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

SCHEDULE 14A
(RULE 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

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Software Spectrum, 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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2
NOTICE OF ANNUAL MEETING
ON SEPTEMBER 21, 2000
AND PROXY STATEMENT

[SOFTWARE SPECTRUM, INC. LOGO]

SOFTWARE SPECTRUM, INC.
2140 MERRITT DRIVE
GARLAND, TEXAS 75041

AUGUST 16, 2000

Dear Shareholder:

We invite you to attend our Annual Meeting of Shareholders on Thursday,
September 21, 2000, at 10:00 a.m. Central time in Garland, Texas. At the
meeting, you will hear a report on our operations and have a chance to meet a
number of our directors and officers.

This booklet includes the formal notice of the Annual Meeting and the Proxy
Statement. The Proxy Statement tells you about the agenda and procedures for the
meeting. It also describes how the Board operates, gives personal information
about our directors, and provides other information about Software Spectrum.

Our Proxy Statement is being written in "Plain English" this year. "Plain
English" is a new format, created by the Securities and Exchange Commission,
that is designed to make documents easier to read. We hope that you agree and
that you find our proxy statement easy to read and understand.

Even if you have only a few shares, we want your shares to be represented
at the meeting. I urge you to complete, sign, date, and return your proxy card
promptly in the enclosed envelope, even if you plan to attend the meeting.

Sincerely,

Judy C. Odom
Chairman & Chief Executive Officer

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
OF SOFTWARE SPECTRUM, INC.

Date:
Thursday, September 21, 2000

Time:
10:00 a.m., Central Time

Place:
Software Spectrum, Inc.
2140 Merritt Drive
Garland, Texas 75041

Purpose:

o To elect two Class III directors;

o To approve the adoption of Amendment No. 1 to Software Spectrum's
Amended and Restated Employee Stock Purchase Plan; and

o To conduct other business that may properly be raised.

Only shareholders of record on August 4, 2000 may vote at the meeting.

WE CORDIALLY INVITE YOU TO ATTEND THE MEETING IN PERSON. EVEN IF YOU
DO NOT PLAN TO ATTEND THE MEETING, YOUR VOTE IS IMPORTANT. PLEASE
COMPLETE, SIGN, DATE, AND RETURN YOUR PROXY CARD PROMPTLY IN THE
ENCLOSED ENVELOPE. IF YOU RETURN YOUR PROXY AND LATER DECIDE THAT YOU
WISH TO ATTEND THE MEETING AND VOTE IN PERSON, YOU MAY REVOKE YOUR
PROXY AT ANY TIME BEFORE IT IS VOTED.

Sincerely,

Robert D. Graham
Secretary

Garland, Texas
August 16, 2000

TABLE OF CONTENTS PAGE
- -----------------------------------------------------------------------------------------------------

GENERAL QUESTIONS AND ANSWERS 1

STOCK OWNERSHIP OF PRINCIPAL SHAREHOLDERS 2

STOCK OWNERSHIP OF MANAGEMENT 3

PROPOSAL ONE - ELECTION OF DIRECTORS 4

Nominees for Class III Directors (Terms expiring in 2000) 4

Continuing Class I Directors (Terms expiring in 2001) 4

Continuing Class II Directors (Terms expiring in 2002) 5

Meetings of the Board and its Committees 5

PROPOSAL TWO - ADOPTION OF AMENDMENT NO. 1 TO THE AMENDED AND RESTATED
EMPLOYEE STOCK PURCHASE PLAN 6

EXECUTIVE COMPENSATION TABLES 8

Summary Executive Compensation Tables 8

Option Grants in Last Fiscal Year 9

Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values 9

Management Continuity Agreements 9

Compensation of Directors 11

Compensation Committee Interlocks and Insider Participation 11

Compliance with Section 16(a) of the Securities Exchange Act of 1934 11

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION 11

STOCK PERFORMANCE GRAPH 13

ADDITIONAL INFORMATION 14

APPENDIX A - AMENDMENT NO. 1 TO THE SOFTWARE SPECTRUM, INC. AMENDED AND RESTATED
EMPLOYEE STOCK PURCHASE PLAN

GENERAL QUESTIONS AND ANSWERS

Q: WHO IS ENTITLED TO VOTE?

A: Software Spectrum shareholders of record at the close of business on August
4, 2000 (the record date) may vote.

Q: WHY AM I RECEIVING THIS PROXY STATEMENT?

A: Our Board of Directors is furnishing this proxy statement to our shareholders
as of August 4, 2000 in connection with the solicitation of proxies to be voted
at our annual meeting of shareholders, or at any adjournment of the meeting, for
the purposes set forth in the Notice of Annual Meeting at the beginning of this
booklet.

Q: HOW DO I VOTE?

A: You may vote by signing, dating, and completing the enclosed proxy card and
returning it in the enclosed self-addressed envelope by mail or by attending the
meeting and voting in person. We recommend you vote by proxy even if you plan to
attend the meeting; you can always change your vote at the meeting if you
desire.

Q: HOW DO PROXIES WORK?

A: The Board of Directors of Software Spectrum is asking for your proxy. The
proxy solicitation may be in person or by mail, telephone, or telegram by
directors, officers, employees, or other authorized designees of Software
Spectrum. Giving your proxy to the persons named by us means you authorize them
to vote your shares at the meeting in the manner you direct. You may vote for
all, some, or none of our director candidates.

If you sign and return the enclosed proxy card but do not specify how to vote,
your shares will be voted FOR the election of all of our director candidates,
FOR the adoption of Amendment No. 1 to the Amended and Restated Employee Stock
Purchase Plan, and in the transaction of such other business as may properly
come before the meeting or any adjournment(s) of the meeting.

You may receive more than one proxy or voting card depending on how you hold
your shares. Shares registered in your name are covered by one card. If you also
hold shares through a broker or someone else, you may also get material from
them asking how you want to vote. Please respond to all of these requests.

Q: HOW WILL VOTING ON OTHER BUSINESS BE CONDUCTED?

A: Our Board knows of no business that will be presented for consideration at
the Annual Meeting, other than the matters referred to in the Notice of Annual
Meeting of Shareholders. If any other matters are properly brought before the
meeting, the persons named as proxies will vote in accordance with their
judgment.

Q: HOW CAN I REVOKE OR CHANGE MY VOTE?

A: You may change or revoke your proxy before it is voted by submitting a new
proxy with a later date, voting in person at the meeting, or by delivering to
our Secretary a written notice of your change or revocation at the address
listed under QUESTIONS on page 14 of this proxy statement before your proxy is
voted at the meeting.

Q: WHAT IS A "QUORUM"?

A: In order to carry on the business of the meeting, we must have a "quorum," or
a majority of the outstanding shares represented at the meeting. The person with
the right to vote the shares must be present at the meeting or represented by
proxy. Shares owned by Software Spectrum (treasury shares) are not voted and do
not count for this purpose.

If a quorum is not represented at the meeting, the shareholders entitled to vote
have the power to adjourn the meeting without notice, other than an announcement
at the meeting, until a quorum is represented. Abstentions and broker non-votes
(when a broker holding shares for clients in street name is not permitted to
vote on certain matters without the client's instructions) are counted for
purposes of determining if a quorum is represented for the transaction of
business. However, abstentions and broker non-votes are not counted in the
election of directors and will have no effect on the election of directors
except to the extent that they affect the total votes received by a candidate.
On matters other than the election of directors, abstentions will be counted as
votes cast, which will have the same effect as a negative vote on such matter.

Q: WHO CAN ATTEND THE MEETING IN PERSON?

A: Only shareholders, their proxy holders, and invited guests may attend the
meeting. If you wish to vote in person and your shares are held by a
stockbroker, you will need to obtain a proxy from the stockbroker authorizing
you to vote your shares held in the stockbroker's name.

Q: HOW MANY SHARES ARE OUTSTANDING AND HOW MANY SHARES CAN I VOTE?

A: As of the close of business on August 4, 2000, 3,681,493 shares of common
stock were issued and outstanding. Every shareholder is entitled to one (1) vote
for each share of common stock held.

Q: WHEN WAS THIS PROXY STATEMENT MAILED TO SHAREHOLDERS?

A: This proxy statement was first mailed to shareholders on or about August
16, 2000.

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STOCK OWNERSHIP OF PRINCIPAL SHAREHOLDERS

In the table below, we show you how much of our common stock was beneficially
owned on July 14, 2000 by each person we know to beneficially own more than 5%
of our common stock.

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

Judy C. Odom(2) 359,264(7) 9.64%

Private Capital Management, Inc. 855,953(8) 23.27
and Bruce S. Sherman(3)

Edward P. Grace III(4) 281,757(9) 7.66

Dimensional Fund Advisors(5) 257,600(10) 7.00

Chatterjee Fund Management(6) 208,200(11) 5.66

- ----------

(1) Unless otherwise indicated, to our knowledge, the owner of all shares
reflected in the table above owns such shares directly and has sole voting
and investment power with respect to such shares.

(2) Ms. Odom's address is 2140 Merritt Drive, Garland, Texas 75041.

(3) The address of Private Capital Management, Inc. and Mr. Sherman is 3003
Tamiami Trail North, Naples, Florida 33940.

(4) Mr. Grace's address is Sun Trust Center, Suite 1850, South Orange Avenue,
Orlando, Florida 32801.

(5) The address of Dimensional Fund Advisors is 1299 Ocean Avenue, 11th Floor,
Santa Monica, California 90401.

(6) The address of Chatterjee Fund Management is 888 Seventh Avenue, New York,
New York 10106.

(7) Includes 50,000 shares that are subject to options exercisable within 60
days of July 14, 2000.

(8) This information is based on a Schedule 13G/A of Private Capital
Management, Inc., SPS Partners, L.P., Bruce S. Sherman and certain other
persons, dated February 15, 2000. Mr. Sherman is president of Private
Capital Management and managing general partner of SPS Partners. He
exercises shared dispositive power with each such entity.

(9) This information is based on a Schedule 13D/A of Edward P. Grace III, dated
November 29, 1999.

(10) This information is based on a Schedule 13G of Dimensional Fund Advisors,
dated February 3, 2000. Dimensional Fund Advisors is an investment adviser
registered under Section 203 of the Investment Advisers Act of 1940 and
disclaims beneficial ownership of such shares.

(11) This information is based on a Schedule 13G of Chatterjee Fund Management,
Dr. Purnendu Chatterjee and certain other entities, dated April 19, 2000.
Dr. Chatterjee is the sole general partner of Chatterjee Fund Management
and manages and/or controls each of the other entities included in the
Schedule 13G. Each entity states in the Schedule 13G that it exercises sole
voting and dispositive power over the shares held by it, and each disclaims
beneficial ownership of shares held by the other entities.

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STOCK OWNERSHIP OF MANAGEMENT

In the table below, we show you how much of our common stock was beneficially
owned on July 14, 2000 by each director and nominee and each of the chief
executive officer and the four other most highly paid executive officers of
Software Spectrum, and by all directors and executive officers as a group.

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

Judy C. Odom, Chairman and 359,264(2) 9.64%
and Chief Executive Officer

Frank Tindle, Director 114,427(3) 3.10

Mellon C. Baird, Director 10,110(4) *

Brian N. Dickie, Director 4,500(5) *

Keith R. Coogan, President, 38,011(6) 1.02
Chief Operating Officer and Director

Roger J. King, President of Product 51,419(7) 1.39
Services and Executive Vice President
of Sales and Marketing

Robert D. Graham, Vice President 18,060(8) *
Strategic Relationships, General
Counsel and Secretary

James W. Brown, Vice President 6,222(9) *
and Chief Financial Officer

All directors and executive officers 647,858(10) 17.61
as a group (12 persons)

- ----------

* Indicates less than one percent.

(1) Unless otherwise indicated, to our knowledge, the owner of all shares
reflected in the table above owns such shares directly and has sole voting
and investment power with respect to such shares.

(2) Includes 50,000 shares that are subject to options exercisable within 60
days of July 14, 2000.

(3) Mr. Tindle and his spouse, as tenants-in-common, jointly hold all such
shares, and Mr. Tindle has shared investment and voting power for these
shares. Includes 9,000 shares that are subject to options exercisable
within 60 days of July 14, 2000.

(4) Includes 9,000 shares that are subject to options exercisable within 60
days of July 14, 2000.

(5) Includes 2,000 shares that are subject to options exercisable within 60
days of July 14, 2000.

(6) Includes 32,000 shares that are subject to options exercisable within 60
days of July 14, 2000.

(7) Includes 28,400 shares that are subject to options exercisable within 60
days of July 14, 2000.

(8) Includes 16,400 shares that are subject to options exercisable within 60
days of July 14, 2000.

(9) Includes 5,600 shares that are subject to options exercisable within 60
days of July 14, 2000.

(10) Includes 194,200 shares that are subject to options exercisable within 60
days of July 14, 2000.

3
8

PROPOSAL ONE
ELECTION OF DIRECTORS

The Board of Directors of Software Spectrum has nominated the two director
candidates named below.

The role of the Board of Directors is to oversee the management of Software
Spectrum on your behalf. The Board reviews Software Spectrum's long-term
strategic plans and exercises direct decision-making authority on key issues.
Just as important, the Board chooses our officers, sets the scope of their
authority to manage our daily operations, and evaluates their performance.

Three of Software Spectrum's five directors, including one of our two nominees,
are Independent Directors. "Independent Directors" are not officers or employees
of Software Spectrum or any of its affiliates.

The Software Spectrum charter and bylaws provide for three classes of directors.
The directors in each class serve staggered three-year terms that expire at the
annual meeting of shareholders three years following their election.

The Software Spectrum Board has nominated for re-election the two persons
currently serving as Class III directors. If elected, these two people will
serve until the Annual Meeting of Shareholders in 2003. Personal information on
these nominees, and on each of our other directors, is given on the following
pages.

You may not vote your proxy for more than two nominees.

The Board has no reason to believe that the nominees will be unable or unwilling
to serve if re-elected, but if a nominee becomes unavailable to serve, your
proxy card authorizes the named proxies to vote for a replacement nominee if the
Board names one.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF EACH OF THE
FOLLOWING NOMINEES FOR CLASS III DIRECTORS.

NOMINEES FOR CLASS III DIRECTORS (TERMS EXPIRING IN 2000)

JUDY C. ODOM Ms. Odom is a co-founder of Software Spectrum and has
Age 47 been a director since its inception in 1983. She served
as Treasurer from 1983 to October 1990, as Vice
President from April 1987 to April 1988, and has served
as Chief Executive Officer since April 1988 and
Chairman of the Board since July 1992. From April 1996
to May 1998, Ms. Odom also served as our President.
From 1977 to 1985, Ms. Odom was employed by the
national accounting firm of Grant Thornton LLP, where
she last served as an audit partner. Ms. Odom is a
Certified Public Accountant.

FRANK TINDLE Mr. Tindle is a co-founder of Software Spectrum and has
Age 48 been a director since 1983. From 1983 to April 1992, he
served as Vice President. From 1980 to 1983, Mr. Tindle
was the principal accounting officer of Southmark
Corporation, and prior to joining Southmark, he was
employed by the national accounting firms of Grant
Thornton LLP and Ernst & Young LLP. Mr. Tindle is a
Certified Public Accountant.

CONTINUING CLASS I DIRECTORS (TERMS EXPIRING IN 2001)

MELLON C. BAIRD Mr. Baird has been a director of Software Spectrum
Age 69 since June 1991. He has been President and Chief
Executive Officer of Titan Systems Corporation, a
wholly owned subsidiary of Titan Corporation, since its
merger with Delfin Systems in September 1998. Titan is
a developer and supplier of information and
communication systems, products, and services for
government and commercial markets. Prior to the merger,
Mr. Baird had served as President and Chief Executive
Officer of Delfin Systems since November 1990 and as
Chairman of the Board since April 1991. He also serves
as a director of EDO Corporation and of Hawker Pacific
Aerospace. From September 1986 to December 1987, Mr.
Baird served as President, Chief Operating Officer, and
a director of Tracor, Inc. From January 1988, after
Tracor, Inc. became a subsidiary of privately-held
Westmark Systems, Inc., until December 1989, he served
as President and Chief Executive Officer of this
diversified technological products and services
company. Mr. Baird served as President of the Defense
and Electronics Group of Eaton Corporation from 1982 to
September 1986.

4
9

KEITH R. COOGAN Mr. Coogan has been a director of Software Spectrum
Age 48 since August 1998. He was named President in May 1998
and has been Chief Operating Officer since April 1996.
Mr. Coogan served as Executive Vice President from
April 1996 to May 1998 and has been a Vice President
since October 1990. He served as Secretary from May
1991 to July 1992 and as Treasurer from October 1990 to
March 1992. From May 1989 until joining Software
Spectrum, Mr. Coogan served as Vice President of
Finance for Leather Center Holdings Inc., a privately
held manufacturer and retailer of leather furniture.
From January 1986 to May 1989, he was Vice President
and Chief Financial Officer of Trinity Texas
Corporation and Ward Hunt Investments, both of which
were privately held real estate sales and development
organizations. Mr. Coogan is a Certified Public
Accountant.

CONTINUING CLASS II DIRECTORS (TERMS EXPIRING IN 2002)

BRIAN N. DICKIE Mr. Dickie has been a director of Software Spectrum
Age 45 since June 1999. He is Group President of TXU Energy,
the unregulated U.S. energy and telecommunications
businesses of TXU Corp., a global energy services
company. He is also responsible for TXU Australia and
is a member of the parent policy committee. Prior to
joining TXU in early 1999, Mr. Dickie served as Chief
Operating Officer of Booz Allen & Hamilton Inc., a
global management and technology consulting firm. He
joined Booz Allen in 1982 and held various management
positions, including Chief Operating Officer from 1997
to 1999; President, Worldwide Commercial Business from
1993 to 1997; and Managing Partner of the firm's
Asia/Pacific practice from 1988 to 1993. From 1982 to
1988, he consulted with clients in the U.S., Canada,
the United Kingdom, and Asia/Pacific.

There is currently a vacancy in this class of directors. The Board of Directors
is seeking an appropriate candidate to fill this vacancy.

MEETINGS OF THE BOARD AND ITS COMMITTEES

Software Spectrum's Board of Directors held four meetings during fiscal year
2000 and acted by written consent on two occasions. The Board appoints
committees to help carry out its duties. In particular, Board committees work on
key issues in greater detail than would be practicable at a full Board meeting.
Each committee reviews the results of its meetings with the full Board.

Audit Committee. The Board of Directors of Software Spectrum has an Audit
Committee that is currently composed of Mellon C. Baird and Brian N. Dickie. The
Audit Committee held four meetings during fiscal 2000. The functions performed
by the Audit Committee include:

o making recommendations concerning our company's independent public
accountants;

o reviewing and approving the scope of our company's annual audit plan;

o reviewing internal audit controls, risk management, and the effectiveness
of our company's programs for implementing audit recommendations; and

o periodically interviewing our company's independent public accountants in
order to analyze the strengths and weaknesses of our financial staff and
systems and the adequacy of its internal controls.

Compensation Committee. The Board of Directors of Software Spectrum has a
Compensation Committee that is currently composed of Mellon C. Baird and Frank
Tindle. The Compensation Committee held two meetings during fiscal year 2000.
The functions performed by the Compensation Committee include:

o periodically establishing the compensation paid to our officers and
reporting its determinations to the Board of Directors concerning
compensation; and

o administering our 1993 Long Term Incentive Plan and 1998 Long Term
Incentive Plan.

During the year, each director attended at least 75% of the aggregate of:

o The total number of meetings held by the Board; and

o The total number of meetings held by all committees on which he served.

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PROPOSAL TWO

ADOPTION OF AMENDMENT NO. 1 TO THE AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE
PLAN

In 1992, we adopted the Software Spectrum, Inc. Employee Stock Purchase Plan,
which provides for the purchase of our common stock by eligible employees at 85%
of the closing price of our stock on the date the shares are purchased, as
described below. In 1997, we amended and restated the plan in order to change
enrollment periods for employees. As adopted, the maximum number of shares of
common stock that were available for purchase by employees under the plan was
165,000. At June 30, 2000, 153,586 shares had been purchased by eligible
employees, leaving 11,414 shares of common stock available for purchase, under
the plan.

In August 2000, the Board of Directors unanimously approved and recommended for
shareholder approval an Amendment No. 1 to the plan that would increase by
150,000 the number of shares of common stock reserved for purchase by eligible
employees. The purpose of this amendment is to make additional shares of common
stock available for purchase by employees. This amendment will become effective
upon shareholder approval. A summary of the plan, as amended by this proposal,
is set forth below. This summary is qualified in its entirety by reference to
the full text of the plan which we have previously filed with the Securities and
Exchange Commission.

The Board of Directors believes that the plan is important as it provides
incentives to our current and future employees to participate more actively in
the Company by acquiring or increasing their ownership interest in Software
Spectrum. The adoption of this amendment has been proposed in order to enable us
to continue to provide this type of incentive to our employees and to more
closely align employee and shareholder interests.

DESCRIPTION OF THE STOCK PURCHASE PLAN

Scope. The plan authorizes the purchase of common stock by our employees through
payroll deductions. The purpose of the plan is to encourage and facilitate the
purchase of our common stock by eligible employees and to further identify our
employees' interests with those of our other shareholders.

The plan, as amended by this proposal, authorizes the purchase of 315,000 shares
of common stock by eligible employees.

Administration. The plan is administered by the Board of Directors.

Eligibility. All employees who have completed six months' employment with
Software Spectrum or one of our subsidiaries and whose usual employment is more
than twenty hours per week and more than five months per calendar year are
eligible to participate in the plan. Employees who own five percent or more of
the voting stock of the Company and, for limited periods, certain officers that
have previously withdrawn from the plan, may not participate in the plan.

Terms of Offering. Under the plan, there are a series of monthly offerings of
our common stock to our participating employees. The exercise date for each
offering is the 15th day of the month (or the next following business day). Each
offering commences on the first business day following the prior offering's
exercise date. On the exercise date, the balance in each participant's stock
purchase account will be used (without further action by the participant) to
purchase the number of whole shares available for purchase at the exercise price
on such date.

The price per share paid by employee participants under the plan is equal to 85%
of the fair market value of our common stock on the exercise date. The exercise
price is payable through payroll deductions from the participants' compensation.
Each participant may spend up to $15,000 to buy our common stock per calendar
year during the existence of the plan; provided that payroll deductions under
the plan will be limited to 10% of a participant's compensation. The last
reported quotation of our common stock on July 14, 2000, as reported by the
Nasdaq National Market System, was $15.50 per share.

No participant or his legal representatives, legatees, or distributees is deemed
to be the holder of any shares of common stock subject to an offering until the
purchase price for the shares has been paid. No payroll deductions credited to a
participant's stock purchase account, nor any rights with regard to the exercise
of rights to receive shares of common stock under the plan, may be assigned,
transferred, pledged, or otherwise disposed of in any way by a participant other
than by will or the laws of descent and distribution. Rights under the plan are
exercisable during a participant's lifetime only by him, his guardian, or legal
representative. Shares may be sold or otherwise transferred by a participant
without restriction, provided that he notifies us of any transfer within two
years of the exercise date on which the shares were purchased.

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11

Termination of Employment. In the event of a participant's retirement, death, or
termination of employment, no payroll deduction will be taken from any
compensation due to the participant at such time and any cash in his stock
purchase account will be paid to the former employee (or his legatees and
distributees, in the event of death).

Amendment and Termination. The Board of Directors may amend, suspend, or
terminate the plan or any part of the plan at any time; provided, however, that:

o no amendment may be made without shareholder approval if the amendment
would cause the plan to fail to meet the requirements of Section 423 of the
Code; and

o no amendment may be made without shareholder approval that would (i)
materially increase the number of shares that may be issued pursuant to an
option granted under the plan; (ii) materially modify the requirements as
to eligibility for participation in the plan; or (iii) materially increase
the benefits accruing to participants under the plan.

Federal Income Tax Consequences. We believe that the plan qualifies as an
"employee stock purchase plan" within the meaning of Section 423 of the Code. As
a result, neither the grant to a participant of an option to purchase shares
under the plan nor the participant's subsequent purchase of shares will result
in the recognition of income to the participant provided that: (i) he is an
employee of Software Spectrum or a subsidiary on the exercise date; and (ii) he
does not sell or otherwise dispose of the shares purchased under the plan within
two years after the date the shares were purchased.

When a participant sells or otherwise disposes of shares after satisfying the
holding period requirement, or upon a participant's death while owning shares
(whether before or after satisfying the holding period requirement), the
participant will recognize ordinary income in an amount equal to the lesser of:
(i) the excess of the fair market value of the shares at the time of the
disposition or death over the price paid for the shares; or (ii) the excess of
the fair market value on the exercise date over the option price on such
exercise date. Any amount realized by the participant in excess of the option
price paid for the shares and the ordinary income amount would be taxable as
long-term capital gain.

If a participant sells or disposes of shares purchased under the plan before
satisfying the holding period requirement, the participant is required to report
the sale to us and will recognize ordinary income in an amount equal to the
excess of the fair market value of the shares on the exercise date over the
price paid for the shares. Upon receipt of such a notice from the participant,
we will claim a tax deduction for this same amount and at the same time as the
income is taxable to the participant. Any difference between the fair market
value of the shares on the exercise date and the amount realized on such sale
would be subject to long-term or short-term capital gain or loss treatment,
depending on the length of time the shares were held. We are not required to
deduct any amount by reason of the grant or exercise of options or the
disposition of shares.

We are unable to determine the amount of benefits that may be received by
participants under the plan, as participation is discretionary with each
employee and as disposition of shares acquired under the plan is discretionary
with each participant.

The affirmative vote of a majority of the shares entitled to vote on this
proposal and represented in person or by proxy is required for approval.

We filed a copy of the plan with the Securities and Exchange Commission with our
Annual Report on Form 10-K for the fiscal year ended April 30, 2000.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF AMENDMENT NO. 1
TO THE AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN.

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EXECUTIVE COMPENSATION TABLES

In the table below, we provide you with information about all cash compensation
we paid to our Chief Executive Officer and our four other most highly paid
executives during the fiscal years ended April 30, 2000, 1999, and 1998.

SUMMARY EXECUTIVE COMPENSATION TABLE

LONG TERM
ANNUAL COMPENSATION COMPENSATION
--------------------------- ------------
SECURITIES ALL OTHER
FISCAL UNDERLYING COMPENSATION
NAME AND POSITION YEAR SALARY($) BONUS($)(1) OPTIONS(#) ($)(2)
----------------- ------ --------- ----------- ------------ ------------

Judy C. Odom 2000 610,000 97,500 25,000 1,025
Chairman of the Board and 1999 510,000 299,150 25,000 1,330
Chief Executive Officer 1998 460,000 213,750 25,000 477

Keith R. Coogan 2000 325,000 85,000 20,000 1,597
President and 1999 310,000 167,913 20,000 1,330
Chief Operating Officer 1998 270,000 122,500 20,000 746

Roger J. King 2000 260,000 71,408(3) 15,000 1,447
Executive Vice President of 1999 240,000 100,203 15,000 1,330
Sales and Marketing and 1998 180,000 112,255 13,000 746
President of Product Services

Robert D. Graham
Vice President Strategic 2000 235,000 48,488 10,000 1,678
Relationships, General 1999 200,000 49,250 10,000 0
Counsel and Secretary 1998 170,000 40,000 13,000 0

James W. Brown 2000 215,000 43,875 8,000 797
Vice President and 1999 175,446 52,587 0 0
Chief Financial Officer 1998(4) 29,212 6,890 10,000 0

(1) For the 2000 fiscal year, the portion of the bonus payable pursuant to the
annual performance pay plan for all executive officers provided for a
potential payment of $806,000 to all executive officers as a group, of
which $274,000 was paid.

(2) Represents amounts allocated to each officer under Software Spectrum's
Savings and Profit Sharing Plan.

(3) Includes $3,750 estimated bonus for the month of April 2000, which will be
finalized and paid in August 2000.

(4) Mr. Brown joined Software Spectrum in February 1998.

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OPTION GRANTS IN LAST FISCAL YEAR

In the table below, we provide you with information about stock option grants we
made during the last fiscal year to our Chief Executive Officer and our four
other most highly paid executives.

Potential Realized
Value at Assumed
Individual Grants Annual Rates of Stock
------------------------------------------------------------------------ Price Appreciation
% of Total Options for Option Term
Options Granted to Employees Exercise Price Expiration ---------------------
Name Granted(#) in Fiscal Year ($/share) Date 5%($) 10%($)
---- ---------- -------------------- -------------- ---------- -------- ---------

Judy C. Odom 25,000 13.00% $15.75 6/24/05 133,913 303,802
Keith R. Coogan 20,000 10.00% $15.75 6/24/05 107,130 243,042
Roger J. King 15,000 8.00% $15.75 6/24/05 80,348 182,281
Robert D. Graham 10,000 5.00% $15.75 6/24/05 53,565 121,521
James W. Brown 8,000 4.00% $15.75 6/24/05 42,852 97,217

AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES

In the table below, we provide you with information about stock options
exercised during the last fiscal year, and the estimated values of unexercised
options held at fiscal year-end, by our Chief Executive Officer and our four
other most highly paid executives.

Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Shares Options at Fiscal Year-End(#) At Fiscal Year-End ($)
Acquired on Value ----------------------------- ----------------------------
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ----------- ------------ ------------- ----------- -------------

Judy C. Odom 0 0 56,000 59,000 233,153 176,592
Keith R. Coogan 0 0 24,000 46,000 80,636 116,644
Roger J. King 0 0 21,800 34,200 70,447 77,826
Robert D. Graham 0 0 9,800 23,200 41,441 52,008
James W. Brown 0 0 4,000 14,000 4,752 26,632

MANAGEMENT CONTINUITY AGREEMENTS

We have entered into Management Continuity Agreements with each of our executive
officers. The purpose of these agreements is to serve the best interests of
Software Spectrum and our shareholders by providing incentives for an executive
to render impartial advice and services during a pending takeover, and to be
available and render services during at least a crucial four-month transition
period following a change of control.

The agreements are entered into prior to a change of control of Software
Spectrum, but the terms do not become effective until this change occurs. The
agreements provide continued employment for a two-year term equivalent to the
terms of employment that existed immediately before the change of control. The
terms of employment include position, location, responsibilities, compensation,
and benefits.

The executive would become entitled to a specific severance payment if
employment is prematurely terminated:

o by us without "cause";

o by the executive during the term of the agreement for "good reason"; or

o without any reason during a 60-day "window period" after the first four
months.

The agreements renew annually, but before a change of control occurs or is
contemplated, we have the ability to terminate the agreements once each year by
giving at least 60-days advance written notice to the executive.

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The agreements, subject to certain exceptions, define a change of control to
encompass any of the following events:

o the acquisition of 50% or more of our stock by a person or group;

o a change in a majority of our Board of Directors (other than a change
approved by the incumbent board);

o approval by our shareholders of a reorganization, merger, or consolidation;
or

o approval by our shareholders of a liquidation or dissolution or sale of all
or substantially all of our assets.

Exceptions to the change of control definition include, but are not limited to:

o acquisitions of our stock by us or by employee benefit plans;

o acquisitions of our stock directly from us; and

o transactions in which our existing shareholders maintain effective control.

The management continuity agreements permit an executive to collect severance
benefits following a change of control, if the executive terminates employment:

o for good reason;

o without any reason, but during a 60-day window period beginning four months
after a change of control; or

o if employment of the executive is terminated by the employer without cause.

Good reason is defined in the agreements generally to include reductions in
compensation or benefits, reduction of duties, and any material relocation.

Cause is defined as a material breach of obligations of employment not cured
after notice has been provided or a conviction for a felony involving moral
turpitude.

Additionally, the agreements provide incentive for an executive to remain with
Software Spectrum for a full year after a change of control through a special
bonus provision. Because of our quarterly bonus system, the agreements provide
that periodic quarterly bonuses will be defined as part of the executive's base
salary as if all requirements for earning the bonus had been met.

The executive will receive 1.5 times his or her annual base salary and bonus if:

o the executive remains employed with Software Spectrum for four months after
a change of control and then chooses to leave during a 60-day window
period;

o the executive is terminated other than for cause during a period of two
years after a change of control; or

o the executive leaves for good reason (such as a reduction in salary or
position) during the period of two years after a change of control.

If the executive stays employed by Software Spectrum through the first
anniversary of a change of control (with continued employment agreement
protection for one additional year), the executive would receive a financial
bonus equal to the executive's annual base salary and bonus (payable whether or
not employment is later terminated).

If the executive is terminated because of a disability during a period of two
years after a change of control, the executive would receive the greater of:

o 1.5 times the executive's annual base salary and bonus; or

o any disability benefits then provided by Software Spectrum.

If the executive dies during employment during a period of two years after a
change of control, the executive's estate would receive the greater of:

o 1.5 times the executive's annual base salary and bonus; or

o any death benefits then provided by Software Spectrum.

The executive would receive no severance benefits if the executive were
terminated by Software Spectrum for cause during a period of two years after a
change of control. The agreements provide that an executive will be reimbursed
for any legal expenses incurred in litigating rights under the agreements
regardless of whether the litigation is successful.

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COMPENSATION OF DIRECTORS

We pay each outside director an annual retainer of $20,000, payable in quarterly
installments, for service as a member of our Board of Directors. Under the
Non-Employee Directors' Retainer Stock Plan, the outside directors may choose to
receive all or part of their annual retainer fees in the form of our common
stock or defer receipt of part of their fees and have the deferred amounts
treated as if invested in our common stock.

We also pay each outside director a fee of $1,000 for each Board Meeting they
attend, and $800 for each committee meeting attended.

In addition, we grant each outside director options to purchase 2,000 shares of
our common stock for each year of service. These options are exercisable at the
fair market value of our common stock on the date of grant and are granted under
the 1993 Long Term Incentive Plan. We reimburse our outside directors for travel
expenses they incur to attend meetings.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Frank Tindle, who serves as a member of the Compensation Committee of our Board
of Directors, served as Vice President of Software Spectrum from 1983 through
April 1, 1992.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

Under Section 16(a) of the Securities Exchange Act of 1934, our directors,
executive officers, and persons who own more than 10% of our stock are required
to file reports of ownership and changes in ownership with the SEC. Executive
officers, directors, and greater than 10% shareholders are required by SEC
regulations to furnish us with copies of all Section 16(a) forms they file.

After review of the copies of these reports furnished to us and written
representations that no other reports were required, we believe that all of our
executive officers, directors, and greater than 10% beneficial owners observed
all Section 16(a) filing requirements applicable to them during the fiscal year
ended April 30, 2000.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

Our Compensation Committee establishes salary levels and performance pay plans
for executive officers and reports its determination to the Board of Directors.
Our Compensation Committee also administers our stock-based incentive plans and
determines grants under these plans for all employees, including executive
officers.

Compensation Philosophy

The compensation philosophy for executive officers generally conforms to our
compensation philosophy for all management level employees. Our compensation is
designed to:

o provide compensation comparable to what is offered by companies with
similar businesses or of similar size, allowing us to successfully attract
and retain the employees we need to achieve long-term success;

o provide compensation that relates to the performance of the individual and
differentiates based upon individual performance;

o provide incentive compensation that varies directly with both our
performance and the individual's contribution to that performance.

o provide an appropriate connection between compensation and the creation of
shareholder value through awards tied to our performance and through
facilitating employee stock ownership.

The following is a report submitted by our Compensation Committee addressing our
compensation policies as they relate to the executive officers for the 2000
fiscal year.

In setting compensation for executive officers, we as a committee consider the
relationship between executive pay and enhancing shareholder value, as well as
the need to motivate and retain key employees. We also operate within Software
Spectrum's overall philosophy, which stresses teamwork, fairness, and the
overall emphasis on cost control, which includes compensation expense.

To achieve our basic compensation goals, we set annual compensation for
executive officers, including base salary, discretionary quarterly performance
pay plans for all executive officers except for the Chief Executive Officer, and
an annual performance pay plan for all executive officers. As a committee, we
receive recommendations from the Chief Executive Officer on base salary,
performance pay plans, and grants under our

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stock option plans for all executive officers other than the Chief Executive
Officer.

In setting executive compensation, we consider the salaries and other benefits,
including stock-based incentive grants, of executive officers in similar
companies according to independent market data. As a committee, we believe that
an executive's personal performance should be appropriately weighted with
Software Spectrum's financial performance in determining the executive's
compensation. As a result, annual performance pay plans are significant
components of the overall compensation of each of our executives.

Discretionary Quarterly Performance Pay Plan

This plan includes all executive officers except the Chief Executive Officer and
measures the executive's ability to achieve certain goals during each quarter of
Software Spectrum's fiscal year. These goals are set and evaluated for each
executive by either the Chief Executive Officer, President, or Executive Vice
President. Additionally, those executives who are responsible for sales and
operating units participate in a quarterly performance pay plan that is based on
attaining specified profitability goals for their specific business segment and
Software Spectrum as a whole.

Annual Performance Pay Plan

This plan includes all executive officers as well as the Chief Executive Officer
and consists of the following two components:

o An individual performance component for each officer is weighted towards a
subjective evaluation of each officer's performance. This evaluation is
completed by us as a committee, with input and advice from the Chief
Executive Officer for all executive officers except the Chief Executive
Officer. This component measures various criteria, including the
performance of those departments under the management of the officer and
effective implementation and achievement of strategic goals.

o An overall financial performance component is calculated by comparing our
financial results for the year with internally established financial goals.

As a committee, we set the financial goals by taking into consideration the
following:

o Software Spectrum's prior financial performance;

o current established financial objectives;

o the performance of other companies within Software Spectrum's
industry;

o recommendations from the Chief Executive Officer;

o Software Spectrum's net earnings;

o Software Spectrum's earnings per share; and

o Software Spectrum's revenue growth.

At least 50% of the total incentive compensation available under the annual
performance pay plan for the 2000 fiscal year was tied to Software Spectrum's
financial performance and growth. For the 2000 fiscal year, Software Spectrum
did not achieve all of the financial performance and growth goals, however we
considered the overall improvement in Software Spectrum's operations in
determining the amount to be paid under the incentive compensation portion of
the plan.

For the 2000 fiscal year, the annual performance pay plan for all executives
provided for a potential payment of $806,000 to all executives as a group, of
which we paid $274,000, or 34%.

As a committee, we believe that incentives based upon Software Spectrum's stock
performance are an important component of each executive officer's overall
compensation package. We also believe that the number of stock options granted
to each officer should be determined by a subjective evaluation of each
executive officer's ability to influence Software Spectrum's long-term growth
and profitability as well as data obtained from independent sources. During
fiscal 2000, we recommended and we granted options to the executive officers as
set forth in the Executive Compensation Table that appears earlier in this
document. Because the value of an option ties directly to our stock price, we
believe as a committee that option grants are an effective incentive for
executive officers to create value for our shareholders.

Mellon C. Baird and Frank Tindle

STOCK PERFORMANCE GRAPH

The following graph shows how an initial investment of $100 in our common stock
on March 31, 1995 would have compared to an equal investment in the Nasdaq
National Market (U.S. Companies) and an index of stocks listed on the Nasdaq
National Market under Standard Industrial Code ("SIC") 504, which is a broad
index prepared by the University of Chicago's Center for Research in Security
Prices that includes companies in the computer, computer peripheral, and
computer software industries. The graph assumes that any dividends are
reinvested.

[GRAPH]

- ------------------------------------------------------------------------------------------------------------------
3/31/95 3/31/96 4/30/97 4/30/98 4/30/99 4/30/00
- ------------------------------------------------------------------------------------------------------------------

Software Spectrum, Inc. 100.0 120.9 82.1 101.5 71.6 108.6
- ------------------------------------------------------------------------------------------------------------------
Nasdaq National Market - (U.S.) 100.0 135.8 155.7 232.7 319.2 483.9
- ------------------------------------------------------------------------------------------------------------------
Nasdaq Stocks - SIC 504 100.0 124.6 100.8 146.9 107.4 123.0
- ------------------------------------------------------------------------------------------------------------------

ADDITIONAL INFORMATION

ANNUAL REPORT

Our Annual Report to Shareholders is enclosed with this proxy statement. We will
also send you, at no charge, a copy of the Software Spectrum Annual Report on
Form 10-K for the fiscal year ended April 30, 2000 and/or any other document
which we refer to in this proxy statement, if requested in writing by a person
who was a shareholder (of record or beneficially) at the close of business on
August 4, 2000. You should send your request to our Corporate Secretary at the
address listed under Questions on this page.

HOW WE SOLICIT PROXIES

In addition to this mailing, our employees, directors, officers, or other
authorized designees may solicit proxies personally, electronically, or by
telephone. We pay the costs of soliciting the proxies. We also reimburse banking
institutions, brokers, custodians, trustees, nominees, and fiduciaries for
expenses incurred in sending these materials to you and getting your
instructions.

SHAREHOLDERS' PROPOSALS

The deadline for shareholder proposals for next year's Annual Meeting is April
20, 2001. These proposals must be received at our principal executive office by
the deadline in order to be considered for inclusion in the proxy statement and
form of proxy. These proposals must also comply with the other requirements of
the proxy solicitation rules of the Securities and Exchange Commission.

CERTIFIED PUBLIC ACCOUNTANTS

The firm of Grant Thornton LLP, independent auditors, has served as our auditors
for the fiscal year ended April 30, 2000 and will serve in that capacity for the
current fiscal year which will end on April 30, 2001. A representative of Grant
Thornton is expected to be present at our Annual Meeting to respond to
appropriate questions and to make a statement if desired.

QUESTIONS

If you have questions or need more information about the Annual Meeting, you may
write to:

Corporate Secretary
Software Spectrum, Inc.
2140 Merritt Drive
Garland, Texas 75041

Or call us at (972) 840-6600 and ask for Investor Relations.

For additional information regarding Software Spectrum, we also invite you to
visit our Internet site at www.softwarespectrum.com.

By Order of the Board of Directors,

ROBERT D. GRAHAM
Secretary

Garland, Texas
August 16, 2000

WE URGE YOU TO COMPLETE, SIGN, DATE, AND RETURN THE ENCLOSED PROXY CARD.

APPENDIX A

AMENDMENT NO. 1 TO THE
SOFTWARE SPECTRUM, INC.
AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN

WHEREAS, Software Spectrum, Inc. (the "Company") has heretofore adopted
the Software Spectrum, Inc. Amended and Restated Employee Stock Purchase Plan
(the "ESPP"); and

WHEREAS, the ESPP provides for the purchase of up to 165,000 shares of
the Company's common stock by certain qualified employees of the Company; and

WHEREAS, pursuant to those provisions of the ESPP permitting the Board
of Directors of the Company to amend the ESPP from time to time, the Company
desires to amend the ESPP to increase the shares available for purchase
thereunder by 150,000, for an aggregate of 315,000 shares to be available for
purchase thereunder;

NOW, THEREFORE, effective as of August 4, 2000, the Plan is hereby
amended as follows:

FIRST

The first sentence of Section 4.1 of the ESPP is hereby amended to read
in its entirety as follows:

The number of Shares for which Options may be granted under the Plan shall be
315,000.

The remaining provisions of the ESPP shall remain in full force and effect and
shall not be impacted by this Amendment.

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THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF
SOFTWARE SPECTRUM, INC.

ANNUAL MEETING OF SHAREHOLDERS - SEPTEMBER 21, 2000

The undersigned hereby appoints Judy C. Odom and Robert D. Graham and
each of them with full power of substitution, attorneys, agents and proxies of
the undersigned to vote as directed below the shares of stock which the
undersigned would be entitled to vote, if personally present, at the Annual
Meeting of Shareholders of Software Spectrum, Inc. (the "Company") to be held at
the offices of the Company, 2140 Merritt Drive, Garland, Texas, Thursday,
September 21, 2000 at 10:00 a.m. Central time, and at any adjournment or
adjournments thereof. If more than one of the above attorneys shall be present
in person or by substitution at such meeting or at any adjournment thereof, both
of said attorneys so present and voting, either in person or by substitution,
shall exercise all of the powers hereby given. The undersigned hereby revokes
any proxy or proxies heretofore given to vote upon or act with respect to such
shares of stock and hereby ratifies and confirms all that said attorneys, their
substitutes, or any of them, may lawfully do by virtue hereof.

- ------------------------------------------------------------------------------
o FOLD AND DETACH HERE o
21

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. Please mark
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSAL 1 AND PROPOSAL 2. your vote as [X]
indicated in
this example

1. Election of Directors Nominees: Judy C. Odom, Frank Tindle

FOR nominees WITHHOLD (Instruction: To withhold authority to vote for any individual nominee, write
listed to the right AUTHORITY that nominee's name on the space provided below.)
to vote for all nominees
listed to the right
------------------------------------------------------------------------------
[ ] [ ]

2. To approve the adoption of Amendment No. 1 to the Company's
Amended and Restated Employee Stock Purchase Plan.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

3. In their discretion on such other matters as may properly come before the meeting.

Signature(s):
-------------------------------------

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

Date Signed: -------------------------------------

Please sign exactly as your name appears on this
proxy. If your stock is jointly owned, both parties
must sign. Fiduciaries and representatives should
so indicate when signing, and when more than one is
named, a majority should sign. If signed by a
corporation, its seal should be affixed.

PLEASE DATE, SIGN AND RETURN THIS PROXY
PROMPTLY IN THE ENCLOSED ENVELOPE. NO
POSTAGE IS REQUIRED.

- ------------------------------------------------------------------------------------------------------------------------------------
o FOLD AND DETACH HERE o