between the highest and lowest quoted selling prices of the
Corporation's stock on any exchange or other market on which the shares of
Common Stock of the Corporation shall be traded on such date. The option price
will be subject to adjustment in accordance with the provisions of Paragraph 5
of the Plan.

     11.  PAYMENT OF STOCK OPTION PRICE:  At the time of the exercise in whole
or in part of any stock option granted hereunder, payment of the option price in
full in cash or, with the consent of the Committee, in Common Stock of the
Corporation or by a promissory note payable to the order of the Corporation
which is acceptable to the Committee, shall be made by the Participant for all
shares so purchased. Such payment may, with the consent of the Committee, also
consist of a cash down payment and delivery of such a promissory note in the
amount of the unpaid exercise price. No Participant shall have the rights of a
shareholder of the Corporation under any stock option until the actual issuance
of shares to said Participant, and prior to such issuance no adjustment shall be
made for dividends, distributions or other rights in respect of such shares,
except as provided in Paragraph 5.

     12.  GRANTING AND EXERCISE OF STOCK OPTIONS:  Each stock option granted
hereunder shall be exercisable at any such time or times or in any such
installments as may be determined by the Committee at the time of the grant.

     A Participant may exercise a stock option, if then exercisable, in whole or
in part by delivery to the Corporation of written notice of the exercise, in
such form as the Committee may



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prescribe, accompanied by full payment for the shares with respect to which the
stock option is exercised. Except as provided in Paragraph 16, stock options
may be exercised only while the Participant is an employee of the Corporation
or a subsidiary.

     Successive stock options may be granted to the same Participant, whether or
not the stock option(s) previously granted to such Participant remain
unexercised. A Participant may exercise a stock option, if then exercisable,
notwithstanding that stock options previously granted to such Participant remain
unexercised.

     13.   TRANSFERS/ENCUMBRANCES OF STOCK OPTIONS: No stock option granted
under the Plan to a Participant shall be transferable by such Participant
otherwise than by will or by the laws of descent and distribution, and such
option shall be exercisable, during the lifetime of the Participant, only by
the Participant. Further, no stock option granted under the Plan to a
Participant shall be pledged, hypothecated or otherwise encumbered by the
Participant or used by the Participant as security for an obligation of the
Participant or other person or entity.

     14.   TERM OF STOCK OPTIONS: If not sooner terminated, each stock option
granted hereunder shall expire not more than 10 years from the date of the
granting thereof.

     15.   CONTINUATION OF EMPLOYMENT: The Committee may require, in its
discretion, that any Participant under the Plan to whom a stock option shall be
granted shall agree in writing as a condition of the granting of such stock
option to remain in the employ of the Corporation or a subsidiary for a
designated minimum period from the date of the granting of such stock option as
shall be fixed by the Committee.

     16.   TERMINATION OF EMPLOYMENT: If the employment of a Participant by the
Corporation or a subsidiary shall be terminated, the Committee may, in its
discretion, permit the exercise of stock options granted to such Participant
for a period not to extend beyond the expiration date with respect to such
Nonqualified Options. In no event, however, shall a stock option be exercisable
subsequent to its expiration date. Furthermore, except for (i) the
Participant's death or disability, or (ii) special circumstances approved by
the Committee, a stock option may only be exercised after termination of a
Participant's employment to the extent exercisable on the date of termination
of employment.

     17.   ACCELERATED VESTING: In the event that the Corporation is acquired
by a third party, regardless of the form of the acquisition (the
"Acquisition"), the options granted under this Plan shall automatically vest to
any Participant under the Plan whom is employed by the Corporation or a
subsidiary on the effective date of the Acquisition. The "effective date" shall
be deemed to be the closing date of the Corporation's Acquisition. The value
of each such stock option to the Participant shall be the fair market value of
the Corporation's Common Stock on the effective date of the Acquisition.

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     18.  INVESTMENT PURPOSE: If the Committee in its discretion determines that
as a matter of law such procedure is or may be desirable, it may require a
Participant, upon any acquisition of stock hereunder by reason of the exercise
of stock options and as a condition to the Corporation's obligation to deliver
certificates representing such shares, to execute and deliver to the
Corporation a written statement, in a form satisfactory to the Committee,
representing and warranting that the Participant's acquisition of shares of
stock shall be for such person's own account, for investment and not with a
view to the resale or distribution thereof and that any subsequent offer for
sale or sale of any such shares shall be made either pursuant to (a) a
Registration Statement on an appropriate form under the Securities Act of 1933,
as amended (the "Securities Act"), which Registration Statement has become
effective and is current with respect to the shares being offered and sold, or
(b) a specific exemption from the registration requirements of the Securities
Act, but in claiming such exemption the Participant shall, prior to any offer
for sale or sale of such shares, obtain a favorable written opinion from counsel
for or approved by the Corporation as to the availability of such exemption. The
Corporation may endorse an appropriate legend referring to the foregoing
restriction upon the certificate or certificates representing any shares issued
or transferred to the Participant under this Plan.

     19.  RIGHTS TO CONTINUED EMPLOYMENT: Nothing contained in the Plan or in
any stock option granted or awarded pursuant to the Plan, nor any action taken
by the Committee hereunder, shall confer upon any Participant any right with
respect to continuation of employment by the Corporation or a subsidiary as an
employee nor interfere in any way with the right of the Corporation or a
subsidiary to terminate such person's employment as an employee at any time with
or without cause.

     20.  WITHHOLDING PAYMENTS: If upon the exercise of a Nonqualified Option
there shall be payable by the Corporation or a subsidiary any amount for income
tax withholding, in the Committee's sole discretion, either the Corporation
shall appropriately reduce the amount of stock or cash to be paid to the
Participant or the Participant shall pay such amount to the Corporation or
subsidiary to reimburse it for such income tax withholding. The Committee may
in its sole discretion, permit Participants to satisfy such withholding
obligations in whole or in part, by electing to have the amount of Common Stock
delivered or deliverable by the Corporation upon exercise of a stock option
appropriately reduced, or by electing to tender Common Stock back to the
Corporation subsequent to exercise of a stock option; to reimburse the
Corporation for such income tax withholding, subject to such rules and
regulations as the Committee may adopt. The Committee may make such other
arrangements with respect to income tax withholding as it shall determine.

     21.  EFFECTIVENESS OF PLAN: The Plan shall be effective as of August 22,
1995; provided that the shareholders of the Corporation approve the Plan within
12 months of that date. Stock options may be granted or awarded prior to
shareholder approval of the Plan, but each such stock option grant or award
shall be subject to shareholder approval of the Plan. No stock option may be
exercised prior to shareholder approval.

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     22.  TERMINATION, DURATION AND AMENDMENTS OF PLAN:  The Plan may be
abandoned or terminated at any time by the Board of Directors of the
Corporation. Unless sooner terminated, the Plan shall terminate on the date ten
years after its adoption by the Board of Directors and no stock options may be
granted or awarded thereafter. The termination of the Plan shall not affect the
validity of any stock option outstanding on the date of termination.

     For the purpose of conforming to any changes in applicable law or
governmental regulations, or for any other lawful purpose, the Board of
Directors shall have the right, with or without approval of the shareholders of
the Corporation, to amend or revise the terms of the Plan at any time; provided,
however, that no such amendment or revision shall (i) increase the maximum
number of shares in the aggregate which are subject to the Plan (subject,
however, to the provisions of Paragraph 5), change the class of persons eligible
to be Participants under the Plan or materially increase the benefits accruing
to Participants under the Plan, without approval or ratification of the
shareholders of the Corporation; or (ii) change the stock option price (except
as contemplated by Paragraph 5) or alter or impair any stock option which shall
have been previously granted or awarded under the Plan, without the consent of
the holder thereof.

     As adopted by the Shareholders on August 22, 1995 effective as of August
22, 1995.







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