<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF
1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF
THE COMMISSION ONLY (AS PERMITTED
BY RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
AMERICAN SOFTWARE, INC.
-----------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange ActRule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
<PAGE>
AMERICAN SOFTWARE, INC.
470 EAST PACES FERRY ROAD
ATLANTA, GEORGIA 30305
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of AMERICAN
SOFTWARE, INC. will be held at the Hotel Nikko Atlanta, 3300 Peachtree Road,
N.E., Atlanta, Georgia, on Wednesday, September 25, 1996 at 4:00 p.m. for the
following purposes:
1. To elect four directors of the Company, two of whom will be elected by
the holders of Class A Common Shares, and two of whom will be elected by
the holders of Class B Common Shares.
2. To consider and vote upon an amendment to the Company's 1991 Employee
Stock Option Plan to increase the base number of Class A Common Shares
that may be subject to options granted under that Plan from 2,150,000
Shares to 2,400,000 Shares.
3. To transact such other business as may properly come before the meeting.
Only shareholders of the Company of record at the close of business on
August 12, 1996 will be entitled to vote at the meeting.
Shareholders are requested to vote, date, sign and mail their proxies in the
form enclosed even though they now plan to attend the meeting. If shareholders
are present at the meeting, their proxies may be withdrawn, and they may vote
personally on all matters brought before the meeting, as described more fully
in the enclosed Proxy Statement.
BY ORDER OF THE BOARD OF DIRECTORS
James R. McGuone, Secretary
September 4, 1996
IMPORTANT
We hope you will attend the shareholders' meeting. In order that there may
be a proper representation at the meeting, each shareholder is requested to
send in his or her proxy in the enclosed envelope, which requires no postage
if mailed in the United States. Attention by shareholders to this request will
reduce the Company's expense in soliciting proxies.
<PAGE>
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
OF AMERICAN SOFTWARE, INC.
----------------
TO BE HELD AT THE
HOTEL NIKKO ATLANTA
3300 PEACHTREE ROAD, N.E.
ATLANTA, GEORGIA
ON SEPTEMBER 25, 1996
This Proxy Statement is furnished to Class A shareholders by the Board of
Directors of AMERICAN SOFTWARE, INC., 470 East Paces Ferry Road, N.E.,
Atlanta, Georgia 30305 (the "Company"), in connection with the solicitation by
the Board of Directors of proxies for use at the Annual Meeting of
Shareholders on Wednesday, September 25, 1996, at 4:00 p.m., and at any
adjournment or adjournments thereof, for the purposes set forth in the
accompanying Notice of Annual Meeting of Shareholders. This Proxy Statement
and accompanying proxy card and Notice of Annual Meeting are first being
mailed to shareholders on or about September 4, 1996.
If the enclosed form of proxy is properly executed and returned, the shares
represented thereby will be voted in accordance with its terms. If no choices
are specified, the proxy will be voted --
FOR -- Election of David H. Gambrell and Thomas R. Williams as Class A
Directors.
FOR -- Adoption of proposed amendment to the Company's 1991 Employee Stock
Option Plan to increase the base number of Class A Common Shares that may
be subject to options granted under that Plan from 2,150,000 Shares to
2,400,000 Shares.
In addition, a properly executed and returned proxy card gives the authority
to vote in accordance with the proxy-holders' best judgment on such other
business as may properly come before the meeting. Any proxy given pursuant to
this solicitation may be revoked, either in writing furnished to the Secretary
of the Company prior to the meeting or personally by attendance at the
meeting, by the person giving the proxy insofar as the proxy has not been
exercised at the meeting.
VOTING SECURITIES
RECORD DATE AND VOTING OF SECURITIES
The Board of Directors has fixed the close of business on August 12, 1996 as
the record date for determining the holders of common stock entitled to notice
of and to vote at the meeting. On August 12, 1996 the Company had outstanding
and entitled to vote a total of 17,491,766 Class A Common Shares ("Class A
shares") and 4,819,289 Class B Common Shares ("Class B shares").
Other than in the election of directors, in which holders of Class A shares
and Class B shares vote as separate classes, each outstanding Class A share is
entitled to one-tenth vote per share and each outstanding Class B share is
entitled to one vote per share on all matters to be brought before the
meeting. The Class A directors and the Class B directors will be elected by a
majority of the votes cast by the respective classes. The increase in the
number of shares authorized under the 1991 Employee Stock Option Plan requires
the affirmative vote of a majority of the shares represented at the meeting
(adjusted as described above). Any other matter submitted to the meeting must
be
1
<PAGE>
approved or ratified by a majority vote of the outstanding shares (adjusted as
described above). A one-third quorum of 5,830,589 Class A shares and of
1,606,430 Class B shares is required to be present or represented by proxy at
the meeting in order to conduct all of the business expected to come before
the meeting.
SECURITY OWNERSHIP
Five Percent Shareholders. The only persons known by the Company to own
beneficially more than 5% of the outstanding shares of common stock of either
class of the Company are those set forth below. Unless otherwise noted, this
information is as of July 31, 1996.
<TABLE>
<CAPTION>
TITLE SHARES
OF NAME AND ADDRESS OF BENEFICIALLY PERCENT
CLASS BENEFICIAL OWNER OWNED OF
CLASS(1)
----- ------------------------------- ------------ --------
<C> <S> <C> <C>
Class A Shares James C. Edenfield 40,125(2)(3) 0.2%(4)(5)
c/o American Software, Inc.
470 East Paces Ferry Road, N.E.
Atlanta, Georgia 30305
Thomas L. Newberry 30,125(2)(6) 0.2%(4)(5)
c/o American Software, Inc.
470 East Paces Ferry Road, N.E.
Atlanta, Georgia 30305
State of Wisconsin Investment 1,630,000 9.0%
Board
P. O. Box 7842
Madison, Wisconsin 53707
Class B Shares James C. Edenfield 2,583,352 53.6%
Thomas L. Newberry 2,235,937 46.4%
</TABLE>
- --------
(1) Based on a total of 17,490,516 Class A shares outstanding and 589,340
Class A shares that may be purchased under options exercisable within 60
days, for an aggregate of 18,079,856 Class A shares deemed outstanding.
(2) Does not include the Class B shares beneficially owned by Mr. Edenfield
and Dr. Newberry, which shares are convertible into Class A shares on a
share for share basis.
(3) Represents shares that may be acquired upon the exercise of stock options
exercisable within 60 days.
(4) For all matters except the election of directors, which involves class
voting, Messrs. Edenfield and Newberry together beneficially own
approximately 73% of the combined, weighted voting rights of the
outstanding Class A and Class B shares. See "Record Date and Voting of
Securities," above.
(5) If their respective Class B shares were converted into Class A shares, Mr.
Edenfield would beneficially own 11.5% of the outstanding Class A shares
and Dr. Newberry would beneficially own 9.9% of the outstanding Class A
shares.
(6) Includes 28,000 shares that may be acquired upon the exercise of stock
options exercisable within 60 days.
2
<PAGE>
Directors and Executive Officers. The following table shows the shares of
common stock of the Company, both Class A and Class B, beneficially owned by
each nominee for director, by each executive officer named in the Summary
Compensation Table and by all directors and executive officers as a group as
of July 31, 1996. The statements as to securities beneficially owned are, in
each instance, based upon information provided by the person(s) concerned.
<TABLE>
<CAPTION>
SHARES PERCENT
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS
OR DESCRIPTION OF GROUP -------------------------- ----------------------
CLASS A CLASS B CLASS A(1) CLASS B
- ------------------------ --------- ---------- ---------- -------
<S> <C> <C> <C> <C>
DIRECTORS:
James C. Edenfield............ 40,125(2)(3) 2,583,352 0.2%(4)(5) 53.6%
Thomas L. Newberry............ 30,125(2)(6) 2,235,937 0.2%(4)(5) 46.4%
David H. Gambrell............. 25,618(7) -0- 0.1% --
Thomas R. Williams............ 18,400(7) -0- 0.1% --
NAMED EXECUTIVE OFFICERS WHO ARE NOT
DIRECTORS:
J. Michael Edenfield.......... 37,983(8) -0- 0.2% --
Paul DiBono, Jr............... 16,000(9) -0- 0.1% --
All directors and executive
officers as a group (9 per-
sons)........................ 181,469(2)(10) 4,819,289 1.1% 100%
</TABLE>
- --------
(1) Based on a total of 17,490,516 Class A shares outstanding and 589,340
Class A shares that may be purchased under options exercisable within 60
days, for an aggregate of 18,079,856 Class A shares deemed outstanding.
(2) Does not include the Class B shares beneficially owned by Mr. Edenfield
and Dr. Newberry, which shares are convertible into Class A shares on a
share for share basis.
(3) Represents shares that may be acquired upon the exercise of stock options
exercisable within 60 days.
(4) For all matters except the election of directors, which involves class
voting, Messrs. Edenfield and Newberry together beneficially own
approximately 73% of the combined, weighted voting rights of the
outstanding Class A and Class B shares. See "Record Date and Voting of
Securities," above.
(5) If their respective Class B shares were converted into Class A shares,
Mr. Edenfield would beneficially own 11.5% of the outstanding Class A
shares and Dr. Newberry would beneficially own 9.9% of the outstanding
Class A shares.
(6) Includes 28,000 shares that may be acquired upon the exercise of stock
options exercisable within 60 days.
(7) Includes 16,000 shares subject to options exercisable within 60 days.
(8) Includes 35,453 shares subject to options exercisable within 60 days.
(9) Includes 15,000 shares subject to options exercisable within 60 days.
(10) Includes 163,796 shares subject to options exercisable within 60 days.
3
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's executive officers and directors, and persons who own
more than 10% of a registered class of the Company's equity securities, to
file reports of ownership and changes in ownership with the Securities and
Exchange Commission (the "Commission"). Officers, directors and holders of
more than 10% of the Class A shares are required by regulations promulgated by
the Commission to furnish the Company with copies of all Section 16(a) forms
they file.
Based upon a review by the Company of filings made under Section 16(a) of
the Exchange Act, not all of the reports required to be filed during fiscal
1996 were filed on a timely basis. The Company is aware of the following Form
5 reports that were filed with the Commission by directors of the Company
after their respective due dates: James C. Edenfield (single report, which
reported gift of stock), Thomas L. Newberry (single report, which reported two
stock option grants received and one gift of stock), David H. Gambrell (single
report, which reported two stock option grants received) and Thomas R.
Williams (single report, which reported two stock option grants received). All
of such reports have been filed at this time. Based upon its review of the
copies of filings received by it, the Company believes that since May 1, 1995
all other Section 16(a) filing requirements applicable to its directors,
officers and greater than 10% beneficial owners were complied with.
ELECTION OF DIRECTORS
The directors of the Company are elected annually to hold office until the
election and qualification of their successors at the next Annual Meeting. Of
the four directors to be elected, two are to be elected by the holders of the
outstanding Class A shares and two are to be elected by the holders of the
outstanding Class B shares. The persons named in the enclosed proxy card
intend to vote Class A shares for the election of David H. Gambrell and Thomas
R. Williams, the Class A director nominees. In the event either of these
individuals should be unavailable to serve as a director, the proxy will be
voted in accordance with the best judgment of the person or persons acting
under it. The Board of Directors has no reason to believe that any director
nominees will be unavailable for election as a director.
4
<PAGE>
It is anticipated that Messrs. Edenfield and Newberry, who together own all
of the Class B shares, will vote their Class B shares in favor of the election
of Messrs. Edenfield and Newberry as Class B directors. Thus, it is expected
that Messrs. Edenfield and Newberry will continue to serve as the Class B
directors.
<TABLE>
<CAPTION>
YEAR
FIRST
ELECTED
NAME OF NOMINEE AGE PRICIPAL OCCUPATION DIRECTORSHIPS DIRECTOR
--------------- --- --------------------------------- --------
<C> <C> <S> <C>
Partner, Gambrell & Stolz, L.L.P.,
David H. Gambrell (1) 66 Attorneys, Atlanta, GA. 1983
Thomas R. Williams(2) 67 President, The Wales Group, Inc.; 1989
director of BellSouth Corporation,
Georgia Power Company, National Life
Insurance Company of Vermont, ConAgra,
Inc. and AppleSouth, Inc.; a trustee of
The Fidelity Group of Mutual Funds; and
retired director, Equifax, Inc. and
National Service Industries, Inc.
Chairman of the Board of American
Thomas L. Newberry(3) 63 Software, Inc. 1971
James C. Edenfield (4) 61 President, Chief Executive Officer and 1971
Treasurer of American Software, Inc. and
American Software USA, Inc.
</TABLE>
- --------
(1) Mr. Gambrell has been a practicing attorney since 1952, and is a partner
in the firm of Gambrell & Stolz, L.L.P., counsel to the Company. He served
as a member of the United States Senate from the State of Georgia in 1971
and 1972. Mr. Gambrell holds a Bachelor of Science degree from Davidson
College and a J.D. from the Harvard Law School.
(2) Mr. Williams is currently the President of The Wales Group, Inc., a
closely held corporation engaged in investments and venture capital. He
has held such position since 1987. In addition to the above directorships,
Mr. Williams was a director of Southern Bell from 1980 to 1983 and is a
former Chairman of the Board of First Wachovia Corporation, First National
Bank of Atlanta and First Atlanta Corporation. He holds a Bachelor of
Science degree in Industrial Engineering from the Georgia Institute of
Technology and a Master of Science degree in Industrial Management from
the Massachusetts Institute of Technology.
(3) Dr. Newberry is a co-founder of the Company and served as Co-Chief
Executive Officer of the Company until November 1989. Prior to founding
the Company, he held executive positions with several companies engaged in
computer systems analysis, software development and sales, including
Management Science America, Inc., an Atlanta-based applications software
development and sales company, where he was also a director. Dr. Newberry
holds Bachelor, Master of Science and Ph.D degrees in Industrial
Engineering from the Georgia Institute of Technology.
(4) Mr. Edenfield is a co-founder of the Company and has served as Chief
Executive Officer since November 1989, and as Co-Chief Executive Officer
for more than five years prior to that time. Prior to founding the
Company, Mr. Edenfield held several executive positions with and was a
director of Management Science America, Inc. He holds a Bachelor of
Industrial Engineering degree from the Georgia Institute of Technology.
From May 1, 1995 to April 30, 1996, the Board of Directors held four formal
meetings and acted by unanimous written consent on five occasions. No director
of the Company attended fewer than 75% of the total meetings of the Board of
Directors and committee meetings on which such Board member served and was
eligible to attend during this period.
5
<PAGE>
The Board of Directors has an Audit Committee, which consists of Messrs.
Gambrell (Chairman) and Williams. The functions of the Audit Committee include
recommending independent public accountants to the Company, reviewing the
scope and results of the independent public accountants' audit, and monitoring
the adequacy of the Company's accounting, financial and operating controls.
The Audit Committee held one meeting during fiscal 1996.
The Company has a 1991 Employee Stock Option Plan Committee, consisting of
Messrs. Edenfield and Newberry. During fiscal 1996, this Committee met or
acted by written consent 23 times. The members of this Committee are not
eligible to participate in the Plan which they are administering. The
functions of this Committee are to grant options and establish the terms of
those options, as well as to construe and interpret the Plan and to adopt
rules in connection therewith.
The Company has a Compensation Committee, consisting of Messrs. Williams
(Chairman) and Gambrell, described below in "Certain Information Regarding
Executive Officers and Directors--Report on Executive Compensation." The
Compensation Committee met or acted by written consent on eight occasions
during fiscal 1996, including three actions relating solely to stock option
grants. The Board has no nominating committee, or any other committee
performing similar functions.
THE BOARD OF DIRECTORS RECOMMENDS THAT CLASS A SHAREHOLDERS VOTE "FOR" MESSRS.
GAMBRELL AND WILLIAMS.
6
<PAGE>
CERTAIN INFORMATION REGARDING EXECUTIVE OFFICERS AND DIRECTORS
EXECUTIVE COMPENSATION
The following table provides certain summary information concerning
compensation paid or accrued by the Company to or on behalf of the Company's
Chief Executive Officer and the two other executive officers of the Company
(determined as of April 30, 1996) whose annual compensation exceeded $100,000
during fiscal 1996 (referred to herein as the "named executive officers") for
the fiscal years ended April 30, 1994, 1995 and 1996:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS/NUMBER ALL
ANNUAL BONUS OR OF OPTION OTHER
NAME AND PRINCIPAL FISCAL SALARY OTHER ANNUAL SHARES COMPENSATION
POSITION YEAR ($) COMPENSATION($) GRANTED ($)(1)(2)
------------------ ------ ------- --------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
James C. Edenfield 1996 434,500 -0- 18,000 -0-
President and Chief 1995 434,500 -0- 48,000 -0-
Executive Officer(3) 1994 434,500 -0- -0- 44
J. Michael Edenfield 1996 240,000 -0- 16,000 -0-
Executive Vice
President/ 1995 240,000 18,850(4) 106,062 -0-
Chief Operating
Officer(3) 1994 51,600 237,168(4)(5) 12,000 449
Paul DiBono, Jr. 1996 126,250 -0- 10,000 -0-
Senior Vice President 1995 117,500 -0- 60,000 -0-
1994 113,333 -0- 10,000 176
</TABLE>
- --------
(1) This column reflects Company contributions for the accounts of these
individuals under the Company's Profit Sharing Plan.
(2) The aggregate amount of perquisites and other personal benefits,securities
or property, given to each named executive officer, valued on the basis of
aggregate incremental cost to the Company, was less than either $50,000 or
10% of the total annual salary and bonus for that executive officer during
each of these years.
(3) James C. Edenfield is the father of J. Michael Edenfield.
(4) These amounts consist of sales commissions earned while J. Michael
Edenfield was in his former position of Senior Vice President, Sales and
Marketing, prior to his promotion to Executive Vice President/Chief
Operating Officer; the amounts shown for fiscal 1995 were earned in fiscal
1994.
(5) J. Michael Edenfield became an executive officer of the Company in fiscal
1994.
STOCK OPTION PLANS
The Company has granted stock options pursuant to four stock option plans.
Two of these plans, the Incentive Stock Option Plan (the "Incentive Plan") and
the Nonqualified Stock Option Plan (the "Nonqualified Plan"), were terminated
effective August 22, 1991 (the "Terminated Plans"), at which time the
shareholders of the Company approved two new option plans: The 1991 Employee
Stock Option Plan (the "Employee Option Plan") and the Directors and Officers
Stock Option Plan (the "D&O Option
7
<PAGE>
Plan"). Options outstanding under the Terminated Plans remain in effect, but
no new options may be granted under those plans. The Employee Option Plan is
proposed to be amended and is described in "Amendment of Employee Option Plan"
below. The following sections describe the other three stock option plans.
Incentive Stock Option Plan. On January 13, 1983 the Company adopted and the
shareholders approved the Incentive Plan. The Incentive Plan was designed to
qualify as an "incentive stock option plan" under Section 422 of the Internal
Revenue Code of 1986 (the "Code"). As incentive stock options, options granted
under the Incentive Plan are subject to substantially the same terms as
incentive stock options that may be granted under the Employee Plan and the
D&O Plan. As of April 30, 1996, there were outstanding under the Incentive
Plan options to purchase 6,513 shares of Class A stock.
Nonqualified Stock Option Plan. Effective June 3, 1986 the Company adopted
the Nonqualified Plan. Options granted under the Nonqualified Plan do not
receive the favorable tax treatment afforded to incentive stock options.
Options granted under this plan were not, however, subject to restrictions on
exercise price and other restrictions applicable to incentive stock options.
Other terms of these options are, in general, substantially the same as
incentive stock options granted by the Company. As of April 30, 1996, there
were outstanding under the Nonqualified Plan options to purchase 46,063 shares
of Class A stock.
The D&O Option Plan. The aggregate number of Class A shares subject to
options that may be granted under the D&O Option Plan is 900,000 Shares. As of
April 30, 1996, there were outstanding under the D&O Option Plan options to
purchase 435,937 shares. Under the D&O Option Plan, the Compensation Committee
may grant (i) an incentive stock option, (ii) a nonqualified option or (iii)
an incentive stock option and a nonqualified option at the same time. All
incentive options will have terms that will comply with the provisions of
Section 422 of the Code.
The aggregate fair market value, determined at the time of grant, of the
Shares with respect to which one or more incentive stock options are
exercisable for the first time by any individual optionee during any calendar
year under the D&O Option Plan (and under the Incentive Stock Option Plan) may
not exceed $100,000. The term of each option will be set at the time of grant
by the Committee granting the option, but no option may have a term in excess
of ten years (five years in the case of incentive options granted to holders
of 10% or more of the Class A stock ("10% Stockholders")).
Under the D&O Option Plan, options may be granted to Directors and officers
of the Company or its subsidiaries. See "Certain Information Regarding
Executive Officers and Directors--Director Compensation" for a description of
the formula by which non-employee Directors automatically receive options
under the D&O Option Plan on a semi-annual basis.
The option price per Class A share is fixed by the applicable Committee in
granting the option, but for incentive stock options will not be less than
100% of the fair market value of a Class A share at the time the option is
granted (110% for options granted to a 10% Stockholder).
Options will be exercisable in such manner, at such time or times (including
any installments) and subject to such terms, conditions or limitations as are
fixed by the applicable Committee, in its sole discretion, when the options
are granted.
8
<PAGE>
No option granted under any of the stock option plans will be transferable
by the optionee otherwise than by will, by the laws of descent and
distribution or by a qualified domestic relations order. During an optionee's
lifetime, an option under any of the stock option plans may only be exercised
by him or her or his or her guardian or legal representative.
Stock Option Committees. Prior to termination of the Incentive Plan and the
Nonqualified Plan on August 22, 1991, these Plans were administered by the
Stock Option Committee, consisting of Mr. Edenfield and Dr. Newberry. As
discussed in "Amendment of Employee Option Plan--Administration," Messrs.
Edenfield and Newberry also comprise the Employee Option Plan Committee. The
D&O Option Plan is administered by the Compensation Committee, consisting of
Messrs. Gambrell and Williams.
The members of these Committees are not eligible to participate in the Plan
which they are administering, except pursuant to the formula option grant
program for non-employee directors under the D&O Option Plan. The Compensation
Committee and the Employee Stock Option Committee consist of "disinterested
persons" as defined in Rule 16b-3 under the Exchange Act. Under the Plans, the
functions of these Committees are to grant options and establish the terms of
those options, as well as to construe and interpret their respective Plans and
to adopt rules in connection therewith.
STOCK OPTION GRANTS
The following table sets forth information with respect to options granted
during fiscal 1996 under the D&O Option Plan to each of the named executive
officers who received option grants under that Plan. No options were granted
to such executive officers during fiscal 1996 under the Employee Option Plan.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------------------
POTENTIAL REALIZED
PERCENT OF VALUE AT ASSUMED
TOTAL ANNUAL RATES OF MARKET VALUE AT
OPTIONS STOCK PRICE END OF 10 YEARS
GRANTED TO FAIR MARKET APPRECIATION FOR ASSUMING 5%/10%
NUMBER OF EMPLOYEES EXERCISE OR VALUE ON OPTION TERM (2) PER ANNUM
OPTIONS IN FISCAL BASE PRICE EXPIRATION DATE OF ------------------ COMPOUNDED
NAME GRANTED(1) 1996 (PER SHARE) DATE GRANT 5% 10% INCREASE
- ---- ---------- ---------- ----------- ---------- ----------- ------------------ --------------- ---
<S> <C> <C> <C> <C> <C> <C> <C>
James C. Edenfield...... 18,000 2% $4.02 02/20/2006 $4.02 $45,540 / $115,380 $6.55 / $10.43
J. Michael Edenfield.... 16,000 2% $4.02 02/20/2006 $4.02 $40,480 / $102,560 $6.55 / $10.43
Paul DiBono, Jr......... 10,000 1% $4.02 02/20/2006 $4.02 $25,300 / $ 64,100 $6.55 / $10.43
</TABLE>
- --------
(1) Such options may not be exercised earlier than one year after the date of
grant. Options vest ratably over a period of four years.
(2) These amounts represent certain assumed rates of appreciation only. Actual
gains, if any, on stock option exercises are dependent on the future
performance of the Company's Class A shares and overall market conditions.
The amounts reflected in this table may not necessarily be achieved.
9
<PAGE>
STOCK OPTION EXERCISES AND OUTSTANDING OPTIONS
The following table contains information, with respect to the named
executive officers, regarding stock options outstanding as of April 30, 1996.
No stock options were exercised by these executive officers during fiscal
1996.
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT 04/30/96 AT 04/30/96
EXERCISABLE/ EXERCISABLE/
NAME UNEXERCISABLE UNEXERCISABLE(1)
---- ------------------- --------------------
<S> <C> <C>
James C. Edenfield..................... 40,125 / 54,000 $90,671 / $115,639
J. Michael Edenfield................... 35,453 / 95,547 $99,983 / $242,504
Paul DiBono, Jr........................ 15,000 / 55,000 $41,250 / $138,594
</TABLE>
- --------
(1) The market price of Class A shares on April 30, 1996 was $5.50 per share.
EMPLOYMENT AGREEMENT AND BONUS POLICY
From May 1, 1983 through April 30, 1995, the compensation of James C.
Edenfield, President and Chief Executive Officer of the Company, was
determined under an employment contract entered into between him and the
Company on January 17, 1983. This contract provided for an annual base salary
of $434,500, payable monthly, plus expenses and normal employee fringe
benefits. In addition, the contract provided for an annual bonus of 5% of the
increase of each fiscal year's pre-tax earnings over the pre-tax earnings of
the preceding fiscal year. Although this contract expired at the end of fiscal
1995, the Board of Directors, after consulting with the Compensation
Committee, determined that these contract terms would continue through fiscal
1996 while the Compensation Committee and Mr. Edenfield met to establish a new
employment contract and compensation terms. Accordingly, during fiscal 1996,
Mr. Edenfield's salary remained at $434,500. He received no bonus under the
bonus formula.
As discussed below under "Report on Executive Compensation", the
Compensation Committee is continuing to work toward a new employment contract,
which is expected to be finalized during fiscal 1997. Meanwhile, Mr. Edenfield
continues to be compensated on the same basis as applied under his previous
employment contract.
Pursuant to written plans, J. Michael Edenfield and Paul DiBono had the
potential to receive certain cash bonuses, stock options and other
compensation, the amounts of which were determined based upon fiscal 1996
performance standards. During fiscal 1996, neither of these individuals
received bonuses under their respective bonus plans. For fiscal 1997, the
bonus plans for these officers will be unique, with incentive goals tied to
increases in revenues and/or net income, either Company-wide or related to
specific areas over which they have responsibility, or both.
CERTAIN TRANSACTIONS
The Company leases one of its office facilities from a partnership that is
owned entirely by Messrs. Edenfield and Newberry under a lease expiring
December 31, 1996. The Company incurred expenses of approximately $291,000 and
$301,000 in fiscal 1995 and 1996, respectively, pursuant to this lease. The
current rental rate is $17.06 per square foot. This rate is subject to annual
cost of living adjustments. Management believes that the terms of the lease
are fair to the Company. It is anticipated that prior to December 31, 1996
Messrs. Edenfield and Newberry will meet with the independent members of the
Board of Directors to determine whether the Company will continue to lease
that building and, if so, on what terms.
10
<PAGE>
DIRECTOR COMPENSATION
During fiscal 1996, the Company compensated Dr. Newberry, the Chairman of
the Board, at the rate of $18,000 per annum, and other Directors who are not
employed by the Company at the rate of $12,000 per annum, plus $600 for each
half-day or $1,200 for each full day meeting of the Board of Directors or any
committee of the Board that they attended.
Directors are eligible to receive stock option grants under the Company's
D&O Option Plan, adopted in 1991. Under the terms of that Plan, Directors who
are not employed by the Company automatically receive stock option grants of
5,000 shares each, effective at six-month intervals, on each October 31 and
April 30, with exercise prices equal to the market price on those respective
dates. These options become exercisable one year after the date of grant and
expire ten years after the date of grant. They do not terminate if the
Director ceases to serve on the Board of the Company. Under this program,
Messrs. Gambrell, Newberry and Williams each received options to purchase an
aggregate of 10,000 shares in fiscal 1996.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Gambrell and Williams have been selected by the Board of Directors
to serve on the Compensation Committee. Mr. Gambrell and James R. McGuone,
Secretary of the Company, are partners in the firm of Gambrell & Stolz,
L.L.P., general counsel to the Company. Legal fees in the amount of $476,578
were paid by the Company to that firm during calendar year 1995 for legal
services rendered as general counsel to the Company, in addition to $18,000 in
Director fees paid during that year for Mr. Gambrell's serving as a Director
and as a member of Board Committees.
REPORT ON EXECUTIVE COMPENSATION
The following is the report of the Compensation Committee of the Board of
Directors of American Software, Inc. for the fiscal year ended April 30, 1996.
Meetings. The Compensation Committee has met four times formally and has
conferred informally a number of times during fiscal year 1996, among the
members of the Committee, as well as with management and the Board of
Directors, concerning its authority and responsibilities.
Compensation of Chief Executive Officer. The Compensation Committee has the
responsibility and authority to review and establish compensation for the
Chief Executive Officer of the Company, including his participation in the
Directors and Officers Stock Option Plan and the re-evaluation and negotiation
of his employment contract. The current employment contract of the Chief
Executive Officer, which was in effect since 1983, expired on April 30, 1995.
Since that time, the Compensation Committee has recommended, and the Board has
approved, that the Chief Executive Officer's compensation package be
maintained at the pre-fiscal 1996 level.
The members of the Compensation Committee have met with the Chief Executive
Officer, who has indicated a preference that his future compensation be
premised upon more performance-based and deferred compensation elements than
is presently the case. The Committee expects to finalize its compensation
proposal with the Chief Executive Officer during the current fiscal year. The
continued participation of the Chief Executive Officer in the Directors and
Officers Stock Option Plan during fiscal 1997 will be determined by the
Compensation Committee based upon its authority to grant options under that
Plan.
11
<PAGE>
As stated above, the Chief Executive Officer's cash compensation in fiscal
year 1996, both salary and bonus, was determined under the terms of his prior
employment contract. Under the terms of that contract, the Chief Executive
Officer received no bonus in fiscal year 1996, because the bonus is calculated
as a percentage of the increase in pre-tax earnings from the previous year,
and there was no such increase.
The Chief Executive Officer received a grant of a stock option on February
20, 1996, consisting of 18,000 shares exercisable at the then-current market
price, or $4.02, with a term of ten years. This option was granted under the
Directors and Officers Stock Option Plan, administered by the Compensation
Committee. The terms and size of this option, which was a nonqualified stock
option, were based upon the Committee's evaluation of the performance of the
Chief Executive Officer, the over-all extent of his compensation and incentive
package and the terms and size of options granted to other officers.
Other Executive Officers. The Compensation Committee has responsibility for
the review of compensation of other executive officers of the Company,
including certain executive officers of operating subsidiaries. To assist in
this process, the Committee has reviewed compensation of officers having
similar responsibilities with peer group companies, based upon publicly
available information. In that regard, the Compensation Committee consults
with the Chief Executive Officer. Through its oversight and control of the
Directors and Officers Stock Option Plan, the Compensation Committee has
direct authority over the granting of stock options to executive officers. In
addition, the Compensation Committee assists the Chief Executive Officer in
evaluating and establishing executive bonus plans, which are customized for
each executive officer.
It has been the policy of the Company in consultation with the Compensation
Committee to base a substantial portion of executive officer compensation upon
the achievement of Company-wide and/or divisional goals, relating in some
cases to growth in revenues, in some cases to growth in net income and in some
cases to both of these factors, as well as other factors. The bonus plans for
each of the most highly compensated executive officers (other than the Chief
Executive Officer) reflect this approach.
Stock option grants under the Directors and Officers Stock Option Plan are
utilized as both a motivating and a compensating factor. Because the
performance of executive officers can substantially influence overall Company
performance, in several instances grants of stock options have been utilized
to create greater incentives for improving Company performance, which the
Compensation Committee believes may positively influence the market price for
Company stock.
On various occasions during fiscal 1996, the Compensation Committee
exercised its authority under the Directors and Officers Stock Option Plan to
grant options to various executive officers of the Company, including the
Chief Executive Officer, as discussed above. In each instance, the terms and
size of the options were intended and calculated by the Compensation Committee
to reward these officers for their prior performance, to serve as incentive
for promotion of Company profitability and other long-term objectives and to
maintain their overall compensation at competitive levels.
During fiscal 1997, the Compensation Committee will continue to consult with
the Chief Executive Officer with respect to executive officer compensation
packages, including salary, bonus, stock options and fringe benefits, to
ensure that compensation is appropriately related to individual and Company
performance, as well as to competitive compensation standards and other
relevant criteria. The
12
<PAGE>
Compensation Committee will continue its investigation of compensation
arrangements in peer group companies as guides for future consultations with
the Board of Directors and the Chief Executive Officer.
Limitations on Deductibility of Executive Compensation. Since 1994, the
Omnibus Budget Reconciliation Act of 1993 has limited the deductibility of
executive compensation paid by publicly held corporations to $1 million per
employee, subject to various exceptions, including compensation based on
performance goals.
The deductibility limitation does not apply to compensation based on
performance goals where (1) the performance goals are established by a
compensation committee which is comprised solely of two or more outside
directors; (2) the material terms are disclosed to shareholders and approved
by majority vote of the stockholders eligible to vote thereon before the
compensation is paid; and (3) before the compensation is paid, the
compensation committee certifies that the performance goals and other material
terms have been satisfied. The Company has not adopted a policy with respect
to deductibility of compensation since no executive officer currently
receives, or has previously received, taxable income in excess of $1 million
per year from the Company. The Compensation Committee will monitor
compensation levels closely, particularly in areas of incentive compensation.
If the Company's performance continues to improve, incentive compensation also
can be expected to increase and it may become necessary to adopt a long-term
incentive compensation plan in compliance with the foregoing criteria.
BY THE COMPENSATION COMMITTEE:
Thomas R. Williams, Chairman
David H. Gambrell
AMENDMENT OF EMPLOYEE OPTION PLAN
GENERAL
On June 28, 1996, the Board of Directors approved, subject to shareholder
approval, an amendment to the Employee Option Plan which would increase the
base number of Class A shares that may be subject to options granted under the
Employee Option Plan by 250,000 shares, from 2,150,000 shares to 2,400,000
shares.
The Employee Option Plan currently provides that only 2,853,709 Class A
shares may be issued pursuant to options under the Employee Option Plan,
consisting of the 2,150,000 base number of authorized shares, plus 703,709
shares transferred from prior stock option plans due to lapsed options. Of
this amount, as of July 31, 1996, 71,799 of these shares have been purchased
pursuant to the exercise of stock options and 2,226,683 shares were subject to
outstanding options, leaving only 555,227 shares available for new options.
The proposed amendment would increase the number of available shares under the
Employee Option Plan to 805,227 shares as of July 31, 1996. The Board of
Directors believes that there currently is an adequate number of shares
available for option grants under the D&O Option Plan (430,063 shares
available as of July 31, 1996).
The following summary of the Employee Option Plan is qualified in its
entirety by reference to the full text of the Employee Option Plan, which
governs in the event of any conflict. Copies of the Plan are available from
the Company, upon written request, to the attention of Pat McManus, Investor
Relations, 470 East Paces Ferry Road, Atlanta, Georgia 30305.
13
<PAGE>
PURPOSE OF PLAN
The purpose of the Employee Option Plan is to promote the interests of the
Company by providing eligible employees with incentives to become owners of
the Company's Class A shares and thereby enable them to benefit directly from
the Company's growth, development and financial success.
SHARES SUBJECT TO THE PLAN
As of July 31, 1996, there were 555,227 Class A shares available for option
grants under the Employee Option Plan and 2,226,683 Class A shares subject to
outstanding options granted under the Employee Option Plan. The terms of the
Plan provide that if an option expires or is canceled without having been
fully exercised, the shares subject to the unexercised portion of such option
will be available for future grant.
ADMINISTRATION
The Employee Option Plan is administered by a committee of the Board of
Directors that consists of Messrs. Edenfield and Newberry. The members of the
Committee are not (and have not been for at least one year prior to joining
that Committee) eligible to receive options under the Plan. The Board appoints
the members of the Committee, fills vacancies on the Committee and has the
power to replace members of the Committee with other eligible persons at any
time. The Committee is authorized to grant options under the Plan, to
determine the terms and conditions of such options and to otherwise administer
the Plan.
ELIGIBILITY
All employees (approximately 600 persons as of July 31, 1996), other than
executive officers and Directors of the Company, are eligible to participate
in the Employee Option Plan.
EXERCISE PRICE
The exercise price per share of any option granted under the Plan is set in
each case by the Committee. For incentive stock options granted under the
Plan, the exercise price must be at least 100% of the fair market value of
Class A stock on the date of grant (110% for 10% shareholders). For
nonqualified stock options granted under the Plan, the exercise price may be
less than the fair market value per share of Common Stock on the date upon
which the option is granted. As of the close of business on July 31, 1996, the
market value of Class A stock was $4.00 per share.
TERMS OF OPTIONS
Options granted pursuant to the Plan generally expire on the tenth
anniversary of the respective option's grant date.
EXERCISE OF OPTIONS
Options granted pursuant to the Plan generally become exercisable in equal
portions over a four-year period. Upon the exercise of an option, the optionee
may either make payment in full in cash to the Company of the exercise price
therefor and any required tax withholding payment or may deliver to the
Company a properly executed exercise notice, together with irrevocable
instructions to a broker to promptly deliver to the Company the amount of sale
or loan proceeds to pay the exercise price.
14
<PAGE>
NON-ASSIGNABILITY OF OPTIONS
An option granted under the Plan is not transferable other than by will, the
applicable laws of descent and distribution, or a qualified domestic relations
order. During the lifetime of an optionee, options may be exercised only by
such optionee or his guardian or legal representative.
DEATH, DISABILITY, RETIREMENT OR TERMINATION OF EMPLOYMENT
Following an optionee's termination of employment, options held by such
person pursuant to the Plan are generally exercisable only with respect to the
portions thereof in which the optionee is then vested. Under each of the
Plans, upon termination of employment, options remain exercisable for 90 days,
or 12 months if termination results from death or disability, but in any event
not beyond the original option term. In the case of retirement, the Committee
has the discretion to permit the exercise of options more than 90 days beyond
termination of employment.
CHANGE OF CONTROL
Currently, option agreements relating to options granted under the Plan
generally provide that in the event of a dissolution, liquidation or sale of
substantially all of the assets of the Company or a merger or consolidation in
which the Company is not the surviving corporation, the options terminate,
except that immediately prior to such an event, the options become fully
exercisable without regard to vesting requirements.
RIGHTS AS A STOCKHOLDER; STATUS OF EMPLOYEE
No person shall have any rights or privileges of a stockholder of the
Company as to shares subject to an option granted pursuant to the Plan until
such option is exercised in accordance with the terms of the Plan.
Furthermore, nothing in the Plan or any agreement entered into pursuant
thereto confers upon an optionee any right to continue in the employment of
the Company or its subsidiaries.
TAX CONSEQUENCES
Following is a brief summary of the principal federal income tax
consequences of the grant and exercise of an option under the Employee Option
Plan and the subsequent disposition of Class A stock acquired upon such
exercise. Under the Plan, at the time of grant the Committee designates each
option either as an incentive stock option or a nonqualified stock option,
with differing tax consequences to the optionee and to the Company for each
type of option.
Nonqualified Options. The grant of a nonqualified option will not result in
any immediate tax consequence to the Company or the optionee. Upon exercise of
a nonqualified option granted under the Plan, the amount by which the fair
market value on the date of exercise of the shares received upon such exercise
exceeds the option price will be taxed as ordinary income to the optionee, and
the Company will generally be entitled to a deduction in an equal amount. Such
amount will not be an item of tax preference to an optionee.
Upon the subsequent disposition of shares acquired upon the exercise of an
option ("Option Stock"), an optionee may realize short-term or long-term
capital gain or loss, assuming such shares of Option Stock constitute capital
assets in an optionee's hands and depending upon the holding period of such
shares of Option Stock, equal to the difference between the selling price and
the tax basis of the shares of Option Stock sold. The tax basis for this
purpose will equal the sum of the exercise price and the amount of ordinary
income realized by the optionee as a result of such exercise.
15
<PAGE>
Incentive Options. Neither the grant nor the exercise of an incentive stock
option will have any immediate tax consequences to the Company or the
optionee. (However, in calculating income for purposes of computing an
individual optionee's alternative minimum tax, the favorable tax treatment
generally accorded incentive stock options is not applicable.)
When an optionee sells Option Stock received upon the exercise of his
incentive stock options, any amount he receives in excess of the option price
will be taxed as a long-term capital gain at the maximum applicable tax rate
(and any loss will be a long-term capital loss) if he has held his shares for
at least two years from the date of granting the option to him and for at
least one year after the issuance of such shares to him. If the shares are not
held for more than two years from the date of granting the option to him or
are not held for more than one year after the issuance of such shares, (i)
ordinary income will be realized in the year of the disposition in an amount
equal to the difference between the fair market value of the shares on the
date the option was exercised and the option price, and (ii) either capital
gain or loss will be recognized in an amount equal to the difference between
the selling price and the fair market value of the shares on the date the
option was exercised. If the selling price is less than the fair market value
on the date the option is exercised, but more than the exercise price,
(i) ordinary income equal to the difference between the exercise price and the
fair market value on the date of exercise is recognized, and (ii) a capital
loss equal to the difference between the fair market value on the date of
exercise and the sales price results.
The Company is not permitted to take a deduction for federal income tax
purposes because of the granting or exercise of any incentive stock option,
except to the extent that ordinary income may be realized by an optionee on
the sale of option shares.
TERMINATION
The Employee Option Plan terminates on May 12, 2001, unless sooner
terminated by the Board. Except as expressly contemplated by the terms of the
Plan, no amendment, discontinuance or termination of the Plan will have any
effect on options outstanding thereunder at the time of termination.
OTHER OPTION PLANS
In addition, the Company has three other stock option plans: the Incentive
Stock Option Plan, Nonqualified Stock Option Plan, and the D&O Option Plan.
None of these Plans are proposed for amendment. In 1991, the Incentive Stock
Option Plan and the Nonqualified Stock Option Plan were replaced by the
Employee Option Plan and the D&O Option Plan. As of July 31, 1996 there were
outstanding under the other Plans options to purchase the following numbers of
shares:
<TABLE>
<S> <C> <C>
Incentive Stock Option
Plan -- 6,513 Shares
Nonqualified Stock
Option Plan -- 46,063 Shares
D&O Option Plan -- 435,937 Shares
</TABLE>
To the extent that any of the options under the first two of these plans
terminate or expire unexercised, the unused option shares automatically become
available under the Employee Option Plan. The terms of options granted under
the other option plans are substantially similar to the terms of options
granted under the Employee Option Plan.
16
<PAGE>
BOARD RECOMMENDATION
The Board of Directors believes it is in the best interest of the Company to
approve the proposed amendment so that the Company will be able to continue to
provide adequate incentives and to attract and retain the services of
competent personnel. Therefore, the Board recommends the adoption of the
proposed stock option plan amendment to the shareholders of the Company.
The affirmative vote of a majority of the combined Class A and Class B
shares in attendance or represented by proxy and entitled to vote at the
Shareholders Meeting is required for approval of the amendment. This vote will
be adjusted for the relative Class A shares and Class B shares voting weights,
as described in "Voting Securities--Record Date and Voting of Securities,"
above. If all of the Class B shares (which are held by Messrs. Edenfield and
Newberry) are voted in favor of these amendments, no additional affirmative
votes will be required. Messrs. Edenfield and Newberry intend to vote their
Class A and Class B shares in favor of these amendments.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSED AMENDMENT.
17
<PAGE>
STOCK PRICE PERFORMANCE GRAPH
The graph below reflects the cumulative stockholder return (assuming the
reinvestment of dividends) on the Company's Class A shares compared to the
return of the NASDAQ Composite Index and two peer group indices for the
periods indicated. The graph reflects the investment of $100 on April 30, 1991
in the Company's Class A shares, the NASDAQ Stock Market--U.S. Companies
("NASDAQ Composite Index") and in two peer group indices. The Company's first
peer group ("Peer Group One") consists of twelve application software
companies whose shares are quoted on NASDAQ and which are considered to be
competitors of the Company in one or more major product areas. The Company's
second peer group ("Peer Group Two") is the Robertson Stephen & Company
Software Index, which is an index of the stock price performance of 74
software companies maintained by Robertson Stephen & Company, an investment
banking firm.
LOGO
<TABLE>
<CAPTION>
4/30/88 4/30/89 4/30/90 4/30/91 4/30/92 4/30/93 4/30/94 4/30/95 4/30/96
------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
American Software, Inc.. $47 $86 $107 $100 $143 $ 56 $ 53 $ 40 $ 53
NASDAQ Composite........ $72 $84 $ 84 $100 $121 $139 $155 $180 $257
Peer Group One.......... $54 $77 $ 94 $100 $119 $108 $109 $181 $343
Peer Group Two.......... $59 $66 $ 77 $100 $125 $118 $150 $215 $331
</TABLE>
18
<PAGE>
INDEPENDENT AUDITORS
The Board of Directors has selected KPMG Peat Marwick LLP, who were auditors
for fiscal 1996, to continue as independent auditors of the Company.
Representatives of KPMG Peat Marwick LLP are expected to attend the
Shareholders Meeting. These representatives will be available to respond to
appropriate questions raised orally and will be given the opportunity to make
a statement if they so desire.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented to the 1997 Annual
Meeting of Shareholders must be forwarded in writing and received at the
principal executive offices of the Company no later than May 7, 1997, directed
to the attention of the Secretary, for consideration for inclusion in the
Company's proxy statement for the 1997 Annual Meeting of Shareholders. Any
such proposals must comply in all respects with the rules and regulations of
the Securities and Exchange Commission.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors does not
intend to present, and has not been informed that any other person intends to
present, any matter for action at the Annual Meeting other than those
specifically referred to in this Proxy Statement. If other matters properly
come before the meeting, it is intended that the holders of the proxies will
act in respect thereto in accordance with their best judgment.
The cost of this solicitation of proxies will be borne by the Company. In
addition to solicitation by mail, employees of the Company may solicit proxies
by telephone, in writing or in person. The Company may request brokerage
houses, nominees, custodians and fiduciaries to forward soliciting material to
the beneficial owners of stock held of record and will reimburse such persons
for any reasonable expense in forwarding the material.
Copies of the 1996 Annual Report of the Company are being mailed to
shareholders together with this Proxy Statement, proxy card and Notice of
Annual Meeting of Shareholders. Additional copies may be obtained from Pat
McManus, Investor Relations, 470 East Paces Ferry Road, Atlanta, Georgia
30305.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED APRIL 30, 1996, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION,
WILL BE FURNISHED WITHOUT CHARGE TO SHAREHOLDERS BENEFICIALLY OR OF RECORD
AT THE CLOSE OF BUSINESS ON AUGUST 12, 1996, ON REQUEST TO PAT MCMANUS,
INVESTOR RELATIONS, 470 EAST PACES FERRY ROAD, ATLANTA, GEORGIA 30305.
By Order of the Board of Directors,
James R. McGuone, Secretary
Atlanta, Georgia
September 4, 1996
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<PAGE>
AMERICAN SOFTWARE, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD SEPTEMBER 25, 1996 AT 4:00 P.M.
HOTEL NIKKO ATLANTA . 3300 PEACHTREE ROAD, N.E., ATLANTA, GEORGIA
FOR HOLDERS OF CLASS A COMMON STOCK
The undersigned hereby appoints James C. Edenfield and Thomas L. Newberry,
or either of them, attorneys and proxies, each with full power of substitution
to vote, in the absence of the other, all Class A Common Shares of AMERICAN
SOFTWARE, INC. held by the undersigned and entitled to vote at the Annual
Meeting of Shareholders to be held September 25, 1996 and at any adjournment or
adjournments thereof, in the transaction of such business as may properly come
before the meeting, and particularly the proposals stated below, all in
accordance with and as more fully described in the accompanying Proxy Statement.
It is understood that this proxy may be revoked at any time insofar as it
has not been exercised and that the shares may be voted in person if the
undersigned attends the meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE FOLLOWING
PROPOSALS:
1. ELECTION OF CLASS A DIRECTORS. Two Class A directors to be elected.
Nominees:
David H. Gambrell [ ] FOR [ ] WITHHOLD AUTHORITY
Thomas R. Williams [ ] FOR [ ] WITHHOLD AUTHORITY
2. AMENDMENT TO 1991 EMPLOYEE STOCK OPTION PLAN. To increase the base number of
shares that may be subject to options under that Plan from 2,150,000 shares to
2,400,000 shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>
THE CLASS A SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY
THE UNDERSIGNED SHAREHOLDER ON THE REVERSE OF THIS PROXY CARD, OR IF NO
DIRECTION IS GIVEN, THEY WILL BE VOTED FOR EACH OF THE ABOVE PROPOSALS. IN
THEIR DISCRETION, THE PROXYHOLDERS ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
Dated:_______________________1996.
__________________________________
Signature
----------------------------------
Signature if held jointly
IMPORTANT: Please sign this Proxy
exactly as your name or names
appear hereon. If shares are held
jointly, signatures should include
both names. Executors,
administrators, trustees, guardians
and others signing in a
representative capacity should
please give their full titles.
PLEASE VOTE, SIGN, DATE AND RETURN
THIS PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
