EXHIBIT 99.2
AMERICAN SOFTWARE, INC.
DIRECTOR AND OFFICER STOCK OPTION PLAN
(Amended and Restated Effective September 25, 1996)
1. Purpose. This Plan shall be known as the "Director and Officer Stock
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Option Plan" (hereinafter referred to as "the Plan" or "this Plan"). The purpose
of the Plan is to provide directors and officers of American Software, Inc. (the
"Company") and its subsidiaries with additional incentive to increase their
efforts on the Company's behalf and to remain in the employ of the Company or
any of its subsidiaries or to remain as directors of the Company by granting to
such persons from time to time options to purchase Class A Common Shares of the
Company.
The options granted under this Plan may, but need not, constitute
"incentive stock options" (referred to herein as "Incentive" options) within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"). An option granted which does not constitute an Incentive option shall
for purposes of the Plan constitute a "Non-Qualified" option. The terms
"subsidiary" or "subsidiaries" mean and include any corporation or other entity
at least a majority of the outstanding voting shares of which is, at the time,
directly or indirectly owned by the Company or by one or more subsidiaries.
2. Shares. The shares to be optioned under the Plan shall be the
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Company's Class A Common Shares, $0.10 par value (the "Shares"), which Shares
may either be authorized but unissued Shares or treasury Shares. The aggregate
number of Shares for which options may be granted under the Plan shall (subject
to the provisions of paragraph 8) be 900,000 Shares, plus the total number of
Shares as to which options granted under this Plan terminate (including options
terminated upon the granting of replacement options or otherwise) or expire
without being wholly exercised. New options may be granted under this Plan
covering the number of Shares to which such termination or expiration relates.
3. Administration. The Plan shall be administered by the Director
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and Officer Stock Option Plan Committee (the "Committee") of the Company's Board
of Directors (the "Board"). The Committee shall consist of such members (not
less than two) of the Board as shall be appointed from time to time by the Board
and who shall be "disinterested persons" as defined in Rule 16b-3 under the
Securities Exchange Act of 1934, as amended. No member of the Committee while
serving as such shall be eligible for participation in the Plan and no member of
the Board may serve on the Committee if he or she received a grant of an option
under this Plan or any other stock option plan of the Company within twelve
months prior to serving on the Committee or while serving on the Committee,
except for options granted pursuant to paragraph 5(b). Subject to the provisions
of the Plan, the Committee shall have exclusive power to select the persons to
whom options will be granted under the Plan, to determine the number of options
to be awarded to each employee selected and to determine the time or times when
options will be awarded. The Committee shall have full power and authority to
administer and interpret the Plan and to adopt such rules, regulations,
agreements and instruments for implementing the Plan
and for the conduct of its business as the Committee deems necessary or
advisable. The Committee's interpretation of the Plan, and all determinations
made by the Committee pursuant to the powers vested in it hereunder, shall be
conclusive and binding on all persons having any interest in the Plan or in any
options granted hereunder.
4. Eligibility. Participants in the Plan shall be selected by the
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Committee from among the directors and officers of the Company and its
subsidiaries.
5. Grant of Options. (a) The Committee may from time to time grant
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options to purchase Shares to such of the directors and officers of the Company
and its subsidiaries as may be selected by the Committee and for such number or
numbers of shares as may be determined by the Committee. Each grant of an option
pursuant to this Plan shall be granted within ten years from the date this Plan
is adopted by the Board. Each grant of an option pursuant to this Plan shall be
made upon such terms and conditions as may be determined by the Committee at the
time of grant, subject to the terms, conditions and limitations set forth in
this Plan.
An individual optionee may be granted (i) an Incentive option, (ii) a
Non-Qualified option, or (iii) an Incentive option and a Non-Qualified option at
the same time.
(b) (i) Commencing October 31, 1994 and continuing on each April 30
and October 31 thereafter during the term of this Plan, each member of the Board
of Directors then in office who is not a full-time employee of the Company,
including members of the Committee, shall receive on each such October 31 and
April 30 an automatic grant of Non-Qualified options to purchase 5,000 Shares,
reduced pro rata to the extent that the director shall have served as a director
of the Company for less than six full months prior to such date. This 5000-Share
amount shall be adjusted automatically to reflect any stock dividends, stock
splits or similar events occurring after August 23, 1994.
(ii) The option price for each such grant shall be equal to the
closing market price of the Shares on the date of grant (or the next preceding
business day if the date of grant is not a business day).
(iii) The options shall not be exercisable until one year after
the date of grant, at which time the options shall be exercisable in full and
shall remain exercisable until ten years after the date of grant, regardless of
whether the option holder remains a director of the Company. In the event of the
death or disability of the option holder, the option may be exercised by his or
her heirs or personal representatives for the remaining term of the option.
(iv) The options shall be represented by option grants in
substantially the same forms as are used from time to time for other Non-
Qualified options granted under this Plan, subject only to the terms set forth
above.
6. Terms, Conditions and Form of Options. Each option shall be evidenced
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by a written agreement ("option agreement") in such form as the Board shall from
time to time
approve, which agreement shall comply with and be subject to the following terms
and conditions:
6.1 Option Effective Date. Each option agreement shall specify an
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effective date, which shall be the date on which the option is granted by the
Committee.
6.2 Option Term. (a) An option shall in no event be exercisable
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after the expiration of ten years from the effective date of the option. In
addition, and in limitation of the above, the option period of any option, other
than an option granted pursuant to paragraph 5(b), shall terminate three months
after the termination of the option holder's employment (or service as a
director) with the Company or subsidiary for any reason except the Retirement
(as hereinafter defined), death or disability of the option holder (the
"optionee"). An option granted pursuant to paragraph 5(b) shall terminate in
accordance with paragraph 5(b)(iii).
(b) (i) The term "Retirement" means the voluntary termination of
employment by an option holder whose age and/or years of employment qualify that
employee for normal retirement under the policies of the Company in effect from
time to time.
(ii) For any option granted on or before August 23, 1994, the
Committee may in its discretion amend that option, on an individual basis, to
permit the exercise of such option beyond the date of Retirement, through the
expiration date of the option.
(iii) The Committee may in its discretion provide in standard
option grant agreements that any option granted after August 23, 1994 may be
exercised after the date of Retirement, through the expiration date of the
option.
(iv) Notwithstanding the foregoing, no option may be exercised
after the expiration of ten years from the effective date of the option, nor may
an option be exercised beyond the amount which is vested as of the date of
Retirement.
(c) In the event of termination of employment (or service as a
director) due to the death or disability of an optionee, the option period of
the option held by him upon the date of such termination shall terminate upon
the earlier of (i) twelve months after the date of the optionee's death or
termination due to disability, as the case may be, or (ii) the date of
termination of such option as determined by his option agreement. In the event
of termination of an optionee's employment due to the death of the optionee,
such optionee's options may be exercised during the 12-month period by his
estate or by the person who acquired the right to exercise such options through
bequest or inheritance.
As used herein, "disability" shall mean the inability of the employee
to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or has lasted or can be expected to last for a continuous period of at
least twelve months.
No transfer of an option by an optionee by will or by the laws of
descent and distribution shall be effective unless the Company shall have been
furnished with written notice thereof and a copy of the will and/or such other
evidence as the Committee may deem necessary to establish the validity of the
transfer and the acceptance by the successor-in-interest or successors-in-
interest of the terms and conditions of the option.
(d) If an optionee is placed on leave of absence status by the Company
or any subsidiary, any then exercisable option shall be suspended at such time.
If an optionee is placed on lay-off status by the Company or any subsidiary, any
then exercisable option may be exercised during the following period of three
months and shall be suspended thereafter. In either case, the unexercised
portion of the option shall either (i) terminate three months after the
optionee's termination of employment with the Company and its subsidiaries or
(ii) be reinstated upon such optionee being re-employed from leave of absence or
lay-off status by the Company or any subsidiary.
6.3 Exercise Price. The exercise price of options shall be the price
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per share fixed by the Committee (the "Exercise Price"); provided, however, that
the Exercise Price per Share for Incentive options shall not be less than the
fair market value of a Share on the date the option is granted. In the event
that the Shares are then listed on an established stock exchange, such fair
market value shall be deemed to be the closing price of the Shares on such stock
exchange on the day the option is granted or, if no sale of the Shares shall
have been made on any stock exchange on that day, the fair market value shall be
determined as such price for the next preceding day upon which a sale shall have
occurred. In the event that the Shares are not listed upon an established
exchange but are quoted on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ"), the fair market value shall be deemed to
be the closing price for the Shares as quoted on NASDAQ on the day the option is
granted. If no sale of the Shares shall have been made on NASDAQ on that day,
the fair market value shall be determined by such prices on the next preceding
day on which a sale shall have occurred. In the event that the Shares are
neither listed on an established stock exchange nor quoted on NASDAQ, the fair
market value on the day the option is granted shall be determined by the
Committee.
6.4 Ten Percent Shareholder. Notwithstanding the above, in regard to
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a director or officer who possesses more than 10% of the total combined voting
power of all classes of stock of the Company or of its subsidiaries and who
receives an Incentive option, the exercise price hereunder shall not be less
than 110% of the fair market value of Common Stock on the date the Incentive
option is granted and the option by its terms shall not be exercisable after the
expiration of 5 years from the date such option is granted.
6.5 Nontransferability of Options. An option shall not be
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transferable by the optionee otherwise than by will, by the laws of descent and
distribution or by a qualified domestic relations order, and shall be exercised
during the lifetime of the optionee only by the optionee or by his guardian or
legal representative. No option or interest therein may be
transferred, assigned, pledged or hypothecated by the optionee during his
lifetime, whether by operation of law or otherwise, or be made subject to
execution, attachment or similar process.
7. Exercise of Options. An option granted pursuant to this Plan shall be
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exercisable at any time within the option period, subject to the terms and
conditions of such option. Exercise of any option shall be made by the delivery,
during the period that such option is exercisable, to the Company in person or
by mail of (i) written notice from the optionee stating that he is exercising
such option and (ii) the payment of the aggregate purchase price of all Shares
as to which such option is then exercised. Such aggregate purchase price shall
be paid to the Company at the time of exercise. Payment shall normally be made
by cash or check; provided, however, that in its sole discretion the Committee
may approve of payment in whole or in part by the giving of a note with adequate
stated interest or by the surrender of common stock. Upon the exercise of an
option in compliance with the provisions of this paragraph, and upon the receipt
by the Company of the payment for said Shares, the Company shall (i) deliver or
cause to be delivered to the optionee so exercising his option a certificate or
certificates for the number of Shares with respect to which the option is so
exercised and payment is so made, and (ii) register or cause such Shares to be
registered in the name of the exercising optionee.
8. Changes in Capital Structure. Appropriate adjustments shall be made
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to the price of the Shares and the number of Shares subject to outstanding
options and the number of Shares issuable under this Plan if there are any
changes in the Shares by reason of stock dividends, stock splits, reverse stock
splits, mergers, recapitalizations or consolidations.
9. Controlling Terms. Option agreements pertaining to options granted
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pursuant hereto may include conditions that are more (but not less) restrictive
to the optionee than the conditions contained herein and, in such event, the
more restrictive conditions shall apply.
10. Termination of the Plan. This Plan shall terminate upon the close of
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business of the day preceding the tenth anniversary of the approval of this Plan
by the Board unless it shall have been sooner terminated by the Board or by
reason of there having been granted and fully exercised stock options covering
all of the Shares subject to this Plan. Upon such termination, no further
options may be granted hereunder. If, after termination of this Plan upon the
tenth anniversary hereof or by Board action as provided above, there are
outstanding options which have not been fully exercised, such options shall
remain in effect in accordance with their terms and shall remain subject to the
terms of this Plan.
11. Amendment or Discontinuance of Plan. The Board may amend, suspend or
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discontinue this Plan at any time without restriction; provided, however, that
the Board may not alter, amend, discontinue, revoke or otherwise impair any
outstanding options which have been granted pursuant to this Plan and which
remain unexercised, except in the event that there is secured the written
consent of the holder of the outstanding option proposed to be so altered or
amended. Nothing contained in this paragraph, however, shall in any way
condition or limit the termination of an option, as hereinabove provided, where
reference is made to termination of employment of an optionee, or as provided in
an option agreement.
12. Limitation of Rights.
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12.1 No Implied Employment Agreement. Neither this Plan nor the
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granting of an option nor any other action taken pursuant to this Plan, shall
constitute or be evidence of any agreement or understanding, express or implied,
that the Company or any subsidiary will retain any person as an employee for any
period of time.
12.2 No Rights as Shareholder. An optionee shall have no rights as
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a shareholder with respect to Shares covered by his option until the date of
exercise of the option, and, except as provided in paragraph 8, no adjustment
will be made for dividends or other rights for which the record date is before
the date of such exercise.
13. Liquidation of the Company. In the event of the complete liquidation
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or dissolution of the Company, other than as an incident to a merger,
reorganization or other adjustment referred to in paragraph 8, any options
granted pursuant to this Plan and remaining unexercised shall be deemed
cancelled without regard to or limitation by any other provisions of this Plan.
14. Intention of Construction. To the extent options granted hereunder
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are intended to constitute Incentive options and comply with Section 422 of the
Code and all provisions of this Plan, all such options and all option agreements
relating thereto shall be construed in such a manner as to effectuate that
intent.
15. Shareholder Approval; Effective Date. This Plan shall become
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effective on the date it is approved by the shareholders of the Company (the
"Effective Date").