UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.    )

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☒Definitive Proxy Statement

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Soliciting Material under §240.14a-12



AMERICAN SOFTWARE, INC.

(Name of registrant as specified in its charter)



(Name of person(s) filing proxy statement, if other than the registrant)

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AMERICAN SOFTWARE, INC.

470 East Paces Ferry Road, N.E.

Atlanta, Georgia 30305


NOTICE OF ANNUAL MEETING OF SHAREHOLDERS


TO THE SHAREHOLDERS:


NOTICE IS HEREBY GIVEN that the 2016 Annual Meeting2019 annual meeting of shareholders (the “Annual Meeting”) of Shareholders of AMERICAN SOFTWARE, INC. (the “Company”) will be held at the offices of the Company, 470 East Paces Ferry Road, N.E., Atlanta, Georgia, on Monday,Wednesday, August 15, 201621, 2019 at 3:00 p.m. for the following purposes:


1.

To elect fivesix directors of the Company, two of whom will be elected by the holders of Class A Common Shares and threefour of whom will be elected by the holders of Class B Common Shares.


2.

To conduct an advisory vote on the compensation of our named executive officers.

3.

To consider and vote upon a proposal to amend the Company’s 2011 Equity Compensation Plan to increase the number of shares of Class A Common Stock that may be subject to options under the 2011 Equity Compensation Plan.

4.

To ratify the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the fiscal year ending April 30, 2017.

2020.


3.To conduct an advisory vote on the compensation of our named executive officers.

4.To approve the adoption of the Company’s 2020 Equity Compensation Plan.

5.

To consider and transact such other business as may properly come before the Annual Meeting.

Only shareholders of record of the Company at the close of business on July 5, 2019 will be entitled to vote at the Annual Meeting.

Only shareholders of record of the Company at the close of business on July 1, 2016 will be entitled to vote at the Annual Meeting.


Shareholders are requested to vote, date, sign and mail their proxies in the form enclosed even though they plan to attend the Annual Meeting. If shareholders are present at the Annual Meeting, their proxies may be withdrawn, and they may vote personally on all matters brought before the Annual Meeting, as described more fully in the enclosed Proxy Statement.




BY ORDER OF THE BOARD OF DIRECTORS

LOGO


                            signature.jpg

James R. McGuone,

Secretary

July 27, 2016

30, 2019





IMPORTANT


We encourage you to attend the Annual Meeting. In order that there may be a proper representation at the Annual Meeting, each shareholder is requested to return 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.


IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON AUGUST 15, 2016:

21, 2019:


This Proxy Statement, the proxy card and the Company’s Annual Report on Form 10-K for the fiscal year
ended April 30, 20162019 are available at: https://materials.proxyvote.com/029683





PROXY STATEMENT

FOR ANNUAL MEETING OF SHAREHOLDERS

OF AMERICAN SOFTWARE, INC.

_____________________________

TO BE HELD AT

AMERICAN SOFTWARE, INC.

470 EAST PACES FERRY ROAD, N.E.

ATLANTA, GEORGIA

ON AUGUST 15, 2016

21, 2019


This Proxy Statement is furnished to Class A shareholders by the Board of Directors of American Software, Inc. (the “Company”), in connection with the solicitation of proxies by the Board of Directors for use at the annual meeting of shareholders (the “Annual Meeting”) to be held at the Company’s offices on Monday,Wednesday, August 15, 201621, 2019 at 3:00 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 July 27, 2016.

30, 2019.


The mailing address of the Company’s executive office is 470 East Paces Ferry Road, N.E., Atlanta, Georgia 30305. The Company’s website iswww.amsoftware.com. Information from the Company’s website is not incorporated by reference into any portion of this Proxy Statement.


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, subject to the broker non-vote rules discussed under “RECORD DATE AND VOTING OF SECURITIES – Broker Non-Votes” below, the proxy will be voted:

FOR—


FOR - Election of W. Dennis Hogue and James B. Miller, Jr., as Class A directors.

FOR—Approval of the advisory resolution regarding executive compensation.

FOR—Approval of amendment of the Company’s 2011 Equity Compensation Plan to increase the number of Class A Common Stock that may be subject to options under the 2011 Equity Compensation Plan.

FOR—


FOR - Ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the fiscal year ending April 30, 2017.

2020.


FOR - Approval of the advisory resolution regarding the compensation of our named executive officers.

FOR - Approval of the adoption of the Company’s 2020 Equity Compensation Plan.

In addition, a properly executed and returned proxy card gives the authority, subject to the broker non-vote rules, to vote in accordance with the proxy holder’s best judgment on such other business as may properly come before the Annual Meeting or any adjournment or adjournments thereof. Any proxy given pursuant to this solicitation may be revoked, either in writing furnished to the Secretary of the Company prior to the Annual Meeting or personally by attendance at the Annual Meeting, by the person giving the proxy insofar as the proxy has not been exercised at the Annual Meeting and the shareholder attending the Annual Meeting informs the Secretary of the Company of his or her intent to revoke the proxy.


RECORD DATE AND VOTING OF SECURITIES


Record Date


The Board of Directors has fixed the close of business on July 1, 20165, 2019 as the record date for determining the holders of common stock entitled to notice of and to vote at the Annual Meeting. On July 1, 2016,5, 2019, the Company had outstanding and entitled to vote a total of 26,461,31129,534,622 Class A Common Shares (“Class A shares”) and 2,487,0861,821,587 Class B Common Shares (“Class B shares”).


Class A and Class B Shareholder Voting


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 toone-tenth of a vote per share and each outstanding Class B share is entitled to one vote per share on all matters to be brought before the Annual Meeting. The Class A directors and the Class B directors will be


elected by a majority of the votes cast by the respective classes. Any other matter submitted to the Annual Meeting must be approved or ratified by a majority vote of the outstanding shares (adjusted as described above) present or represented by proxies at the Annual Meeting. Aone-third quorum of 8,820,4379,844,874 Class A shares and 829,029607,196 Class B shares is required to be present or represented by proxy at the Annual Meeting in order to conduct all of the business expected to come before the Annual Meeting. Votes that are withheld, broker non-votes and votes of abstention cast by any shareholder on a particular action will be counted towards the quorum requirement, but will not be counted as a vote for or against the action.


Broker Non-Votes


Broker non-votes occur when a broker or nominee holding shares for a beneficial owner does not vote on a non-routine proposal because the broker or nominee has not received voting instructions from the beneficial owner and does not have discretionary voting power with respect to such proposal. Rule 452 of the New York Stock Exchange, which has been adopted by the Nasdaq Stock Market, provides that a broker or other nominee holding shares for a beneficial owner may generally vote on routine matters, but not non-routine matters, without receiving voting instructions. The uncontested election of directors (Proposal 1), the advisory vote on the compensation of our named executive officers (Proposal 2)3) and the vote to amendapprove the adoption of the Company’s 20112020 Equity Compensation Plan (as defined below) to increase the number of shares available for issuance from 5,000,000 to 6,000,0000 (Proposal 3)4) are non-routine matters.Please provide instructions to your broker or nominee on how to vote your shares.If you do not provide such voting instructions, your shares will not be voted for Proposals 1, 23 and 3.4. The ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm for fiscal 20172020 (Proposal 4)2) is considered routine.a routine matter. Because at least one routine item is to be voted on at the Annual Meeting, shares held in the name of brokers or other nominees and voted on Proposal 42 will be counted for purposes of the quorum requirement, as noted above.

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PROPOSAL 1: ELECTION OF DIRECTORS


Overview


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 shareholders. Of the fivesix directors to be elected, two are to be elected by the holders of the outstanding Class A shares and threefour are to be elected by the holders of the outstanding Class B shares. The persons named on the enclosed proxy card intend to vote Class A shares for the election of W. Dennis Hogue and James B. Miller, Jr., the Class A director nominees. In the eventIf any 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. If any of the nominees is unable to serve, the remaining Board members may elect a substitute to fill the resulting vacancy.


It is anticipated that Mr. Edenfield, who owns approximately 70%100% of the Class B shares, will vote his Class B shares in favor of the election of James C. Edenfield, J. Michael Edenfield, Matthew G. McKenna and Thomas L. Newberry, V, as Class B directors. Thus, it is expected that James C. Edenfield, J. Michael Edenfield, Matthew G. McKenna and Thomas L. Newberry, V will be elected as Class B directors.


Director Background and Qualifications


The Board seeks directors with strong reputations and experience in areas relevant to the strategy and operations of the Company’s business, particularly industries and segments that the Company serves. Each of the nominees for election as a director at the Annual Meeting has substantial and meaningful experience in core management skills, such as strategic, financial and operational planning, financial reporting, corporate governance, risk management, and leadership development. The information set forth below includes a summary of each director nominee’s individual qualifications, experience, attributes and skills that we believe add to the strength of our Board of Directors.

Candidates for membership on the Board are recommended by current members of the Board or management. When evaluating candidates for membership on the Board, the Board considers a number of factors, including:


business expertise and skills;

understanding of the Company’s business and industry;

judgment and integrity;

educational and professional background; and

commitments to other businesses and responsibilities.


The 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 as a director of the Company are set forth below.

NAME OF NOMINEE

  AGE  

PRINCIPAL OCCUPATION; DIRECTORSHIPS

 YEAR
FIRST
ELECTED
DIRECTOR		 

CLASS A DIRECTORS:

    

W. Dennis Hogue

   63   Senior Partner and Managing Director of ChampionScott Partners; Chief Executive Officer of Hogue Enterprises, Inc.; President of American Durahomes; President of The Hogue Corp., d/b/a GRN of Marietta  2001  

James B. Miller, Jr.

   76   Founder, Chairman and Chief Executive Officer of Fidelity Southern Corporation, the parent company of Fidelity Bank  2002  

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NAME OF NOMINEE

  AGE  

PRINCIPAL OCCUPATION; DIRECTORSHIPS

 YEAR
FIRST
ELECTED
DIRECTOR		 

CLASS B DIRECTORS:

    

James C. Edenfield

   81   Executive Chairman and Treasurer of American Software, Inc.  1971  

J. Michael Edenfield

   58   President and Chief Executive Officer of American Software, Inc.  2001  

Thomas L. Newberry, V

   49   Author; Founder and Chief Executive Officer of The 1% Club, Inc.  2001  


NAME OF NOMINEEAGE
PRINCIPAL OCCUPATION; DIRECTORSHIPS

YEAR FIRST ELECTED DIRECTOR
CLASS A DIRECTORS:   
W. Dennis Hogue66
Senior Partner and Managing Director of ChampionScott Partners; Chief Executive Officer of Hogue Enterprises, Inc.; President of American Durahomes; President of The Hogue Corp., d/b/a GRN of Marietta

2001
James B. Miller, Jr.79
Executive Chairman and Director of Ameris Bancorp, the parent company of Ameris Bank

2002
CLASS B DIRECTORS:   
James C. Edenfield84
Executive Chairman and Treasurer of American Software, Inc.

1971
J. Michael Edenfield61Former President and Chief Executive Officer of2001
Matthew G. McKenna62Principal of McKenna & Associates, LLC2017
Thomas L. Newberry, V52
Author; Founder and Chief Executive Officer of The 1% Club, Inc.

2001



Class A Directors


W. Dennis Hogue. In November 2013, Mr. Hogue joined ChampionScott Partners, a global management consulting firm specializing in technology and technology-enabled companies, as a Senior Partner and Managing Director. Since November 2007, Mr. Hogue has also served as President of American Durahomes, a provider of durable and affordable homes. Since January 2005, Mr. Hogue also has also served as Chief Executive Officer of Hogue Enterprises, Inc., a real estate investment company. From July 2003 to January 2005, he served as Chief Executive Officer of Datatrac Corporation, a software developer and wireless communications provider for the expedited product delivery industry. Mr. Hogue earned a Bachelor of Science degree in Psychology from Florida State University in 1974.


Mr. Hogue’s many years of executive-level experience at other companies, his education and training and his in-depth knowledge of the Company’s operations and technology gained from more than twelve years with the Company, from 1983 to 1996, where he served as Group Vice President and in other positions, enable him to provide our Board with strong and capable
leadership.


James B. Miller, Jr.Mr. Miller is currently the Executive Chairman and a member of the board of directors of each of Ameris Bancorp, a publicly held bank holding corporation, and its wholly-owned subsidiary, Ameris Bank. Prior to July 2019, Mr. Miller was the Chairman of the Board and Chief Executive Officer of Fidelity Southern Corporation, a publicly held bank holding corporation and the parent corporation of Fidelity Bank, positions he has held since 1979. He became Chairman of Fidelity Bank in 1998 and served as President of Fidelity Bank from 1977 to 1997 and from 2003 to 2004. In addition to his positionpositions at Fidelity Southern Corporation,Ameris Bancorp and Ameris Bank, Mr. Miller currently serves as the Chief Executive Officer of Fidelity Bank. He is a director of Interface, Inc., a publicly held textile manufacturing company. Mr. Miller is also chairman of privately held family real estate businesses. He holds a Bachelor of Arts Degree from Florida State University and an L.L.B. from Vanderbilt University Law School.


Mr. Miller’s extensive leadership experience at Fidelity Southern Corporationtwo publicly traded bank holding corporations and itstheir wholly-owned subsidiary Fidelity Bank,banks, as well as his board experience with other companies in a variety of industries, brings to the Board the business and financial acumen of an experienced senior executive. We believe his financial expertise and legal background; his role as Chairman of the Board of Fidelity Southern Corporation, a publicly held company;background and his service on the Interface, Inc. audit committee qualify him well to serve on our Board, and in particular to serve as chair of our Audit Committee. The Board has determined that Mr. Miller is an “audit committee financial expert.”


Class B Directors


James C. Edenfield. Mr. Edenfield is aco-founder of the Company and has served as our Executive Chairman since September 2014. Mr. Edenfield previously served as President and Chief Executive Officer from November 1989 to May 2014 and asCo-Chief Executive Officer 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., an Atlanta-based applications software development and sales company. He holds a Bachelor of Industrial Engineering degree from the Georgia Institute of Technology. Mr. James C. Edenfield is the father of J. Michael Edenfield.

4


As a co-founder and Executive Chairman of the Company, and aswith more than 40 years of experience in our President and Chief Executive Officer for 40 years,industry, Mr. Edenfield provides essential insight and guidance to our Board of Directors from an insider perspective regarding the day-to-dayday to-day operations of the Company.


J. Michael Edenfield. Mr. Edenfield isserved as our President and Chief Executive Officer positions he has held sincefrom May 2014.2013 to March 2017. Mr. Edenfield previously served as President and Chief Executive Officer of Logility, Inc., a wholly-ownedsubsidiarywholly-owned subsidiary of the Company and a former publicly traded company, from January 1997 to August 2015. Mr. Edenfield previously served as Executive Vice President of the Company from June 1994 to May 2014, and as Chief Operating Officer of the Company sincefrom August 2009.2009 to April 2013. From May 1987 to June 1994, Mr. Edenfield served in various positions with American Software USA, Inc., a wholly-owned subsidiary of the Company. Mr. Edenfield holds a Bachelor of Industrial Management degree from the Georgia Institute of Technology.

Mr. J. Michael Edenfield has served as our President and Chief Executive Officer since May 2014, and previously served as Executive Vice Presidentis the son of the Company, and President and Chief Executive Officer of our subsidiary Logility, Inc., including twelve years as Chief Executive Officer of Logility while it was a separate reporting public company. HisJames C. Edenfield.


Mr. Edenfield’s executive management experience with the Company and Logility combined with his perspective as a former public company chief executive adds important leadership and operational experience to our Board of Directors.


Matthew G. McKenna. Mr. McKenna has served as Principal of McKenna & Associates, LLC, a management and consulting advisory firm, since July 2016. Mr. McKenna previously served as Managing Director of Strategy&, a global strategy consulting firm and subsidiary of PricewaterhouseCoopers, from July 2015 to June 2016, and as Senior Executive Advisor of Booz & Company, a global management consulting firm, from January 2008 to June 2015. Prior to serving at Booz & Company,


Mr. McKenna held a variety of positions at Booz Allen Hamilton over a 22-year period, including Managing Partner of the company’s Houston office and Energy Operations Sector Practice Leader. From 1981 to 1985, Mr. McKenna served as a Supply Chain Applications Consultant for the Company. Mr. McKenna holds a B.S. in Engineering from the Georgia Institute of Technology and an MBA from Harvard University.

Mr. McKenna brings to the Board of Directors significant strategy development and implementation experience gained from his long career in management consulting.

Thomas L. Newberry, V. Mr. Newberry founded The 1% Club, Inc. in October 1992 and has acted as its Chief Executive Officer since that time. The 1% Club sponsors programs designed to assist entrepreneurs and their families in accomplishing their goals. He is also the author of motivational books and audio programs dedicated to improving performance in business operations and salesmanship. Mr. Newberry earned a Bachelor of Science degree from Georgia State University in 1989.


Mr. Newberry’s experience as an entrepreneur and a business executive, combined with his leadership in the field of executive performance and motivation, allow him to provide unique and important insights to the Board of Directors, particularly as the Board addresses motivational and management issues.


THE BOARD OF DIRECTORS RECOMMENDS THAT CLASS A

SHAREHOLDERS VOTE “FOR” MESSRS. HOGUE AND MILLER.

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CORPORATE GOVERNANCE


Board Meetings


The Board of Directors held fourfive meetings during fiscal 2016.2019. 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.


Director Attendance at Annual Meetings


Although the Company does not have a policy with regard to Board members’ attendance at the Company’s annual meetings of shareholders, all of the directors are encouraged to attend such meetings. All of the Company’s directors were in attendance at the 20152018 Annual Meeting.


Director Independence


Because the holders of Class B shares have the right to elect threefour of the fivesix directors and Mr. James C. Edenfield owns approximately 70%100% of the issued and outstanding Class B shares, the Company qualifies as a “controlled company” as defined in Rule 5615(c)(1) of the Nasdaq Marketplace Rules (the “Nasdaq Rules”). Please see “Security Ownership of Management and Certain Beneficial Owners,”Owners” below. Therefore, the Company is not subject to certain provisions of Rule 5606(b) and all of Rules 5606(d) and (e) of the Nasdaq Rules that otherwise would require the Company to have (i) a majority of independent directors on the Board; (ii) a compensation committee composed solely of independent directors; (iii) a nominating committee composed solely of independent directors; (iv) compensation of the Company’s executive officers determined by a majority of the independent directors or a compensation committee composed solely of independent directors; and (v) director nominees selected, or recommended for the Board’s selection, either by a majority of the independent directors or a nominating committee composed solely of independent directors.


Director Nominations


In light of the voting power of Mr. Edenfield, and in view of the fact thatbecause Board vacancies have occurred infrequently, the Board has determined that the Board, rather than a nominating committee, is the most appropriate body for identifying director candidates and selecting nominees to be presented at the Annual Meeting of shareholders. Each member of the Board participates in this process. It is the view of the Board that this function has been performed effectively by the Board, and that it is appropriate for the Company not to have a separate nominating committee or charter for this purpose. The Board has further determined that it would not be productive to have a fixed policy with respect to consideration of candidates recommended by security holders. However, if a shareholder communication includes a recommendation of a candidate for director, the Board will consider that candidate along with any other candidates for a Board position.


Board Diversity


The Company does not have a formal policy with regard to the consideration of diversity in identifying director nominees. The Board strives to nominate directors with a variety of complementary skills so that, as a group, the Board will possess the appropriate talent, skills, and expertise to oversee the Company’s businesses.


Board Leadership Structure


The Board does not have a policy regarding the separation of the roles of Chief Executive Officer and Chairman of the Board, as the Board believes it is in the best interest of the Company to make that determination based on the position and direction of the Company and the membership of the Board. Currently, the positions of ChiefJames C. Edenfield, our Executive Officer and Chairman, are separate and the Board believes this structure is in the best interest ofserving as the Company’s shareholders at this time.

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principal executive officer.


Committees of the Board of Directors


Audit Committee


The Board of Directors has an Audit Committee, which presently consists of Messrs. Miller (Chairman), Hogue, McKenna and Newberry. The Audit Committee held four meetingsduringmeetings during fiscal 2016,2019, in addition to its consultations with our independent


registered public accounting firm and management in connection with review of interim financial statements. The Nasdaq Rules require audit committees to be composed of not less than three members who are “independent,” as that term is defined in the Nasdaq Rules. The Board of Directors has determined that all of the Audit Committee members meet the Nasdaq definition of “independent.”


The Audit Committee has a written charter, which can be found on our website atwww.amsoftware.com. The Audit Committee’s charter outlines the composition requirements of the Audit Committee, as described above, as well as its duties and responsibilities. The primary responsibility of the Audit Committee is to oversee the Company’s financial reporting process on behalf of the Board and report the results of the Audit Committee’s activities to the Board. The functions of the Audit Committee include making an annual recommendation of independent registered public accounting firm to the Company, reviewing the scope and results of the independent registered public accounting firm’s audit, monitoring the adequacy of the Company’s accounting, financial and operating controls, reviewing from time to time the Company’s periodic financial statements and other financial reports with management and with the independent registered public accounting firm, pre-approving audit services and permitted non-audit services and related fees, and reviewing with management and the independent registered public accounting firm the financial statements to be included in the Company’s annual and quarterly reports. The Board of Directors has determined that James B. Miller, Jr., Chairman of the Audit Committee, is an “audit committee financial expert” as defined in the rules of the Securities and Exchange Commission.Commission (the “SEC”).


Compensation Committee


The Board has a Compensation Committee, consisting of Messrs. Miller (Chairman), Hogue, McKenna and Newberry. During fiscal 2016,2019, the Compensation Committee met on two occasions. The Compensation Committee has a written charter, which can be found on our website atwww.amsoftware.com. The Compensation Committee’s charter outlines the composition requirements of the Compensation Committee, as well as its duties and responsibilities. The Compensation Committee has authority to establish the compensation of the Chief Executive OfficerChairman and the President and to consult with the Chief Executive OfficerChairman about the compensation of the other named executive officers. In addition, the Compensation Committee, acting as the Special Stock Option Committee, has the authority to grant stock options to the Chief Executive OfficerChairman and the other named executive officers under the Company’s 2011 Equity Compensation Plan (the “2011 Pan”)., and will have that authority under the 2020 Equity Compensation Plan (the “2020 Plan”) if it is approved by the shareholders. See “Proposal 4 – Approval of 2020 Equity Compensation Plan.” See also “Executive Compensation – Compensation Discussion and Analysis,”Analysis” below for a further discussion of the Compensation Committee and the functions it performs.


Two different committees of the Board administer the 2011 Plan (see “Executive Compensation – Stock Options”), and will administer the 2020 Plan if it is approved by the shareholders, depending on whether the option grant is made to an executive officer, a director or to other employees.another person. The Special Stock Option Committee, which consists of Messrs. Miller, Hogue, McKenna and Newberry, each members of the Compensation Committee, administers stock option grants to executive officers and directors. The Stock Option Committee, which consists of James C. Edenfield and J. Michael Edenfield, administers stock option grants to other employees. The functions of these committees are to grant stock options and establish the terms of those stock options, as well as to construe and interpret the plans and to adopt related rules and procedures. During fiscal 2016,2019, the Special Stock Option Committee acted by written consent on one occasion in connection with the grant of stock options under the Company’s 2011 Plan, and the Stock Option Committee acted by written consent on seventhree occasions in connection with the grant of stock options under the Company’s 2011 Plan.

7


Risk Oversight


We believe that understanding and managing risk is the responsibility of each employee of the Company. However, management is ultimately accountable to our Board of Directors and shareholders for the day-to-day management of risks we face. Our Board, of Directors, as a whole and through its committees, oversees planning and responding to risks arising from changing business conditions or the initiation of new activities, strategies or products. Our Board of Directors also is responsible for overseeing compliance with laws and regulations, responding to recommendations from auditors and supervisory authorities, and overseeing management’s conformance with internal policies and controls addressing the operations and risks of significant activities.


Code of Business Conduct and Ethics


The Company has adopted a Code of Business Conduct and Ethics, which applies to all directors, officers and employees of the Company, including its Chief Executive Officer,Chairman, President, Chief Financial Officer and Controller. The Code of Business Conduct and Ethics is available on the Company’s website atwww.amsoftware.com/marketing/marketing/company-investors.jspinvestor-relations/.






Communications Between Shareholders and Directors


Shareholders may contact the Board or any individual director by writing to them c/o Mr. Vincent C. Klinges, Chief Financial Officer, American Software, Inc., 470 East Paces Ferry Road, N.E., Atlanta, Georgia 30305. Inquiries sent by mail may be sorted and summarized by Mr. Klinges or his designee before they are forwarded to the addressee.

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PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM

The Board of Directors, upon the recommendation of the Audit Committee, has appointed KPMG LLP (“KPMG”) to serve as its independent registered public accounting firm for the fiscal year ending April 30, 2020. KPMG acted in such capacity during the fiscal year ended April 30, 2019. This appointment is being presented to the shareholders for ratification. Although the Company is not required to obtain shareholder ratification, the Company has elected to do so in order to provide the shareholders with an opportunity to participate in this decision. In the event that the shareholders do not ratify the appointment of KPMG as the independent registered public accounting firm of the Company, the Board will consider the retention of another independent registered public accounting firm.

The Company expects that representatives of KPMG will attend the 2019 Annual 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.

During the fiscal year ended April 30, 2019, the Company engaged KPMG to provide certain audit services, including the integrated audit of the annual consolidated financial statements, quarterly reviews of the consolidated financial statements included in our Quarterly Reports on Form 10-Q, services performed in connection with filing this Proxy Statement and the Annual Report on Form 10-K by the Company with the SEC, attendance at meetings with the Audit Committee and consultation on matters relating to accounting, tax and financial reporting. KPMG has acted as independent registered public accounting firm for the Company since 1982. Neither KPMG nor any of its associates has any relationship to the Company or any of its subsidiaries except in its capacity as independent registered public accounting firm.

The aggregate fees billed to the Company by KPMG for services rendered during fiscal 2019 and fiscal 2018 are summarized below:

Audit Fees. Fees for audit services totaled approximately $820,000 in fiscal 2019 and approximately $962,000 in fiscal 2018, including fees associated with the annual audit, a purchase accounting review of an acquisition in fiscal 2018, and the reviews of consolidated financial statements in Quarterly Reports on Form 10-Q, including Sarbanes-Oxley 404 audit fees.

Audit Related Fees. There were no fees for audit related services incurred for fiscal 2019 or fiscal 2018.

Tax Fees. There were no fees for tax services, including tax compliance, tax advice and tax planning, billed to the Company by KPMG in fiscal 2019 or in fiscal 2018.

All Other Fees. The Company’s independent registered public accounting firm did not receive fees for other services not described above in fiscal 2019 or in fiscal 2018.

In accordance with the Nasdaq Rules and rules and regulations promulgated by the SEC, the approval of the Audit Committee is required for all independent audit engagement fees, terms and conditions and all permitted non-audit engagements (including the fees, terms and conditions thereof) that the independent registered public accounting firm performs for the Company.

Board Recommendation

The Board believes it is in the best interest of the Company and its shareholders to ratify the appointment of KPMG as its independent registered public accounting firm for the fiscal year ending April 30, 2020. Approval of this proposal requires the affirmative vote of a majority of the shares present or represented by proxy and entitled to vote on this proposal.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF KPMG AS ITS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING APRIL 30, 2020.



AUDIT COMMITTEE REPORT

The following is the Report of the Audit Committee of the Board of Directors of American Software, Inc. for the fiscal year ended April 30, 2019.

The Board of Directors has adopted a written charter for the Audit Committee. As set forth in the charter, the Audit Committee’s job is one of oversight. It is not the duty of the Audit Committee to prepare the financial statements of the Company, to plan or conduct audits, or to determine that the financial statements of the Company are complete and accurate and are in accordance with U.S. generally accepted accounting principles. The Company’s management is responsible for preparing the Company’s consolidated financial statements and for maintaining internal controls. The independent registered public accounting firm of the Company is responsible for auditing the consolidated financial statements and for expressing an opinion as to whether those audited financial statements fairly present, in all material respects, the financial position, results of operations, and cash flows to the Company in conformity with U.S. generally accepted accounting principles.

In fulfilling its responsibilities with respect to the fiscal 2019 audit, the Audit Committee: (1) reviewed and discussed the audited consolidated financial statements for the fiscal year ended April 30, 2019 with Company management and KPMG, the Company’s independent registered public accounting firm; (2) discussed with KPMG the matters required to be discussed pursuant to Statement on Auditing Standards No. 1301, “Communications Audit Committees,” as adopted by the Public Company Accounting Oversight Board (PCAOB); and (3) received the disclosure and the letter from KPMG required by the applicable requirements of the PCAOB regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence and discussed with KPMG its independence from the Company.

Based on the Audit Committee’s review of the audited consolidated financial statements and discussions with management and KPMG, the Audit Committee recommended to the Board that the audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2019 for filing with the Securities and Exchange Commission.

The Nasdaq Rules require audit committees to be composed of not less than three members who are “independent directors,” as that term is defined in the listing requirements. The Audit Committee believes that its members meet the definition of “independent directors” set forth in those rules.

By the Audit Committee:

James B. Miller, Jr., Chairman
W. Dennis Hogue
Matthew G. McKenna
Thomas L. Newberry, V



EXECUTIVE COMPENSATION


Compensation Discussion and Analysis


We believe that attracting, retaining and motivating effective executive officers is critical to the overall success of our business. To achieve these goals we have adopted executive compensation programs that we have designed to reward performance and emphasize the creation of shareholder value. For fiscal 2016,2019, our Compensation Committee and Chief Executive Officer and Executive Chairman were responsible forestablishing executive compensation policies and overseeing executive compensation practices. For fiscal 2017, our Compensation Committee and Chief Executive Officer are responsible forestablishingfor establishing executive compensation policies and overseeing executive compensation practices. In the following Compensation Discussion and Analysis, we describe the material elements of compensation for our executive officers identified in the Summary Compensation Table (the “named executive officers”). Our named executive officers for fiscal 20162019 are: J. Michael Edenfield, our President and Chief Executive Officer; James C. Edenfield, our Executive Chairman and Treasurer; H. Allan Dow, our President; Vincent C. Klinges, our Chief Financial Officer; and Valerie King, our Vice President and General Counsel. Effective January 1, 2019, James R. McGuone our Vice President,resigned as General Counsel of the Company and was not serving as an executive officer of the Company at the end of fiscal 2019; however, Mr. McGuone remains with the Company as its Corporate Secretary. Pursuant to Item 402(a)(3)(iv) of Regulation S-K, Mr. McGuone is included among the Company’s other named executive officers. Please see the Summary Compensation Table below for detailed components of theirour named executive officers’ fiscal 20162019 compensation.


Included below is certain information regarding our non-director executive officers. Please see “Director Background and Qualifications” above for additional information regarding Mr. J. Michael Edenfield and Mr. James C. Edenfield.


H. Allan Dow. Mr. Dow, age 55, was elected as our President in March 2017. Previously, Mr. Dow served as president of Logility Inc., a subsidiary of the Company, since August 2015 and as that company’s Executive Vice President of Sales from September 2000 to July 2015. Mr. Dow brings more than 30 years of experience in strategic planning, sales development, implementation services, and product innovation to streamline, accelerate and optimize supply chain and retail planning enterprises. Mr. Dow holds a Bachelor of Science degree in Chemical Engineering from the University of Maine.

Vincent C. Klinges.Mr. Klinges, age 53,56, joined American Software in February 1998 as Vice President of Finance. In September 1999, Mr. Klinges was promoted to Chief Financial Officer, and also became the Chief Financial Officer of Logility, Inc. From July 1995 to February 1998, Mr. Klinges was employed by Indus International, Inc. (formerly known as TSW International, Inc.), a data management company, as Controller. From November 1986 to July 1995, Mr. Klinges held various positions with Dun & Bradstreet, Inc., a publicly traded data management company, including Controller of its software subsidiary, Sales Technologies, a software division of Dun & Bradstreet Inc.Technologies. Mr. Klinges holds a Bachelor of Business Administration from St. Bonaventure University.


Valerie P. King. Ms. King, age 56, joined the Company as Assistant General Counsel in August 2018, and was elected Vice President and General Counsel as of January 1, 2019. Ms. King has practiced law for 20 years. Prior to joining the Company, Ms. King Served as Assistant General Counsel and then General Counsel for Smith Douglas Homes from January 2017 to July 2018. From November 2015 to January 2017, Ms. King served as outside counsel for clients of several law firms, and from October 2013 to November 2015 she was employed by Premiere Global Services, Inc. Ms. King holds an undergraduate degree in marketing from the Wharton School of the University of Pennsylvania; an MBA from the University of North Carolina at Chapel Hill; and a Juris Doctor from the Cardozo School of Law.

James R. McGuone.Mr. McGuone, age 69,72, was elected as our Secretary in May 1988 and became Vice President and General Counsel in May 2009, when he joined the Company. As of January 1, 2019, he now serves as Corporate Secretary. Prior to joining the Company, Mr. McGuone, who has been a practicing attorney since 1972, was a partner with the law firm of Holland & Knight, L.L.P. in its Atlanta, Georgia office. Mr. McGuone holds a B.A. degree from The Pennsylvania State University and a J.D. degree from Fordham University School of Law.


Oversight of Fiscal 20162019 Compensation Program


The Compensation Committee of the Board (the “Committee”)of Directors is responsible for establishing and reviewing our overall compensation philosophy. The Committee and the Chief Executive Officer together review and establish executive compensation plans. TheCompensation Committee reviews and establishes all elements of compensation of the Chief Executive Officer. TheChairman and the President. With respect to executive officers other than the Executive Chairman and the President, the Compensation Committee also reviews and consults with the Chief Executive OfficerChairman about salaries and other compensation of thesuch other executive officers, andbut the Executive Chairman has the authority to establish the compensation for such other executive officers. The Compensation Committee acts as the Special Stock Option Committee with respect to stock option grants to all executive officers, including the Chief Executive Officer. The Chief Executive Officer reviews and establishes all non-equity related elements of compensation of the executive officers of the Company and its subsidiaries, other than his own non-equity related compensation, which is set by the Committee.Chairman. With respect to the major elements of executive compensation plans, the Chief Executive OfficerChairman consults with and seeks input from the Committee. The Chief Executive OfficerCompensation Committee and makes recommendations to the Committee regarding levels of option grants to specific individuals, as input to the Compensation Committee’s final decision.

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Executive Compensation Philosophy


We believe that a compensation program which promotes our ability to attract, retain and motivate outstanding executives will help us meet our long-range objectives, thereby serving the interests of the Company’s shareholders. Our executive officer compensation program is designed to achieve the following objectives:


Provide compensation opportunities that are competitive with those of companies of a similar size.


Create a strong connection between executives’ compensation and our annual and long-term financial performance.


Include performance-based incentive compensation that offers an opportunity for above-average financial reward to executives without creating incentives for undue business risks.


Design incentive compensation benchmarks that closely align the interests of executive officers with those of our shareholders.


Consideration of Peer Companies

In developingmaking compensation plansdecisions, the Compensation Committee reviews publicly available information on practices and programs and compensation levels of members of a peer group selected by the Compensation Committee, consisting of technology companies similar to us. The Compensation Committee reviews our compensation peer group at least annually and makes adjustments to its composition if warranted, taking into account changes in both our business and the businesses of the companies in the peer group.

During fiscal 2019, the Compensation Committee used the following compensation peer group to assist with the determination of compensation for our executive officers,officers: Aspen Technology, Inc., Descartes, Coupa Software, Amber Road, Manhattan Associates, QAD, Kinaxis, Service Source International, SPS Commerce, and Computer Task Group (the last is an IT staffing company comparable to the Company’s subsidiary, The Proven Method, Inc.).

While we have taken notebelieve this compensation data provides useful insight into the competitiveness of and considered compensation paid by, our competitors, but historically we have not performed systematic reviews of competitors’ compensation policies nor engaged in benchmarking of executive compensation. Consequently, information about competitors’ specific compensation policies has not been a primary consideration in forming our compensation policiespackages, the data serves only a reference point and decisions. As with many other U.S. technology companies, we traditionally have emphasized the use of stock options and individualized bonus plans in compensating and motivating our executives. We have found that the value of these compensation components is difficult to measure, and therefore comparing them in an objective way to similar arrangements developed by other companies, including competitors, has been of limited value.

do not currently target any particular benchmark.


Elements of Compensation

General

General. We have selected and have structured the components of our executive officer compensation in order to achieve our objectives of attracting, retaining and motivating such officers. We consider the components of our compensation program – salary, bonus plan, stock options, and personal benefits such as insurance and retirement plans – together to achieve a balanced compensation package that addresses the objectives described above, and separately in order to evaluate their reasonableness. Taken as a whole, we believe that these elements of our compensation structure reward past performance and provide appropriate motivation to achieve both long- and short-term objectives that benefit shareholders.


In our approach to executive compensation we generally have emphasized bonus plans and stock options, as we believe those components have the greatest potential for directly aligning the future interests of executive officers with those of shareholders. We also believe that our practice of emphasizing stock option grants, which we have followed over a long period,for many years, has helped to motivate our executives to develop strategies that further our long-term interests. We intend for our executive bonus plans to motivate executive officers over a shorter term, based upon achieving operating results that enhance shareholder value without taking undue business risks. In reviewing salaries of executive officers, we consider the executive’s previous salary level in light of prior year performance, rate of inflation and trends in executive compensation among our competitors. In selecting insurance and retirement plans, we have taken into account the needs of our entire workforce, on the principle that these kinds of plans are most effective and most valued if they are made available across all levels of compensation within the Company.


Base Salaries. We establish the salaries of our named executive officers at levels that we believe are, when viewed in conjunction with their potential bonus income and stock option grants, competitive and reasonable in light of their experience, prior performance and level of responsibility. For fiscal 2016,2019, the Compensation Committee reviewed and established the base salary of our Chiefthe Executive Officer, whileChairman and the Chief Executive Officer reviewed and established the salaries of our other officers, including the namedPresident. With respect to executive officers other than the Executive Chairman and the President, the Committee consulted with input from the Compensation Committee.Executive Chairman, but the Executive Chairman retained the authority to establish the base salary for such executive officers.

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The following table summarizes the salary arrangements for the named executive officers in the fiscal years ended April 30, 20162019 and 2017:2020:

NameFiscal 2019 ($)Fiscal 2020 ($)
James C. Edenfield588,448598,448
H. Allan Dow610,000660,000
Vincent C. Klinges336,000366,000
Valerie King
250,000(1)
260,000
James R. McGuone
289,996(1)
84,000

James C. Edenfield.    For fiscal 2016, Mr. Edenfield’s salary remained at $532,500. For fiscal 2017, Mr. James C. Edenfield’s salary increased to $553,448, an increase of $20,948 over his

(1) Represents the named executive officer’s annualized base salary for the prior year.

J. Michael Edenfield.    For fiscal 2016,2019. As described elsewhere, Mr. J. Michael Edenfield’s salary increased to $490,000,McGuone was a named executive officer for all of fiscal 2019, but with different roles and titles, and Ms. King was an increase of $20,000 over his salaryexecutive officer only for the prior year. For Fiscal 2017, Mr. J. Michael Edenfield’s salary increased to $515,000, an increaselast four months of $20,000 over the prior year.

Vincent C. Klinges.    For fiscal 2016, Mr. Klinges salary increased to $270,000, an increase of $15,000 over his salary for the prior year. For fiscal 2017, Mr. Klinges’ salary increased to $288,000, an increase of $18,000 over the prior year.2019.


Bonuses

James R. McGuone.    For fiscal 2016, Mr. McGuone’s salary increased to $241,996, an increase of $12,000 over his salary for the prior year. For fiscal 2017, Mr. McGuone’s salary increased to $255,996, an increase of $14,000.

Bonuses. Each of our named executive officers has a bonus plan established during the first quarter of a fiscal year, covering that fiscal year. The Compensation Committee establishes the bonus plan for Mr. James C. Edenfield, our Chief Executive Officer. Our Chief Executive Officer and Executive Chairman, and H. Allan Dow, our President. Mr. Edenfield, after consulting with the Compensation Committee, establishedestablishes the bonus plans for our other officers for fiscal 2016, including the other named executive officers. Our Chief Executive Officer, after consulting with the Compensation Committee, established the bonus plans for our other officers, for fiscal 2017, including the other named executive officers. In each case, the bonus plan is customized for the individual executive officer. We use these bonus plans, in tandem with stock option grants, as tools to (i) attract and retain qualified executives, while at the same time aligning(ii) reward executives for their role in achieving specified annual performance goals, and (iii) align our executives’ interests with those of our shareholders. To accomplish this, we establish annual bonus plans with attainable, pre-established, objective performance goals, using formulas tied to important factors that positively affect return on investment.

The following summarizes Each year, the Compensation Committee evaluates the performance goals selected for the bonus arrangementsplan and may select new or additional performance goals for the following fiscal year bonus plan.


Fiscal 2019 Bonuses. In fiscal 2019, the Compensation Committee selected the following financial performance metrics as the general set of metrics upon which to base the bonus plan: revenue, adjusted EBITDA and annual contract value (“ACV”). Revenue is a GAAP measure reported in the Company’s Annual Report on Form 10-K. The Compensation Committee believes that revenue is one of the most recognizable and objective measures of corporate growth and performance. Adjusted EBITDA represents our GAAP net earnings adjusted for amortization of intangibles, depreciation, interest income, other net income, tax expense, and has been further adjusted to exclude capitalized software development costs. The Committee believes that adjusted EBITDA is a meaningful measure that enables the Company to evaluate its cash flow performance relative to annual performance targets. ACV is a forward-looking operating measure used by management to better understand cloud services (Software-as-a-Service and other related cloud services) revenue trends within the Company’s business, as it reflects the Company’s current estimate of revenue to be generated under the existing client contracts in the forward 12-month period. The Compensation Committee believes that ACV is one of the most important performance metrics associated with growth in the Software-as-a-Service industry.

For each financial performance metric selected for fiscal 2019, our executive officers, including our named executive officers, inwill receive a minimum bonus amount if the fiscal years ended April 30, 2016 and 2017:

James C. Edenfield.    For fiscal 2016,Company achieves its minimum performance goal, with the Compensation Committee decidedremaining bonus amount being pro-rated to continue Mr. Edenfield’s annual100% of a target bonus arrangement,amount, which provides for a bonus equal to 5% ofwould be paid if the increase ofCompany achieves its target performance goal. If the fiscal year’s pre-tax earnings overCompany exceeds its target performance goal, the pre-tax earnings of the preceding fiscal year. For fiscal 2016, Mr. Edenfield received a bonus of $152,443 under this formula. His bonus planexecutive officer will remain the same for fiscal year 2017.

J. Michael Edenfield.    For fiscal 2016, Mr. Edenfield was eligible for a bonus equal to 5% of the increase in our operating income in fiscal 2016 over fiscal 2015. For fiscal 2016, Mr. Edenfield received a bonus of $146,693 under this formula. His bonus plan will remain the same for fiscal year 2017. Mr. Edenfield will not receive an incentive bonus for 2017 unless our fiscal 2017 operating income is greater than our fiscal 2016 operating income.

Vincent C. Klinges.    For fiscal 2016, Mr. Klinges was eligible to receive a bonus amount equal to 2.5%such executive’s target bonus amount multiplied by the percentage of the increase in our operating income inCompany’s actual performance relative to the Company’s target performance goal. Revenue, adjusted EBITDA and ACV related to any acquisition made during the fiscal 2016 over fiscal 2015, with a maximum bonusyear are excluded for purposes of $300,000 and a minimum bonus of $15,000 provided that he remained with the Company on June 30, 2016. For fiscal 2016, Mr. Klinges receiveddetermining whether a bonus equalhas been earned. The Company failed to $73,346. For fiscal 2017, Mr. Klinges is eligible to receive a bonusachieve its minimum performance goals for fiscal 2017 equal to 2.5% of the increase in our operating income in fiscal 2017 over fiscal 2016, with a maximum bonus of $300,000 and a minimum bonus of $15,000 provided that he remains with the Company on June 30, 2017.

James R. McGuone.    For fiscal 2016, Mr. McGuone was eligible to receive a bonus equal to 1.5% of the increase in our operating income in fiscal 2016 over fiscal 2015, with a maximum bonus of $190,000 provided that he remained with the Company on June 30, 2016. For fiscal 2016, Mr. McGuone received a bonus equal to $44,008. For fiscal 2017, Mr. McGuone will be eligible to receive a bonus equal to 1.5% of

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the increase in our operating income in fiscal 2017 over fiscal 2016, with a maximum bonus of $190,000 provided that he remains with the Company on June 30, 2017.

Bonuses2019. Accordingly, bonuses were not paid to our named executive officers in fiscal 20162019.


For fiscal 2019, the Company’s minimum and target performance goals, and actual performance, are shownsummarized in the “Bonuses” columnfollowing table:



Financial Performance MetricMinimum Performance GoalTarget Performance Goal
Actual Fiscal 2019 Performance(1)
Achievement
%
Revenue113,000,000122,000,000108,706,0000%
Adjusted EBITDA15,000,00016,000,0006,988,0000%
Annual Contract Value7,000,00013,000,0004,750,0000%

(1) Revenue, operating income and ACV related to any acquisition made during the fiscal year is excluded for purposes of determining whether a bonus has been earned.

Mr. James C. Edenfield’s bonus for fiscal 2019 was determined as follows:
Financial Performance MetricMinimum Bonus Amount ($)
Target Bonus Amount
($)
Weighting
Actual Bonus Award
($)
Revenue33,300100,00033.3%-0-
Adjusted EBITDA33,300100,00033.3%-0-
Annual Contract Value33,300100,00033.3%-0-
Total100,000300,000 -0-

Mr. Dow’s bonus for fiscal 2019 was determined as follows:
Financial Performance MetricMinimum Bonus Amount ($)
Target Bonus Amount
($)
Weighting
Actual Bonus Award
($)
Revenue30,000300,00033.3%-0-
Adjusted EBITDA30,000300,00033.3%-0-
Annual Contract Value30,000300,00033.3%-0-
Total90,000900,000 -0-

Mr. Klinges’ bonus for fiscal 2019 was determined as follows:
Financial Performance Metric
Minimum Bonus Amount
($)
Target Bonus Amount
($)
Weighting
Actual Bonus Award
($)
Revenue8,00060,00033.3%-0-
Adjusted EBITDA8,00060,00033.3%-0-
Annual Contract Value8,00060,00033.3%-0-
Total24,000180,000 -0-

Mr. McGuone’s bonus for fiscal 2019 was determined as follows:
Financial Performance Metric
Minimum
Bonus Amount ($)
Target Bonus Amount
($)
Weighting
Actual Bonus Award
($)
Revenue3,00033,33333.3%-0-
Adjusted EBITDA3,00033,33333.3%-0-
Annual Contract Value3,00033,33333.3%-0-
Total9,000100,000 -0-

Ms. King was not eligible for a bonus for fiscal 2019.

Fiscal 2020 Bonuses. Similar to the Summary Compensation Table, below.

fiscal 2019 bonuses, fiscal 2020 bonuses will only be funded to the extent that the Company achieves its minimum targets, which are based on fiscal 2020 results.




Stock Option Awards. The Compensation Committee, which is responsible for grants of stock options to the named executive officers, believes that granting stock options to executive officers is an effective means to reward them for their prior performance, to serve as an incentive for promotion of Company profitability and other long-term objectives, and to maintain their overall compensation at competitive levels. Thus, option grants reflect both a retrospective and prospective approach to executive compensation. As compared to our executive bonus plans, stock options address longer term compensation and incentives. To establish option grant levels, the Compensation Committee has monitored developments and trends among publicly held technology companies regarding equity and non-equity based incentive compensation. The Compensation Committee continues to believe that stock options represent the most efficient and effective means for the Company to achieve the compensatory and incentive objectives referred todescribed above.


The Compensation Committee typically grants stock options to executive officers once annually, usually during the month of June or July, while the salary and bonus plans for executives are being considered and finalized. The option exercise prices are fixed as of the close of trading on the grant date and are based on the closing price of our Class A shares, as quoted on the Nasdaq Stock Market. For fiscal 2020, desired option grants for executive officers are contingent upon shareholder approval of the 2020 Plan, and the option exercise prices would be fixed as of the date of such approval. Options granted to executives during the past several years have terms of six years and vest ratably over a five-year period. We expect this practice to continue.


The Compensation Committee did not undertakerely on a quantitative analysis inwhen determining the levels of stock option grants to named executive officers for the 20162019 or 20172020 fiscal years.

The Compensation Committee developed its decisions on stock option grants based on a qualitative analysis considering the following factors:

•


Executive Chairman Recommendations. The Compensation Committee placed substantial weight on the stock option grant recommendations of the Executive Chairman in fiscal 2019, particularly as to stock option grants to named executive officers other than himself. The Compensation Committee considered several factors, including the Executive Chairman’s intimate knowledge of the role and performance level of each of the named executive officers over an extended time period, demonstrated skill in retaining and motivating our officers and key employees, and emphasis on and effectiveness in managing the business of the Company on a fiscally conservative basis. In part because of these factors, the Compensation Committee ultimately decided to grant stock options in accordance with the Executive Chairman’s stock option grant recommendations.

Current and Past Years’ Financial Results. The Compensation Committee observed that our operating performance in fiscal 2019 fell short of expectations and, as a result, the Company failed to achieve its annual performance goals. In light of the Company’s overall performance, the Compensation Committee decided to grant limited base salary increases to our named executive officers. To incentivize improved performance in fiscal 2020, the Compensation Committee granted more stock options in fiscal 2019 as compared to prior years. By providing a larger percentage of our executives’ overall compensation in the form of equity, we are further aligning our executives’ interests with those of our shareholders.

Relative Influence of Named Executive OfficersChief Executive Officer Recommendations.    The Compensation Committee placed substantial weight on the stock option grant recommendations of J. Michael Edenfield, the Chief Executive Officer of the Company in fiscal 2016, particularly as to stock option grants to named executive officers other than himself. The Compensation Committee based this weight on several factors, including the Chief Executive Officer’s intimate knowledge of the role and performance level of each of the named executive officers over an extended time period, his demonstrated skill in retaining and motivating our officers and key employees, and his emphasis on, and effectiveness in managing, the business of the Company on a fiscally conservative basis. In part because of these factors, the Compensation Committee ultimately decided to grant stock options in accordance with the Chief Executive Officer’s stock option grant recommendations.

•

Current and Past Years’ Financial Results.    The Compensation Committee noted that the stock option grants being considered were consistent with stock option grants to the same named executive officers in recent years. The Compensation Committee observed that our operating performance in fiscal 2015 and fiscal 2016, in the view of the Compensation Committee, was favorable in light of market conditions. The Compensation Committee therefore concluded that this favorable overall performance mitigated in favor of granting stock options at least at the same level as options granted in recent years. Moreover, the Compensation Committee believes that this favorable performance represented some evidence that prior year stock option grants were effective motivating factors for the named executive officers.

•

Perceived Value of Named Executive Officers. The stock option grants to the named executive officers were not at the same level for each individual. The Compensation Committee considered the roles of the named executive officers and their ability, individually, to influence our profitability and position in the marketplace. In fiscal 2016, this resulted in the largest stock option grant being made to our Chief Executive Officer (150,000 shares), followed by grants in descending amounts to

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our Executive Chairman (70,000 shares), the Chief Financial Officer (65,000 shares), and the Vice President and General Counsel (24,000 shares). In the Compensation Committee’s judgment, these levels of stock option grants reasonably reflected the relative ability of officers holding these positions to affect the performance of the Company. In particular, the Compensation Committee believes that the Chief Executive Officer has set the tone within the Company for controlling costs while preserving or enhancing market share under difficult economic circumstances.

•

Current and Past Years’ Compensation Packages.    The Compensation Committee establishes the overall compensation package of the Chief Executive Officer of the Company. The Compensation Committee advises on, but does not have the authority to establish, the compensation packages of the other named executive officers, except for stock option grants. In reviewing the compensation package of J. Michael Edenfield, the Compensation Committee noted that his fiscal 2016 salary and potential bonus did not increase substantially compared to his fiscal 2015 compensation, and his fiscal 2017 salary and potential bonus had not increased substantially compared to his fiscal 2016 compensation. In reviewing the compensation packages of Vince Klinges and James R. McGuone, the Compensation Committee noted that their fiscal 2016 salaries and potential bonuses had not increased substantially compared to recent years. These factors mitigated in favor of not reducing the aggregate level of stock option grants to these named executive officers.

In May 2015, the Compensation Committee, consistent with the above factors and objectives, granted stock options to the named executive officers were not at the same level for each individual. The Compensation Committee considered the roles of the named executive officers and their ability, individually, to influence our profitability and position in the following amounts: J. Michael Edenfield – 150,000 shares;marketplace, as well as other factors. In fiscal 2019, this resulted in the largest stock option grant being made to Mr. Dow (300,000 shares), followed by grants in descending amounts Mr. James C. Edenfield – 70,000 shares; Vincent(90,000 shares), Mr. Klinges (80,000 shares), Mr. McGuone (35,000 shares) and Ms. King (5,000 shares). In the Compensation Committee’s judgment, these levels of stock option grants reasonably reflected the relative ability of officers holding these positions to affect the performance of the Company.


Current and Past Years’ Compensation Packages. The Compensation Committee establishes the overall compensation package of the Executive Chairman and the President. The Compensation Committee advises on, but does not have the authority to establish, the compensation packages of the other named executive officers, except for stock option grants. In reviewing the compensation package of James C. Edenfield, the Compensation Committee noted that his fiscal 2019 salary and potential bonus did not increase substantially compared to his fiscal 2018 compensation. In light of the Company’s performance in fiscal 2019, our Executive Chairman’s fiscal 2020 salary increased only slightly, and his potential bonus did not change compared to his fiscal 2019 compensation. In reviewing the compensation package of H. Allan Dow, the Compensation Committee noted that his fiscal 2019 salary and potential bonus did not increase substantially compared to his fiscal 2018 compensation. As a result, his fiscal 2020 salary and potential bonus were increased by $50,000 and $100,000, respectively, when compared to his fiscal 2019 salary and potential bonus. In reviewing the compensation packages of Vince Klinges, – 65,000 shares;the Compensation Committee also noted that his fiscal 2019 salary and potential bonus had not increased substantially compared to recent years. As a result, his fiscal 2020 salary and potential bonus were increased by $30,000 and $20,000, respectively, when compared to his fiscal 2019 compensation. In reviewing the


compensation package of Valerie King, the Compensation Committee noted that fiscal 2020 would be her first full year as a named executive officer and as an employee of the Company. Accordingly, she received an annualized salary increase of $10,000 and a target bonus of $45,000. In reviewing the compensation package of James R. McGuone, – 24,000 shares.

the Compensation Committee noted that fiscal 2020 would be his first full year as the Corporate Secretary while not also serving as the Company’s General Counsel. Accordingly, his fiscal 2020 base salary was reduced significantly compared to fiscal 2019. As noted above, each named executive officer received a larger percentage of his or her overall compensation in the form of stock options in fiscal 2019 to better align pay with the Company’s performance. The Company intends to continue this practice in fiscal 2020.


Personal Benefits and Perquisites. We provide a variety of health, retirement and other benefits to all employees. Our executive officers are eligible to participate in the benefit plans on the same basis as all other employees. These benefit plans include medical, dental, life and disability insurance. Our Chief Executive Officer received an automobile allowance and was reimbursed for the cost of one club membership in fiscal 2016. Our Executive Chairman and TreasurerMr. James C. Edenfield received the use of an automobile owned by the Company and the Company also paid the cost of three club memberships for him in fiscal 2016.2019. Our President received a car allowance in fiscal 2019. Otherwise, our executive officers do not receive any personal benefits or perquisites that are not available on a non-discriminatory basis to all employees. The perquisites of the named executive officers in fiscal 20162019 were as set forth in the “All Other Compensation” column and footnote 2 to the Summary Compensation Table below.


Other Benefits. We do not provide pension benefit plans, or non-qualified contribution plans or other non-qualified deferred compensation options to any of our employees, including our named executive officers.

Stock Purchase Plan. We formerly had in placeoffered a stock purchase plan for our employees, providing to them an opportunity to acquire our shares at a discount to market prices. We discontinued this plan several years ago after concluding that the cost of maintaining and accounting for such a plan exceeded the perceived benefit that we perceivedto our employees gained from such a plan.


Consideration of Shareholder Votes on Executive Compensation

In determining executive compensation for fiscal 2019, the Compensation Committee considered the overwhelming shareholder support that the “say-on-pay” proposal received at our 2018 Annual Meeting. After carefully considering such feedback, along with the other factors described above, the Compensation Committee determined to continue to utilize the same elements it has used in previous years, with certain changes to provide appropriate motivation to achieve both long- and short-term objectives that benefit shareholders, and to recruit, retain and incentivize key employees.

Impact of Regulatory Requirements


For taxable years beginning before January 1, 2018, Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), generally disallowsdisallowed a tax deduction to a public company for compensation in excess of $1 million paid to the company’s chief executive officer and any other executive officer (other than the chief financial officer) required to be reported to its shareholders under the Securities Exchange Act of 1934 (the “Exchange Act”) by reason of such executive officer being one of the four most highly compensated executive officers. However, qualifying performance-based compensation iswas not subject to the deduction limitation if certain requirements were met.
Congress repealed the exemption for performance-based compensation in new tax legislation enacted December 22, 2017, effective for tax years beginning after December 31, 2017, and expanded the number of employees who will be considered “covered employees” subject to the 162(m) limit to include the Chief Financial Officer (who was previously excluded) and certain former named executive officers. As a result of these changes, compensation exceeding $1 million paid to executive officers covered by Section 162(m)’s deduction limit was not deductible in 2018 nor will it be in future years, unless it qualifies for transition relief applicable to certain arrangements in place as of November 2, 2017. Due to uncertainties of the scope of the transition relief, however, there are met. no assurances that any compensation we pay to our covered employees will be or remain exempt from Section 162(m)’s deduction limit.

Although we consider the tax implications of Section 162(m) of the Code, we do not have a formal policy in place requiring that part or all compensation must qualify under this section, in order to preserve flexibility with respect to the design of our compensation programs.

Section 409A of the Code provides for certain requirements that a plan that provides for the deferral of compensation must meet, including requirements relating to when payments under such a plan may be made, acceleration of benefits, and the timing of elections under such a plan. Failure to satisfy these requirements will generally lead to an accelerated of timing of inclusion in income of deferred compensation, as well as certain penalties and interest.

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Although we consider the tax implications of Section 162(m) of the Code, we do not have a formal policy in place requiring that part or all compensation must qualify under this section, in order to preserve flexibility with respect to the design of our compensation programs.





Compensation Committee Report


The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management, and based on the Compensation Committee’s review and discussions with management, has recommended to the full Board of Directors that the Compensation Discussion and Analysis be included in our Annual Report on Form 10-K for the year ended April 30, 2016,2019, as well as the Proxy Statement for the Annual Meeting.


Respectfully submitted by the Compensation Committee of the Board of Directors


James B. Miller, Jr., Chairman

W. Dennis Hogue

Matthew G. McKenna
Thomas L. Newberry, V


Compensation Policies and Risk


We do not believe that risks arising from our compensation policies and practices for our employees are reasonably likely to have a material adverse effect on the Company. We are aware that incentive compensation arrangements can be structured in such a way as to encourage undue risk-taking by executives who make decisions that tend to maximize short-term compensation at the expense of the long-term interests of the enterprise. We believe that in the past our incentive compensation plans have motivated management to act in ways that are consistent with the long-term interests of our shareholders: promoting growth while maintaining substantial cash reserves, avoiding debt, managing expenses and carefully evaluating potential acquisitions. We have structured current incentive compensation arrangements for executive officers in a manner consistent with past practices, and believe that those arrangements contribute to our long-term goals without encouraging undue risk-taking.

risk taking.


Compensation Committee Interlocks and Insider Participation

On May 11, 2016,


Messrs. Miller (Chairman), Hogue, McKenna and Newberry were selected by the Board of Directors to serve on theconstitute our Compensation Committee. Mr. Jarvis served on the Compensation Committee during fiscal 2016 until his retirement, which became effective on November 12, 2015. Since the beginning of fiscal 2016,2019, none of Messrs. Miller, Hogue, McKenna or Newberry or Jarvis werewas an officer or employee of the Company or had any relationship with the Company requiring disclosure under Securities and Exchange CommissionSEC regulations. During fiscal 2016,2019, none of our named executive officers served as a director or member of the compensation committee of any other entity whose executive officers served on our Board of Directors or Compensation Committee.

14


Summary Compensation Table


The following table reflects compensation paid to the Company’s named executive officers for fiscal 2014,2017, fiscal 20152018 and fiscal 2016.2019.


NameFiscal YearSalary ($)Bonus ($)Stock Awards ($)Option Awards(1) ($)
Non-Equity Incentive Plan Compen- sation
($)

Change In Pension Value and Nonqualified Deferred Compen- sation Earnings
($)
All Other Compen-
sation(2) ($)
Total ($)
James C. Edenfield, Executive Chairman and Treasurer
2019
2018
2017
588,448
563,448
553,488
-0-
298,364
345,741		-0-
-0-
-0-
255,356
155,571
136,920
-0-
-0-
-0-
2,000
1,960
-0-
26,765
26,056
24,749
872,570
1,045,399
1,060,898
H. Allan Dow President
2019
2018
2017
610,000
460,000
376,667
-0-
596,729
-0-		-0-
-0-
-0-
851,188
486,160
-0-
-0-
-0-
-0-
4,867
5,367
-0-
13,260
13,260
13,260
1,479,315
1,561,516
389,927
Vincent C. Klinges, Chief Financial Officer
2019
2018
2017
336,000
310,000
288,000
-0-
179,019
15,000		-0-
-0-
-0-
226,984
145,848
127,140
-0-
-0-
-0-
3,371
3,930
-0-
-0-
-0-
-0-
566,354
638,797
430,140
Valerie King, Vice President and General Counsel2,019
185,897(3)
-0--0-12,074-0-875-0-198,845
James R. McGuone, Secretary
2019
2018
2017
221,331(3)
271,996
255,996
-0-
119,346
-0-		-0-
-0-
-0-
99,305
58,339
46,944
-0-
-0-
-0-
813
2,399
-0-
-0-
-0-
-0-
321,449
452,080
302,940

Name

 Fiscal
Year		  Salary
($)		  Bonus
($)		  Stock
Awards
($)		  Option
Awards(1)
($)		  Non-Equity
Incentive
Plan
Compen-
sation
($)		  Change In
Pension
Value and
Nonqualified
Deferred
Compen-
sation
Earnings
($)		  All
Other
Compen-
sation(2)
($)		  Total
($)		 

James C. Edenfield,

  2016    532,500    152,443    -0-    113,400    -0-    -0-    11,912    810,255  

Executive Chairman and

  2015    532,500    -0-    -0-    133,926    -0-    -0-    25,038    691,464  

Treasurer

  2014    512,500    18,611    -0-    179,118    -0-    -0-    27,221    737,450  

J. Michael Edenfield,

  2016    490,000    146,693    -0-    243,000    -0-    -0-    34,530    914,223  

President and Chief

  2015    470,000    -0-    -0-    288,456    -0-    -0-    26,717    785,173  

Executive Officer

  2014    420,000    37,027    -0-    358,236    -0-    -0-    30,070    845,333  

Vincent C. Klinges,

  2016    270,000    73,346    -0-    105,300    -0-    -0-    -0-    448,646  

Chief Financial Officer

  2015    255,000    10,000    -0-    123,624    -0-    -0-    -0-    388,624  
  2014    243,000    18,514    -0-    149,265    -0-    -0-    -0-    410,779  

James R. McGuone,

  2016    241,996    44,008    -0-    38,880    -0-    -0-    -0-    324,884  

Vice President, General

Counsel and Secretary

  2015    229,996    -0-    -0-    45,329    -0-    -0-    -0-    275,325  
  2014    217,996    11,108    -0-    59,706    -0-    -0-    -0-    288,810  

(1)

The value of stock option awards in this column represents the aggregate grant date fair value of stock option grants made during the year computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation-Stock Compensation. For discussion of relevant assumptions used in calculating the grant date fair value, see Note 7 to the Company’s Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended April 30, 2016.

(2)

Amounts shown as “All Other Compensation” are attributable to perquisites and other personal benefits, and to other items of compensation that are not reported elsewhere in the Summary Compensation Table. Perquisites and other personal benefits for James C. Edenfield include the use of a Company-owned automobile and three club memberships. Perquisites and other personal benefits for J. Michael Edenfield include an automobile allowance and a club membership.

(1) The value of stock option awards in this column represents the aggregate grant date fair value of stock option grants made during the year computed in accordance with Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) Topic 718, Compensation–Stock Compensation. For discussion of relevant assumptions used in calculating the grant date fair value, see Note 7 to the Company’s Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended April 30, 2019.
(2) Amounts shown as “All Other Compensation” are attributable to perquisites, other personal benefits, and other items of compensation that are not reported elsewhere in the Summary Compensation Table. Perquisites and other personal benefits for James C. Edenfield include the use of a Company-owned automobile and three club memberships. Perquisites and other personal benefits for Mr. Dow include an automobile allowance.
(3) As described elsewhere, Mr. McGuone was a named executive officer for all of fiscal 2019, but with different roles and titles, and Ms. King was an executive officer only for the last four months of fiscal 2019.

Employment Agreements


We do not have formal employment contracts with our executive officers covering compensation matters. Accordingly, we set their compensation annually, under compensation plans individualized for each executive officer.


Retention Agreements

Upon recommendation and approval of the Compensation Committee, we entered into retention agreements with our named executive officerseach of Messrs. James C. Edenfield, Dow, Klinges and McGuone on July 11, 2016 to provide for severance compensation should their employment be terminated under certain defined circumstances. We believe that such severance arrangements are key components to a competitive compensation package and are in line with companies in our peer group. In addition, we believe that these retention arrangements will help us retain our executive leadership in the event of a possible change in control and should such change in control occur, will help retain executive talent for the new organization.

15


The retention agreements provide for compensation to the executive in the event the executive’s employment is terminated following the consummation of a “change in control” for reasons other than the executive’s death, retirement, disability or for “cause” (as defined in the respective agreements), or if the executive voluntarily terminates employment for “good reason” (as defined in the respective agreements). The compensation payable under the retention agreements is a lump sum severance payment equal to a multiple of the sum of the executive’s annual base salary plus the executive’s bonus for the prior year as of the date of the change in control. The multiples applicable to our named executive officerseach person are as follows:




Name

Multiple

James C. Edenfield

2x
H. Allan Dow2x

J. Michael Edenfield

3x

Vincent C. Klinges

1.5x

James R. McGuone

1.5x


In addition, following termination of employment after a change in control, each of Mr.Messrs. James C. Edenfield, Mr. J. Michael Edenfield, Mr.Dow, Klinges and Mr. McGuone are entitled to receive health insurance coverage (subject to a COBRA election) and certain other fringe benefits equivalent to those in effect at the date of termination for a period of twenty-four, thirty-six, eighteen, and eighteentwenty-four months, respectively. The retention agreements require the executive to comply with certain covenants that preclude the executive from competing with the Company or soliciting customers or employees of the Company for a period following termination of employment equal to the period for which fringe benefits are continued under the applicable agreement. The retention agreements expire upon the earlier of the executive’s termination or three years after a change in control of the Company or any successor to the Company.

The


These retention agreements with our named executive officers do not influence the vesting status of outstanding stock options under the 2011 Plan. However, in accordance with the terms ofunder the 2011 Plan and(and the 2020 Plan, if approved), upon the determination by the Compensation Committee in its role as the Stock Option Committee, in the event of a change in control as defined in the 2011 Plan,applicable plan, all awards willmay vest and become immediately exercisable in full.


A calculation of the potential post-employment payments due to our named executive officers under the agreements discussed above, assuming the triggering event for the payments occurred on the last business day of the year ended April 30, 2016,2019, is set forth below under the heading “Potential"Potential Payments Upon Termination or Change In Control.”

"


Stock Options


Stock Option Plan


As of April 30, 2016,2019, we had outstanding stock options granted under our 2011 Plan. All directors of the Company and employees of the Company and its subsidiaries, totaling 420424 persons as of April 30, 2016,2019, are eligible to participate in the 2011 Plan. The 2011 Plan became effective on August 16, 2010. We have authorized a2010 and was most recently amended by our shareholders on August 23, 2017 to increase the total number of 5,000,000shares of Class A shares and 500,000 stock appreciation rights for issuance pursuantthat may be subject to options granted under this plan.by 1,000,000 shares. As of April 30, 2016,2019, under the 2011 Plan, option holders had exercised 588,500option2,929,797 option shares, there were 3,489,857option3,983,060 option shares outstanding, and 921,643shares87,143 shares remained available for stock option grants. If approved by the shareholders at the Annual Meeting,issuance under the 2011 Equity Compensation Plan will be amended in order to increasePlan.

On May 29, 2019, the numberBoard of shares of Class A Common Stock that may beDirectors approved, subject to options undershareholder approval, the American Software, Inc. 2020 Equity Compensation Plan. See “Proposal 3” below.

4 – Approval of 2020 Equity Compensation Plan” for a more detailed description of this new plan.


Stock Option Committees


Two separate committees administer our stock option plans: (i) the Special Stock Option Committee (comprised of Messrs. Miller, Hogue, McKenna and Newberry, as members of the Compensation Committee) is responsible for option grants to officers and directors, and (ii) the Stock Option Committee (comprised of James C. Edenfield

16

and J. Michael Edenfield) is responsible for other option grants. The members of these Committees are not eligible to participate in the portion of the plan that they administer, except pursuant to the formula option grant program for non-employee directors. 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 the plans and adopt rules in connection with options that the particular committee grants. Except for the 2011 Plan, the function of these committees is limited to continuing and interpreting the plans.


Fiscal 20162019 Grants of Stock Options


The following table discloses the potential payouts under the stock options awarded to the named executive officers during the fiscal year ended April 30, 2016.2019.



  
All Option Awards: Number of Securities Underlying Options
(#)(1)

Exercise or Base Price of Option Awards
($/Sh)(2)

Closing Market Price
($/Sh)

Grant Date Fair Value of Option Awards
($)(3)
NameGrant Date
James C. Edenfield6/15/201890,00013.6813.68255,356
H. Allan Dow6/15/2018300,00013.6813.68851,188
Vincent C. Klinges6/15/201880,00013.6813.68226,984
James R. McGuone6/15/201835,00013.6813.6899,305
Valerie King9/19/20185,00011.5011.5012,074

Name

  Grant
Date		   All Option Awards:
Number of Securities
Underlying Options
(#)(1)		   Exercise or Base
Price of Option
Awards
($/Sh)(2)		   Closing
Market  Price
($/Sh)		   Grant Date Fair
Value of Option
Awards
($)(3)		 

James C. Edenfield

   5/28/15     70,000     8.81     8.81     113,400  

J. Michael Edenfield

   5/28/15     150,000     8.81     8.81     243,000  

Vincent C. Klinges

   5/28/15     65,000     8.81     8.81     105,300  

James R. McGuone

   5/28/15     24,000     8.81     8.81     38,880  

(1)

The stock options vest ratably on the first, second, third, fourth, and fifth anniversaries of the option grant date and expire in six years.

(2)

The exercise price is determined based on the closing price of the shares as traded on the Nasdaq Stock Market on the grant date.

(3)

For purposes of Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) Topic 718, “Stock Compensation” and this table, the grant date fair value of options is determined using the Black-Scholes option valuation model with the following assumptions: exercise price equal to fair market value of stock ($8.81 grant date); dividend yield (5%); expected volatility rate (33.8830%); risk-free interest rate (1.51%); and expected option term of 5 years.

17

(1) The stock options vest ratably on the first, second, third, fourth, and fifth anniversaries of the option grant date and expire in six years.
(2) The exercise price is determined based on the closing price of the shares as traded on the Nasdaq Stock Market on the grant date.
2016(3) For purposes of FASB ASC Topic 718, Compensation–Stock Compensation and this table, the grant date fair value of options is determined using the Black-Scholes option valuation model. The following assumptions were made with respect to options issued to Messrs. Edenfield, Dow, Klinges and McGuone on June 15, 2018: exercise price equal to fair market value of stock on the grant date ($13.68); dividend yield (3.0%); expected volatility rate (28.65%); risk-free interest rate (3.22%); and expected option term of 5 years. The following assumptions were made with respect to options issued to Ms. King on September 19, 2018: exercise price equal to fair market value of stock on the grant date ($11.50); dividend yield (3.0%); expected volatility rate (30.87%); risk-free interest rate (3.83%); and expected option term of 5 years.

2019 Outstanding Equity Awards at Fiscal Year-End


The table below discloses outstanding exercisable and unexercisable stock options outstanding as of April 30, 20162019 for the named executive officers.



Option Awards
Name

Number of Securities Underlying Unexercised Options Exercisable
(#)
Number of Securities Underlying Unexercised Options Unexercisable
(#)


Option Exercise Price
($)(1)


Option Expiration Date (2)
James C. Edenfield-0-13,0009.677/14/2020
42,00028,0008.815/28/2021
28,00042,00010.016/20/2022
16,00064,00011.086/7/2023
-0-90,00013.686/15/2024
H. Allan Dow50,000-0-9.7912/19/2019
72,00048,0008.548/26/2021
50,000200,00011.086/7/2023
-0-300,00013.686/15/2024
Vincent C. Klinges48,00012,0009.677/14/2020
39,00026,0008.815/28/2021
26,00039,00010.016/20/2022
15,00060,00011.086/7/2023
-0-80,00013.686/15/2024
James R. McGuone4,4004,4009.677/14/2020
-0-9,6008.815/28/2021
4,80014,40010.016/20/2022
6,00024,00011.086/7/2023
-0-35,00013.686/15/2024
Valerie King-0-5,00011.509/19/2024

    Option Awards 

Name

  Number of Securities
Underlying Unexercised
Options Exercisable
(#)		   Number of Securities
Underlying Unexercised
Options Unexercisable
(#)		   Option Exercise Price
($)(1)		   Option Expiration
Date(2)		 

James C. Edenfield

   42,600     12,000     8.12     6/29/2017  
   36,000     24,000     8.57     7/3/2018  
   24,000     36,000     8.97     7/11/2019  
   13,000     52,000     9.67     7/14/2020  
   -0-     70,000     8.81     5/28/2021  

J. Michael Edenfield

   96,000     24,000     8.12     6/29/2017  
   72,000     48,000     8.57     7/3/2018  
   48,000     72,000     8.97     7/11/2019  
   28,000     112,000     9.67     7/14/2020  
   -0-     150,000     8.81     5/28/2021  

Vincent C. Klinges

   40,000     10,000     8.12     6/29/2017  
   30,000     20,000     8.57     7/3/2018  
   20,000     30,000     8.97     7/11/2019  
   12,000     48,000     9.67     7/14/2020  
   -0-     65,000     8.81     5/28/2021  

James R. McGuone

   16,000     4,000     8.12     6/29/2017  
   12,000     8,000     8.57     7/3/2018  
   8,000     12,000     8.97     7/11/2019  
   4,400     17,600     9.67     7/14/2020  
   -0-     24,000     8.81     5/28/2021  

(1)

The number of shares underlying options awarded and the related exercise prices shown in the table are the amounts on the applicable grant date.

(2)

The stock option grants prior to March 2005 expire in ten years and vest ratably on the first, second, third and fourth anniversaries of the option grant date. The stock option grants during or following March 2005 expire in six years and vest ratably on the first, second, third, fourth and fifth anniversaries of the option grant date.

2016

(1) The number of shares underlying options awarded and the related exercise prices shown in the table are the amounts on the applicable grant date.
(2) The stock option grants prior to March 2005 expire in ten years and vest ratably on the first, second, third and fourth anniversaries of the option grant date. The stock option grants during or following March 2005 expire in six years and vest ratably on the first, second, third, fourth and fifth anniversaries of the option grant date.

2019 Option Exercises and Stock Vested


The following table sets forth the actual value received by the named executive officers upon the exercise of stock options in fiscal 2016.

   Option Awards 

Name

  Number of Shares
Acquired on Exercise
(#)		   Value Realized
on Exercise
($)		 

James C. Edenfield

   25,400     127,130  

J. Michael Edenfield

   97,527     535,879  

Vincent C. Klinges

   10,000     57,697  

James R. McGuone

   4,000     22,728  

18

2019.


 Option Awards
NameNumber of Shares Acquired on Exercise (#)
Value Realized on Exercise
($)
James C. Edenfield64,000120,876
H. Allan Dow70,000128,285
Vincent C. Klinges25,69893,177
James R. McGuone8,80022,944
Valerie King-0--0-




Potential Payments upon Termination or Change of Control


We entered into retention agreements with our named executive officersMessrs. James C. Edenfield, Dow, Klinges and McGuone on July 11, 2016. See “Compensation Discussion and Analysis—Retention Agreements.” The following table sets forth in tabular form estimates of the potential post-employment payments due to thethese named executive officers pursuant to the retention agreements discussed above, and the 2011 Plan, assuming the triggering events for the payments occurred on the last business day of the fiscal year ended April 30, 2016.2019.

Name


Cash Severance(1) ($)
Estimated Value of Accelerated Equity Awards
($)
Total ($)
James C. Edenfield1,176,896534,1101,711,007
H. Allan Dow1,220,0001,314,0552,534,055
Vincent C. Klinges504,000426,424930,424
James R. McGuone331,996171,587503,582

Name

  Cash  Severance(1)
($)		   Estimated Value of
Accelerated Equity
Awards
($)		   Total
($)		 

James C. Edenfield

   1,369,886     443,006     1,812,892  

J. Michael Edenfield

   1,910,079     918,696     2,828,775  

Vincent C. Klinges

   515,019     389,587     904,606  

James R. McGuone

   429,006     149,298     578,304  

(1)

Consists of a multiple of the executive’s annual base salary plus the executive’s bonus for the prior year as of the date of the change in control. See “Compensation Discussion and Analysis—Retention Agreements” for the multiples applicable to each named executive officer.

19

DIRECTOR COMPENSATION

(1) Consists of a multiple of the executive’s annual base salary plus the executive’s bonus for the prior year as of the date of the change in control. See “Compensation Discussion and Analysis—Retention Agreements” for the multiples applicable to each named executive officer.




PAY RATIO DISCLOSURE

As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, below is a reasonable estimate about the relationship of the annual total compensation of our employees and the annual total compensation of Mr. James C. Edenfield, our Executive Chairman and Principal Executive Officer. For fiscal 2016,2019, our last completed fiscal year:

The median of the total annual compensation of all employees of our Company (other than Mr. Edenfield) was $103,159;

The total annual compensation of Mr. Edenfield, as reported in the Summary Compensation Table shown elsewhere in this proxy statement, was $872,570; and

Based on this information and calculated in a manner consistent with Item 402(u) of Regulation S-K, for fiscal 2019, the reasonable estimate of the ratio of the total annual compensation of Mr. Edenfield, to the median of the total annual compensation of all employees, was 8 to 1.

We used the following methodologies, estimates and assumptions as permitted under SEC rules to identify and select the median employee for purposes of determining our reasonable estimate of pay ratio as set forth above:

Reference Date. We chose April 30, 2019, the last day of our fiscal year, as the date to identify our “median employee.”

Employee Population. Our employee population on April 30, 2019, after taking into consideration the adjustment permitted by SEC rules relating to independent contractors, consisted of approximately 424 individuals. Although independent contractors are part of our workforce, they are not employees of the Company and accordingly, were not included in our employee population.

No Exclusions or Adjustments. Although permitted by SEC rules, we did not exclude any of our employees from our employee population in order to determine the median employee, nor did we make any cost-of-living adjustments in identifying the median employee.

Annualized Compensation. We annualized the compensation of all employees.

Relative Compensation. With respect to the annual total compensation of Mr. Edenfield, as required by SEC rules, we used the amount reported in the “Total” column of our 2019 Summary Compensation Table included in this proxy statement and incorporated by reference under Item 11 of Part III of our Annual Report.



DIRECTOR COMPENSATION

For fiscal 2019, the Company compensated the directors who are not employed by the Company at the rate of $20,000$50,000 per annum, plus $1,000$1,200 for each half-day or $2,000$2,400 for each full day meeting of the Board of Directors or any committee of the Board that they attended. The Chairmen of the Audit and Compensation Committees each received an additional $4,000.$5,000. For fiscal 2017,2020, the Board annual compensation has remained the same.


Directors are eligible to receive stock option grants under the Company’s 2011 Plan. By resolution of the Board, newly-elected directors who are not employed by the Company automatically receive stock option grants of 5,000 shares each upon their initial election and 3,000 shares each as of the end of each fiscal quarter, with an exercise price equal to the closing market price on the date of each such grant. These options become exercisable one year after the date of grant and expire six years after the date of grant. They do not terminate if the director ceases to serve on the Board of the Company after the options becamebecome exercisable. Under this program,

In fiscal 2019, W. Dennis Hogue, James B. Miller, Jr. and, Thomas L. Newberry, V and Matthew G. McKenna each received option grants valued at $23,317 in fiscal 2016, and John J. Jarvis received an option grant valued at $11,945.

$32,078.


The following table provides compensation information for non-employee members of our Board for the fiscal year ended April 30, 2016.2019.

Name


Fees Earned or Paid in Cash
($)
Stock Awards ($)




Option Awards
($) (1)


Non-Equity Inventive Compen- sation
($)

Change In Pension Value and Nonqualified Deferred Compensation Earnings
($)



All Other Compen- sation
($)
Total ($)
W. Dennis Hogue63,200-0-32,078-0--0--0-95,278
James B. Miller, Jr.70,800-0-32,078-0--0--0-102,878
Thomas L. Newberry, V63,200-0-32,078-0--0--0-95,278
Matthew G. McKenna63,200-0-32,078-0--0--0-95,278

Name

  Fees Earned
or Paid in
Cash ($)		   Stock
Awards
($)		   Option
Awards
($)(1)		   Non-Equity
Inventive
Compensation
($)		   Change In Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)		   All
Other
Compen-
sation
($)		   Total
($)		 

W. Dennis Hogue

   27,400     -0-     23,317     -0-     -0-     -0-     50,717  

John J. Jarvis(2)

   18,400     -0-     11,945     -0-     -0-     -0-     30,345  

James B. Miller, Jr.

   30,150     -0-     23,317     -0-     -0-     -0-     53,467  

Thomas L. Newberry, V

   27,400     -0-     23,317     -0-     -0-     -0-     50,717  

(1)

The amounts shown in the “Option Awards” column equal the amounts we recognized during fiscal 2016 as compensation expenses for financial reporting purposes as a result of options granted in fiscal 2016. In accordance with FASB ASC Topic 718, stock options issued in fiscal 2016 were valued using the Black-Scholes option valuation model with the following assumptions: exercise price equal to fair market value of stock on the grant date; dividend yield (4%); expected volatility rate (33.5043%); risk-free interest rate (1.4175%); and expected option term of 5 years.

(2)

Mr. Jarvis retired from the Board of Directors, effective as of November 12, 2015.

(1) The amounts shown in the “Option Awards” column equal the amounts we recognized during fiscal 2019 as compensation expenses for financial reporting purposes as a result of options granted in fiscal 2019. In accordance with FASB ASC Topic 718, stock options issued in fiscal 2019 were valued using the Black-Scholes option valuation model.

CERTAIN TRANSACTIONS


On December 8, 2003, our Board of Directors adopted a resolution directing the Audit Committee of the Board of Directors to establish and implement procedures for identifying and conducting an appropriate review of any proposed transaction that meets the definition of “related party transaction” within the meaning of Item 404 of SEC Regulation S-K. In January 2004, the Audit Committee adopted written procedures in accordance with such direction. Under those procedures, the Audit Committee reviews and evaluates any proposed related party transaction and determines whether the terms of such transaction, judged at the time of the determination, are fair to the Company. Our officers are instructed that when a related party transaction is proposed they are to bring it to the attention of the Audit Committee, which then reviews the transaction and makes a determination of whether it meets the above standard. The Audit Committee is required to prepare a report of its deliberations, conclusions and recommendations, and furnish that report to the full Board of Directors. During fiscal 2016,2019, we were not a party to any transactions involving amounts in excess of $120,000 in which any related person had a direct or indirect interest.

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PROPOSAL 2:3: ADVISORY VOTE ON THE COMPENSATION OF

OUR NAMED EXECUTIVE OFFICERS


Pursuant to Section 14A of the Exchange Act, we are requesting that our shareholders to approve, on an advisory basis, the compensation of our executive officers, each of whom is named in the Summary Compensation Table, as described in the “Compensation Discussion and Analysis” and disclosed in the Summary Compensation Table and related compensation tables and narrative discussion presented under “Executive Compensation” in this Proxy Statement.


Our executive compensation program has been designed to attract, retain and motivate our executive team by providing competitive compensation within our market. We believe that our executive compensation program provides an appropriate balance between salary and “at-risk” forms of incentive compensation, as well as a mix of incentives that encourage our executives to focus on both long- and short-term objectives without encouraging inappropriate risks to achieve performance.


As an advisory vote, this proposal is not binding on the Company. However, our Compensation Committee and our Board of Directors value the opinions of our shareholders expressed through your vote on this proposal and will consider the outcome of this vote in making future compensation decisions for our executive officers.


Accordingly, we will present the following resolution for vote at our 20162019 Annual Meeting of Shareholders:

Meeting:


“RESOLVED, that the shareholders of the Company approve, on an advisory basis, the compensation of the Company’s named executive officers, as described in the Compensation Discussion and Analysis and disclosed in the Summary Compensation Table and related tables and narrative discussion set forth in the Proxy Statement.”


The proposal to approve, on an advisory basis, the compensation of our executive officers requires the affirmative vote of the majority of the shares represented in person or by proxy at the Annual Meeting and entitled to vote on the proposal.


THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL, ON AN ADVISORY BASIS, OF THE FOREGOING RESOLUTION REGARDING THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AS PRESENTED IN THIS PROXY STATEMENT.

Each proxy solicited on behalf of our Board of Directors will be voted FOR“FOR” the approval of the compensation of our named executive officers unless the shareholder instructs otherwise in the proxy.

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PROPOSAL 3: AMENDMENT4: APPROVAL OF THE 20112020 EQUITY COMPENSATION PLAN TO INCREASE THE NUMBER OF SHARES OF CLASS A COMMON STOCK THAT MAY BE SUBJECT TO OPTIONS FROM 5,000,000 SHARES TO 6,000,000 SHARES

Under


On May 29, 2019, the 2011Board of Directors approved, adopted and resolved to submit for shareholder approval the Company’s 2020 Equity Compensation Plan. If approved by our shareholders, the 2020 Plan which became effective on August 16, 2010, as amended, we have authorized a totalreserves for issuance under the 2020 Plan 2,500,000 shares of 5,000,000 Class A Common Stock plus the number of shares, and 500,000 stock appreciation rightsif any, remaining available for issuance pursuant to options granted under the Company’s 2011 Plan. As noted above, as of April 30, 2016, there were 921,643shares available for stock option grants. Also as noted above, we

We believe that granting stock options to executive officers and other employees is an effective means to reward them for their prior performance, to serve as an incentive for promotion of Company profitability and other long-term objectives, and to maintain their overall compensation at competitive levels.

On May 11, 2016, the Board As noted above, as of Directors approved, adopted and resolved to submitApril 30, 2019, there were 87,143 shares available for shareholder approval an amendment tofuture awards under the 2011 Plan (the “Plan Amendment”). If approved by our shareholders, the Plan Amendment would increase the number of shares of Class A Common Stock that may be subject to options from 5,000,000 shares to 6,000,000 shares.

Plan.


For fiscal years 2014, 20152017, 2018 and 2016,2019, the amountnumber of shares used for incentive purposes was equal to 2.3%1.2%, 1.2%4.0% and 3.8%4.2%, respectively, of the Company’s total weighted average shares outstanding (also referred to as the equity expenditure rate or “burn rate”).

From the end of fiscal 2019 to June 30, 2019, the Company’s burn rate was 0.1%. For the fiscal years 2014, 20152017, 2018 and 2016,2019, the amountnumber of shares authorized but unissued pursuant to the 2011 Equity Compensation Plan equaled 3.5%5.1%, 2.4%4.6% and 3.1%0.3%, respectively, of the Company’s shares of Common Stock on a fully diluted basis. This is commonly referred to as the “overhang.”

From the end of fiscal 2019 to June 30, 2019, the Company’s overhang was 0.2%.


The Company believes that both the overhang and burn rate trends are favorable for the Company during the period from fiscal 20142017 through fiscal 2016.2019. The Company’sCompany's burn rate trends are also more favorable than the industry burn rate benchmarks used by Institutional Shareholder Services Inc. (“ISS”), a proxy advisory service, for Russell 3000 companies in the “Software"Software & Services”Services" industry (the ISS benchmarks for fiscal years 2014, 20152017, 2018 and 20162019 are 7.25%8.71%, 7.88%10.22% and 8.74%9.35%, respectively). We believe our burn rate combined with our small overhang indicates that an increasethe requested number of 1,000,000 shares of Class A Common Stock available for issuance pursuant to the 2011 Equity Compensation2020 Plan is unlikely to result in material dilution to our shareholders.


Under the 20112020 Plan, the Company may grant options, and stock appreciation rights (“SARs”) and shares of restricted stock to officers and other employees of the Company or any subsidiary, consultants and other service providers to the Company or any subsidiary, orand members of the Board of Directors. Options may be either incentive stock options or nonqualified stock options. The number of options, SARs or SARsshares of restricted stock granted is determined by the particular committee that administers such grants. See “Administration,”“Administration” below. Option grants to non-employee directors can only be nonqualified stock options. SARs and shares of restricted stock may be granted to any Planplan participant. Other than the proposed increase in the number of Class A Common shares that may be subject to options under the 2011 Plan, the terms of the 2011 Plan have not changed.

The following summary of the 20112020 Plan including the Plan Amendment, is qualified in its entirety by reference to the full text of the 20112020 Plan, and the Plan Amendment, which governgoverns in the event of any conflict. A copy of the 20112020 Plan and the Plan Amendment, is attached to this Proxy Statement asAppendix A.


We intend to register the additional Class A shares that would be available for awards under the 20112020 Plan on Form S-8 under the Securities Act of 1933, as amended, as soon as practicable after receiving shareholder approval of the Plan Amendment.

2020 Plan.


Purpose of the 20112020 Plan


The purpose of the 20112020 Plan is to aid the Company in recruiting and retaining key employees, directors, consultants and other service providers of outstanding ability and to motivate such employees, directors, consultants and other service providerspersons to exert their best efforts on behalf of the Company and its affiliates.

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Shares Subject to the 20112020 Plan


The maximum number of Class A shares that may be issued under the 20112020 Plan as amended to date (i.e., prior tois 2,500,000 plus the proposed amendment to be voted upon by our shareholders at the Annual Meeting), is currently 5,000,000 shares and the maximum number of SARs that may be granted is 500,000,shares remaining available for issuance under the 2011 Plan, subject to adjustment as provided below. Such shares may be shares of original issuance or treasury shares. Any sharesShares that are subject to optionsawards granted under the 20112020 Plan that are terminated, expire unexercised, lapse or are forfeited or are surrenderedgenerally will again be available again for issuance under the 20112020 Plan.

However, the following shares will not be available again for grant under the 2020 Plan: (i) cancelled on settlement of options or SARs in payment of the exercise price thereof; (ii) repurchased by Company using option exercise proceeds; (iii) withheld to pay taxes; and (iv) share-settled awards where only the actual shares delivered are counted against the plan reserve.


In the event of any change in the outstanding shares by reason of any share dividend or split, reorganization, recapitalization, merger, consolidation, spin-off, combination or exchange of shares or other corporate exchange or change in capital structure, any distribution to shareholders (other than regular cash dividends) or any similar event, the applicable stock option committee, without


liability to any person, will make such substitution or adjustment, if any, as it deems to be equitable as to the number or kind of shares or other securities issued or reserved for issuance. The committee will determine in its sole discretion the manner in which such substitution or adjustment shall be made.


Administration


The 20112020 Plan is administered by the Board of Directors and by the Stock Option Committee and(or any other committee of the Board to which the Board has delegated full or partial power to act, such as the Special Stock Option Committee. The Special Stock Option Committee, composed of non-employee directors, is responsible for the administration and granting of stock options to executive officers of the Company. The Stock Option Committee, consisting of other directors of the Company,Committee), which is responsible for the administration and granting of stock options to other employees and eligible persons. The Stock Option Committee currently is composed of James C. Edenfield and J. Michael Edenfield. The Special Stock Option Committee currently is composed of Messrs. Miller, Hogue and Newberry. General referencesReferences in this Proposal 34 to the “committee” mean the Stock Option Committee or Special Stock Option Committee, as applicable.

any other committee of the Board to which the Board has delegated full or partial power to act. The committee has the full power and authority to establish terms and conditions of any award consistent with the 2020 Plan and waive any such terms and conditions at any time; provided, however, the committee is not permitted to accelerate or waive any vesting conditions applicable to an award, except in the event of a participant’s death, disability, retirement or upon a Change of Control (as defined below).


Eligibility


All directors and employees are eligible to participate in the 20112020 Plan. Additionally, consultants and other service providers to the Company may be eligible for option grants,the issuance of awards under the 2020 Plan, if deemed appropriate by the Stock Option Committee.

Althoughcommittee.


No Repricing without Shareholder Approval

Under the 2020 Plan, the committee may not, expressly providedwithout the approval of the Company’s shareholders, cancel outstanding options or SARs and grant in substitution, new options or SARs having a lower exercise price, amend any outstanding options or SARs to reduce the exercise price or purchase any outstanding unexercised options or SARs.

Minimum Vesting Requirements

No portion of any options, SARs or shares of restricted stock will have a vesting period of less than one year from the date of grant.

Clawback

Any award granted pursuant to the 2020 Plan shall be subject to mandatory repayment by the participant to the Company (i) to the extent set forth in any award agreement, (ii) to the extent that such participant is, or in the 2011 Plan, on May 17, 2010, the Boardfuture becomes, subject to (a) any “clawback” or recoupment policy adopted a resolution continuing the policy of granting certain stock options to directors under the 2011 Plan. Newly-elected directors who are not employed by the Company automatically will receive stock option grantsor any of 5,000 shares each upon their initial election and 3,000 shares each asits affiliates to comply with the requirements of any applicable laws, rules or regulations, including pursuant to final rules adopted by the end of each fiscal quarter, with an exercise price equalSEC pursuant to the fair market value onDodd-Frank Wall Street Reform and Consumer Protection Act, or otherwise, or (b) any applicable laws which impose mandatory recoupment, under circumstances set forth in such applicable laws, including the dateSarbanes-Oxley Act of each such grant.

2002.


Exercise Price


The exercise price per share of any option granted under the 20112020 Plan is set in each case by the committee that administers the 20112020 Plan or by the entire Board, but shall not be less than 100% of the fair market value of common stock on the date of grant (110% for 10% stockholders if the option is an incentive stock option). Under the 2011 Plan, the committee may not reduce the exercise price per share of any award previously granted without the approval of the Company’s shareholders. As of the close of business on June 30, 2016, the market value of common stock was $10.48 per share.


Terms of Options


The terms of individual option grants and SARs are determined by the particular committee granting the option or SAR, as discussed above in “Administration.”“Administration” above. If the committees continue their current practices,

23

options granted pursuant to the 20112020 Plan generally will expire on the sixth anniversary of the grant date and will become exercisable in equal portions over a five-year period (other than options granted to non-employee directors, which vest one year following the date of grant). A SAR granted in connection with an option (A)(i) may be granted at the time the related option is granted or at any time prior to the exercise or cancellation of the related option, (B)(ii) shall cover the same number of shares covered by the option (or such lesser number of shares as the committee may determine), and (C)(iii) shall be subject to the same terms and conditions as such Option,option, except for certain additional limitations permitted under the 20112020 Plan.






Exercise of Options


Options granted pursuant to the 20112020 Plan are exercisable according to the terms of the 20112020 Plan, and at such times and under such conditions as determined by the committee that administers the optionoptions and as set forth in the option grant agreement relating to the options being exercised. The option plangrant agreement may specify whether the option price may be paid by the participant (i) in cash or its equivalent (e.g., by personal check) at the time the Option is exercised, (ii) in shares having a fair market value equal to the aggregate option price for the shares being purchased and satisfying such other requirements as may be imposed by the committee, if such shares have been held by the participant for no less than six months, (iii) partly in cash and partly in shares, (iv) if there is a public market for the shares at such time, through the delivery of irrevocable instructions to a broker to sell shares obtained upon the exercise of the option, or (v) to the extent approved by the committee, through “net settlement” in shares. AnyThe option agreement may provide for deferred payment from the proceeds of sale through a bank or broker of some of all of the shares to which such exercise relates.


Exercise of SARs


Each SAR granted independent of an option shall entitle a participant upon exercise to an amount equal to the product of (i) the excess of (A) the fair market value on the exercise date of one share over (B) the exercise price per Share, multiplied by (ii) the number of shares covered by the SAR. Each SAR granted in conjunction with an option, or a portion thereof, shall entitle a participant to surrender to the Company the unexercised option, or any portion thereof, and to receive from the Company in exchange therefor an amount equal to the product of (i) the excess of (A) the fair market value on the exercise date of one share over (B) the greater of the exercise price per share or the option price per share, multiplied by (ii) the number of shares covered by the option, or portion thereof, which is surrendered. The date on which a notice of exercise is received by the Company shall be the exercise date. Payment shall be made in cash as set forth in the award agreement. SARs may be exercised from time to time upon actual receipt by the Company of written notice of exercise stating the number of shares with respect to which the SAR is being exercised.

Non-Transferability

An option


Restricted Shares

The award agreement for restricted shares will set forth the number of shares subject to the award, the period during which and the conditions under which the restricted shares may be forfeited to the Company, and the other terms and conditions of the award. Restricted shares may not be sold, transferred, or SARotherwise encumbered or disposed of until the expiration of the restricted period and the fulfillment of any other conditions to the award. The award agreement will set forth a period of time during which the participant must remain in the continuous employment (or other service-providing capacity) for the forfeiture and transfer restrictions to lapse. Unless otherwise provided in the award agreement, the participant receiving restricted shares will have the right to receive dividends and to vote such shares, provided, however, that any cash or stock dividends with respect to the restricted stock will be withheld by the Company for the participant’s account. Such dividends will be distributed to the participant upon the release of restrictions on the shares. At the end of the restricted period and provided that any other restrictive conditions of the award are met, a stock certificate will be delivered to the participant free of the restricted stock legend (or restrictions on book-entry shares will be removed).

Non-Transferability of Awards

Awards granted under the 20112020 Plan isare not transferable other than by will or the applicable laws of descent and distribution. During the lifetime of a participant, optionsawards may be exercised only by such participant or his or her guardian or legal representative.


Change of Control


In the event of a Change of Control (as defined below), the committee may, but shall not be obligated to, (i) accelerate, vest or cause the restrictions to lapse with respect to all or any portion of an award not already vested, (ii) cancel such awards for fair value (as determined in the sole discretion of the committee) which, in the case of options and SARs, may equal the excess, if any, of the value of the consideration to be paid in the Change of Control transaction to holders of the same number of shares subject to such options or SARs (or, if no consideration is paid in any such transaction, the fair market value of the shares subject to such options or SARs) over the aggregate exercise price of such options or SARs, (iii) provide for the issuance of substitute awards that will substantially preserve the otherwise applicable terms of any affected awards previously granted, as

24

determined by the committee in its sole discretion, or (iv) provide that for a period of at least 10 days prior to the Change of Control, such options shall be exercisable as to all shares subject thereto and that upon the occurrence of the Change of Control, such options shall terminate and be of no further force or effect.

The committee may, in its discretion and without the consent of any participant, determine that upon the occurrence of a Change of Control, each or any award or a portion thereof outstanding immediately prior to the Change of Control and not previously exercised or settled will be canceled in exchange for a payment with respect to each



vested share subject to such award in cash, shares, shares of a corporation or other business entity a party to the Change of Control, or other property which, in any such case, will be in an amount having a fair market value equal to the fair market value of the consideration to be paid per share in the Change of Control, reduced by the exercise or purchase price per share, if any, under such award.

For purposes of the 20112020 Plan, “Change of Control” means a transaction or a series of transactions occurring within any single 12-month period in which: (i) any one Person (as that term is used for purposes of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended), or more than one Person acting as a group, acquires ownership of stock of Company that, together with stock held by such Person or group, constitutes majority shareholder voting power, taking into account all such stock acquired during the 12-month period ending on the date of the most recent acquisition; (ii) a majority of the members of the Board is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election; or (iii) any one Person, or more than one Person acting as a group, other than a Person or group of persons that is related to the Company, acquires assets from the Company that have a total gross fair market value equal to or more than 75% of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions, taking into account all such assets acquired during the 12- month12-month period ending on the date of the most recent acquisition.


Governing Law


The 20112020 Plan will be governed by and construed in accordance with the laws of the State of Georgia.


No Right to Employment or Awards


The granting of an award under the 20112020 Plan imposes no obligation on the Company or any of its subsidiaries to continue the employment of a participant and does not lessen or affect their right to terminate the employment of such participant. No participant or other person will have any claim to be granted any award. The terms and conditions of awards and the committee’s determinations and interpretations need not be the same with respect to each participant.


Code Section 409A


The 20112020 Plan expressly provides that no award will be granted, deferred, accelerated, extended, paid out or modified in a manner that would result in the imposition of an additional tax upon a Participant under Section 409A of the Code, and the committee will have the authority to alter the payment or delivery of shares under the 20112020 Plan in order to avoid such tax liability.


Plan Benefits


Awards granted under the 20112020 Plan are subject to the discretion of the Stock Option Committee and Special Stock Option Committee. See “Executive Compensation – Elements of Compensation – Stock Option Plans” and “Executive Compensation – Stock Options – Fiscal 20162019 Grants of Stock Options” for information related to recent grants of stock options. There are no outstanding options granted to participants in the 20112020 Plan that are dependent upon the passage of the Plan Amendment.

Termination

2020 Plan.


Termination; Amendment

The 20112020 Plan will terminate on May 17, 2020,29, 2024, the tenthfifth anniversary of the date on which it was adopted by the Board of Directors of the Company, unless sooner suspended or terminated by the Board. In general, no such suspension or termination will have any effect on outstanding awards without the consent of the participant.

The committee may amend, alter, suspend, discontinue or terminate the 2020 Plan at any time; however, no amendment, alteration, suspension, discontinuation or termination may be made without shareholder approval if such change would increase the total number of shares reserved for issuance under the 2020 Plan or change the maximum number of shares for which awards may be granted to any participant. Additionally, the consent of a participant is required if any such change would materially adversely impair any of the rights under any award granted under the 2020 Plan.


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 20112020 Plan and the subsequent disposition of shares of common stock acquired upon such

25

exercise. Under the 20112020 Plan, at the time of grant the committee designates each option as either an incentive stock option or a nonqualified stock option, with differing tax consequences to the participant 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 participant. Upon exercise of a nonqualified option granted under the 20112020 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 participant, and the Company generally will 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 a participant.


Upon the subsequent disposition of shares acquired upon the exercise of an option (“Option Stock”), a participant may realize short-term or long-term capital gain or loss (assuming such shares of Option Stock constitute capital assets in a participant’s hands), 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 participant 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 participant. (However, in calculating income for purposes of computing an individual participant’s alternative minimum tax, the favorable tax treatment generally accorded incentive stock options is not applicable.)


When a participant 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, (a) ordinary income equal to the difference between the exercise price and the fair market value on the date of exercise is recognized, and (b) 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 a participant on the exercise or sale of Option Stock.


SARs


The grant of a SAR is not a taxable event to the Company or the participant. When a participant exercises a SAR, the excess of the fair market value of the common stock at the time of exercise over the unit grant price, multiplied by the number of units exercised, will be taxed as ordinary income to the participant. The Company may claim a deduction for federal income tax purposes for compensation paid in an equal amount after the participant has exercised the SAR.

26


Restricted Shares

The award of restricted shares will not result in taxable income to the participant, and the Company will not be entitled to take a deduction, at the time of grant unless the participant makes an election under Section 83(b) of the Code to be taxed at such time. If such election is not made, upon the lapse of the restrictions upon restricted shares, the participant will recognize ordinary income in the amount equal to the fair market value of the shares at the time the restricted shares vest (less any amount paid for the shares), and the Company will be entitled to a deduction for the same amount. Prior to the lapse of the restrictions on restricted shares, any dividends received on such shares will be treated as ordinary income to the participant (and will not be eligible for reduced rates of taxation applicable to qualified dividend income).

If an election under Section 83(b) of the Code is made within 30 days after receipt of restricted shares, the participant will recognize ordinary income in the year that the restricted shares are awarded in an amount equal to the fair market value of the shares on the date of such award determined as if the restricted shares were not subject to restrictions, and the Company will be entitled to a deduction for the same amount. If the election is made, the participant will not recognize income at the time that the restrictions actually lapse. Any dividends received after the election is made generally will constitute qualified dividend income generally subject to reduced rates of taxation. If the restricted shares subject to the election are subsequently forfeited, the participant


will not be entitled to a deduction or tax refund. Any ordinary income of the participant will be subject to tax withholding by the Company. The Company generally will have no tax consequence in connection with the later disposition of shares acquired pursuant to vested restricted shares.

New Plan Benefits

Any future awards granted to eligible participants under the 2020 Plan will be subject to the discretion of the committee and, therefore, the number of awards that will be granted under the 2020 Plan is not determinable at this time.

Past Award Payments

The number of equity-based awards that were made under the 2011 Plan during fiscal 2019 to each of our named executive officers is set forth above under “Fiscal 2019 Grants of Stock Options” and is incorporated herein by reference. The following table sets forth information regarding the number of equity-based awards that were made under the 2011 Plan during fiscal 2019 to: (i) all current executive officers as a group, (ii) all directors, who are not executive officers, as a group, and (iii) all employees, who are not named executive officers, as a group. There is no applicable disclosure to be made with regard to any associate of our directors, director nominees, and executive officers or any other recipient of 5% or more of the awards.

NAMEOPTIONSSARS
All current executive officers as a group515,000-0-
All directors, who are not executive officers, as a group48,000-0-
All employees, who are not executive officers, as a group755,000-0-

Board Recommendation


The Board of Directors believes it is in the best interest of the Company and its shareholders to approve the adoption of the 2020 Plan Amendment so that the Company will be able to continue to provide adequate incentives and to attract and retain the services of competent personnel. The affirmative vote of a majority of the shares in attendance or represented by proxy and entitled to vote at the Annual Meeting of Shareholders is required for adoption of the Plan Amendment. 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 this proposal. Abstentions and broker non-votes will be counted as present for purposes of determining the presence of a quorum but will not have any effect on the outcome of this proposal.

2020 Plan.


THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE AMENDMENT TOADOPTION OF THE 20112020 EQUITY COMPENSATION PLAN TO INCREASE THE NUMBER OF CLASS A SHARES OF COMMON STOCK THAT MAY BE SUBJECT TO OPTIONS FROM 5,000,000 SHARES TO 6,000,000 SHARES.

27

PROPOSAL 4: RATIFICATION OF APPOINTMENT OF

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors, upon the recommendation of the Audit Committee, has appointed KPMG LLP (“KPMG”) to serve as its independent registered public accounting firm for the fiscal year ending April 30, 2017. KPMG acted in such capacity during the fiscal year ended April 30, 2016. This appointment is being presented to the shareholders for ratification. Although the Company is not required to obtain shareholder ratification, the Company has elected to do so in order to provide the shareholders with an opportunity to participate in this decision. In the event that the shareholders do not ratify the appointment of KPMG as the independent registered public accounting firm of the Company, the Board of Directors will consider the retention of another independent registered public accounting firm.

The Company expects that representatives of KPMG will attend the Annual Meeting of Shareholders. 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.

During the fiscal year ended April 30, 2016, the Company engaged KPMG to provide certain audit services, including the audit of the annual consolidated financial statements, quarterly reviews of the consolidated financial statements included in our Quarterly Reports on Form 10-Q, services performed in connection with filing this Proxy Statement and the Annual Report on Form 10-K by the Company with the SEC, attendance at meetings with the Audit Committee and consultation on matters relating to accounting, tax and financial reporting. KPMG has acted as independent registered public accounting firm for the Company since 1983. Neither KPMG nor any of its associates has any relationship to the Company or any of its subsidiaries except in its capacity as independent registered public accounting firm.

The aggregate fees billed to the Company by KPMG for services rendered during fiscal 2016 and fiscal 2015 are summarized below:

Audit Fees.    Fees for audit services totaled approximately $762,500 in fiscal 2016 and approximately $813,000 in fiscal 2015, including fees associated with the annual audit, a purchase accounting review of an acquisition in fiscal 2015 and the reviews of consolidated financial statements in Quarterly Reports on Form 10-Q, including Sarbanes-Oxley 404 audit fees.

Audit Related Fees.    Fees for audit related services totaled zero in fiscal 2016 and fiscal 2015.

Tax Fees.    There were no fees for tax services, including tax compliance, tax advice and tax planning, billed to the Company by KPMG in fiscal 2016 or in fiscal 2015.

All Other Fees.    The Company’s independent registered public accounting firm did not receive fees for other services not described above in fiscal 2016 or in fiscal 2015.

During fiscal 2016, KPMG did not utilize any leased personnel in connection with the audit.

In accordance with the Nasdaq Rules and rules and regulations promulgated by the SEC, the approval of the Audit Committee is required for all independent audit engagement fees and terms and all permitted non-audit engagements (including the fees and terms thereof) that the independent registered public accounting firm performs for the Company.

Board Recommendation

The Board believes it is in the best interest of the Company and its shareholders to ratify the appointment of KPMG as its independent registered public accounting firm for the fiscal year ending April 30, 2017. Approval of this proposal requires the affirmative vote of a majority of the shares present or represented by proxy and entitled to vote on this proposal.

28

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF KPMG AS ITS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING APRIL 30, 2017.

29

AUDIT COMMITTEE REPORT

The following is the Report of the Audit Committee of the Board of Directors of American Software, Inc. for the fiscal year ended April 30, 2016.

The Board of Directors has adopted a written charter for the Audit Committee. As set forth in the charter, the Audit Committee’s job is one of oversight. It is not the duty of the Audit Committee to prepare the financial statements of the Company, to plan or conduct audits, or to determine that the financial statements of the Company are complete and accurate and are in accordance with U.S. generally accepted accounting principles. The Company’s management is responsible for preparing the Company’s consolidated financial statements and for maintaining internal controls. The independent registered public accounting firm of the Company is responsible for auditing the consolidated financial statements and for expressing an opinion as to whether those audited financial statements fairly present the financial position, results of operations, and cash flows to the Company in conformity with U.S. generally accepted accounting principles.

In fulfilling its responsibilities with respect to the fiscal year 2016 audit, the Audit Committee: (1) reviewed and discussed the audited consolidated financial statements for the fiscal year ended April 30, 2016 with Company management and KPMG, the Company’s independent registered public accounting firm; (2) discussed with KPMG the matters required to be discussed pursuant to Statement on Auditing Standards No. 16, “Communications with Audit Committees”, issued by the Public Company Accounting Oversight Board (PCAOB); and (3) received the disclosure and the letter from KPMG required by the applicable requirements of the PCAOB regarding the independent registered public accounting firm’s communications with the audit committee concerning independence and discussed with KPMG its independence from the Company.

Based on the Audit Committee’s review of the audited consolidated financial statements and discussions with management and KPMG, the Audit Committee recommended to the Board that the audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2016 for filing with the Securities and Exchange Commission.

The Nasdaq Rules require audit committees to be composed of not less than three members who are “independent directors,” as that term is defined in the listing requirements. The Audit Committee believes that its members meet the definition of “independent directors” set forth in those rules.

By the Audit Committee:

James B. Miller, Jr., Chairman

W. Dennis Hogue

Thomas L. Newberry, V

30

PLAN.





























SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS AND MANAGEMENT


The following table sets forth, as of June 30, 20162019 (unless otherwise indicated), the beneficial ownership of Class A shares and Class B shares by: (i) each person known to management to own beneficially more than 5% of the outstanding shares of our common stock; and (ii) each current director, each nominee for director, each of our named executive officers, and our executive officers and directors as a group. Unless otherwise noted, (i) we believe that each of the beneficial owners set forth in the table has sole voting and investment power, and (ii) the address of each person listed below is 470 East Paces Ferry Road, N.E., Atlanta, Georgia 30305.

NAME OF BENEFICIAL OWNER

OR DESCRIPTION OF GROUP

  SHARES  BENEFICIALLY
OWNED		   PERCENT OF CLASS 
  CLASS A   CLASS B   CLASS  A(1)   CLASS  B(1) 

Beneficial owners of more than 5%

        

James C. Edenfield

   238,600(2)    1,821,587     *     70.4% 

Dr. Thomas L. Newberry

   97,425(3)    665,499     *     29.6% 

Brown Capital Management, Inc.

   4,223,019(4)    -0-     15.9%    —    

Kayne Anderson Rudnick Investment Management LLC

   3,204,125(5)    -0-     12.1%    —    

Renaissance Technologies LLC

   1,713,994(6)    -0-     6.5%    —    

BlackRock, Inc.

   1,624,017(7)    -0-     6.1%    —    

 

Directors and named executive officers

        

James C. Edenfield

   238,600(2)    1,821,587     *     70.4% 

J. Michael Edenfield

   789,753(8)    -0-     3.0%    —    

W. Dennis Hogue

   96,435(9)    -0-     *     —    

James B. Miller, Jr.

   97,542(10)    -0-     *     —    

Thomas L. Newberry, V

   51,750(11)    -0-     *     —    

Vincent C. Klinges

   253,232(12)    -0-     *     —    

James R. McGuone

   61,200(11)    -0-     *     —    

ALL DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP (9 PERSONS)

   1,685,937(13)    2,487,086     15.7%    100.0% 

*

Denotes less than 1%.

(1)

Share percentages are based on an aggregate of 26,507,987 Class A shares outstanding as of June 30, 2016, plus 60-day option shares held by the person or group in question. There were 2,487,086 Class B shares outstanding as of June 30, 2016.

(2)

Includes 178,600 shares that may be acquired upon the exercise of Mr. Edenfield’s own stock options exercisable within 60 days and 60,000 shares held by the James C. and Norma T. Edenfield Foundation, Inc., as to which Mr. Edenfield has shared voting and investment power.

(3)

Includes 55,425 Class A shares of which the Thomas L. Newberry 2014 Trust is the record owner and 33,000 which may be acquired upon the exercise of Dr. Newberry’s own stock options exercisable within 60 days.

(4)

Based on Schedule 13G/A dated February 16, 2016. Of this amount, the reporting person has sole voting power as to 2,450,540shares and sole dispositive power as to all of the shares (4,223,019), which are owned of record by its investment advisory clients. Brown Capital Management’s reported address is 1201 N. Calvert Street, Baltimore, Maryland 21202.

(5)

Based on Schedule 13G/A dated February 5, 2016. Of this amount, the reporting person has sole voting power as to 2,579,725 shares, shared voting power as to 624,400 shares, sole dispositive power as to 2,579,725 shares, and shared dispositive power as to 624,400 shares. Kayne Anderson Rudnick Investment Management’s reported address is 1800 Avenue of the Stars, 2nd Floor, Los Angeles, California 90067.

31

(6)

Based on Schedule 13G/A dated February 11, 2016. Of this amount, the reporting person has sole voting power as to 1,665,816 shares, sole dispositive power as to 1,697,355 shares and shared dispositive power as to 16,639 shares. Renaissance Technologies’ reported address is 800 Third Avenue, New York, New York 10022.

(7)

Based on Schedule 13G/A dated January 30, 2016. Of this amount, the reporting person has sole voting power as to 1,559,611 shares and sole dispositive power as to all of the shares (1,624,017). BlackRock’s reported address is 55 East 52nd Street, New York, NY 10022.

(8)

Includes 374,000 shares subject to options exercisable within 60 days.

(9)

Includes 63,750 shares subject to options exercisable within 60 days.

(10)

Includes 60,750 shares subject to options exercisable within 60 days.

(11)

Represents shares subject to options exercisable within 60 days.

(12)

Includes 157,000 shares subject to options exercisable within 60 days.

(13)

Includes 947,050 shares subject to options exercisable within 60 days.

 SHARES BENEFICIALLY OWNEDPERCENT OF CLASS
NAME OF BENEFICIAL OWNER OR DESCRIPTION OF GROUPCLASS ACLASS B

CLASS A (1)

CLASS B (1)
Beneficial owners of more than 5%    
James C. Edenfield
221,000(2)
1,821,587*100%
Brown Capital Management, Inc.
4,120,901(3)
-0-14%-
Kayne Anderson Rudnick Investment Management LLC
2,689,162(4)
-0-9.1%-
Renaissance Technologies LLC
2,092,300(5)
-0-7.1%-
BlackRock, Inc.
1,975,477(6)
-0-6.7%-
Directors and named executive officers    
James C. Edenfield
221,000(2)
1,821,587*100%
J. Michael Edenfield
533,753(7)
-0-1.79%-
W. Dennis Hogue
66,274(8)
-0-*-
Matthew G. McKenna
25,000(9)
-0-* 
James B. Miller, Jr.
121,856(10)
-0-*-
Thomas L. Newberry, V
15,000(11)
-0-*-
H. Allan Dow
362,154(12)
-0-1.23%-
Vincent C. Klinges
293,838(13)
-0-*-
James R. McGuone
42,200(11)
-0-*-
Valerie King-0--0-*-
ALL DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP (11
PERSONS)
1,689,075(14)
1,821,5875.52%100%
____________________
* Denotes less than 1%.
(1) Share percentages are based on an aggregate of 29,483,885 Class A shares outstanding as of June 30, 2019, plus options exercisable within 60 days of June 30, 2019. There were 1,821,587 Class B shares outstanding as of June 30, 2019.
(2) Includes 161,000 shares that may be acquired upon the exercise of Mr. Edenfield’s own stock options exercisable within 60 days and 60,000 shares held by the James C. and Norma T. Edenfield Foundation, Inc., as to which Mr. Edenfield has shared voting and investment power.
(3) Based on Schedule 13G/A dated February 14, 2019. Of this amount, the reporting person has sole voting power as to 2,396,367 shares and sole dispositive power as to 4,120,901 shares, which are owned of record by its investment advisory clients. Brown Capital Management’s reported address is 1201 N. Calvert Street, Baltimore, Maryland 21202.
(4) Based on Schedule 13G/A dated February 15, 2019. Of this amount, the reporting person has sole voting power as to 1,897,171 shares, shared voting power as to 791,991 shares, sole dispositive power as to 1,897,171 shares, and shared dispositive power as to 791,991 shares. Kayne Anderson Rudnick Investment Management’s reported address is 1800 Avenue of the Stars, 2nd Floor, Los Angeles, California 90067.
(5) Based on Schedule 13G/A dated February 13, 2019. Of this amount, the reporting person has sole voting power as to 2,092,300 shares and sole dispositive power as to 2,092,300 shares. Renaissance Technologies’ reported address is 800 Third Avenue, New York, New York 10022.
(6) Based on Schedule 13G/A dated February 4, 2019. Of this amount, the reporting person has sole voting power as to 1,928,638 shares and sole dispositive power as to 1,975,477 shares. BlackRock’s reported address is 55 East 52nd Street, New York, NY 10022.
(7) Includes 118,000 shares subject to options exercisable within 60 days.
(8) Includes 60,000 shares subject to options exercisable within 60 days.
(9) Includes 20,000 shares subject to options exercisable within 60 days.
(10) Includes 60,000 shares subject to options exercisable within 60 days.
(11) Represents shares subject to options exercisable within 60 days.
(12) Includes 306,000 shares subject to options exercisable within 60 days.


(13) Includes 197,000 shares subject to options exercisable within 60 days.
(14) Includes 987,200 shares subject to options exercisable within 60 days.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE


Section 16(a) of 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.SEC. Officers, directors and holders of more than 10% of the Class A shares are required under regulations promulgated by the SEC to furnish the Company with copies of all Section 16(a) forms they file.

Based solely upon a review by the Company of copies of these reports filed with the SEC and written representations furnished to the Company by its officers and directors, all of the persons subject to the Section 16(a) reporting requirements filed the required reports on a timely basis with respect to fiscal year 2016. The Company believes2019, except that all of the transactions referenced herein have now been reported on January 31, 2019, a late Form 4 and Form 5.

was filed for Mr. James B. Miller, Jr. relating to the exercise of 3,000 options into an equal number of shares of Class A Common Stock on January 18, 2019.




SHAREHOLDER PROPOSALS


Proposals of shareholders intended to be presented at the 20172020 Annual Meeting of Shareholders must be forwarded in writing and received at the principal executive offices of the Company no later than March 29, 2017,April 1, 2020, directed to the attention of the Secretary, to be considered for inclusion in the Company’s Proxy Statement for that Annual Meeting. Any such proposals must comply in all respects with the rules and regulations of the Securities and Exchange Commission.

32

SEC.























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 matters specifically referred to in this Proxy Statement. If other matters properly come before the Annual Meeting, it is intended that the holders of the proxies will act with respect thereto in accordance with their best judgment.


The Company will bear the cost of this solicitation of proxies. 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 20162019 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, N.E., Atlanta, Georgia 30305.


Pursuant to SEC rules, we may send a single annual report or proxy statement to any household at which two or more shareholders reside if they share the same last name or we reasonably believe they are members of the same family. This procedure is referred to as “householding.” Each shareholder subject to householding will continue to receive a separate proxy card or voting instruction card. We will promptly deliver, upon written or oral request, a separate copy of our annual report or proxy statement, as applicable, to a shareholder at a shared address to which a single copy was previously delivered. If you received a single set of disclosure documents this year, but you would prefer to receive your own copy, you may direct requests for separate copies to Pat McManus, Investor Relations, 470 East Paces Ferry Road, N.E., Atlanta, Georgia 30305 or call (404) 364-7615. Also, if your household currently receives multiple copies of disclosure documents and you would like to receive just one set, please contact us at the same address and phone number.


A COPY OF THE COMPANY’S ANNUAL REPORT ON FORM10-K FOR THE FISCAL YEAR ENDED APRIL 30, 2016,2019, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WILL BE FURNISHED WITHOUT CHARGE TO BENEFICIAL OWNERS OR SHAREHOLDERS BENEFICIALLY OR OF RECORD AT THE CLOSE OF BUSINESS ON JULY 1, 2016,5, 2019, ON REQUEST TO PAT McMANUS, INVESTOR RELATIONS, 470 EAST PACES FERRY ROAD, N.E., ATLANTA, GEORGIA 30305.


By Order of the Board of Directors,

LOGO


                        signaturea01.jpg
James R. McGuone, Secretary



Atlanta, Georgia


July 27, 2016

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30, 2019


















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Appendix A


American Software, Inc.

2011


2020 Equity Compensation Plan


1.Purpose of the Plan. The purpose of the 20112020 Equity Compensation Plan (the “Plan”) is to aid American Software, Inc., a Georgia corporation (“Company”), and its Affiliates (defined below) in recruiting and retaining key employees, directors, consultants and other service providers of outstanding ability and to motivate such employees, directors, consultants and other service providers to exert their best efforts on behalf of Company and its Affiliates by providing incentives through the granting of Awards (defined below). Company expects that it will benefit from the added interest which such key employees, directors, consultants and other service providers will have in the welfare of Company as a result of their proprietary interest in Company’s success.


2.Definitions. The following capitalized terms used in the Plan have the respective meanings set forth in thisSection 2:

“Act” means the Securities Exchange Act of 1934, as amended, or any successor thereto.


“Affiliate” means with respect to Company, any entity directly or indirectly controlling, controlled by, or under common control with, Company or any other entity designated by the Board in which Company or an Affiliate has an interest. For purposes of this definition, “

control” means direct or indirect ownership or control of more than 50% of the voting interests of an entity.


“Award” means an Option, SAR, or Stock Appreciation RightRestricted Award granted pursuant to the Plan.


“Board” means the Board of Directors of Company.


“Cause” has the meaning set forth in the Participant’s employment agreement, consulting agreement, separation agreement or other similar agreement with Company, as in effect on the date an Award is granted; provided, that if no such agreement or definition exists, unless otherwise specified in the Award agreement, “Cause” means: (i) a failure of the Participant to substantially perform his or her duties (other than as a result of physical or mental illness or injury); (ii) the Participant’s willful misconduct or gross negligence; (iii) a material breach by the Participant of the Participant’s fiduciary duty or duty of loyalty to Company or any Affiliate; (iv) a plea of guilty or nolo contendere by the Participant to (or conviction of the Participant for the commission of) any felony or any other serious crime involving moral turpitude; (v) a material breach of the Participant’s obligations under any agreement entered into between the Participant and Company or any Affiliate; (vii) a material breach of Company’s written policies or procedures; or (viii) unauthorized acts intended to result in the Participant’s personal enrichment at the material expense of Company or an Affiliate. For purposes of this definition, no act, or failure to act, on the Participant’s part shall be considered “willful” unless done, or omitted to be done, by the Participant not in good faith and without reasonable belief that the Participant’s action or omission was in the best interest of Company.

“Change of Control” means any event which is a “change in control event” as defined in U.S. Treasury Regulation Section 1.409A-3(i)(5) or any subsequent regulation or authoritative governmental interpretation of Section 409A(a)(2)(A)(v) of the Code, including any amendments thereto. To the extent consistent with such definition, a “ChangeChange of Control”Control means a transaction or a series of transactions occurring within any single 12-month period in which:

(i) any one Person, or more than one Person acting as a group, acquires ownership of stock of Company that, together with stock held by such Person or group, constitutes Majority Shareholder Voting Power, taking into account all such stock acquired during the 12-month period ending on the date of the most recent acquisition;

(ii) a majority of the members of the Board is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election; or

(iii) any one Person, or more than one Person acting as a group, other than a Person or group of persons that is related to Company, acquires assets from Company that have a total gross fair market value equal to or more than 75%of the total gross fair market value of all of the assets of Company immediately prior to such acquisition or acquisitions, taking into account all such assets acquired during the 12-month period ending on the date of the most recent acquisition.

(a)any one Person, or more than one Person acting as a group, acquires ownership of stock of Company that, together with stock held by such Person or group, constitutes Majority Shareholder Voting Power, taking into account all such stock acquired during the 12-month period ending on the date of the most recent acquisition;
(b)a majority of the members of the Board is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election; or
(c)
any one Person, or more than one Person acting as a group, other than a Person or group of Persons that is related to Company, acquires assets from Company that have a total gross fair market value equal to or more than 75%of the total gross fair market value of all of the assets of Company immediately prior to such acquisition or acquisitions, taking into account all such assets acquired during the 12-month period ending on the date of the most recent acquisition.
Notwithstanding the foregoing, a “Change inof Control” shall not include any transaction or a series of transactions in which the Class


B Common Shares of the Company held by any personPerson holding such shares as of the Effective Date are transferred to one or more members of his or her immediate family, to an entity controlled by any such family member or members or a trust for the benefit of any such family member or members. Further, a “Change inof Control” shall not include any transaction or a series of transactions in any acquisition of stock or assets by a Person who owns Majority Shareholder Voting Power prior to such transaction or series of transactions.

A-1

Unless otherwise provided in the applicable Award agreement, solely for the purpose of determining the timing of any payments pursuant to any Award constituting a “deferral of compensation” subject to Section 409A of the Code, a Change of Control shall be limited to a “change in the ownership of Company,” a “change in the effective control of Company,” or a “change in the ownership of a substantial portion of the assets of Company” as such terms are defined in Section 1.409A-3(i)(5) of the U.S. Treasury Regulations. No Award agreement shall define a Change of Control in such a manner that a Change of Control would be deemed to occur prior to the actual consummation of the event or transaction that results in a Change of Control of Company (e.g., upon the announcement, commencement, or shareholder approval of any event or transaction that, if completed, would result in a Change of Control of Company).
“Code” means the Internal Revenue Code of 1986, as amended, or any successor thereto.


“Committee” means the Stock Option Committee of the Board, or such other committee of the Board (including, without limitation, the full Board) to which the Board has delegated full or partial power to act under or pursuant to the provisions of the Plan.


“Company” has the meaning set forth inSection 1.


“Disability” has the meaning set forth in the Participant’s employment agreement, consulting agreement, separation agreement or other similar agreement with Company, as in effect on the date an Award is granted; provided, that if no such agreement or definition exists, unless otherwise specified in the Award agreement, “Disability” means Disabilitya disability as defined for purposes of Section 409A of the Code. In a dispute, the Disability determination shall be in the sole discretion of the Committee, and a Participant (or his or her representative) shall furnish the Committee with medical evidence documenting the Participant’s disability or infirmityDisability which is satisfactory to the Committee.


“Effective Date” means May 17, 2010 (the29, 2019, which is the date the Board approved the Plan). The effectiveness of the Plan and the validity of any and all Awards granted hereunder are contingent upon approval of the Plan by the requisite vote of the shareholders of Company in a manner which complies with Section 422(b)(1) of the Code, the requirements of any national securities exchange on whichPlan.

“Employment” (and variations thereof, such Shares are listed or admitted to trading and the provisions of the corporate charter, bylaws and applicable state law of Company.as “

“Employmentemployed” means) means: (i) a Participant’s employment if the Participant is an employee of Company or any of its Affiliates,Affiliates; (ii) a Participant’s service as a consultant or other service provider, if the Participant is a consultant or other service provider to Company or its Affiliates,Affiliates; and (iii) a Participant’s service as an non-employee director, if the Participant is a non-employee member of the Board.


“Fair Market Value” means, on a given date,date: (i) if there should beis a public market for the Shares on such date, the closing price of the Shares as reported on such date on the composite tape of the principal national securities exchange on which such Shares are listed or admitted to trading, or, if no composite tape exists for such national securities exchange on such date, then the closing price on the principal national securities exchange on which such Shares are listed or admitted to trading,trading; or (ii) if the Shares are not listed or admitted to trading or quotation on a national securities exchange, the arithmetic mean of the per Share closing bid price and per Share closing asked price on such date as quoted on the National Association of Securities Dealers Automated Quotation System (or such market in which such prices are regularly quoted),; or (iii) if there is no market on which the Shares are regularly quoted, the Fair Market Value shall be the value established by the Committee in good faith pursuant to the reasonable application of a reasonable valuation method under U.S. Treasury Regulation Section 1.409A-1(b)(5)(iv)(B). With respect to (i) and (ii) above, if no sale of Shares shall havehas been reported on such composite tape or such national securities exchange on such date or quoted on the National Association of Securities Dealer Automated Quotation System on such date, then the immediately preceding date on which sales of the Shares have been so reported or quoted shall be used.


“Good Reason” has the meaning set forth in the Participant’s employment agreement, consulting agreement, separation agreement or other similar agreement with Company, as in effect on the date an Award is granted; provided that if no such agreement or definition exists, unless otherwise specified in the Award agreement, “Good Reason” means the assignment to a Participant following a Change of Control of any duties inconsistent with the Participant’s duties, responsibilities, title, or any other action by Company that results in a material diminution in the Participant’s annual compensation and other benefits, position, authority, duties or responsibilities, excluding in each case any assignment or action that is remedied by Company within 30 days of receipt of notice from the Participant. Good Reason shall exist only if (x) the Participant notifies Company of the event establishing Good Reason within 90 days of its initial existence, (y) Company is provided 30 days to cure such event and (z) the Participant Separates from Service with Company (or its successor) within 180 days of the initial occurrence of the event.


“ISO” means an Option that is also an incentive stock option granted pursuant toSection6(d).


“Majority Shareholder Voting Power” means eithereither: (i) with respect to the election of members of the Board by the shareholders of Company, the ability to elect a majority of the Board,Board; or (ii) with respect to all other matters, more than 50% of the total voting power of the stock of Company, in both cases taking into account the relative voting power of the Shares and Company’s Class B Common Shares.


“Option” means a stock option granted pursuant toSection 6.


“Option Price” means the purchase price per Share of an Option, as determined pursuant toSection 6(a).


“Participant” means an employee, director, consultant or other service provider of Company or any of its Affiliates who is selected by the Committee to participate in the Plan.

A-2


“Permitted Holder” means, as of the date of determination, any and all of an employee benefit plan (or trust forming a part thereof) maintained by (i) Company or (ii)by any corporation or other Person of which a majority of its voting power of its voting equity securities or equity interest is owned, directly or indirectly, by Company.


“Person” means a “person”, as such term is used for purposes of Section 13(d) or 14(d) of the Act (or any successor section thereto).


“Plan” has the meaning set forth inSection 1.


“Restricted Award” means any Award granted pursuant to Section 8(a).
“Restricted Period” has the meaning set forth in Section 8(a).

“Restricted Stock” has the meaning set forth in Section 8(a).    

“Retirement” means, unless otherwise defined in the applicable Award agreement, termination of a Participant’s employment with Company or any of its Affiliates based on the Participant’s having attained a mandatory retirement age as established in a written agreement between the Participant and Company.

“Separation from Service” and “Separates from Service” have the meanings ascribed to such terms pursuant to Section 409A of the Code and the regulations promulgated thereunder.
“Shares” means Company’s Class A Common Shares.


“Stock Appreciation RightSAR” means a stock appreciation right granted pursuant toSection7.

“Subsidiary” means a subsidiary corporation, as defined in Section 424(f) of the Code (or any successor section thereto).


3.Shares Subject to the Plan. Subject toSection 89, the total number of Shares which may be issued under the Plan is 2,500,000 andplus the maximum number of Stock Appreciation Rights that may be granted is 500,000.Shares, if any, remaining available for issuance under Company’s 2011 Equity Compensation Plan, as amended. The Shares may consist, in whole or in part, of unissued Shares or treasury Shares. The issuance of Shares or the payment of cash upon the exercise of an Award or in consideration of the cancellation or termination of an Award shall reduce the total number of Shares available under the Plan, as applicable. Shares subject to Awards that are forfeited or Shares that terminate, expire or lapse without the payment of consideration mayshall, to the extent of such forfeiture, termination, expiration or lapsing, again be granted againavailable for issuance of future Awards under the Plan. The following Shares shall not be available again for grant under the Plan: (i) cancelled on settlement of Options or SARs in payment of the exercise price thereof; (ii) repurchased by Company using Option exercise proceeds; (iii) withheld to pay taxes; and (iv) Share-settled Awards where only the actual Shares delivered are counted against the Plan reserve.


4.Administration. The Plan shall be administered by the Committee. The Committee is authorized to interpret the Plan, to establish, amend and rescind any rules and regulations relating to the Plan, and to make any other determinations that it deems necessary or advisable for the administration of the Plan. The Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan in the manner and to the extent the Committee deems necessary or advisable. Any decision of the Committee in the interpretation and administration of the Plan, as described herein, shall lie within its sole and absolute discretion and shall be final, conclusive and binding on all parties concerned (including, but not limited to, Participants and their beneficiaries or successors). TheExcept as otherwise provided herein, the Committee shall have the full power and authority


to establish the terms and conditions of any Award consistent with the provisions of the Plan and to waive any such terms and conditions at any time (including, without limitation, acceleratingprovided, however, that the Committee shall not be permitted to accelerate or waivingwaive any vesting conditions)conditions applicable to any Award, except in the event of the Participant’s death, Disability or Retirement or a Change of Control as set forth in Section 9(b). Determinations made by the Committee under the Plan need not be uniform and may be made selectively among Participants, whether or not such Participants are similarly situated. Awards may, inIn the discretion of the Committee, Awards may be made under the Plan in assumption of, or in substitution for, outstanding awards previously granted by Company, any of its Affiliates or any of their respective predecessors, or any entity acquired by Company or with which Company combines. The number of Shares underlying such substitute awardsAwards shall be counted against the aggregate number of Shares available for Awards under the Plan.

5.Effective Date and Length of Plan. The CommitteePlan shall require paymentbe effective as of the Effective Date; provided, that the effective date of the Plan and the validity of any minimum amount it may determine to be necessary to withhold for federal, state, local or other taxes as a resultand all Awards granted hereunder are contingent upon approval of the exercise, vesting or grant of an Award. Unless the Committee specifies otherwise, the Participant may elect to pay a portion or all of such minimum withholding taxes by (i) delivery in Shares, or (ii) having Shares withheld by Company from any Shares that would have otherwise been receivedPlan by the Participant. The numberrequisite vote of the shareholders of Company in a manner which complies with Section 422(b)(1) of the Code, the requirements of any national securities exchange on which such Shares so deliveredare listed or withheldadmitted to trading, and the provisions of the corporate charter, bylaws and applicable state law of Company. Unless sooner terminated in accordance with Section 155, the Plan shall have an aggregate Fair Market Value sufficient to satisfy the applicable minimum withholding taxes.

5. Limitations. No Award may be grantedremain in effect until all Awards under the Plan have been satisfied by the issuance of Shares or payment of cash or have expired or otherwise terminated, but no award shall be granted more than five years after the tenth anniversary of the Effective Date, but Awards theretofore granted may extend beyond that date.Date.


6.Terms and Conditions of Options. Options granted under the Plan shall be, as determined by the Committee, non-qualified or incentive stock options for federal income tax purposes, as evidenced by the related Award agreements, and shall be subject to the foregoing and the following terms and conditions and to such other terms and conditions, not inconsistent therewith, as the Committee shall determine:


(a)
(a) Option Price. The Option Price per Share shall be determined by the Committee, but shall not be less than 100% of the Fair Market Value of a Share on the date an Option is granted (other than in the case of

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Options granted in assumption or substitution of previously granted awards, as described inSection 4; provided that such assumption or substitution is described in Treasury Regulation Section 1.409A-1(b)(5)(v)(D)).

(b) Exercisability. Options granted under the Plan shall be exercisable at such time and upon such terms and conditions as may be determined by the Committee, but in no event shall an Option be exercisable more than ten years after the date it is granted. Each Award agreement shall set forth the extent to which the Participant shall have the right to exercise the Option following termination of the Participant’s employment or service with Company or its Affiliates. Such provisions shall be determined in the sole discretion of the Committee, shall be included in the Award agreements, need not be uniform among all Options issued pursuant to the Plan, and may reflect distinctions based on the reasons for termination.

(c) Exercise of Options. Except as otherwise provided in the Plan or in an Award agreement, an Option may be exercised for all, or from time to time any part, of the Shares for which it is then exercisable. For purposes ofSection 6, the exercise date of an Option shall be the later of the date a notice of exercise is received by Company and, if applicable, the date payment is received by Company pursuant to clause (i), (ii), (iii), (iv) or (v) in the following sentence. The purchase price for the Shares as to which an Option is exercised shall be paid to Company to the extent permitted by law, (i) in cash or its equivalent (e.g., by personal check) at the time the Option is exercised, (ii) in Shares having a Fair Market Value equal to the aggregate Option Price for the Shares being purchased and satisfying such other requirements as may be imposed by the Committee; provided, that such Shares have been held by the Participant for no less than six months (or such other period as established from time to time by the Committee in order to avoid adverse accounting treatment applying generally accepted accounting principles), (iii) partly in cash and partly in Shares (as described in (ii) above), (iv) if there is a public market for the Shares at such time, through the delivery of irrevocable instructions to a broker to sell Shares obtained upon the exercise of the Option and to deliver promptly to Company an amount out of the proceeds of such sale equal to the aggregate Option Price for the Shares being purchased plus any and all federal, state, or local taxes and any other levies of any kind required by law to be deducted or withheld with respect to the exercise of the Option, or (v) to the extent the Committee shall approve in the Award agreement, through “net settlement” in Shares. In the case of a “net settlement” of an Option, Company will not require a cash payment of the Option Price of the Option set forth in the Award agreement, but will reduce the number of Shares issued upon the exercise by the largest number of whole Shares that have a Fair Market Value that does not exceed the aggregate Option Price set forth in the Award agreement. With respect to any remaining balance of the aggregate Option Price. The Option Price per Share shall be determined by the Committee, but shall not be less than 100% of the Fair Market Value of a Share on the date an Option is granted (other than in the case of Options granted in assumption or substitution of previously granted awards, as described in Section 4; provided, that such assumption or substitution is described in U.S. Treasury Regulation Section 1.409A-1(b)(5)(v)(D)).


(b)
Exercisability. Options granted under the Plan shall be exercisable at such time and upon such terms and conditions as may be determined by the Committee, but in no event shall an Option be exercisable more than ten years after the date it is granted. Each Award agreement shall set forth the extent to which the Participant shall have the right to exercise the Option following termination of the Participant’s employment with Company or its Affiliates. Such provisions shall be determined in the sole discretion of the Committee, shall be included in the Award agreements, need not be uniform among all Options issued pursuant to the Plan, and may reflect distinctions based on the reasons for termination.

(c)
Exercise of Options. Except as otherwise provided in the Plan or in an Award agreement, an Option may be exercised for all, or from time to time any part, of the Shares for which it is then exercisable. For purposes of Section 6, the exercise date of an Option shall be the later of the date a notice of exercise is received by Company and, if applicable, the date payment is received by Company pursuant to clause (i), (ii), (iii), (iv) or (v) in the following sentence. The purchase price for the Shares as to which an Option is exercised shall be paid to Company, to the extent permitted by law: (i) in cash or its equivalent (e.g., by personal check) at the time the Option is exercised; (ii) in Shares having a Fair Market Value equal to the aggregate Option Price for the Shares being purchased and satisfying such other requirements as may be imposed by the Committee; provided, that such Shares have been held by the Participant for no less than six months (or such other period as established from time to time by the Committee in order to avoid adverse accounting treatment applying generally accepted accounting principles); (iii) partly in cash and partly in Shares (as described in (ii) above); (iv) if there is a public market for the Shares at such time, through the delivery of irrevocable instructions to a broker to sell Shares obtained upon the exercise of the Option and to deliver promptly to Company an amount out of the proceeds of such sale equal to the aggregate Option Price for the Shares being purchased plus any and all federal, state, or local taxes and any other levies of any kind required by law to be deducted or withheld with respect to the exercise of the Option; or (v) to the extent the Committee shall approve in the Award agreement, through “net settlement” in Shares. In the case of a “net settlement” of an Option, Company will not require a cash payment of the Option Price of the Option set forth in the Award agreement, but will reduce the number of Shares issued upon the exercise by the largest number of whole Shares that have a Fair Market Value that does not exceed the aggregate Option Price set forth in the Award agreement. With respect to any remaining balance of the aggregate Option Price, Company


shall accept a cash payment. No Participant shall have any rights to dividends or other rights of a shareholder with respect to Shares subject to an Option until the Participant has given written notice of exercise of the Option, paid in full for such Shares and, if applicable, has satisfied any other conditions imposed by the Committee pursuant to the Plan.

(d) ISOs. The Committee may grant Options under the Plan that are intended to be ISOs. Such ISOs shall comply with the requirements of Section 422 of the Code (or any successor section thereto). No ISO may be granted to any Participant who at the time of such grant, owns more than 10% of the total combined voting power of all classes of stock of Company or of any Subsidiary, unless (i) the Option Price for such ISO is at least 110% of the Fair Market Value of a Share on the date the ISO is granted and (ii) the date on which such ISO terminates is a date not later than the day preceding the fifth anniversary of the date on which the ISO is granted. Any Participant who disposes of Shares acquired upon the exercise of an ISO either (i) within two years after the date of grant of such ISO or (ii) within one year after the transfer of such Shares to the Participant, shall notify Company of such disposition and of the amount realized upon such disposition. All Options granted under the Plan are intended to be nonqualified stock options, unless the applicable Award agreement expressly states that the Option is intended to be an ISO. If an Option is intended to be an ISO, and if for any reason such Option (or portion thereof) shall not qualify as an ISO, then, to the extent of such non-qualification, such Option (or portion thereof) shall be regarded as a nonqualified stock option granted under the Plan. In no event shall any member of the Committee, Company or any of its Affiliates (or their respective employees, officers or directors) have any liability to any Participant (or any other Person) due to the failure of an Option to qualify for any reason as an ISO.

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(e) Attestation. Wherever in this Plan or any agreement evidencing an Award a Participant is permitted to pay the exercise price of an Option or taxes relating to the exercise of an Option by delivering Shares, the Participant may, subject to procedures satisfactory to the Committee, satisfy such delivery requirement by presenting proof of beneficial ownership of such Shares, in which case Company shall treat the Option as exercised without further payment and/or shall withhold such number of Shares from the Shares acquired by the exercise of the Option, as appropriate.


(d)
ISOs. The Committee may grant Options under the Plan that are intended to be ISOs. Such ISOs shall comply with the requirements of Section 422 of the Code (or any successor section thereto). No ISO may be granted to any Participant who, at the time of such grant, owns more than 10% of the total combined voting power of all classes of stock of Company or of any subsidiary, unless: (i) the Option Price for such ISO is at least 110% of the Fair Market Value of a Share on the date the ISO is granted; and (ii) the date on which such ISO terminates is a date not later than the day preceding the fifth anniversary of the date on which the ISO is granted. Any Participant who disposes of Shares acquired upon the exercise of an ISO either within two years after the date of grant of such ISO or within one year after the transfer of such Shares to the Participant shall notify Company of such disposition and of the amount realized upon such disposition. All Options granted under the Plan are intended to be nonqualified stock options, unless the applicable Award agreement expressly states that the Option is intended to be an ISO. If an Option is intended to be an ISO and if for any reason such Option (or portion thereof) shall not qualify as an ISO then, to the extent of such non-qualification, such Option (or portion thereof) shall be regarded as a nonqualified stock option granted under the Plan. In no event shall any member of the Committee, Company or any of its Affiliates (or their respective employees, officers or directors) have any liability to any Participant (or any other Person) due to the failure of an Option to qualify for any reason as an ISO.

(e)
Attestation. Wherever in the Plan or any agreement evidencing an Award a Participant is permitted to pay the exercise price of an Option or taxes relating to the exercise of an Option by delivering Shares, the Participant may, subject to procedures satisfactory to the Committee, satisfy such delivery requirement by presenting proof of beneficial ownership of such Shares, in which case Company shall treat the Option as exercised without further payment and/or shall withhold such number of Shares from the Shares acquired by the exercise of the Option, as appropriate.

7.Terms and Conditions of Stock Appreciation RightsSARs.

(a) Grants. The Committee may also grant (i) a Stock Appreciation Right independent of an Option or (ii) a Stock Appreciation Right in connection with an Option, or a portion thereof. A Stock Appreciation Right granted pursuant to clause (ii) of the preceding sentence (A) may be granted at the time the related Option is granted or at any time prior to the exercise or cancellation of the related Option, (B) shall cover the same number of Shares covered by an Option (or such lesser number of Shares as the Committee may determine), and (C) shall be subject to the same terms and conditions as such Option except for such additional limitations as are contemplated by thisSection 7 (or such additional limitations as may be included in an Award agreement).

(b) Terms. The exercise price per Share of a Stock Appreciation Right shall be an amount determined by the Committee but in no event shall such amount be less than the Fair Market Value of a Share on the date the Stock Appreciation Right is granted (other than in the case of a Stock Appreciation Right granted in assumption or substitution of previously granted awards, as described inSection 4; provided that such assumption or substitution is described in Treasury Regulation Section 1.409A-1(b)(5)(v)(D)); provided, however, that, in the case of a Stock Appreciation Right granted in conjunction with an Option, or a portion thereof, the exercise price may not be less than the Option Price of the related Option. Each Stock Appreciation Right granted independent of an Option shall entitle a Participant upon exercise to an amount equal to the product of (i) the excess of (A) the Fair Market Value on the exercise date of one Share over (B) the exercise price per Share,multiplied by (ii) the number of Shares covered by the Stock Appreciation Right. Each Stock Appreciation Right granted in conjunction with an Option, or a portion thereof, shall entitle a Participant to surrender to Company the unexercised Option, or any portion thereof, and to receive from Company in exchange therefor an amount equal to the product of (i) the excess of (A) the Fair Market Value on the exercise date of one Share over (B) the greater of the exercise price per Share or the Option Price per Share,multiplied by (ii) the number of Shares covered by the Option, or portion thereof, which is surrendered. The date on which a notice of exercise is received by Company shall be the exercise date. Payment shall be made in cash as set forth in the Award agreement. Stock Appreciation Rights may be exercised from time to time upon actual receipt


(a)
Grants. The Committee may grant: (i) a SAR independent of an Option; or (ii) a SAR in connection with an Option or a portion thereof. A SAR granted pursuant to clause (ii) of the preceding sentence: (A) may be granted at the time the related Option is granted or at any time prior to the exercise or cancellation of the related Option; (B) shall cover the same number of Shares covered by an Option (or such lesser number of Shares as the Committee may determine); and (C) shall be subject to the same terms and conditions as such Option except for such additional limitations as are contemplated by this Section 7 (or such additional limitations as may be included in an Award agreement).

(b)
Terms. The exercise price per Share of a SAR shall be an amount determined by the Committee, but in no event shall such amount be less than the Fair Market Value of a Share on the date the SAR is granted (other than in the case of a SAR granted in assumption or substitution of previously granted awards, as described in Section 4; provided, that such assumption or substitution is described in U.S. Treasury Regulation Section 1.409A-1(b)(5)(v)(D)); provided further, that, in the case of a SAR granted in conjunction with an Option or a portion thereof, the exercise price may not be less than the Option Price of the related Option. Each SAR granted independent of an Option shall entitle a Participant upon exercise to an amount equal to the product of (i) the excess of (A) the Fair Market Value on the exercise date of one Share over (B) the exercise price per Share, multiplied by (ii) the number of Shares covered by the SAR. Each SAR granted in conjunction with an Option or a portion thereof shall entitle a Participant to surrender to Company the unexercised Option, or any portion thereof, and to receive from Company in exchange therefor an amount equal to the product of (i) the excess of (A) the Fair Market Value on the exercise date of one Share over (B) the greater of the exercise price per Share or the Option Price per Share, multiplied by (ii) the number of Shares covered by the Option or portion thereof which is surrendered. The date on which a notice of exercise is received by Company shall be the exercise date. Payment shall be made in cash as set forth in the Award agreement; provided, however, the Award agreement shall not provide for any delay in payment after exercise that would constitute a deferral of compensation with respect to any SAR intended to satisfy the requirements of U.S. Treasury Regulation Section 1.409A-1(b)(5)(i)(B). SARs may be exercised from time to time upon actual receipt


by Company of written notice of exercise stating the number of Shares with respect to which the Stock Appreciation RightSAR is being exercised.

(c)
Limitations

(c) Limitations. The Committee may, impose, in its sole discretion, impose such conditions upon the exercisability or transferability of SARs as it may determine, but in no event shall a SAR be exercisable more than ten years after the date it is granted.


8.Restricted Stock Appreciation Rights as it may determine, but in no event shall a Stock Appreciation Right be exercisable more than ten years after the date it is granted.Awards

8. .


(a)
General. A Restricted Award is an Award of actual Shares (“Restricted Stock”) having a value equal to the Fair Market Value of an identical number of Shares which may, but need not, provide that such Restricted Award may not be sold, assigned, transferred or otherwise disposed of, or pledged or hypothecated as collateral for a loan or as security for the performance of any obligation or for any other purpose, for such period (the “Restricted Period”) as the Committee shall determine. Each Restricted Award granted under the Plan shall be evidenced by an Award agreement. Each Restricted Award so granted shall be subject to the conditions set forth in this Section 8, and to such other conditions not inconsistent with the Plan as may be reflected in the applicable Award agreement.

(b)
Restricted Stock. Each Participant granted Restricted Stock shall execute and deliver to Company an Award agreement with respect to the Restricted Stock setting forth the restrictions and other terms and conditions applicable to such Restricted Stock. If a Participant fails to execute an agreement evidencing an Award of Restricted Stock, the Award shall be null and void. Subject to the restrictions set forth in the Award, the Participant shall have the rights and privileges of a shareholder as to such Restricted Stock, including the right to vote such Restricted Stock and the right to receive dividends; provided, that any cash dividends and stock dividends with respect to the Restricted Stock shall be withheld by Company for the Participant’s account, and interest may be credited on the amount of the cash dividends withheld at a rate and subject to such terms as determined by the Committee. The cash dividends or stock dividends so withheld by the Committee and attributable to any Restricted Stock (and earnings thereon, if applicable) shall be distributed to the Participant, upon the release of restrictions on such Shares, in cash or in Shares having a Fair Market Value equal to the amount of such dividends, at the discretion of the Committee. If such Shares are forfeited, the Participant shall have no right to such dividends.

(c)
Restrictions. Restricted Stock awarded to a Participant shall be subject to the following restrictions until the expiration of the Restricted Period, and to such other terms and conditions as may be set forth in the applicable Award agreement: (i) the Shares shall be subject to the restrictions on transferability set forth in the Award agreement; (ii) the Shares shall be subject to forfeiture to the extent provided in the applicable Award agreement; and (iii) to the extent such Shares are forfeited, all rights of the Participant to such Shares and as a shareholder with respect to such Shares shall terminate without further obligation on the part of Company.

(d)
Restricted Period. With respect to Restricted Awards, the Restricted Period shall commence on the date the Committee adopts a resolution expressly granting the Award and end at the time or times set forth on a schedule established by the Committee in the applicable Award agreement. Upon the expiration of the Restricted Period with respect to any Shares awarded pursuant to a Restricted Award, the restrictions set forth in this Section 8 and the applicable Award agreement shall be of no further force or effect with respect to such Shares, except as set forth in the applicable Award agreement.

(e)
Legends. Each certificate or computerized or manual entry in the records of Company or its transfer agent (i.e., “book entry” position), if any, representing Restricted Stock awarded under the Plan shall bear a legend in such form as Company deems appropriate.

9.Adjustments upon Certain Events. Notwithstanding any other provisionsprovision in the Plan to the contrary, the following provisions shall apply to all Awards granted under the Plan:


(a)
Generally(a) Generally. In the event of any change in the outstanding Shares after the Effective Date by reason of any Share dividend or split, reorganization, recapitalization, merger, consolidation, spin-off, combination or exchange of Shares or other corporate exchange or change in capital structure, any distribution to shareholders of Shares (other than regular cash dividends) or any similar event, the event of any change in the outstanding Shares after the Effective Date by reason of any Share dividend or split, reorganization, recapitalization, merger, consolidation, spin-off, combination or exchange of Shares or other corporate exchange or change in capital structure, any distribution to shareholders of Shares (other than regular cash dividends) or any similar event, the


Committee, without liability to any personPerson, shall make such substitution or adjustment, if any, as it deems to be equitable (subject toSection 1520), as to the number or kind of Shares or other securities issued or reserved for issuance as set forth inSection 3 or pursuant to outstanding Awards; provided, that the Committee shall determine in its sole discretion the manner in which such substitution or adjustment shall be made.

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(b) Change of Control. In the event of a Change of Control (or similar corporate transaction, whether or not including any Permitted Holder) after the Effective Date, the Committee may (subject toSection 15), but shall not be obligated to, (i)


(b)
Change of Control.
i.
In the event of a Change of Control (or similar corporate transaction, whether or not including any Permitted Holder) after the Effective Date, the Committee may (subject to Section 20), but shall not be obligated to: (A) accelerate, vest or cause the restrictions to lapse with respect to all or any portion of an Award; (B) cancel such Awards for fair value (as determined in the sole discretion of the Committee) which, in the case of Options and SARs, may equal the excess, if any, of value of the consideration to be paid in the Change of Control transaction to holders of the same number of Shares subject to such Options or SARs (or, if no consideration is paid in any such transaction, the Fair Market Value of the Shares subject to such Options or SARs) over the aggregate exercise price of such Options or SARs; (C) provide for the issuance of substitute Awards that will substantially preserve the otherwise applicable terms of any affected Awards previously granted hereunder, as determined by the Committee in its sole discretion; or (D) provide that for a period of at least ten days prior to the Change of Control, such Options shall be exercisable as to all Shares subject thereto and that upon the occurrence of the Change of Control, such Options shall terminate and be of no further force or effect. For the avoidance of doubt, pursuant to (B) above, the Committee may cancel Options and SARs for no consideration if the aggregate Fair Market Value of the Shares subject to such Options or SARs is less than or equal to the aggregate Option Price of such Options or exercise price of such SARs.

ii.
The Committee may (subject to Section 20), in its discretion at or after grant and without the consent of any Participant, determine that, upon the occurrence of a Change of Control, each or any Award or a portion thereof outstanding immediately prior to the Change of Control and not previously exercised or settled shall be canceled in exchange for a payment with respect to each vested Share subject to such Award in: (A) cash; (B) stock of Company or of a corporation or other business entity a party to the Change of Control; or (C) other property which, in any such case, shall be in an amount having a Fair Market Value equal to the Fair Market Value of the consideration to be paid per Share in the Change of Control, reduced by the exercise or purchase price per Share, if any, under such Award (which payment may, for the avoidance of doubt, be zero if the per Share exercise or purchase price of an Award is greater than the per Share consideration in connection with the Change of Control). If such determination is made by the Committee, the amount of any such payment (reduced by applicable withholding taxes, if any) shall be paid to Participants with respect to the vested portions of their canceled Awards as soon as practicable following the date of the Change of Control and may be paid with respect to the unvested portions of their canceled Awards in accordance with the vesting schedules applicable to such Awards.

(c)
Repricing. Notwithstanding anything to the contrary herein, without the approval of the shareholders of Company, the Committee shall not provide for any of the following: (i) the cancellation of outstanding Options or SARs and the grant in substitution therefor of new Options or SARs having a lower exercise price; (ii) the amendment of outstanding Options or SARs to reduce the exercise price thereof; or (iii) the purchase of outstanding unexercised Options or SARs by Company, whether by cash payment or otherwise. This subsection shall not be construed to apply to issuing or assuming a stock option in a transaction to which section 424(a) applies, within the meaning of Section 424 of the Code.

10.Minimum Vesting. With respect to all or any portionAwards under the Plan, the vesting period must be a minimum of an Award, (ii) cancel such Awards for fair value (as determined inone year from the sole discretiondate of the Committee) which, in the case of Options and Stock Appreciation Rights, may equal the excess, if any, of value of the consideration to be paid in the Change of Control transaction to holders of the same number of Shares subject to such Options or Stock Appreciation Rights (or, if no consideration is paid in any such transaction, the Fair Market Value of the Shares subject to such Options or Stock Appreciation Rights) over the aggregate exercise price of such Options or Stock Appreciation Rights, (iii) provide for the issuance of substitute Awards that will substantially preserve the otherwise applicable terms of any affected Awards previously granted hereunder as determined by the Committee in its sole discretion, or (iv) provide that for a period of at least 10 days prior to the Change of Control, such Options shall be exercisable as to all Shares subject thereto and that upon the occurrence of the Change of Control, such Options shall terminate and be of no further force or effect. For the avoidance of doubt, pursuant to (ii) above, the Committee may cancel Options and Stock Appreciation Rights for no consideration if the aggregate Fair Market Value of the Shares subject to such Options or Stock Appreciation Rights is less than or equal to the aggregate Option Price of such Options or exercise price of such Stock Appreciation Rights.grant.


9. 11.No Right to Employment or Awards. The granting of an Award under the Plan shall impose no obligation on Company or any of its Affiliates to continue the Employmentemployment of a Participant and shall not lessen or affect Company’s or any of its Affiliates’ right to terminate the Employmentemployment of such Participant. No Participant or other Person shall have any claim to be granted any Award, and there is no obligation for uniformity of treatment of Participants, or holders or beneficiaries of Awards. The


terms and conditions of Awards and the Committee’s determinations and interpretations with respect thereto need not be the same with respect to each Participant (whether or not such Participants are similarly situated).

12.

10. Successors and Assigns. The Plan shall be binding on all successors and assigns of Company and the Participants, including, without limitation, the estate of each such Participant, and the executor, administrator or trustee of such estate, and any receiver or trustee in bankruptcy or any other representative of the Participant’s creditors.


11. Nontransferability13.Non-Transferability of Awards. Unless otherwise determined by the Committee, an Award shall not be transferable or assignable by the Participant otherwise than by will or by the laws of descent and distribution. An Award exercisable after the death of a Participant may be exercised by the legatees, personal representatives or distributees of the Participant.


12. Amendments14.Amendment or Termination. The Committee may amend, alter or discontinue the Plan, but no amendment, alteration or discontinuation shall be made which, (a) without the approval of the shareholders of Company, would (except as is provided inSection 8) increase the total number of Shares reserved for the purposes of the Plan or change the maximum number of Shares for which Awards may be granted to any Participant, or (b)
(a)
The Committee may amend, alter, suspend, discontinue or terminate the Plan, but no amendment, alteration, suspension, discontinuation or termination shall be made which: (i) without the approval of the shareholders of Company, would (except as is provided in Section 9) increase the total number of Shares reserved for the purposes of the Plan or change the maximum number of Shares for which Awards may be granted to any Participant; or (ii) without the consent of a Participant, would materially adversely impair any of the rights under any Award theretofore granted to such Participant under the Plan; provided, however, that the Committee may amend the Plan in such manner as it deems necessary to permit the granting of Awards meeting the requirements of the Code or other applicable laws (including, without limitation, to avoid adverse tax consequences to Company or any Participant).

(b)To the extent applicable and notwithstanding anything herein to the contrary, the Plan and Awards issued hereunder shall be interpreted in accordance with Section 409A of the Code and the U.S. Treasury Regulations and other interpretative guidance issued thereunder, including, without limitation, any such regulations or other guidance that may be issued after the Effective Date. Notwithstanding any provision herein to the contrary, If the Committee determines that any amounts payable hereunder will be taxable to a Participant under Section 409A of the Code, the U.S. Treasury Regulations or other interpretative guidance issued thereunder prior to payment to such Participant of such amount, Company may: (i) adopt such amendments to the Plan and Awards and appropriate policies and procedures, including amendments and policies with retroactive effect, that the Committee determines necessary or appropriate to preserve the intended tax treatment of the benefits provided by the Plan and Awards hereunder; and/or (ii) take such other actions as the Committee determines necessary or appropriate to avoid the imposition of an additional tax under Section 409A of the Code.

(c)
The Committee is hereby authorized to make equitable and proportionate adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events (and shall make such adjustments for the events described in Section 9) affecting Company, any Affiliate, or the financial statements of Company or any Affiliate, or changes in applicable laws, regulations or accounting principles.

(d)In order to facilitate the making of any Award or combination of Awards under the Plan, the Committee may provide for such special terms for Awards to Participants who are foreign nationals or who are Employed by Company or any Affiliate outside the United States of America as the Committee may consider necessary or appropriate to accommodate differences in local law, tax policy or custom. Moreover, the Committee may approve such supplements to or amendments, restatements or alternative versions of the Plan as it may consider necessary or appropriate for such purposes, without thereby affecting the terms of the Plan as in effect for any other purpose, and the corporate secretary or other appropriate officer of Company may certify any such document as having been approved and adopted in the same manner as the Plan. No such special terms, supplements, amendments or restatements shall include any provisions that are inconsistent with the terms of the Plan as then in effect unless the Plan could have been amended to eliminate such inconsistency without further approval by the shareholders of Company.

15.Tax Withholding. A Participant may be required to pay to Company or any Participant).Affiliate, and Company or such Affiliate shall have the right and is hereby authorized to withhold from any Award, any payment due or transfer made under any Award or under the Plan, or any compensation or other amount owing to a Participant, the amount (in cash, Shares, other securities, other Awards or other property) of any applicable withholding or other tax-related obligations with respect to an Award, its exercise or any other transaction involving an Award, or any payment or transfer under an Award or under the Plan, and to take such other



action as may be necessary in the opinion of Company to satisfy all obligations for the payment of such taxes. Without limiting the generality of the foregoing, the Committee may, in its discretion, permit a Participant to satisfy or arrange to satisfy, in whole or in part, the extent applicable, notwithstanding anything hereintax obligations incident to the contrary, this Plan and Awards issued hereunder shall be interpreted in accordance with Section 409A of the Code and Department of Treasury regulations and other interpretative guidance issued thereunder, including without limitation any such regulationsan Award by: (a) electing to have Company withhold Shares or other guidance that may be issued after the Effective Date. Notwithstanding any provision herein to the contrary, in the event the Committee determines that any amounts payable hereunder will be taxable to a Participant under Section 409A of the Code and related Department of Treasury guidance prior to paymentproperty otherwise deliverable to such Participant of such amount, Company may (i) adopt such

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amendmentspursuant to the PlanAward (provided, however, that the amount of any Shares so withheld shall not exceed the amount necessary to satisfy required federal, state, local and/or foreign withholding obligations using the maximum statutory withholding rates for such federal, state, local and/or foreign tax purposes, including payroll taxes, as are applicable to the Participant); and/or (b) tendering to Company or an Affiliate Shares owned by such Participant (or by such Participant and Awardshis or her spouse jointly) and appropriate policiespurchased or held for the requisite period of time, in each case as may be required to avoid Company’s or an Affiliate’s incurring an adverse accounting charge and procedures, including amendmentsbased on the Fair Market Value of the Shares on the payment date as determined by the Committee. All such elections shall be irrevocable, made in writing, signed by the Participant, and policies with retroactive effect,subject to any restrictions or limitations that the Committee, determines necessary or appropriate to preserve the intended tax treatment of the benefits provided by the Plan and Awards hereunder, and/or (ii) take such other actions as the Committee determines necessary or appropriate to avoid the imposition of an additional tax under Section 409A of the Code.

in its sole discretion, deems appropriate.


13. 16.Choice of Law. The Plan shall be governed by and construed in accordance with the laws of the State of Georgia without regard to conflicts of laws.


14. Effectiveness of Plan17.Severability. The Plan shall be effective as of the Effective Date, subject to the approval of Company’s shareholders, as provided inSection2 in the definition of “Effective Date.”

15. Section 409A. Notwithstanding other provisionsIf any provision of the Plan or any Award is, becomes, or is deemed to be invalid, illegal or unenforceable in any jurisdiction or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to the applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person or Award, and in either case the remainder of the Plan and any such Award shall remain in full force and effect.


18.Requirements for Issuance. Company will not be obligated to issue, deliver or transfer any Shares pursuant to the Plan or to remove from Shares previously delivered pursuant to the Plan any restrictions or conditions, including conditions that constitute a substantial risk of forfeiture, until: (a) all conditions of the applicable Award agreement have been met or removed to the satisfaction of the Committee; (b) all other legal matters, including receipt of consent or approval of any regulatory body and compliance with any state or federal securities or other law, in connection with the issuance and delivery of such Shares have been satisfied; (c) the Participant or holder or beneficiary of the Shares or Award has executed and delivered to Company such representations or agreements thereunder,as the Committee may consider appropriate to satisfy the requirements of any state or federal securities or other law; and (d) such issuance would not entitle Company to recover amounts under Section 16(b) of the Act from such Participant or holder or beneficiary of the Shares or Award. The inability of Company to obtain authority from any regulatory body having jurisdiction, if such authority is deemed by Company’s counsel to be necessary to the lawful issuance of any Shares hereunder, shall relieve Company of any liability with respect to the failure to issue the Shares as to which such requisite authority has not been obtained.

19.Clawback. Any Award granted pursuant to the Plan shall be subject to mandatory repayment by the Participant to Company: (a) to the extent set forth in any Award Agreement; and (b) to the extent that such Participant is, or in the future becomes, subject to: (i) any “clawback” or recoupment policy adopted by Company or any Affiliate, including any policy intending to comply with the requirements of any applicable laws, rules or regulations, including pursuant to final rules adopted by the Securities and Exchange Commission pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, or otherwise; or (ii) any applicable law which imposes mandatory recoupment, including the Sarbanes-Oxley Act of 2002, under circumstances set forth in such law.

20.Section 409A. Notwithstanding any other provision of the Plan or any Award agreement hereunder, no Award shall be granted, deferred, accelerated, extended, paid out or modified under thisthe Plan in a manner that would result in the imposition of an additional tax upon a Participant under Section 409A of the Code upon a Participant. In the event thatCode. If it is reasonably determined by the Committee that, as a result of Section 409A of the Code, any payment or delivery of Shares inwith respect ofto any Award under the Plan may not be made at the time contemplated by the terms of the Plan or the relevant Award agreement as the case may be, without causing the Participant holding such Award to be subject to taxation under Section 409A of the Code, Company will make such payment or delivery of Shares on the first day that would not result in the Participant incurring any tax liability under Section 409A of the Code. In the case of a Participant who is a “specified employee” (within the meaning of Section 409A(a)(2)(B)(i) of the Code), any payment and/or delivery of Shares inwith respect ofto any Award subject to Section 409A of the Code that is linked to the date of the Participant’s separationSeparation from serviceService shall not be made prior to the date which is six (6) months after the date of such Participant’s separationSeparation from serviceService from Company and its Affiliates, determined in accordance with Section 409A of the Code and the regulations promulgated thereunder. Company shall use commercially reasonable efforts to implement the provisions of thisSection 1520 in good faith; provided, that neither Company, the Committee nor any of Company’s employees, directors or representatives shall have any liability to Participants with respect to thisSection 1520.

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FIRST AMENDMENT TO THE

AMERICAN SOFTWARE, INC.

2011 EQUITY COMPENSATION PLAN

1. Section 3







[Remainder of the Plan is removed and replaced with the following:

“Subject to Section 8, the total number of Shares which may be issued under the Plan is 3,700,000 and the maximum number of Stock Appreciation Rights that may be granted is 500,000. The Shares may consist, in whole or in part, of unissued Shares or treasury Shares. The issuance of Shares or the payment of cash upon the exercise of an Award or in consideration of the cancellation or termination of an Award shall reduce the total number of Shares available under the Plan, as applicable. Shares subject to Awards that terminate or lapse without the payment of consideration may be granted again under the Plan.”

2. This Amendment was approved by the Board of Directors on May 15, 2013, by the shareholders of the Company on August 19, 2013.

3. Except as amended herein, the Plan shall remain in full force and effect.

4. All capitalized terms used and not otherwise defined in this Amendment have the same meanings ascribed to them in the Plan.

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SECOND AMENDMENT TO THE

AMERICAN SOFTWARE, INC.

2011 EQUITY COMPENSATION PLAN

1. Section 3 of the Plan is removed and replaced with the following:

“Subject to Section 8, the total number of Shares which may be issued under the Plan is 5,000,000 and the maximum number of Stock Appreciation Rights that may be granted is 500,000. The Shares may consist, in whole or in part, of unissued Shares or treasury Shares. The issuance of Shares or the payment of cash upon the exercise of an Award or in consideration of the cancellation or termination of an Award shall reduce the total number of Shares available under the Plan, as applicable. Shares subject to Awards that terminate or lapse without the payment of consideration may be granted again under the Plan.”

2. This Amendment was approved by the Board of Directors on May 13, 2015, by the shareholders of the Company on August 17, 2015.

3. Except as amended herein, the Plan shall remain in full force and effect.

4. All capitalized terms used and not otherwise defined in this Amendment have the same meanings ascribed to them in the Plan.

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THIRD AMENDMENT TO THE

AMERICAN SOFTWARE, INC.

2011 EQUITY COMPENSATION PLAN

1. Section 4 of the Plan is amended by adding the following clause to the end of the fourth sentence:

“, provided, however, that the Committee may not reduce the Option Price per Share of any Award previously granted without the approval of the Shareholders pf the Company.”

2. This Amendment was approved by the Board of Directors on May 13, 2015, by the shareholders of the Company on August 17, 2015.

3. Except as amended herein, the Plan shall remain in full force and effect.

4. All capitalized terms used and not otherwise defined in this Amendment have the same meanings ascribed to them in the Plan.

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FOURTH AMENDMENT TO THE

AMERICAN SOFTWARE, INC.

2011 EQUITY COMPENSATION PLAN

WHEREAS, American Software, Inc. (the “Company”) has previously adopted the American Software, Inc. 2011 Equity Compensation Plan, as amended (the “Plan”), reserving the right therein to amend the Plan; and

WHEREAS, the Board of Directors of the Company has deemed it advisable and in the best interest of the Company that the Plan be amended to increase the number of shares of Common Stock of the Company which are authorized to be issued under the Plan;

NOW, THEREFORE, subject to the approval of the shareholders of the Company, the Plan is hereby amended as follows:

1. Section 3 of the Plan is removed and replaced with the following:

“Subject to Section 8, the total number of Shares which may be issued under the Plan is 6,000,000 and the maximum number of Stock Appreciation Rights that may be granted is 500,000. The Shares may consist, in whole or in part, of unissued Shares or treasury Shares. The issuance of Shares or the payment of cash upon the exercise of an Award or in consideration of the cancellation or termination of an Award shall reduce the total number of Shares available under the Plan, as applicable. Shares subject to Awards that terminate or lapse without the payment of consideration may be granted again under the Plan.”

2. This Amendment is subject to approval by the shareholders of the Company.

3. Except as amended herein, the Plan shall remain in full force and effect.

4. All capitalized terms used and not otherwise defined in this Amendment have the same meanings ascribed to them in the Plan.

IN WITNESS WHEREOF, the undersigned has executed this Amendment, effective as of May 11, 2016.

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AMERICAN SOFTWARE, INC.

By:

/s/ James R. McGuone

James R. McGuone, Secretary


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VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.

AMERICAN SOFTWARE, INC.

ATTN: PATRICIA MCMANUS

ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS

470 E. PACS FERRY ROAD

ATLANTA, GA 30305

If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

                                  
  The Board of Directors recommends you vote FOR the following:                
   
  1. Election of Directors                         
  
   Nominees For Against Abstain           
  

 

1A

 W. Dennis Hogue  ¨ ¨ ¨     For Against Abstain 
               

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1B

 

 

James B. Miller

 

 

¨

 

 

¨

 

 

¨

  

 

4

 

 

Amend the 2011 Equity Compensation Plan to increase the number of Class A Common Shares that may be subject to options under the Plan from 5,000,000 to 6,000,000 shares.

 

 

¨

 

 

¨

 

 

¨

 
  

 

The Board of Directors recommends you vote FOR proposals 2 through 5.

 

 

For

 

 

Against

 

 

Abstain

        
             
             
                  
      2 Ratification of the appointment by the Board of Directors, upon the recommendation of the Audit Committee, of KPMG LLP to serve as the independent registered public accounting audit firm for the Company for the fiscal year ending April 30, 2017. ¨ ¨ ¨  5 Such other business as may properly come before the meeting or any adjournment thereof. ¨ ¨ ¨  
  

 

3

 

 

Render a non-binding advisory vote approving the compensation of the Executive Officers of the Company.

 

 

¨

 

 

¨

 

 

¨

           
  

 

For address change/comments, mark here.

   ¨           
  (see reverse for instructions) Yes No            
  

Please indicate if you plan to attend this meeting

 

 

¨

 

 

¨

            
  

 

 

Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.

        
                  
                        
                        
   Signature [PLEASE SIGN WITHIN BOX]       Date                 Signature (Joint Owners)                 Date                    

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:The Combined Document and Notice & Proxy Statement are available atwww.proxyvote.com

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AMERICAN SOFTWARE, INC.

Annual Meeting of Shareholders

August 15, 2016 3:00 PM

This proxy is solicited by the Board of Directors

The shareholder(s) hereby appoint(s) James C. Edenfield and J. Michael Edenfield, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common Stock of AMERICAN SOFTWARE, INC. that the shareholder(s) is/are entitled to vote at the Annual Meeting of shareholder(s) to be held at 03:00 PM, EST on 8/15/2016, at the American Software, Inc., 470 E Paces Ferry Road Atlanta, GA 30305, and any adjournment or postponement thereof.

This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors’ recommendations. 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.

  Address change/comments:

(If you noted any Address Changes and/or Comments above, please mark corresponding box on the reverse side.)

Continued and to be signed on reverse side


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