<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
[X] Definitive Proxy Statement Rule 14a-6(e)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
AMERICAN SOFTWARE, INC.
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No Filing Fee Required.
[_] 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 Act Rule 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.:
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(3) Filing Party:
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(4) Date Filed:
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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 Grand Hyatt Atlanta, 3300 Peachtree Road,
N.E., Atlanta, Georgia, on Tuesday, August 26, 1997 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 2,400,000
Shares to 2,700,000 Shares.
3. To consider and vote upon an amendment to the Company's Directors and
Officers Stock Option Plan to increase the number of Class A Common
Shares that may be subject to options granted under that Plan from
900,000 Shares to 1,000,000 Shares.
4. 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 July
11, 1997 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
August 1, 1997
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
GRAND HYATT ATLANTA
3300 PEACHTREE ROAD, N.E.
ATLANTA, GEORGIA
ON AUGUST 26, 1997
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 Tuesday, August 26, 1997, 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 August 1, 1997.
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 2,400,000 Shares to
2,700,000 Shares.
FOR -- Adoption of proposed amendment to the Company's Directors and
Officers Stock Option Plan to increase the number of Class A Common Shares
that may be subject to options granted under that Plan from 900,000 Shares
to 1,000,000 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 July 11, 1997 as
the record date for determining the holders of common stock entitled to notice
of and to vote at the meeting. On July 11, 1997 the Company had outstanding
and entitled to vote a total of 17,750,754 Class A Common Shares ("Class A
shares") and 4,815,289 Class B Common Shares ("Class B shares").
1
<PAGE>
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 proposed increases
in the number of shares authorized under the 1991 Employee Stock Option Plan
and the Directors and Officers Stock Option Plan require 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 approved or ratified
by a majority vote of the outstanding shares (adjusted as described above). A
one-third quorum of 5,916,919 Class A shares and of 1,605,096 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 June 30, 1997.
<TABLE>
<CAPTION>
TITLE SHARES PERCENT
OF NAME AND ADDRESS OF BENEFICIALLY OF
CLASS BENEFICIAL OWNER OWNED CLASS(1)
----- ------------------- ------------ --------
<S> <C> <C> <C>
Class A James C. Edenfield 65,325(2)(3) 0.4%(4)(5)
Shares c/o American Software, Inc.
470 East Paces Ferry Road, N. E.
Atlanta, Georgia 30305
Thomas L. Newberry 41,125(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(7) 9.2%
Board
P. O. Box 7842
Madison, Wisconsin 53707
Class B 2,579,352 53.6%
Shares James C. Edenfield
Thomas L. Newberry 2,235,937 46.4%
</TABLE>
- --------
(1) Based on a total of 17,736,288 Class A shares outstanding, plus any shares
issuable pursuant to options held by the person in question which may be
exercised within 60 days.
(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.
2
<PAGE>
(5) If their respective Class B shares were converted into Class A shares, Mr.
Edenfield would beneficially own 11.7% of the outstanding Class A shares
and Dr. Newberry would beneficially own 10.1% of the outstanding Class A
shares.
(6) Includes 39,000 shares that may be acquired upon the exercise of stock
options exercisable within 60 days.
(7) Based upon an amended Schedule 13G filed by such entity dated January 21,
1997.
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 June 30, 1997. The statements as to securities beneficially owned are, in
each instance, based upon information provided by the person(s) concerned.
<TABLE>
<CAPTION>
SHARES PERCENT
BENEFICIALLY OWNED OF CLASS
NAME OF BENEFICIAL OWNER -------------------------- ----------------------
OR DESCRIPTION OF GROUP CLASS A CLASS B CLASS A(1) CLASS B
- ------------------------ --------- ---------- ---------- -------
<S> <C> <C> <C> <C>
DIRECTORS:
James C. Edenfield............ 65,375(2)(3) 2,579,352 .4%(4)(5) 53.6%
Thomas L. Newberry............ 41,125(2)(6) 2,235,937 .2%(4)(5) 46.4%
David H. Gambrell............. 35,618(7) -0- .2% --
Thomas R. Williams............ 28,400(7) -0- .2% --
NAMED EXECUTIVE OFFICERS WHO ARE NOT
DIRECTORS:
J. Michael Edenfield.......... 75,998(8) -0- .4% --
Paul DiBono, Jr............... 38,500(9) -0- .2% --
Ellen M. Valentine............ 15,000(10) -0- .1% --
All directors and executive
officers as a group (9
persons)..................... 306,703(2)(11) 4,815,289 1.7% 100%
</TABLE>
- --------
(1) Based on a total of 17,736,288 Class A shares outstanding, plus any
shares issuable pursuant to options held by the person or group in
question which may be exercised within 60 days.
(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 subject to 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 11.7% of the outstanding Class A
shares and Dr. Newberry would beneficially own 10.1% of the outstanding
Class A shares.
(6) Includes 39,000 shares subject to options exercisable within 60 days.
(7) Includes 26,000 shares subject to options exercisable within 60 days.
(8) Includes 73,468 shares subject to options exercisable within 60 days.
(9) Includes 37,500 shares subject to options exercisable within 60 days.
(10) Represents shares subject to options exercisable within 60 days.
(11) Includes 289,030 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 under 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, the Company believes that all of the reports required to be
filed during fiscal 1997 were filed on a timely basis.
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.
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.
The nominees for directors, their ages, their principal occupations for at
least the past five years, other public company directorships held by them and
the year each was first elected a director of the Company are set forth below.
<TABLE>
<CAPTION>
YEAR
FIRST
ELECTED
NAME OF NOMINEE AGE PRICIPAL OCCUPATION; DIRECTORSHIPS DIRECTOR
--------------- --- ---------------------------------- --------
<C> <C> <S> <C>
David H. Gambrell(1) 67 Partner, Gambrell & Stolz, L.L.P., 1983
Attorneys-at-law, Atlanta, GA.
Thomas R. Williams(2) 68 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.
Thomas L. Newberry(3) 64 Chairman of the Board of American 1971
Software, Inc.
James C. Edenfield(4) 62 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
4
<PAGE>
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, 1996 through April 30, 1997, the Board of Directors held four
meetings. 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.
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 1997.
The Company has a 1991 Employee Stock Option Plan Committee, consisting of
Messrs. Edenfield and Newberry. During fiscal 1997, this Committee met or
acted by written consent ten times. The members of this Committee are not
eligible to participate in this Plan. 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 five occasions
during fiscal 1997, including two 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.
5
<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 three other executive officers of the Company
(determined as of April 30, 1997) whose annual compensation exceeded $100,000
during fiscal 1997 (referred to herein as the "named executive officers") for
the fiscal years ended April 30, 1997, 1996 and 1996:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS/NUMBER ALL
ANNUAL BONUS OR OF OPTION OTHER
NAME AND PRINCIPAL FISCAL SALARY OTHER ANNUAL SHARES COMPENSATION
POSITION YEAR ($) COMPENSATION($) GRANTED ($)(1)(2)
------------------ ------ ------- --------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
James C. Edenfield 1997 434,500 171,225 35,000 -0-
President and Chief 1996 434,500 -0- 18,000 -0-
Executive Officer(3) 1995 434,500 -0- 48,000 -0-
J. Michael Edenfield 1997 240,000 102,735 30,000 -0-
Executive Vice 1996 240,000 -0- 16,000 -0-
President/ 1995 240,000 18,850(5) 106,062 -0-
Chief Operating
Officer(3)(4)
Paul DiBono, Jr. 1997 135,000 5,000 30,000 -0-
Senior Vice President 1996 126,250 -0- 10,000 -0-
1995 117,500 -0- 60,000 -0-
Ellen M. Valentine 1997 116,600 14,382 30,000 -0-
Vice President 1996 --(6) --(6) --(6) --(6)
1995 --(6) --(6) --(6) --(6)
</TABLE>
- --------
(1) The Company did not make any 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) J. Michael Edenfield also serves as President, Chief Executive Officer and
Director of Logility, Inc., a wholly-owned subsidiary of the Company
formed in July 1996.
(5) The bonus amounts shown for fiscal 1995 were earned in fiscal 1994, and
represent 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.
(6) Ms. Valentine became an executive officer of the Company in fiscal 1997.
6
<PAGE>
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 Plan"). Options outstanding under the
Terminated Plans remain in effect, but no new options may be granted under
those plans. The Employee Option Plan and the D&O Option Plan are proposed to
be amended and are described in "Amendment of Employee Option Plan" below. The
following sections describe the other two 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, as amended (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 Option
Plan and the D&O Option Plan. As of April 30, 1997, there were outstanding
under the Incentive Plan options to purchase 6,175 Class A shares.
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, 1997, there
were outstanding under the Nonqualified Plan options to purchase 46,063 Class
A shares.
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.
7
<PAGE>
STOCK OPTION GRANTS
The following table sets forth information with respect to options granted
during fiscal 1997 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 1997 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) 1997 (PER SHARE) DATE GRANT 5% 10% INCREASE
- ---- ----------- ---------- ----------- ---------- ----------- ------------------ ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
James C. Edenfield...... 35,000 4% $4.8125 08/06/2001 $4.3750 $81,113 / $228,813 $7.13 / $11.35
J. Michael Edenfield.... 30,000 4% $4.3750 08/06/2006 $4.3750 $82,650 / $209,250 $7.13 / $11.35
Paul DiBono, Jr......... 10,000 1% $4.0156 02/20/2006 $4.0156 $25,244 / $ 64,044 $6.54 / $10.42
20,000 2% $4.3750 08/06/2006 $4.3750 $55,100 / $139,500 $7.13 / $11.35
Ellen M. Valentine...... 15,000 2% $4.0156 02/20/2006 $4.0156 $37,866 / $ 96,066 $6.54 / $10.42
15,000 2% $4.3750 08/06/2006 $4.3750 $41,325 / $104,625 $7.14 / $11.35
</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.
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, 1997.
No stock options were exercised by these executive officers during fiscal
1997.
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS OPTIONS
AT 04/30/97 AT 04/30/97
EXERCISABLE/ EXERCISABLE/
NAME UNEXERCISABLE UNEXERCISABLE (1)
---- --------------- -----------------
<S> <C> <C>
James C. Edenfield..................................... 56,625 / 72,500 141,147 / 121,507
J. Michael Edenfield................................... 65,969 / 95,031 195,332 / 221,156
Paul DiBono, Jr........................................ 32,500 / 57,500 94,336 / 128,633
Ellen M. Valentine..................................... 11,250 / 33,750 21,504 / 55,137
</TABLE>
- --------
(1) The market price of Class A shares on April 30, 1997 was $5.75.
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. The contract expired at the end of fiscal 1995, and
since such time Mr. Edenfield has continued to be compensated on the same
basis as applied under the
8
<PAGE>
Contract. The Board of Directors, after consulting with the Compensation
Committee, determined that the same contract terms would continue through
fiscal 1998. Accordingly, during fiscal 1997, Mr. Edenfield's salary remained
at $434,500. He received a bonus of $171,225 under the bonus formula with
respect to fiscal 1997.
Pursuant to written plans, J. Michael Edenfield, Paul DiBono and Ellen M.
Valentine had the potential to receive certain cash bonuses, stock options and
other compensation, the amounts of which were determined based upon fiscal
1997 performance standards. Each of these individuals qualified for a bonus
under performance standards applicable during fiscal 1997. For fiscal 1998,
the bonus plans for these officers again 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 that by its
terms expired December 31, 1996. An extension of that lease, on a month-to-
month basis, has been approved by the disinterested members of the Board of
Directors for the balance of calendar year 1997, pending negotiation of a new
long-term lease. The Company incurred expenses of approximately $293,000 and
$299,00 in fiscal 1996 and 1997, respectively, pursuant to this lease. The
current rental rate is $17.00 per square foot. Management believes that the
terms of the lease are fair to the Company.
DIRECTOR COMPENSATION
During fiscal 1997, 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 1997.
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 $706,855
were paid by the Company to that firm during calendar year 1996 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.
9
<PAGE>
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, 1997.
Meetings. The Compensation Committee has met three times formally and has
conferred informally a number of times during fiscal year 1997, among the
members of the Committee and 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 D&O
Option Plan and the re-evaluation and negotiation of his employment contract.
The 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 up through fiscal 1997.
Effective May 1, 1997, the Compensation Committee and the Chief Executive
Officer, James C. Edenfield, agreed to formally extend his existing
compensation arrangement on a year-to-year basis, on the same terms as have
been in effect. Accordingly, for fiscal 1998, the Chief Executive Officer will
receive a base salary of $434,500 and a bonus equal to 5% of the increase in
the Company's pre-tax earnings for fiscal 1998 over the pre-tax earnings for
fiscal 1997. This decision reflects the belief of the Compensation Committee
and Mr. Edenfield that compensation should be tied substantially to growth in
earnings.
The continued participation of the Chief Executive Officer in the D&O Option
Plan during fiscal 1998 will be determined by the Compensation Committee based
upon its authority to grant options under that Plan.
The Chief Executive Officer's cash compensation in fiscal year 1997, 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 a bonus with respect to fiscal year 1997 equal to 5% of the increase
in pre-tax earnings from the previous year. As the Company had no pre-tax
earnings in fiscal 1996, the bonus for fiscal 1997 was calculated on the basis
of 5% of the Company's fiscal 1997 pre-tax earnings.
The Chief Executive Officer received a grant of a stock option on August 6,
1996, consisting of 35,000 shares exercisable at 110% of the then-current
market price, or $4.8125, with a term of five years. This option was granted
under the D&O Option Plan, administered by the Compensation Committee. The
terms and size of this option, which was an incentive 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
10
<PAGE>
oversight and control of the D&O 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 D&O 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 two occasions during fiscal 1997, the Compensation Committee exercised
its authority under the D&O 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 1998, 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 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 shareholders 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
11
<PAGE>
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 STOCK OPTION PLANS
GENERAL
On May 20, 1997, 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 300,000 shares, from 2,400,000 shares to 2,700,000
Shares. On that same date, the Board of Directors approved, subject to
shareholder approval, an amendment to the D&O Option Plan, which would
increase the number of Class A shares that may be subject to options granted
under the D&O Option Plan by 100,000 shares, from 900,000 shares to 1,000,000
shares.
The Employee Option Plan, as of June 30, 1997, provided that only 3,103,709
Class A shares may be issued pursuant to options granted under the Employee
Option Plan, consisting of the 2,400,000 base number of authorized shares,
plus 703,709 shares transferred from prior stock option plans due to lapsed
options. Of this amount, as of June 30, 1997, 300,368 shares have been
purchased pursuant to the exercise of stock options and 2,396,658 shares were
subject to outstanding options, leaving only 406,683 shares available for new
options. The proposed amendment would increase the number of available shares
under the Employee Option Plan to 706,683 as of June 30, 1997.
As of June 30, 1997, of the 900,000 shares of Class A stock authorized under
the D&O Option Plan, 45,500 shares have been purchased pursuant to the
exercise of stock options and 546,937 shares were subject to outstanding
options, leaving only 307,563 shares available for new options. The proposed
amendment would increase the number of available shares under the D&O Option
Plan to 407,563 shares as of June 30, 1997.
The following summary of the Plans is qualified in its entirety by reference
to the full text of the Employee Option Plan and D&O Option Plan, which govern
in the event of any conflict. Copies of the Plans are available from the
Company, upon written request, to the attention of Pat McManus, Investor
Relations, 470 East Paces Ferry Road, Atlanta, Georgia 30305.
PURPOSE OF PLANS
The purpose of both of the Plans is to promote the interests of the Company
by providing eligible employees and Directors 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.
12
<PAGE>
SHARES SUBJECT TO THE PLAN
As of June 30, 1997, there were 406,683 and 307,563 Class A shares available
for option grants under the Employee Option Plan and D&O Option Plan,
respectively, and 2,396,658 and 546,937 Class A shares subject to outstanding
options granted under the Employee Option Plan and D&O Option Plan,
respectively. The terms of both Plans 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
Each of the Plans is administered by a committee of the Board of Directors.
The Employee Option Plan Committee consists of Messrs. Edenfield and Newberry.
The D&O Option Plan is administered by the Compensation Committee, consisting
of Messrs. Gambrell and Williams. The members of the Employee Option Plan
Committee are not eligible to receive options under such Plan. Members of the
Compensation Committee are deemed by the Board of Directors to be
disinterested persons within the meaning of Rule 16b-3 of the Securities
Exchange Act of 1934. The Board appoints the members of these Committees,
fills vacancies on these Committees and has the power to replace members of
these Committees with other eligible persons at any time. The Committees are
authorized to grant options under the Plans, to determine the terms and
conditions of such options and to otherwise administer the Plans.
ELIGIBILITY
All employees (approximately 610 persons as of June 30, 1997), other than
executive officers and Directors of the Company, are eligible to participate
in the Employee Option Plan. All executive officers and Directors of the
Company (including members of the Compensation Committee) are eligible to
participate in the D&O Option Plan.
EXERCISE PRICE
The exercise price per share of any option granted under either of the Plans
is set in each case by the respective Committee. For incentive stock options
granted under either 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 either 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 June 30, 1997, the market value of Class A stock was approximately
$7.52 per share.
TERMS OF OPTIONS
Options granted pursuant to either Plan generally expire on the tenth
anniversary of the grant date, except for incentive stock options granted to
10% shareholders, which expire on the fifth anniversary of the date of grant.
EXERCISE OF OPTIONS
Options granted pursuant to either Plan generally become exercisable in
equal portions over a four-year period (other than formula options granted to
non-employee directors, which fully vest after one
13
<PAGE>
year). Upon the exercise of an option, the optionee may either make payment in
full in cash to the Company of the exercise price 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.
NON-ASSIGNABILITY OF OPTIONS
An option granted under either of the Plans 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 either of the Plans 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 Committees for both Plans have 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 Plans
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 SHAREHOLDER; STATUS OF EMPLOYEE
No person shall have any rights or privileges of a shareholder of the
Company as to shares subject to an option granted pursuant to either of the
Plans until such option is exercised in accordance with the terms of such
Plan. Furthermore, nothing in either of the Plans 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
The following is a brief summary of the principal federal income tax
consequences of the grant and exercise of an option under the Plans and the
subsequent disposition of Class A stock acquired upon such exercise. Under the
Plans, at the time of grant the respective 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 either of the Plans, the amount by which
the fair market value on the date of exercise of the shares
14
<PAGE>
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 in the year the option is executed. 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.
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
Both the Employee Option Plan and the D&O Option Plan terminate on May 12,
2001, unless sooner terminated by the Board of Directors. Except as expressly
contemplated by the terms of each of the Plans, no amendment, discontinuance
or termination of such Plan will have any effect on options outstanding
thereunder at the time of termination.
OTHER OPTION PLANS
In addition, the Company has two other stock option plans: the Incentive
Stock Option Plan and the Nonqualified Stock Option Plan. Neither 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
15
<PAGE>
Option Plan and the D&O Option Plan. As of June 30, 1997 there were
outstanding under the other Plans options to purchase the following numbers of
shares:
<TABLE>
<S> <C> <C>
Incentive Stock Option
Plan -- 6,175 Shares
Nonqualified Stock Option
Plan -- 46,063 Shares
</TABLE>
To the extent that any of the options under these plans terminate or expire
unexercised, the unused option shares automatically become available under the
Employee Option Plan. The terms of those options are substantially similar to
the terms of options granted under the Employee Option Plan and the D&O Option
Plan.
BOARD RECOMMENDATION
The Board of Directors believes it is in the best interest of the Company to
approve the proposed amendments 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 of Directors recommends the adoption
of the proposed stock option plan amendments 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 amendments. 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 AMENDMENTS.
16
<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, 1992
in the Company's Class A shares, the NASDAQ Stock Market--U.S. Companies
("NASDAQ Composite Index") and in a published industry peer group index. The
peer group is the Robertson Stephens & Company Software Index, which is an
index of the stock price performance of 67 software companies maintained by
Robertson Stephens & Company, an investment banking firm.
[GRAPH APPEARS HERE]
<TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG AMERICAN SOFTWARE, INC., NASDAQ COMPOSITE AND PEER GROUP
<CAPTION>
Measurement period American NASDAQ Peer
(Fiscal Year Covered) Software, Inc. Index Index
- --------------------- -------------- -------- --------
<S> <C> <C> <C>
Measurement PT -
04/30/92 $ 100 $ 100 $ 100
FYE 04/30/93 $ 39 $ 115 $ 94.4
FYE 04/30/94 $ 36.8 $ 128 $ 120.6
FYE 04/30/95 $ 27.9 $ 148.8 $ 172.7
FYE 04/30/96 $ 37.2 $ 212.1 $ 265.1
FYE 04/30/97 $ 38.8 $ 224.5 $ 224.5
</TABLE>
The Company has elected to omit from the above table the 12-company peer
group index used in recent proxy statements, relying instead on the published
Robertson, Stephens line of business index. This decision reflects the
Company's determination that the Robertson, Stephens index utilizes a more
representative peer group against which the Company's stock price performance
should be measured.
17
<PAGE>
INDEPENDENT AUDITORS
The Board of Directors has selected KPMG Peat Marwick LLP, who were auditors
for fiscal 1997, 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 at the 1998 Annual
Meeting of Shareholders must be forwarded in writing and received at the
principal executive offices of the Company no later than April 3, 1998,
directed to the attention of the Secretary, for consideration for inclusion in
the Company's proxy statement for the 1998 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 1997 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, 1997, 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 JULY 11, 1997, 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
August 1, 1997
18
<PAGE>
CLASS A AMERICAN SOFTWARE, INC. CLASS A
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR
THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
AUGUST 26, 1997 AT 4:00 P.M. AT
THE GRAND HYATT ATLANTA
3300 PEACHTREE ROAD, N.E.
ATLANTA, GEORGIA
FOR HOLDERS OF CLASS A COMMON SHARES
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 on August 26, 1997 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 on the reverse side
hereof, 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 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 PROPOSALS LISTED ON THE REVERSE SIDE.
IN THEIR DISCRETION, THE PROXYHOLDERS ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
- --------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
IMPORTANT: Please sign this Proxy exactly as your name(s) appear(s) 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.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ------------------------------------ ---------------------------------------
- ------------------------------------ ---------------------------------------
- ------------------------------------ ---------------------------------------
<PAGE>
<TABLE>
<S> <C>
[X] PLEASE MARK VOTES
AS IN THIS SAMPLE
- ----------------------------------------------
AMERICAN SOFTWARE, INC. THE BOARD OF DIRECTORS RECOMMENDS
- ---------------------------------------------- A VOTE "FOR" EACH OF THE FOLLOWING PROPOSALS
CLASS A
Election of Class A Directors. For All With- For All
------------------------------ Nominees hold Except
Mark box at right if an address change Two Class A Directors to be elected.
or comment has been noted [ ] [ ] [ ] [ ]
on the reverse side of this card. NOMINEES:
DAVID H. GAMBRELL
THOMAS R. WILLIAMS
NOTE: If you do not wish your shares voted "FOR" a particular nominee, mark the
"For All Except" box and strike a line through the name of the nominee. Your
shares will be voted for the remaining nominee.
Amendment to 1991 Employee Stock Option Plan. For Against Abstain
---------------------------------------------
To increase the base number of shares that may be [ ] [ ] [ ]
subject to options under the Plan from 2,400,000
shares to 2,700,000 shares.
-----------------
Please be sure to sign |Date | Amendment to Directors and Officers Stock Option Plan. For Against Abstain
and date this proxy. | | -----------------------------------------------------
- ---------------------------------------------- To increase the number of shares that may be subject to [ ] [ ] [ ]
| | options under that Plan from 900,000 shares to
| | 1,000,000 shares.
| |
- -Shareholder sign here---Co-owner sign here---
</TABLE>
