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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [_]

Check the appropriate box:

[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))

[X] Definitive Proxy Statement

[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12

American Software, Inc.
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(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required

[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

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(2) Aggregate number of securities to which transaction applies:

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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):

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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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[_] Fee paid previously with preliminary materials.

[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

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(4) Date Filed:

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Notes:

AMERICAN SOFTWARE, INC.
470 East Paces Ferry Road
Atlanta, Georgia 30305

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TO THE SHAREHOLDERS:

NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of AMERICAN
SOFTWARE, INC. will be held at the Swissotel, 3391 Peachtree Road, N.E.,
Atlanta, Georgia on Thursday, August 26, 1999 at 4:00 p.m. for the following
purposes:

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

2. To consider and vote upon an amendment to the Company's 1991 Employee
Stock Option Plan to increase the base number of Class A Common Shares
that may be subject to options granted under that Plan from 3,600,000
Shares to 4,600,000 Shares.

3. To consider and vote upon an amendment to the Company's Directors and
Officers Stock Option Plan to increase the number of Class A Common
Shares that may be subject to options granted under that Plan from
1,200,000 Shares to 1,600,000 Shares.

4. To consider and transact such other business as may properly come before
the meeting.

Only shareholders of the Company of record at the close of business on July
12, 1999 will be entitled to vote at the meeting.

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

BY ORDER OF THE BOARD OF DIRECTORS

James R. McGuone,
Secretary

August 3, 1999

IMPORTANT

We encourage you to attend the shareholders' meeting. In order that there
may be a proper representation at the meeting, each shareholder is requested
to send in his or her proxy in the enclosed envelope, which requires no
postage if mailed in the United States. Attention by shareholders to this
request will reduce the Company's expense in soliciting proxies.

PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
OF AMERICAN SOFTWARE, INC.

----------------

TO BE HELD AT THE
SWISSOTEL
3391 PEACHTREE ROAD, N.E.
ATLANTA, GEORGIA
ON AUGUST 26, 1999

This Proxy Statement is furnished to Class A shareholders by the Board of
Directors of AMERICAN SOFTWARE, INC., 470 East Paces Ferry Road, N.E.,
Atlanta, Georgia 30305 (the "Company"), in connection with the solicitation by
the Board of Directors of proxies for use at the Annual Meeting of
Shareholders on Thursday, August 26, 1999 at 4:00 p.m., and at any adjournment
or adjournments thereof, for the purposes set forth in the accompanying Notice
of Annual Meeting of Shareholders. This Proxy Statement and accompanying proxy
card and Notice of Annual Meeting are first being mailed to shareholders on or
about August 3, 1999.

If the enclosed form of proxy is properly executed and returned, the shares
represented thereby will be voted in accordance with its terms. If no choices
are specified, the proxy will be voted -

FOR - Election of David H. Gambrell and Thomas R. Williams as Class A
Directors.

FOR - Adoption of proposed amendment to the Company's 1991 Employee Stock
Option Plan to increase the base number of Class A Common Shares that may
be subject to options granted under that Plan from 3,600,000 Shares to
4,600,000 Shares.

FOR - Adoption of proposed amendment to the Company's Directors and
Officers Stock Option Plan to increase the number of Class A Common Shares
that may be subject to options granted under that Plan from 1,200,000
Shares to 1,600,000 Shares.

In addition, a properly executed and returned proxy card gives the authority
to vote in accordance with the proxy-holders' best judgment on such other
business as may properly come before the meeting or any adjournment thereof.
Any proxy given pursuant to this solicitation may be revoked, either in
writing furnished to the Secretary of the Company prior to the meeting or
personally by attendance at the meeting, by the person giving the proxy
insofar as the proxy has not been exercised at the meeting.

VOTING SECURITIES

Record Date and Voting of Securities

The Board of Directors has fixed the close of business on July 12, 1999 as
the record date for determining the holders of common stock entitled to notice
of and to vote at the meeting. On July 12, 1999, the Company had outstanding
and entitled to vote a total of 16,772,044 Class A Common Shares ("Class A
shares") and 4,768,289 Class B Common Shares ("Class B shares").

Other than in the election of directors, in which holders of Class A shares
and Class B shares vote as separate classes, each outstanding Class A share is
entitled to one-tenth vote per share and each outstanding Class B share is
entitled to one vote per share on all matters to be brought before the
meeting. The Class A directors and the Class B directors will be elected by a
majority of the votes cast by the respective classes. The proposed increases
in the number of shares authorized under the 1991 Employee Stock Option Plan
and the Directors and Officers Stock Option Plan require the affirmative vote
of a majority of the shares represented at the meeting (adjusted as described
above). Any other matter submitted to the meeting must be approved or ratified
by a majority vote of the outstanding shares (adjusted as described above). A
one-third quorum of 5,590,682 Class A

shares and of 1,573,535 Class B shares is required to be present or
represented by proxy at the meeting in order to conduct all of the business
expected to come before the meeting. A vote 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.

Security Ownership

Five Percent Shareholders. The only persons known by the Company to own
beneficially more than 5% of the outstanding shares of common stock of either
class of the Company are those set forth below. Unless otherwise noted, this
information is as of June 30, 1999. The statements as to securities
beneficially owned are, in each instance, based upon information provided by
the person(s) concerned. Except as disclosed in the notes to the table, each
person has sole voting and investment power with respect to the entire number
of shares shown as beneficially owned by that person.

Shares Percent
Name and Address of Beneficial Beneficially of
Title of Class Owner Owned Class(1)
-------------- ------------------------------ ------------ --------

CLASS A SHARES James C. Edenfield............ 76,125(2)(3) 0.5%(4)
c/o American Software, Inc.
470 East Paces Ferry Road, N.
E.
Atlanta, Georgia 30305
Thomas L. Newberry............ 71,425(2)(5) 0.4%(4)
c/o American Software, Inc.
470 East Paces Ferry Road, N.
E.
Atlanta, Georgia 30305
Dimensional Fund Advisors,
Inc.......................... 869,012(6) 5.2%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
State of Wisconsin Investment
Board........................ 1,315,300(7) 7.8%
P. O. Box 7842
Madison, Wisconsin 53707
CLASS B SHARES James C. Edenfield............ 2,562,352 53.8%
Thomas L. Newberry............ 2,202,937 46.2%

- --------

(1) Based on a total of 16,772,044 Class A shares outstanding, plus any shares
issuable pursuant to options held by the person in question which may be
exercised within 60 days.

(2) Does not include the Class B shares beneficially owned by Mr. Edenfield
and Dr. Newberry, which shares are convertible into Class A shares on a
share for share basis.

(3) Represents shares that may be acquired upon the exercise of stock options
exercisable within 60 days.

(4) For all matters except the election of directors, which involves class
voting, Messrs. Edenfield and Newberry together beneficially own
approximately 74% of the combined, weighted voting rights of the
outstanding Class A and Class B shares. See "Record Date and Voting of
Securities," above. If their respective Class B shares were converted into
Class A shares, Mr. Edenfield would beneficially own 12.2% of the
outstanding Class A shares and Dr. Newberry would beneficially own 10.5%
of the outstanding Class A shares.

(5) Includes 69,000 shares that may be acquired upon the exercise of stock
options exercisable within 60 days.

(6) Based on Schedule 13G dated February 12, 1999.

(7) Based on Schedule 13G amendment dated January 16, 1999.

Directors and Executive Officers. The following table shows the shares of
common stock of the Company, both Class A and Class B, beneficially owned by
each nominee for director, by each executive officer named in the Summary
Compensation Table and by all directors and executive officers as a group as
of June 30, 1999. The statements as to securities beneficially owned are, in
each instance, based upon information provided by the person(s) concerned.
Except as disclosed in the notes to the table, each person has sole voting and
investment power with respect to the entire number of shares shown as
beneficially owned by that person.

Shares
Beneficially
Owned Percent of Class
----------------------- -------------------
Name of Beneficial Owner
or Description of Group Class A Class B Class A(1) Class B
------------------------ ------- --------- ---------- -------

James C. Edenfield.................. 76,125(2)(3) 2,562,352 .5%(4) 53.8%
Thomas L. Newberry.................. 71,425(2)(5) 2,202,937 .4%(4) 46.2%
David H. Gambrell................... 56,000(3) -0- .3% --
Thomas R. Williams.................. 56,000(3) -0- .3% --
J. Michael Edenfield................ 112,530(6) -0- .7% --
Paul DiBono, Jr..................... 60,000(3) -0- .4% --
ALL DIRECTORS AND EXECUTIVE OFFICERS
AS A GROUP (8 PERSONS)............. 432,080(2)(7) 4,765,289 2.5% 100%

- --------
(1) Based on a total of 16,772,044 Class A shares outstanding, plus any shares
issuable pursuant to options held by the person or group in question which
may be exercised within 60 days.

(2) Does not include the Class B shares beneficially owned by Mr. Edenfield
and Dr. Newberry, which shares are convertible into Class A shares on a
share for share basis.

(3) Represents shares subject to options exercisable within 60 days.

(5) Includes 69,000 shares subject to options exercisable within 60 days.

(6) Includes 106,062 shares subject to options exercisable within 60 days.

(7) Includes 423,187 shares subject to options exercisable within 60 days.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's executive officers and directors, and persons who own
more than 10% of a registered class of the Company's equity securities to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission (the "Commission"). Officers, directors and holders of more than
10% of the Class A shares are required under regulations promulgated by the
Commission to furnish the Company with copies of all Section 16(a) forms they
file.

Based upon a review by the Company of filings made under Section 16(a) of
the Exchange Act, not all of the reports required to be filed during fiscal
1999 were filed on a timely basis. The Company is aware of the following
reports that were filed with the Commission by officers, directors and 10%
stockholders of the Company after their respective due dates: Thomas L.
Newberry (annual statement of beneficial ownership) and

Thomas R. Williams (annual statement of beneficial ownership). Based upon its
review of copies of filings received by it, the Company believes that since
May 1, 1998, all other Section 16(a) filing requirements applicable to its
directors, officers and greater than 10% beneficial owners were complied with.

ELECTION OF DIRECTORS

The directors of the Company are elected annually to hold office until the
election and qualification of their successors at the next Annual Meeting. Of
the four directors to be elected, two are to be elected by the holders of the
outstanding Class A shares and two are to be elected by the holders of the
outstanding Class B shares. The persons named in the enclosed proxy card
intend to vote Class A shares for the election of David H. Gambrell and Thomas
R. Williams, the Class A director nominees. In the event either of these
individuals should be unavailable to serve as a director, the proxy will be
voted in accordance with the best judgment of the person or persons acting
under it. The Board of Directors has no reason to believe that any director
nominees will be unavailable for election as a director.

It is anticipated that Messrs. Edenfield and Newberry, who together own all
of the Class B shares, will vote their Class B shares in favor of the election
of Messrs. Edenfield and Newberry as Class B directors. Thus, it is expected
that Messrs. Edenfield and Newberry will continue to serve as the Class B
directors.

The nominees for directors, their ages, their principal occupations for at
least the past five years, other public company directorships held by them and
the year each was first elected a director of the Company are set forth below.

Year First
Elected
Name of Nominee Age Principal Occupation; Directorships Director
--------------- --- ----------------------------------- ----------

CLASS A DIRECTORS:
David H. Gambrell(1) 69 Partner, Gambrell & Stolz, L.L.P., 1983
Attorneys-at-law, Atlanta, GA.

Thomas R. Williams(2) 70 President, The Wales Group, Inc.; 1989
currently a Director of ConAgra, Inc.;
National Life Insurance Company of
Vermont; and Avado Brands, Inc.; also a
trustee of Fidelity Group of Mutual
Funds.

CLASS B DIRECTORS:
James C. Edenfield(3) 64 President, Chief Executive Officer and 1971
Treasurer of American Software, Inc.
and American Software USA, Inc.;
Chairman of the Board of Directors of
Logility, Inc.

Thomas L. Newberry(4) 66 Chairman of the Board of American
Software, Inc. 1971

- --------
(1) Mr. Gambrell has been a practicing attorney since 1952, and is a partner
in the firm of Gambrell & Stolz, L.L.P., counsel to the Company. He served
as a member of the United States Senate from the State of Georgia in 1971
and 1972. Mr. Gambrell holds a Bachelor of Science degree from Davidson
College and a J.D. from the Harvard Law School.

(2) Mr. Williams is currently the President of The Wales Group, Inc., a
closely held corporation engaged in investments and venture capital. He
has held such position since 1987. In addition to the above directorships,
Mr. Williams was a director of Southern Bell from 1980 to 1983 and is a
former Chairman of the Board of First Wachovia Corporation, First National
Bank of Atlanta and First Atlanta Corporation. He

holds a Bachelor of Science degree in Industrial Engineering from the
Georgia Institute of Technology and a Master of Science degree in
Industrial Management from the Massachusetts Institute of Technology.

(3) Mr. Edenfield is a co-founder of the Company and has served as Chief
Executive Officer since November 1989, and as Co-Chief Executive Officer
for more than five years prior to that time. Prior to founding the
Company, Mr. Edenfield held several executive positions with and was a
director of Management Science America, Inc., an Atlanta-based
applications software development and sales company. He holds a Bachelor
of Industrial Engineering degree from the Georgia Institute of Technology.

(4) Dr. Newberry is a co-founder of the Company and served as Co-Chief
Executive Officer of the Company until November 1989. Prior to founding
the Company, he held executive positions with several companies engaged in
computer systems analysis, software development and sales, including
Management Science America, Inc., where he was also a director. Dr.
Newberry holds Bachelor, Master of Science and Ph.D degrees in Industrial
Engineering from the Georgia Institute of Technology.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT CLASS A SHAREHOLDERS VOTE
"FOR" MESSRS. GAMBRELL AND WILLIAMS.

From May 1, 1998 through April 30, 1999, the Board of Directors held four
meetings. No director of the Company attended fewer than 75% of the total
meetings of the Board of Directors and committee meetings on which such Board
member served and was eligible to attend during this period.

The Board of Directors has an Audit Committee, which consists of Messrs.
Gambrell (Chairman) and Williams. The functions of the Audit Committee include
recommending independent public accountants to the Company, reviewing the
scope and results of the independent public accountants' audit, and monitoring
the adequacy of the Company's accounting, financial and operating controls.
The Audit Committee held one meeting during fiscal 1999.

The Company has a 1991 Employee Stock Option Plan Committee, consisting of
Messrs. Edenfield and Newberry. During fiscal 1999, this Committee met or
acted by written consent 23 times. The members of this Committee are not
eligible to participate in this Plan. The functions of this Committee are to
grant options and establish the terms of those options, as well as to construe
and interpret the Plan and to adopt rules in connection therewith.

The Company has a Compensation Committee, consisting of Messrs. Williams
(Chairman) and Gambrell, described below in "Certain Information Regarding
Executive Officers and Directors--Report on Executive Compensation." The
Compensation Committee met or acted by written consent on four occasions
during fiscal 1999, including two actions relating solely to stock option
grants.

The Board has no nominating committee or any other committee performing
similar functions.

CERTAIN INFORMATION REGARDING EXECUTIVE OFFICERS AND DIRECTORS

Executive Compensation

The following table provides certain summary information concerning
compensation paid or accrued by the Company to or on behalf of the Company's
Chief Executive Officer and the other executive officers of the Company whose
annual compensation exceeded $100,000 during fiscal 1999 (referred to herein
as the "named executive officers") for the fiscal years ended April 30, 1997,
1998 and 1999:

SUMMARY COMPENSATION TABLE
-------------------------------------------------------------
Long-Term
Compensation
Awards/Number
Bonus or of Option
Annual Other Annual Shares All Other
Name and Principal Fiscal Salary Compensation Granted Compensation
Position Year ($) ($) (1) ($)(2)(3)
- ------------------------ ------ ------- ------------ ------------- ------------

James C. Edenfield...... 1999 434,500 -0- 123,000 -0-
President and Chief 1998 434,500 450,850 35,000 -0-
Executive Officer(4) 1997 434,500 171,225 35,000 -0-

J. Michael Edenfield.... 1999 240,000(4)(5) -0- 221,000(6) -0-
Executive Vice 1998 240,000 345,669(5) 70,000(6) -0-
President; President of 1997 240,000 102,735 30,000 -0-
Logility, Inc.(4)

Paul DiBono, Jr......... 1999 144,899 -0- 65,000 -0-
Senior Vice President 1998 142,000 10,000 30,000 -0-
1997 135,000 5,000 20,000 -0-

Vincent C. Klinges...... 1999 97,023 10,000 40,000 -0-
Vice President, 1998 19,487 -0- 10,000 -0-
Finance(7)

- --------
(1) These option shares do not include any options that were issued as
replacement options in association with the Company's August 1998 offer to
exchange employees' current options for replacement options. See "Stock
Option Repricing."

(2) The Company did not make any contributions for the accounts of these
individuals under the Company's Profit Sharing Plan.

(3) The aggregate amount of perquisites and other personal benefits,
securities or property given to each named executive officer, valued on
the basis of aggregate incremental cost to the Company, was less than
either $50,000 or 10% of the total annual salary and bonus for that
executive officer during each of these years.

(4) James C. Edenfield is the father of J. Michael Edenfield.

(5) All of the 1999 annual salary amount was paid by Logility, Inc., a
majority-owned subsidiary of the Company. Of the 1998 bonus amount,
$282,136 was paid by the Company for services prior to his resignation as
Chief Operating Officer of the Company in October 1997, and $63,533 was
paid by Logility, Inc.

(6) These shares include 70,000 stock options granted by Logility, Inc. in
fiscal 1999 and 20,000 stock options granted by Logility, Inc. in fiscal
1998.

(7) Mr. Klinges joined the Company in February 1998.

Stock Option Plans

The Company has granted stock options pursuant to four stock option plans.
Two of these plans, the Incentive Stock Option Plan (the "Incentive Plan") and
the Nonqualified Stock Option Plan (the "Nonqualified Plan"), were terminated
effective August 22, 1991 (the "Terminated Plans"), at which time the
shareholders of the Company approved two new option plans: The 1991 Employee
Stock Option Plan (the "Employee Option Plan") and the Directors and Officers
Stock Option Plan (the "Directors and Officers Option Plan"). Options
outstanding under the Terminated Plans remain in effect, but no new options
may be granted under those plans. The Employee Option Plan and the Directors
and Officers Option Plan are proposed to be amended and are described in
"Amendment of Stock Option Plans" below. The following sections describe the
other two stock option plans.

Incentive Stock Option Plan. On January 13, 1983, the Company adopted and
the shareholders approved the Incentive Plan. The Incentive Plan was designed
to qualify as an "incentive stock option plan" under

Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"). As
incentive stock options, options granted under the Incentive Plan are subject
to substantially the same terms as incentive stock options that may be granted
under the Employee Option Plan and the Directors and Officers Option Plan. As
of April 30, 1999, there were outstanding under the Incentive Plan options to
purchase 1,600 Class A shares.

Nonqualified Stock Option Plan. Effective June 3, 1986, the Company adopted
the Nonqualified Plan. Options granted under the Nonqualified Plan do not
receive the favorable tax treatment afforded to incentive stock options.
Options granted under this Plan were not, however, subject to restrictions on
exercise price and other restrictions applicable to incentive stock options.
Other terms of these options are, in general, substantially the same as
incentive stock options granted by the Company. As of April 30, 1999, there
were outstanding under the Nonqualified Plan options to purchase 37,125 Class
A shares.

Stock Option Committees. Prior to termination of the Incentive Plan and the
Nonqualified Plan, these Plans were administered by the Stock Option
Committee, consisting of Mr. Edenfield and Dr. Newberry. As discussed in
"Amendment of Stock Option Plans--Administration," below, Messrs. Edenfield
and Newberry also comprise the Employee Option Plan Committee. The Directors
and Officers Option Plan is administered by the Compensation Committee,
consisting of Messrs. Gambrell and Williams.

The members of these Committees are not eligible to participate in the Plan
that they administer, except pursuant to the formula option grant program for
non-employee directors under the Directors and Officers Option Plan. The
Compensation Committee and the Employee Stock Option Committee consist of
"disinterested persons" as defined in Rule 16b-3 under the Exchange Act. Under
the Plans, the functions of these Committees are to grant options and
establish the terms of those options, as well as to construe and interpret the
respective Plans and adopt rules in connection therewith.

Stock Option Grants

The following table sets forth information with respect to options granted
during fiscal 1999 to each of the named executive officers.
OPTION GRANTS IN LAST FISCAL YEAR

Individual Grants
--------------------------- Potential
Realized Value at
Percent of Assumed Annual
Total Rates of Stock
Options Price
Number of Granted to Exercise or Appreciation for
Options Employees in Base Price Expiration Option Term
Name Granted(1) Fiscal 1999 (Per Share)($) Date (2)($) 5% 10%
- ------------------------ --------- ------------ -------------- ---------- -----------------

James C. Edenfield...... 123,000(3) 4.44% 3.025 08/31/2003 212,724 / 539,083
J. Michael Edenfield.... 151,000(3) 5.45% 2.75 08/31/2008 261,148 / 661,802
70,000(4) 11.59% 2.813 08/27/2008 123,836 / 313,824
Thomas L. Newberry...... 5,000 0.18% 2.875 10/29/2008 8,647 / 21,914
5,000 0.18% 2.75 04/20/2009 9,040 / 22,910
Thomas R. Williams...... 5,000 0.18% 2.875 10/29/2008 8,647 / 21,914
5,000 0.18% 2.75 04/30/2009 9,040 / 22,910
David H. Gambrell....... 5,000 0.18% 2.875 10/29/2008 8,647 / 21,914
5,000 0.18% 2.75 04/30/2009 9,040 / 22,910
Paul DiBono, Jr......... 90,000(3) 3.25% 2.75 08/31/2008 155,651 / 394,451
Vincent C. Klinges...... 40,000(3) 1.44% 2.75 08/31/2008 69,178 / 175,312

- -------
(1) Such options may not be exercised earlier than one year after the date of
grant. Options vest ratably over a period of four years.

(2) These amounts represent certain assumed rates of appreciation only. Actual
gains, if any, on stock option exercises are dependent on the future
performance of the Company's Class A shares (and, in the case of the
Logility options granted

to J. Michael Edenfield, Logility's common stock) and overall market
conditions. The amounts reflected in this table may not necessarily be
achieved.

(3) These options represent options issued in accordance with the Company's
August 1998 offer to exchange employees' current stock options for
replacement options (see "Stock Option Resetting").

(4) Those options represent grants of Logility stock options and the
percentage and fair market value information for these option grants
relate to Logility stock options and Logility Common Stock.

Stock Option Exercises and Outstanding Options

The following table contains information, with respect to (i) the number of
stock options exercised during the last fiscal year, and the values realized
in respect thereof, by the named executive officers, and (ii) the number stock
options and the value of said stock options held by the named executive
officers as of April 30, 1999.

Value of
Number of Unexercised
Unexercised Options In-the-Money
Shares Value at 04/30/99 Options at 04/30/99
Acquired on Realized Exercisable/ Exercisable/
Name Exercise(#) ($) Unexercisable Unexercisable(1)($)
---- ----------- -------- ------------------- -------------------

James C. Edenfield...... -- -- 76,125 / 123,000 -0-
J. Michael Edenfield(2). 3,938 23,746 111,062 / 236,000(3) -0- / 87,500(4)
Paul DiBono, Jr......... -- -- 60,000 / 90,000 -0-
Vincent C. Klinges...... -- -- 0 / 40,000 -0-

- --------
(1) The market price of Class A shares on April 30, 1999 was $2.75.

(2) During fiscal 1999, J. Michael Edenfield exercised options for 3,938
shares of American Software, Inc. Class A Common Stock at an exercise
price of $2.22 per share.

(3) Includes options to purchase 90,000 shares of common stock of Logility,
5,000 of which are exercisable.

(4) Consists of the value of certain unexercised Logility Stock Options.

Stock Option Resetting

On August 31, 1998, the Company offered its employees the right to exchange
all current options for replacement options with an exercise price of $2.75.
The replacement options were for an equal number of shares as the options
surrendered. Employees who accepted the offer surrendered their vesting status
and commenced their new option vesting schedule at the time the replacement
options were granted. See "Report on Executive Compensation". The following
table provides information regarding these replacement options with respect to
all named executive officers of the Company who participated in this offer, as
well as all other options repriced or exchanged during the past ten years with
respect to the Company's named executive officers:

TEN-YEAR OPTION EXCHANGES

Length of
Original
Number of Market Price Exercise Option Term
Securities of Stock at Price at Remaining at
Underlying Time of Time of Date of
Options Resetting or Resetting or New Resetting or
Repricing Which were Amendment Amendment Exercise Amendment
Name Date Exchanged ($) ($) Price (Years)
---- --------- ---------- ------------ ------------ -------- ------------

James C. Edenfield...... 8/31/98 18,000 2.75 4.02 3.03 2.5
President and Chief 8/31/98 35,000 2.75 4.81 3.03 2.9
Executive Officer 8/31/98 35,000 2.75 6.13 3.03 8.7
8/31/98 35,000 2.75 3.50 3.03 10.0
1/30/95 24,000 2.75 5.00 3.03 6.7
1/30/95 24,000 2.75 5.00 3.03 7.0

J. Michael Edenfield.... 8/31/98 5,000 2.75 2.67 2.75 0.7
Executive Vice
President; 8/31/98 16,000 2.75 4.02 2.75 7.5
President of Logility,
Inc. 8/31/98 30,000 2.75 4.38 2.75 7.9
8/31/98 50,000 2.75 6.13 2.75 8.7
8/31/98 50,000 2.75 3.50 2.75 10.0
1/30/95 1,686 2.75 4.11 2.75 3.2
1/30/95 3,791 2.75 12.50 2.75 5.2
1/30/95 5,625 2.75 3.33 2.75 5.2
1/30/95 4,500 2.75 8.13 2.75 5.4
1/30/95 12,000 2.75 5.00 2.75 6.5
1/30/95 12,000 2.75 5.00 2.75 7.4
1/30/95 12,000 2.75 5.00 2.75 8.4

Paul DiBono, Jr. ....... 8/31/98 30,000 2.75 6.13 2.75 8.7
Senior Vice President 8/31/98 35,000 2.75 3.50 2.75 10.0
1/30/95 1,266 2.75 3.31 2.75 0.1
1/30/95 4,500 2.75 4.11 2.75 3.0
1/30/95 4,725 2.75 3.11 2.75 3.5
1/30/95 15,975 2.75 9.25 2.75 4.5
1/30/95 900 2.75 5.04 2.75 4.6
1/30/95 2,000 2.75 9.62 2.75 5.6
1/30/95 2,000 2.75 8.15 2.75 5.6
1/30/95 4,000 2.75 5.00 2.75 6.8
1/30/95 4,000 2.75 5.00 2.75 7.6
1/30/95 10,000 2.75 5.00 2.75 8.6

Vincent C. Klinges...... 8/31/98 10,000 2.75 7.31 2.75 9.5
Vice President, Finance 8/31/98 30,000 2.75 3.50 2.75 10.0

Employment Agreement and Bonus Policy

From May 1, 1983 through April 30, 1995, the compensation of James C.
Edenfield, President and Chief Executive Officer of the Company, was
determined under an employment contract entered into between him and the
Company on January 17, 1983. This contract provided for an annual base salary
of $434,500, payable monthly, plus expenses and normal employee fringe
benefits. In addition, the contract provided for an annual bonus of 5% of the
increase of each fiscal year's pre-tax earnings over the pre-tax earnings of
the preceding fiscal year. The contract expired at the end of fiscal 1995, and
since that time Mr. Edenfield has continued to be compensated on the same
basis as applied under the contract. The Board of Directors, after consulting
with the Compensation Committee, determined that the same contract terms would
continue through fiscal 1999. Accordingly, during fiscal 1999, Mr. Edenfield's
salary was 434,500. He received no bonus under the bonus formula with respect
to fiscal 1999. See "Report on Executive Compensation" for a detailed
discussion of Mr. Edenfield's compensation in fiscal 1999 and proposed changes
for fiscal 2000.

Pursuant to written plans, J. Michael Edenfield and Paul DiBono had the
potential to receive certain cash bonuses, stock options and other
compensation, the amounts of which were determined on the basis of fiscal 1999
performance standards. Neither Mr. Edenfield nor Mr. DiBono qualified for a
bonus under performance standards applicable during fiscal 1999. For fiscal
2000, the bonus plans for these officers again will have individualized
incentive goals tied to increases in revenues and/or net income, either
Company-wide or related to specific areas over which they have responsibility,
or both. The incentive plan of J. Michael Edenfield is established by the
Compensation Committee of the Logility Board of Directors.

Certain Transactions

The Company leases one of its office facilities from a partnership that is
owned entirely by Messrs. Edenfield and Newberry under a lease that by its
terms expired December 31, 1996. An extension of that lease, on a month-to-
month basis, has been approved by the disinterested members of the Board of
Directors pending negotiation of a new long-term lease. The Company incurred
expenses of approximately $300,000 in fiscal 1998, and approximately $ 300,000
in fiscal 1999 pursuant to this lease. The current rental rate is $17.00 per
square foot. Management believes that the terms of the lease are fair to the
Company.

The Company and Logility have previously entered into various agreements
(the "Intercompany Agreements"), including a Services Agreement, a Facilities
Agreement, a Marketing License Agreement and a Tax Sharing Agreement. These
Agreements and the other Intercompany Agreements are further described in the
Company's Annual Report on Form 10-K for the fiscal year ended April 30, 1999,
filed with the Securities and Exchange Commission. In fiscal 1999, Logility
paid the following aggregate amounts to the Company under the terms of the
Intercompany Agreements: Services Agreement--$1,481,000; Facilities
Agreement--$342,000; and Marketing License Agreement--$308,000. Under the Tax
Sharing Agreement, Logility received no allocation of federal, state and local
taxes for fiscal 1999.

As a result of the various transactions between the Company and Logility,
amounts payable to and receivable from Logility arise from time to time.
However at April 30, 1999, there was no payable or receivable between the
Company and Logility.

Director Compensation

During fiscal 1999, the Company compensated Dr. Newberry, the Chairman of
the Board, at the rate of $18,000 per annum, and other Directors who are not
employed by the Company at the rate of $12,000 per annum, plus $600 for each
half-day or $1,200 for each full day meeting of the Board of Directors or any
committee of the Board that they attended.

Directors are eligible to receive stock option grants under the Company's
Directors and Officers Option Plan, adopted in 1991. Under the terms of that
Plan, Directors who are not employed by the Company automatically receive
stock option grants of 5,000 shares each, effective at six-month intervals, on
each October 31 and April 30, with exercise prices equal to the market price
on those respective dates. These options become exercisable one year after the
date of grant and expire ten years after the date of grant. They do not
terminate if the Director ceases to serve on the Board of the Company. Under
this program, Messrs. Gambrell, Newberry and Williams each received options to
purchase an aggregate of 10,000 shares in fiscal 1999.

Compensation Committee Interlocks and Insider Participation

Messrs. Gambrell and Williams have been selected by the Board of Directors
to serve on the Compensation Committee. Mr. Gambrell and James R. McGuone,
Secretary of the Company, are partners in the firm of Gambrell & Stolz,
L.L.P., general counsel to the Company. Legal fees in the amount of $451,058
were paid by the Company (including fees paid by Logility) to that firm during
fiscal year 1999 for legal services rendered as general counsel to the Company
and to Logility, in addition to $18,200 in Director fees paid during that year
for Mr. Gambrell's serving as a Director of the Company and as a member of
Board Committees.

Report on Executive Compensation

The following is the report of the Compensation Committee of the Board of
Directors of American Software, Inc. for the fiscal year ended April 30, 1999.

Meetings. The Compensation Committee has met two times formally and has
conferred informally a number of times during fiscal year 1999, among the
members of the Committee and with the Chief Executive Officer concerning the
authority and responsibilities of the Committee.

Executive Compensation Philosophy. The Committee believes that a
compensation program that enables the Company to attract and retain
outstanding executives will assist the Company in meeting its long-range
objectives, thereby serving the interests of the Company's shareholders. The
compensation program of the Company is designed to achieve the following
objectives:

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

. Create a strong link between the executive's compensation and the
Company's annual and long-term financial performance.

. Include above-average elements of financial risk through performance-
based incentive compensation that offers an opportunity for above-
average financial reward to the executives.

Fiscal Year 2000 Compensation of Chief Executive Officer. The Compensation
Committee has the responsibility and authority to review and establish
compensation for the Chief Executive Officer of the Company, including his
participation in the D&O Option Plan and the re-evaluation and negotiation of
his employment contract. In the previous two fiscal years, the Compensation
Committee and the Chief Executive Officer, James C. Edenfield, agreed to
extend his existing compensation arrangement on a year-to-year basis. For the
fiscal year 2000, the Committee has decided to continue the Chief Executive
Officer's current level of compensation, so that Mr. Edenfield will continue
to receive a base salary of $434,500 and a bonus equal to 5% of the increase
in the Company's pre-tax earnings for fiscal 2000 over the pre-tax earnings
for fiscal 1999. The Committee's decision to continue this basis for
compensation in fiscal 2000 reflects the belief of the Compensation Committee
and Mr. Edenfield that the Chief Executive Officer's compensation should be
tied substantially to growth in earnings and that the existing compensation
arrangement meets that objective.

In extending this basis for compensation of the Chief Executive Officer, the
Committee believes Mr. Edenfield is paid a reasonable current salary, and any
potential bonus is based on corporate financial goals that align his interests
with those of other shareholders. Moreover, Mr. Edenfield is the largest
shareholder in the Company, and to the extent his performance as CEO
translates into an increase in the value of the Company's shares, all
shareholders, including Mr. Edenfield, share the benefits.

The Committee also considered, however, that the compensation of Mr.
Edenfield as Chief Executive Officer has been determined on the same basis for
the past nine fiscal years. During this period, Mr. Edenfield has led the
Company through difficult changes in the market for the Company's software and
services. The Committee also notes the fact that the Company does not provide
a Company-funded retirement plan, unlike many comparable companies. To more
adequately compensate Mr. Edenfield for this leadership and to address the
absence of a funded retirement program, the Committee has considered a number
of different compensation strategies.

The Compensation Committee has decided, and Mr. Edenfield has agreed, that
the optimal compensation strategy for the Company and for Mr. Edenfield is to
adopt a deferred compensation arrangement specifically for him. Under this
arrangement, which has not yet been finalized, the Company would pay $200,000
in additional compensation to Mr. Edenfield, which would be set aside and
invested for the purpose of providing income to him upon retirement. The
deferred compensation arrangement is expected to provide for eventual
reimbursement to the Company of amounts paid under the arrangement. In
addition, under the deferred compensation arrangement, Mr. Edenfield will have
the option, at his complete discretion, to defer and direct the investment of
all or a portion of his annual bonus (if any). It is anticipated that this
deferred compensation agreement will be finalized within the next 30 days and
will be made effective as of May 1, 1999.

The participation of the Chief Executive Officer in the D&O Option Plan
during fiscal 2000 will be determined by the Compensation Committee based upon
its authority to grant options under that Plan.

Fiscal Year 1999 Compensation of the Chief Executive Officer. The Chief
Executive Officer's cash compensation in fiscal year 1999, both salary and
bonus, was determined under the terms of the compensation arrangement
described above, without any deferred compensation feature. Accordingly, the
Chief Executive Officer did not receive a bonus with respect to fiscal year
1999 as the Company did not have pre-tax earnings in fiscal 1999.

The Chief Executive Officer received a grant of stock options on August 12,
1998, consisting of the right to purchase 35,000 Class A shares, exercisable
at the then-current market price of $3.50 per share, with a term of ten years.
These options were granted under the D&O Option Plan, which is administered by
the Compensation Committee. On August 31, 1998, at the same time as the
Committee approved the general resetting of prices of stock options, as
discussed below, the Chief Executive Officer received a grant of stock
options, consisting of the right to purchase 123,000 Class A shares,
exercisable at $3.025 per share, or 10% above the then-current market price,
with a term of five years. These options were granted under the D&O Option
Plan. These options were granted to Mr. Edenfield on the condition that he
relinquish other options, granted to him over the past seven years, including
the options granted August 12, 1998, to purchase an equal number of shares, at
prices ranging from $3.50 to $6.125 per share. The new options will vest over
a four-year period, while most of the options he surrendered were either
partially or fully vested at that time. The Committee's decision to offer the
replacement stock options to Mr. Edenfield were based upon the Committee's
evaluation of the performance of the Chief Executive Officer and the over-all
extent of his compensation and incentive package as well as the factors
described below with respect to repricing of stock options generally.

Other Executive Officers. The Compensation Committee has responsibility for
the review of compensation of other executive officers of the Company,
including certain executive officers of operating subsidiaries. (The
Compensation Committee does not review or have oversight over the compensation
of J. Michael Edenfield by Logility, Inc., or the compensation of any other
Logility officers, as their compensation is reviewed by the compensation
committee of Logility's Board of Directors.) To assist in this process, the
Committee has reviewed compensation of officers having similar
responsibilities with peer group companies, based upon publicly available
information. In that regard, the Compensation Committee consults with the
Chief Executive Officer. Through its oversight and control of the D&O Option
Plan, the Compensation Committee has direct authority over the granting of
stock options to executive officers. In addition, the Compensation Committee
assists the Chief Executive Officer in evaluating and establishing executive
bonus plans, which are customized for each executive officer.

It has been the policy of the Company in consultation with the Compensation
Committee to base a substantial portion of executive officer compensation upon
the achievement of Company-wide and/or divisional goals, relating in some
cases to growth in revenues, in some cases to growth in net income and in some
cases to both of these factors, as well as other factors. The bonus plans for
each of the most highly compensated executive officers (other than the Chief
Executive Officer) reflect this approach.

Stock option grants under the D&O Option Plan are utilized as both a
motivating and a compensating factor. Because the performance of executive
officers can substantially influence performance of the entire enterprise, in
several instances grants of stock options have been utilized to create greater
incentives for improving Company performance, which the Compensation Committee
believes may positively influence the market price for Company stock.

On August 12, 1998, the Compensation Committee exercised its authority under
the D&O Option Plan to grant new stock options to various executive officers
of the Company, including the Chief Executive Officer, as discussed above. In
each instance, the term and size of the options were intended and calculated
by the Compensation Committee to reward these officers for their prior
performance, to serve as incentive for promotion of Company profitability and
other long-term objectives and to maintain their overall compensation at
competitive levels.

On August 31, 1998, the Compensation Committee approved the repricing and
replacement of all outstanding stock options of the Company held by executive
officers, including the Chief Executive Officer. The Committee made this
decision at a time when the stock price of the Company was at an historically
low level, as were the market prices of the stock of many other companies in
the Company's industry sector. The Committee believed at that time, and still
believes, that the operating performance of the Company and the market price
of its shares at that time were influenced primarily by market and economic
factors, rather than the performance of the Company's executives or key
employees. The repricing enabled the Company to retain key personnel in a
market in which such personnel are in demand. Accordingly, the Committee
determined that repricing outstanding stock options at the current market
price was in the best interests of the Company and its shareholders.

During fiscal 2000, the Compensation Committee will continue to consult with
the Chief Executive Officer with respect to executive officer compensation
packages, including salary, bonus, stock options and fringe benefits, to
ensure that compensation is appropriately related to individual and Company
performance, as well as to competitive compensation standards and other
relevant criteria.

Limitations on Deductibility of Executive Compensation. Since 1994, the
Omnibus Budget Reconciliation Act of 1993 has limited the deductibility of
executive compensation paid by publicly held corporations to $1 million per
employee, subject to various exceptions, including compensation based on
performance goals.

The deductibility limitation does not apply to compensation based on
performance goals where (1) the performance goals are established by a
compensation committee which is comprised solely of two or more outside
directors; (2) the material terms are disclosed to shareholders and approved
by majority vote of the shareholders eligible to vote thereon before the
compensation is paid; and (3) before the compensation is paid, the
compensation committee certifies that the performance goals and other material
terms have been satisfied. The Company has not adopted a policy with respect
to deductibility of compensation since no executive officer currently
receives, or has previously received, taxable income in excess of $1 million
per year from the Company. The Compensation Committee will continue to monitor
compensation levels closely, particularly in areas of incentive compensation.
If the Company's performance improves substantially, incentive compensation
also can be expected to increase and it may become necessary to adopt a long-
term incentive compensation plan in compliance with the foregoing criteria.

BY THE COMPENSATION COMMITTEE:

Thomas R. Williams, Chairman
David H. Gambrell

AMENDMENT OF STOCK OPTION PLANS

General

On May 18, 1999, the Board of Directors approved, subject to shareholder
approval, an amendment to the Employee Option Plan which would increase the
base number of Class A shares that may be subject to options granted under the
Employee Option Plan by 1,000,000 shares, from 3,600,000 shares to 4,600,000
shares. On that same date, the Board of Directors approved, subject to
shareholder approval, an amendment to the Directors and Officers Option Plan,
which would increase the number of Class A shares that may be subject to
options granted under the Directors and Officers Option Plan by 400,000
shares, from 1,200,000 shares to 1,600,000 shares.

The Employee Option Plan, as of June 30, 1999, provided that only 4,323,253
Class A shares may be issued pursuant to options granted under the Employee
Option Plan, consisting of the 3,600,000 base number of authorized shares,
plus 723,253 shares transferred from prior stock option plans due to lapsed
options. Of this amount, as of June 30, 1999, 650,310 shares have been issued
pursuant to the exercise of stock options and 2,809,971 shares were subject to
outstanding options, leaving only 862,972 shares available for new options.
The proposed amendment would increase the number of available shares under the
Employee Option Plan to 1,862,972 shares as of June 30, 1999.

As of June 30, 1999, of the 1,200,000 shares of Class A stock authorized
under the Directors and Officers Option Plan, 62,687 shares have been
purchased pursuant to the exercise of stock options and 1,106,000 shares were
subject to outstanding options, leaving only 31,313 shares available for new
options. The proposed amendment would increase the number of available shares
under the Directors and Officers Option Plan to 431,313 shares as of June 30,
1999.

The following summary of the Plans is qualified in its entirety by reference
to the full text of the Employee Option Plan and Directors and Officers Option
Plan, which govern in the event of any conflict. Copies of the Plans are
available from the Company, upon written request, to the attention of Pat
McManus, Investor Relations, 470 East Paces Ferry Road, Atlanta, Georgia
30305.

Purpose of Plans

The purpose of both of the Plans is to promote the interests of the Company
by providing eligible employees and Directors with incentives to purchase
Class A shares and thereby enable them to benefit directly from the Company's
growth, development and financial success.

Shares Subject to the Plan

As of June 30, 1999, there were 862,972 and 31,313 Class A shares available
for option grants under the Employee Option Plan and Directors and Officers
Option Plan, respectively, and 2,809,971 and1,106,000 Class A shares subject
to outstanding options granted under the Employee Option Plan and Directors
and Officers Option Plan, respectively. The terms of both Plans provide that
if an option expires or is canceled without having been fully exercised, the
shares subject to the unexercised portion of such option will be available for
future grant.

Administration

Each of the Plans is administered by a committee of the Board of Directors.
The Employee Option Plan Committee consists of Messrs. Edenfield and Newberry.
The Directors and Officers Option Plan is administered by the Compensation
Committee, consisting of Messrs. Gambrell and Williams. The members of the
Employee Option Plan Committee are not eligible to receive options under such
Plan. Members of the Compensation Committee are deemed by the Board of
Directors to be disinterested persons within the meaning of Rule 16b-3 of the
Securities Exchange Act of 1934. The Board appoints the members of these
Committees, fills vacancies on these Committees and has the power to replace
members of these Committees with other eligible persons at any time. The
Committees are authorized to grant options under the Plans, to determine the
terms and conditions of such options and to otherwise administer the Plans.

Eligibility

All employees (approximately 650 persons as of June 30, 1999, including
employees of Logility, Inc.), other than executive officers and Directors of
the Company, are eligible to participate in the Employee Option Plan. All
executive officers and Directors of the Company (including members of the
Compensation Committee) are eligible to participate in the Directors and
Officers Option Plan.

Exercise Price

The exercise price per share of any option granted under either of the Plans
is set in each case by the respective Committee. For incentive stock options
granted under either Plan, the exercise price must be at least 100% of the
fair market value of Class A shares on the date of grant (110% for 10%
shareholders). For nonqualified stock options granted under either Plan, the
exercise price may be less than the fair market value per share of Common
Stock on the date upon which the option is granted. As of the close of
business on June 30, 1999, the market value of Class A shares was $3.8125 per
share.

Terms of Options

Options granted pursuant to either Plan generally expire on the tenth
anniversary of the grant date, except for incentive stock options granted to
10% shareholders, which expire on the fifth anniversary of the date of grant.

Exercise of Options

Options granted pursuant to either Plan generally become exercisable in
equal portions over a four-year period (other than formula options granted to
non-employee directors, which fully vest after one year). Upon the exercise of
an option, the optionee may either make payment in full in cash to the Company
of the exercise price

and any required tax withholding payment or may deliver to the Company a
properly executed exercise notice, together with irrevocable instructions to a
broker to promptly deliver to the Company the amount of sale or loan proceeds
to pay the exercise price.

Non-Assignability of Options

An option granted under either of the Plans is not transferable other than
by will, the applicable laws of descent and distribution, or a qualified
domestic relations order. During the lifetime of an optionee, options may be
exercised only by such optionee or his guardian or legal representative.

Death, Disability, Retirement or Termination of Employment

Following an optionee's termination of employment, options held by such
person pursuant to either of the Plans are generally exercisable only with
respect to the portions thereof in which the optionee is then vested. Under
each of the Plans, upon termination of employment, options remain exercisable
for 90 days, or 12 months if termination results from death or disability, but
in any event not beyond the original option term. In the case of retirement,
the Committees for both Plans have the discretion to permit the exercise of
options more than 90 days beyond termination of employment.

Change of Control

Currently, option agreements relating to options granted under the Plans
generally provide that in the event of a dissolution, liquidation or sale of
substantially all of the assets of the Company or a merger or consolidation in
which the Company is not the surviving corporation, the options terminate,
except that immediately prior to such an event, the options become fully
exercisable without regard to vesting requirements.

Rights as a Shareholder; Status of Employee

No person shall have any rights or privileges of a shareholder of the
Company as to shares subject to an option granted pursuant to either of the
Plans until such option is exercised in accordance with the terms of such
Plan. Furthermore, nothing in either of the Plans or any agreement entered
into pursuant thereto, confers upon an optionee any right to continue in the
employment of the Company or its subsidiaries.

Tax Consequences

The following is a brief summary of the principal federal income tax
consequences of the grant and exercise of an option under the Plans and the
subsequent disposition of Class A shares acquired upon such exercise. Under
the Plans, at the time of grant the respective Committee designates each
option either as an incentive stock option or a nonqualified stock option,
with differing tax consequences to the optionee and to the Company for each
type of option.

Nonqualified Options. The grant of a nonqualified option will not result in
any immediate tax consequence to the Company or the optionee. Upon exercise of
a nonqualified option granted under either of the Plans, the amount by which
the fair market value on the date of exercise of the shares received upon such
exercise exceeds the option price will be taxed as ordinary income to the
optionee, and the Company will generally be entitled to a deduction in an
equal amount in the year the option is executed. Such amount will not be an
item of tax preference to an optionee.

Upon the subsequent disposition of shares acquired upon the exercise of an
option ("Option Stock"), an optionee may realize short-term or long-term
capital gain or loss, assuming such shares of Option Stock constitute capital
assets in an optionee's hands and depending upon the holding period of such
shares of Option Stock, equal to the difference between the selling price and
the tax basis of the shares of Option Stock sold. The tax basis for this
purpose will equal the sum of the exercise price and the amount of ordinary
income realized by the optionee as a result of such exercise.

Incentive Options. Neither the grant nor the exercise of an incentive stock
option will have any immediate tax consequences to the Company or the
optionee. (However, in calculating income for purposes of computing an
individual optionee's alternative minimum tax, the favorable tax treatment
generally accorded incentive stock options is not applicable.)

When an optionee sells Option Stock received upon the exercise of his
incentive stock options, any amount he receives in excess of the option price
will be taxed as a long-term capital gain at the maximum applicable tax rate
(and any loss will be a long-term capital loss) if he has held his shares for
at least two years from the date of granting the option to him and for at
least one year after the issuance of such shares to him. If the shares are not
held for more than two years from the date of granting the option to him or
are not held for more than one year after the issuance of such shares, (i)
ordinary income will be realized in the year of the disposition in an amount
equal to the difference between the fair market value of the shares on the
date the option was exercised and the option price, and (ii) either capital
gain or loss will be recognized in an amount equal to the difference between
the selling price and the fair market value of the shares on the date the
option was exercised. If the selling price is less than the fair market value
on the date the option is exercised, but more than the exercise price, (i)
ordinary income equal to the difference between the exercise price and the
fair market value on the date of exercise is recognized, and (ii) a capital
loss equal to the difference between the fair market value on the date of
exercise and the sales price results.

The Company is not permitted to take a deduction for federal income tax
purposes because of the granting or exercise of any incentive stock option,
except to the extent that ordinary income may be realized by an optionee on
the sale of option shares.

Termination

Both the Employee Option Plan and the Directors and Officers Option Plan
terminate on May 12, 2001, unless sooner terminated by the Board of Directors.
Except as expressly contemplated by the terms of each of the Plans, no
amendment, discontinuance or termination of such Plan will have any effect on
options outstanding thereunder at the time of termination.

Other Option Plans

In addition, the Company has two other stock option plans: the Incentive
Stock Option Plan and the Nonqualified Stock Option Plan. Neither of these
Plans are proposed for amendment. In 1991, the Incentive Stock Option Plan and
the Nonqualified Stock Option Plan were replaced by the Employee Option Plan
and the Directors and Officers Option Plan. As of June 30, 1999, there were
outstanding under the other Plans options to purchase the following numbers of
shares:

Incentive Stock Option Plan................................ 1,600 Shares

Nonqualified Stock Option Plan............................. 37,125 Shares

To the extent that any of the options under these plans terminate or expire
unexercised, the unused option shares automatically become available under the
Employee Option Plan. The terms of those options are substantially similar to
the terms of options granted under the Employee Option Plan and the Directors
and Officers Option Plan.

Board Recommendation

The Board of Directors believes it is in the best interest of the Company
and its shareholders to approve the proposed amendments so that the Company
will be able to continue to provide adequate incentives and to attract and
retain the services of competent personnel. Therefore, the Board of Directors
recommends the adoption of the proposed stock option plan amendments to the
shareholders of the Company.

The affirmative vote of a majority of the combined Class A and Class B
shares in attendance or represented by proxy and entitled to vote at the
Shareholders Meeting is required for approval of the amendments. This vote

will be adjusted for the relative Class A shares and Class B shares voting
weights, as described in "Voting Securities--Record Date and Voting of
Securities," above. If all of the Class B shares (which are held by Messrs.
Edenfield and Newberry) are voted in favor of these amendments, no additional
affirmative votes will be required. Messrs. Edenfield and Newberry intend to
vote their Class A and Class B shares in favor of these amendments.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSED AMENDMENTS.

STOCK PRICE PERFORMANCE GRAPH

The graph below reflects the cumulative stockholder return (assuming the
reinvestment of dividends) on the Company's Class A shares compared to the
return of the Nasdaq Composite Index and a peer group index for the periods
indicated. The graph reflects the investment of $100 on April 30, 1994 in the
Company's Class A shares, the Nasdaq Stock Market--U.S. Companies ("Nasdaq
Composite Index") and in a published industry peer group index. The peer group
is the Robertson Stephens Hi-Tech Index--Software Group, which is an index of
the stock price performance of 67 software companies maintained by Robertson
Stephens & Company, an investment banking firm.

04/30/94 07/31/94 10/31/94 01/31/95 04/30/95 07/31/95 10/31/95
American
Software,
Inc. $100 $85.82 $ 85.07 $ 55.18 $ 75.87 $105.76 $142.54
NASDAQ
Composite $100 $98.41 $105.95 $102.91 $115.01 $136.43 $141.18
Peer Group $100 $92.76 $115.92 $119.48 $141.47 $181.19 $196.80
.
.
01/31/96 04/30/96 07/31/96 10/31/96 01/31/97 04/30/97 07/31/97
American
Software,
Inc. $ 89.66 $101.16 $ 73.57 $101.16 $127.61 $105.76 $156.34
NASDAQ
Composite $144.42 $162.23 $147.25 $166.45 $188.03 $171.80 $217.19
Peer Group $185.13 $217.18 $178.67 $191.44 $212.01 $183.92 $247.45
.
.
10/31/97 01/31/98 04/30/98 07/31/98 10/31/98 01/31/99 04/30/99
American
Software,
Inc. $216.11 $172.43 $150.60 $105.76 $ 51.74 $ 52.88 $ 50.58
NASDAQ
Composite $217.16 $220.67 $254.61 $255.15 $241.39 $341.48 $346.51
Peer Group $262.96 $259.93 $331.10 $293.70 $291.61 $394.26 $382.38

INDEPENDENT AUDITORS

The Board of Directors has selected KPMG LLP, who were auditors for fiscal
1999, to continue as independent auditors of the Company.

Representatives of KPMG LLP are expected to attend the Shareholders Meeting.
These representatives will be available to respond to appropriate questions
raised orally and will be given the opportunity to make a statement if they so
desire.

SHAREHOLDER PROPOSALS

Proposals of shareholders intended to be presented at the 2000 Annual
Meeting of Shareholders must be forwarded in writing and received at the
principal executive offices of the Company no later than April 5, 2000,
directed to the attention of the Secretary, for consideration for inclusion in
the Company's proxy statement for the 2000 Annual Meeting of Shareholders. Any
such proposals must comply in all respects with the rules and regulations of
the Securities and Exchange Commission.

OTHER MATTERS

As of the date of this Proxy Statement, the Board of Directors does not
intend to present, and has not been informed that any other person intends to
present, any matter for action at the Annual Meeting other than those
specifically referred to in this Proxy Statement. If other matters properly
come before the meeting, it is intended that the holders of the proxies will
act in respect thereto in accordance with their best judgment.

The cost of this solicitation of proxies will be borne by the Company. In
addition to solicitation by mail, employees of the Company may solicit proxies
by telephone, in writing or in person. The Company may request brokerage
houses, nominees, custodians and fiduciaries to forward soliciting material to
the beneficial owners of stock held of record and will reimburse such persons
for any reasonable expense in forwarding the material.

Copies of the 1999 Annual Report of the Company are being mailed to
shareholders together with this Proxy Statement, proxy card and Notice of
Annual Meeting of Shareholders. Additional copies may be obtained from Pat
McManus, Investor Relations, 470 East Paces Ferry Road, Atlanta, Georgia
30305.

A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED APRIL 30, 1999, AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, WILL BE FURNISHED WITHOUT CHARGE TO SHAREHOLDERS
BENEFICIALLY OR OF RECORD AT THE CLOSE OF BUSINESS ON JULY 12, 1999, ON
REQUEST TO PAT McMANUS, INVESTOR RELATIONS, 470 EAST PACES FERRY ROAD,
ATLANTA, GEORGIA 30305.

By Order of the Board of Directors,

James R. McGuone, Secretary

Atlanta, Georgia
August 3, 1999

AMERICAN SOFTWARE, INC.

PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
AUGUST 26, 1999 AT 4:00 P.M.
THE SWISSOTEL
3391 PEACHTREE ROAD, N.E.
ATLANTA, GEORGIA

The undersigned hereby appoints James C. Edenfield and Thomas L. Newberry, or
either of them, attorneys and proxies, each with full power of substitution to
vote, in the absence of the other, all Class A Common Shares of AMERICAN
SOFTWARE, INC. held by the undersigned and entitled to vote at the Annual
Meeting of Shareholders to be held on August 26, 1999 and at any adjournment or
adjournments thereof, in the transaction of such business as may properly come
before the meeting, and particularly the proposals stated on the reverse side,
all in accordance with and as more fully described in the accompanying Proxy
Statement.

It is understood that this proxy may be revoked at any time insofar as it has
not been exercised and that the shares may be voted in person if the undersigned
attends the meeting.

THE CLASS A SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
UNDERSIGNED SHAREHOLDER ON THE REVERSE OF THIS PROXY CARD, OR IF NO DIRECTION IS
GIVEN, THEY WILL BE VOTED FOR EACH OF THE PROPOSALS LISTED ON THE REVERSE SIDE.
IN THEIR DISCRETION, THE PROXYHOLDERS ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.

- --------------------------------------------------------------------------------
PLEASE VOTE, SIGN DATE AND RETURN THIS PROXY CARD PROMPTLY, USING THE ENCLOSED
ENVELOPE.
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
IMPORTANT: Please sign this Proxy exactly as your name or names appears hereon.
If shares are held jointly, signatures should include both names. Executors,
administrators, trustees, guardians and others signing in a representative
capacity should please give their full titles.
- --------------------------------------------------------------------------------

HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?

- ----------------------------------- -------------------------------------

[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE

- -------------------------------------------------------------- THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF
AMERICAN SOFTWARE, INC. THE FOLLOWING PROPOSALS:
- --------------------------------------------------------------
CLASS A COMMON STOCK 1. Election of Class A Directors. Two Class A
Directors to be elected. For Both With- For Both
Mark box at right if an address change or comment has been [_] Nominees hold Except
noted on the reverse side of this card. David H. Gambrell [_] [_] [_]
Thomas R. Williams [_] [_] [_]
CONTROL NUMBER:
RECORD DATE SHARES: NOTE: If you do not wish your shares voted "For" a
particular nominee, mark the "For All Except" box and
strike a line through the name(s) of the nominee(s). Your
shares will be voted for the remaining nominee(s).

For Against Abstain
2. Amendment to 1991 Employee [_] [_] [_]
Stock Option Plan. To increase
the base number of shares that
may be subject to options under
the Plan from 3,600,000 shares
to 4,600,000 shares.

------------- 3. Amendment to Directors and For Against Abstain
Please be sure to sign and date this Proxy. Date Officers Stock Option Plan. [_] [_] [_]
- -------------------------------------------------------------- To increase the number of
shares that may be subject to
- -------Shareholder sign here--------Co-owner sign here-------- options under the Plan from
1,200,000 shares to 1,600,000
shares.

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