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Computer Software (CSW)

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Tuesday 08 August, 2006

Computer Software

Notice of EGM

Computer Software Group PLC
08 August 2006


                          COMPUTER SOFTWARE GROUP PLC
                  ("Computer Software Group" or the "Company")

                               NOTICE OF EGM AND
                      APPROVAL OF LONG TERM INCENTIVE PLAN

INTRODUCTION

Over recent months, the Remuneration Committee has considered, in conjunction
with independent advisers, incentive arrangements for senior executives which
are not limited to option arrangements as has been the case until now.
Independent advice on the overall remuneration package for senior management has
also been obtained. As a result of these deliberations, the Board intends to
implement a Long Term Incentive Plan, or LTIP, as the best way to ensure that
executive remuneration packages are aligned with the interests of shareholders.
The LTIP will complement and run alongside the Company's existing executive
stock option award scheme.

Subject to shareholder approval, the Company proposes to make awards under the
LTIP to its four senior executives as follows:

Vin Murria         Chief Executive             4,000,000 ordinary shares
Barbara Firth      Chief Financial Officer     425,000 ordinary shares
David England      Chief Operating Officer     250,000 ordinary shares
David Woodcock     Chief Commercial Officer    250,000 ordinary shares

Stock options have previously been awarded to both Vin Murria and Barbara Firth
over 1.25 million and 386,000 ordinary shares respectively at prices between
48.8p and 57p per ordinary share in the case of Vin Murria and 48.8p and 112.5p
per ordinary share in the case of Barbara Firth.

As a condition of the grant of Vin Murria's award, the Board has required that
she should also invest £500,000 in the Company and this will happen by way of
subscription of 502,512 new ordinary shares at a price of 99.5p per ordinary
share.

As Vin Murria is part of the existing Concert Party within Computer Software
Group, receipt of ordinary shares under her LTIP Award, as and when vested, the
exercise of certain options, and the subscription by her for the new ordinary
shares will result in the Concert Party having to make an offer for the
remainder of the ordinary shares in the Company not already owned by it pursuant
to Rule 9 of The Takeover Code. However, The Panel on Takeovers and Mergers
("Panel") have granted a waiver of this obligation subject to shareholder
approval at the proposed EGM on 4th September 2006, notice of which will be
posted to shareholders tomorrow.

BACKGROUND TO AND REASONS FOR THE PROPOSALS

Since March 2003, Vin Murria has been responsible for identifying, negotiating,
and integrating some 14 acquisitions. With the exception of the acquisition of
Systems Team (Alveston Holdings Limited), which was introduced to the Company by
a third party, all of these acquisitions have been made by direct approaches to
the vendors themselves based largely on her knowledge of the market, in depth
research and personal contacts. As a result the Company has benefited from
buying companies at what it believes to be a significant discount to the market
norm.

These companies have been successfully integrated and substantial cost savings
and operational synergies such as cross-selling have been implemented. The
results speak for themselves. The ordinary shares have increased from a low of
18.75p, and a corresponding market capitalisation of £2.7 million, in August
2003 to a value of 99.5p and a corresponding market capitalisation of £57.74
million as at 4 August 2006. The Board are of the view that this could not have
been achieved without Vin Murria's considerable deal making skills and
determination. It is therefore proposed to make the following award to her
immediately following the subscription for new ordinary shares, subject to
shareholder and Panel approval:

1,000,000 ordinary shares receivable when the Company's ordinary share price
exceeds £0.85;
1,000,000 ordinary shares receivable when the Company's ordinary share price
exceeds £1.00;
1,000,000 ordinary shares receivable when the Company's ordinary share price
exceeds £1.25;
1,000,000 ordinary shares receivable when the Company's ordinary share price
exceeds £1.60.

The price of an ordinary share is to be measured on the basis of a 60 day
rolling average, using the mid market closing price and ending with the day
prior to the date of measurement. It is likely that on grant, the first tranche
of Vin Murria's award will vest as the Company's ordinary share price has been
above 85p for some time.

Vin Murria is also subject to a ''lock-in'' period, save in certain
circumstances, of one year following the vesting of each tranche of the award.

The Board feel it is also necessary to grant awards to other senior executives
at the same time, in recognition of their contribution to the Company to date in
the case of Barbara Firth, and also to sufficiently incentivise them to drive
and manage the Company in its continuing growth. To this end, awards as
mentioned above have been granted to Barbara Firth, David Woodcock and David
England, subject to certain vesting conditions. It is likely that, on grant, the
first tranche of Barbara Firth's award will vest, reflecting her contribution to
the Company's past success.

SUBSCRIPTION FOR NEW ORDINARY SHARES

Vin Murria, as one of the conditions attached to her award, will, subject to the
passing of Resolution 3 at the EGM, subscribe for 502,512 new ordinary shares at
99.5p per share, being the closing mid market share price as at 4 August 2006
being the latest practicable date prior to the posting of the circular and
notice of EGM to shareholders.

Application has been made for the 502,512 new ordinary shares, and 1,106,251 new
ordinary shares, representing the number of ordinary shares expected to vest
under the awards to Vin Murria and Barbara Firth immediately following the
making of the awards, to be admitted to trading on AIM, and subject to approval
by shareholders at the EGM, these shares will be admitted on 5 September 2006.

EXTRAORDINARY GENERAL MEETING

The Company will tomorrow post a notice of EGM to shareholders. The EGM will be
held on 4th September 2006 for consideration of the proposals detailed above.




                      This information is provided by RNS
            The company news service from the London Stock Exchange