UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.)

Filed by the Registrantx                            Filed by a Party other than the Registrant¨

Check the appropriate box:

AMERICAN SOFTWARE, INC.

American Software, Inc.(Name of registrant as specified in its charter)

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement,person(s) filing proxy statement, if other than the Registrant)registrant)

Payment of Filing Fee (Check the appropriate box):

AMERICAN SOFTWARE, INC.

470 East Paces Ferry Road, N.E.

Atlanta, Georgia 30305

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TO THE SHAREHOLDERS:

NOTICE IS HEREBY GIVEN that the 20092012 Annual Meeting of Shareholders of AMERICAN SOFTWARE, INC. (the “Company”) will be held at the offices of the Company, 470 East Paces Ferry Road, N.E., Atlanta, Georgia, on Monday, August 17, 200920, 2012 at 4:3:00 p.m. for the following purposes:

Only shareholders of record of the Company at the close of business on July 7, 20096, 2012 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 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 If shareholders are present at the meeting, their proxies may be withdrawn, and they may vote personally on all matters brought before the meeting, as described more fully in the enclosed Proxy Statement.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

July 28, 200930, 2012

IMPORTANT

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

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE

ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON AUGUST 17, 2009:20, 2012:

This Proxy Statement and the Annual Report on Form 10-K are available at:

https:http://www.sendd.com/EZProxy/?project_id=324www.rrdezproxy.com/2012/AmericanSoftware/

PROXY STATEMENT

FOR ANNUAL MEETING OF SHAREHOLDERS

OF AMERICAN SOFTWARE, INC.

TO BE HELD AT

AMERICAN SOFTWARE, INC.

470 EAST PACES FERRY ROAD, N.E.

ATLANTA, GEORGIA

ON AUGUST 17, 200920, 2012

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 of proxies by the Board of Directors for use at the Annual Meeting of Shareholders on Monday, August 17, 200920, 2012 at 4:3:00 p.m. and at any adjournment or adjournments thereof, for the purposes set forth in the accompanying Notice of Annual Meeting of Shareholders. This Proxy Statement and accompanying proxy card and Notice of Annual Meeting are first being mailed to shareholders on or about July 28, 2009.30, 2012.

If the enclosed form of proxy is properly executed and returned, the shares represented thereby will be voted in accordance with its terms. If no choices are specified, subject to the broker non-vote rules discussed under “RECORD DATE AND VOTING OF SECURITIES – Broker Non-votes” below, the proxy will be voted:

FOR—Election of W. Dennis Hogue, Dr. John J. Jarvis and James B. Miller, Jr. as Class A directors.

FOR—Approval of an amendment tothe advisory resolution regarding executive compensation.

FOR—Ratification of the appointment of KPMG LLP as the Company’s 2001 Stock Option Plan to increaseindependent registered public accounting firm for the number of Class A Common Shares that may be subject to options granted under that Plan from 5,275,000 Shares to 6,075,000 Shares.

FOR—Ratification and approval of the conversion of stock options outstanding under the Logility, Inc. stock option plans to Company stock options and related actions.fiscal year ending April 30, 2013.

In addition, a properly executed and returned proxy card gives the authority, subject to the broker non-vote rules, to vote in accordance with the proxy-holders’proxy holder’s best judgment on such other business as may properly come before the meeting or any adjournment or adjournments thereof. Any proxy given pursuant to this solicitation may be revoked, either in writing furnished to the Secretary of the Company prior to the 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 and the shareholder attending the meeting informs the Secretary of the Company of his or her intent to revoke the proxy.

RECORD DATE AND VOTING OF SECURITIES

Record Date

The Board of Directors has fixed the close of business on July 7, 20096, 2012 as the record date for determining the holders of common stock entitled to notice of and to vote at the meeting. On July 7, 2009,6, 2012, the Company had outstanding and entitled to vote a total of 22,425,44624,533,993 Class A Common Shares (“Class A shares”) and 2,877,0862,587,086 Class B Common Shares (“Class B shares”).

Class A and Class B Shareholder Voting

Other than in the election of directors, in which holders of Class A shares and Class B shares vote as separate classes, each outstanding Class A share is entitled 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. Any other matter submitted to the meeting must be approved or ratified by a majority vote of the outstanding shares (adjusted as described above) present or represented by proxies at the meeting. A one-third quorum of 7,475,1498,177,180 Class A shares and of 959,029862,276 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. Votes that are withheld, broker or other nominee non-votes on non-routine matters and votes of abstention cast by any shareholder on a particular action will be counted towards the quorum requirement, but will not be counted as a vote for or against the action.

Broker Non-votes

Broker non-votes occur when a broker or nominee holding shares for a beneficial owner does not vote on a non-routine proposal because the broker or nominee has not received voting instructions from the beneficial owner and does not have discretionary voting power with respect to such proposal. Rule 452 of the New York Stock Exchange, which has been adopted by the Nasdaq Stock Market, provides that a broker or other nominee holding shares for a beneficial owner may generally vote on routine matters, but not non-routine matters, without receiving voting instructions. The uncontested election of directors (Proposal 1) is now considered non-routine; the advisory vote on executive compensation (Proposal 2) is also a non-routine matter.Please provide instructions to your broker or nominee on how to vote your shares.If you do not provide such voting instructions, your shares will not be voted for Proposals 1 and 2. The ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm for fiscal 2012 (Proposal 3) is considered routine. Because at least one routine item is to be voted on at the meeting, shares held in the name of brokers or other nominees and voted on Proposal 3 will be counted for purposes of the quorum requirement, as noted above.

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PROPOSAL 1: ELECTION OF DIRECTORS

Overview

The directors of the Company are elected annually to hold office until the election and qualification of their successors at the next Annual Meeting of Shareholders. Of the seven directors to be elected, three are to be elected by the holders of the outstanding Class A shares and four 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 W. Dennis Hogue, Dr. John J. Jarvis and James B. Miller, Jr., the Class A director nominees. In the event any of these individuals should be unavailable to serve as a director, the proxy will be voted in accordance with the best judgment of the person or persons acting under it. The Board of Directors has no reason to believe that any director nominees will be unavailable for election as a director. If any of the nominees is unable to serve, the remaining Board members may elect a substitute to fill the resulting vacancy.

It is anticipated that Mr. Edenfield and Dr. Newberry, who together own all of the Class B shares, will vote their Class B shares in favor of the election of James C. Edenfield, J. Michael Edenfield, Dr. Thomas L. Newberry and Thomas L. Newberry, V as Class B directors. Thus, it is expected that James C. Edenfield, J. Michael Edenfield, Dr. Thomas L. Newberry and Thomas L. Newberry, V will be elected as Class B directors.

Director Background and Qualifications

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

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

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

Name of Nominee		Age				Principal Occupation; Directorships		Year First Elected Director
CLASS A DIRECTORS:
W. Dennis Hogue			59			Chief Executive Officer of Hogue Enterprises, Inc.; President of American Durahomes; President of The Hogue Corp., d/b/a GRN of Marietta			2001
John J. Jarvis			70			Retired; former Executive Director of The Logistics Institute— Asia Pacific			2001
James B. Miller, Jr.			72			Founder, Chairman and Chief Executive Officer of Fidelity Southern Corporation, the parent company of Fidelity Bank			2002

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Class A Directors

W. Dennis Hogue.    Since January 2005, Mr. Hogue has served as Chief Executive Officer of Hogue Enterprises, Inc., a real estate investment company. Since November 2007, Mr. Hogue has served as President of American Durahomes, a provider of durable and affordable homes. From July 2003 to January 2005, he served as Chief Executive Officer of Datatrac Corporation, a software developer and wireless communications provider for the expedited product delivery industry. Mr. Hogue earned a Bachelor of Science degree in Psychology from Florida State University in 1974.

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

John J. Jarvis.    Dr. Jarvis is retired. From 2001 until January 1, 2004 he was Executive Director of The Logistics Institute—Asia Pacific, which is a collaboration between the National University of Singapore and the Georgia Institute of Technology. Dr. Jarvis has served as President of the Institute of Industrial Engineers (IIE), Secretary of the Institute of Management Sciences (TIMS) and President of the Operations Research Society of America (ORSA). He has served on the Councils of ORSA and TIMS and on the Boards of the Institute for Operations Research and Management Sciences and IIE. Dr. Jarvis earned a Bachelor of Science degree in Industrial Engineering in 1963 and a Masters of Science degree in Industrial Engineering in 1965, both from the University of Alabama, and a Ph.D. from Johns Hopkins University in 1968.

Dr. Jarvis has a history of demonstrated leadership in the logistics software industry, both as a software company executive and in academic and research environments. His ability to bring these diverse perspectives to the Board enhances its effectiveness and strengthens its ability to adapt to changing industry conditions.

James B. Miller, Jr.    Mr. Miller is currently the Chairman of the Board and Chief Executive Officer of Fidelity Southern Corporation, the parent corporation of Fidelity Bank, positions he has held since 1979. He has been Chairman of Fidelity Bank since 1998. He is a director of Interface, Inc., a publicly held textile manufacturing company. Mr. Miller is chairman of privately held family real estate businesses. Mr. Miller holds a Bachelor of Arts Degree from Florida State University and an L.L.B. from Vanderbilt University Law School.

Mr. Miller’s long leadership experience at Fidelity Southern Corporation and its subsidiary Fidelity Bank, as well as his board experience with other companies in a variety of industries, brings to the Board the business and financial acumen of an experienced senior executive. We believe his financial expertise and legal background; his role as Chairman of the Board of Fidelity Southern Corporation, a publicly held company; and his prior service on the Interface, Inc. audit committee and current service on the Interface, Inc. governance committee qualify him well to serve on our Board, and in particular to serve as chair of our Audit Committee. The Board has determined he is an “audit committee financial expert.”

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THE BOARD OF DIRECTORS RECOMMENDS THAT CLASS A

SHAREHOLDERS VOTE “FOR” MESSRS. HOGUE, JARVIS AND MILLER.

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CORPORATE GOVERNANCE

Board Meetings

The Board of Directors held sixfour meetings during fiscal 2009.2012. No director of the Company attended fewer than 67%75% of the total meetings of the Board of Directors and committee meetings on which such Board member served and was eligible to attend during this period.

Director Attendance at Annual Meetings

Although the Company does not have a policy with regard to Board members’ attendance at the Company’s Annual Meetings of Shareholders, all of the directors are encouraged to attend such meetings. All of the Company’s directors were in attendance at the 2011 Annual Meeting.

Director Independence

Each of Mr. James C. Edenfield and Dr. Thomas L. Newberry have stated in their respective Schedule 13Gs, as filed with the Securities and Exchange Commission (sometimes referred to herein as the “SEC”), that they, acting as a group, share voting power with respect to all shares beneficially held by them because they have established a practice of consulting with each other regarding the voting of such shares. As a result, the Company qualifies as a “controlled company” as defined in Rule 4350(c)(5) of the Nasdaq Marketplace Rules. Please see “Security Ownership of Management and Certain Beneficial Owners,” below. Therefore, the Company is not subject to the provisions of Rule 4350(c) of the Nasdaq Marketplace Rules that otherwise would require the Company to have (i) a majority of independent directors on the Board; (ii) a compensation committee composed solely of independent directors; (iii) a nominating committee composed solely of independent directors; (iv) compensation of the Company’s executive officers determined by a majority of the independent directors or a compensation committee composed solely of independent directors; and (v) director nominees selected, or recommended for the Board’s selection, either by a majority of the independent directors or a nominating committee composed solely of independent directors.

Director Nominations

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

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

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

Although theThe Company does not have a formal policy with regard to the consideration of diversity in identifying director nominees. The Board members’ attendance atstrives to nominate directors with a variety of complementary skills so that, as a group, the Board will possess the appropriate talent, skills, and expertise to oversee the Company’s Annual Meetings of shareholders, allbusinesses.

Board Leadership Structure

The Board does not have a policy regarding the separation of the directorsroles of Chief Executive Officer and Chairman of the Board, as the Board believes it is in the best interests of the Company to make that determination based on the position and direction of the Company and the membership of the Board. Currently, the positions of Chief Executive Officer and Chairman are encouraged to attend such meetings. Allseparate and the Board believes this structure is in the best interest of the Company’s directors were in attendanceshareholders at the 2008 Annual Meeting.this time.

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The Company has adopted a Code of Business Conduct and Ethics, which applies to all directors, officers and employeesCommittees of the Company, including its Chief Executive Officer, Chief Financial Officer and Controller. The CodeBoard of Business Conduct and Ethics is available on the Company’s website atwww.amsoftware.com/marketing.Directors

The Board of Directors has an Audit Committee, which presently consists of Messrs. Miller (Chairman), Hogue and Jarvis. The Audit Committee held four meetings during fiscal 2009,2012, in addition to its consultations with our independent registered public accounting firm and management in connection with review of interim financial statements. The Rules of the Nasdaq Stock Market (“Nasdaq Rules”) require audit committees to be composed of not less than three members who are “independent,” as that term is defined in the Nasdaq Rules. The Board of Directors has determined that all of the Audit Committee members meet the Nasdaq definition of “independent.”

The Company’s Audit Committee Charter outlines the composition requirements of the Audit Committee, as described above, as well as its duties and responsibilities. The primary responsibility of the Audit Committee is to provide assistance to the Company in connection with the financial reporting process. The functions of the Audit Committee include making an annual recommendation of independent public accountants to the Company, reviewing the scope and results of the independent public accountants’ audit, monitoring the adequacy of the Company’s accounting, financial and operating controls, reviewing from time to time the Company’s periodic financial statements and other financial reports with management and with the independent registered public accounting firm, pre-approving audit services and permitted non-audit services and related fees, and reviewing with management and the independent registered public accounting firm the financial statements to be included in the Company’s Annual Report. The Board of Directors has determined that James B. Miller, Jr., Chairman of the Audit Committee, is an “audit committee financial expert” as defined in the rules of the Securities and Exchange Commission.

The Board has a Compensation Committee, consisting of John J. Jarvis and Thomas L. Newberry. During fiscal 2009,2012, the Compensation Committee met on one occasion.two occasions. The Compensation Committee has authority to establish the compensation of Chief Executive Officer and to consult with the Chief Executive Officer about the compensation of the other named executive officers. In addition, the Compensation Committee, acting as the Special Stock Option Committee, has had the authority to grant stock options to the Chief Executive Officer and the other named executive officers under the Company’s 2001 Stock Option2011 Equity Compensation Plan. See “Executive Compensation—Compensation – Compensation Discussion and Analysis,” below, for a further discussion of the Compensation Committee and the functions it performs.

Two different committees of the Board administer the 2011 Equity Compensation Plan, the 2001 Stock Option Plan and the Logility Plans (see “Proposal 3: Ratification of Actions Pertaining to Logility“Executive Compensation – Stock Options—Description of Logility Plans as Adopted by American Software”Options”), depending on whether the option grant is to an executive officer or director or to other employees. The Special Stock Option Committee, which consists of John J. Jarvis and Thomas L. Newberry, as the members of the Compensation Committee, administers stock option grants to executive officers and directors. The Stock Option Committee, which consists of James C. Edenfield and Thomas L. Newberry, administers grants to other employees. The functions of these committees are to grant stock options and establish the terms of those stock options, as well as to construe and interpret the planplans and to adopt related rules in connection therewith.and procedures. During fiscal 2009,2012, the Stock Option Committee acted by written consent on eightnine occasions in connection with the grant of stock options under the Company’s 2001 Stock Option2011 Equity Compensation Plan. The Special Stock Option Committee, concurrently with its role as the Compensation Committee, acted by written consentmet on one occasion during fiscal 2009.2012.

Risk Oversight

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

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Code of Business Conduct and Ethics

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

Communications Between Shareholders and Directors

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

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

We believe that attracting, retaining and motivating effective executive officers is critical to the overall success of our business. To achieve these goals we have adopted executive compensation programs that we have designed to reward performance and emphasize the creation of shareholder value. Our Compensation Committee and Chief Executive Officer are responsible for establishing executive compensation policies and overseeing executive compensation practices. In the following Compensation Discussion and Analysis we describe the material elements of compensation for our executive officers identified in the Summary Compensation Table (the “named executive officers”). Our named executive officers are: James C. Edenfield, President and Chief Executive Officer; J. Michael Edenfield, Executive Vice President and Chief Operating Officer of the Company, and President and Chief Executive Officer of Logility, Inc.; Vincent C. Klinges, Chief Financial Officer of the CompanyOfficer; and of Logility; and Jeffrey W. Coombs, SeniorJames R. McGuone, Vice President of American Software USA, Inc.and General Counsel. Please see the Summary Compensation Table below for detailed components of their fiscal 20092012 compensation.

Oversight of Compensation Program

The Compensation Committee of the Board (the “Committee”) is responsible for establishing and reviewing our overall compensation philosophy. The Committee and the Chief Executive Officer together review and establish executive compensation plans. The Committee and the Chief Executive Officer share these responsibilities in the manner described below.

Role of Compensation Committee. The Committee reviews and establishes all elements of compensation of the Chief Executive Officer. The Committee also reviews and consults with the Chief Executive Officer about salaries and other compensation of the other executive officers and acts as the Special Stock Option Committee with respect to stock option grants to all executive officers, including the Chief Executive Officer. Until July 2009, Logility was a majority-owned subsidiary of the Company, but remained a separate, publicly-held company. Effective July 9, 2009 Logility became our wholly-owned subsidiary. In making decisions about stock option grants with respect to fiscal 2009 and earlier years, the Committee obtained from the compensation committee of the Logility board information about, and took into consideration, stock option grants made or proposed to be made under Logility’s stock option plans to our named executive officers who also were executive officers of Logility. As Logility’s status as a separate public company terminated in July 2009, Logility no longer grants stock options and thus it is no longer necessary to consult on these matters.

Role of Chief Executive Officer. The Chief Executive Officer reviews and establishes all non-equity related elements of compensation of the executive officers of the Company and its subsidiaries, other than his own compensation. With respect to the major elements of executive compensation plans, the Chief Executive Officer consults with and seeks input from the Committee. The Chief Executive Officer makes recommendations to the Committee regarding levels of option grants to specific individuals, as input to the Committee’s final decision.

Decisions Affecting Overlapping Executive Officers.    With respect to fiscal 2009 and earlier years, two named executive officers of the Company, J. Michael Edenfield and Vincent C. Klinges, also were executive officers of Logility for SEC reporting purposes. The following paragraphs discuss how compensation decisions regarding these two officers were divided between the Company and Logility for those years.

J. Michael Edenfield.    J. Michael Edenfield is Executive Vice President of the Company, and also serves as President and Chief Executive Officer of Logility. As Mr. Edenfield’s day-to-day responsibilities focus primarily on Logility, the compensation committee of the Logility board of directors, by mutual agreement between the Company and Logility, was responsible for establishing most of the primary elements of his compensation, including his salary, annual bonus plan, participation in Logility stock option plans and employee benefits. The Committee retained the authority to grant stock options to Mr. Edenfield under our stock option plan, and communicated with the Logility compensation committee in order to coordinate stock option decisions.

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Vincent C. Klinges.    Vincent Klinges serves both as our Chief Financial Officer and as Chief Financial Officer of Logility. By mutual agreement between the Company and Logility, we established most of the primary elements of Mr. Klinges’ compensation, including his salary, annual bonus plan, participation in our stock option plan and other employee benefits. The Logility compensation committee retained the authority to grant stock options to Mr. Klinges under Logility option plans, and communicated with the Committee in order to coordinate stock option decisions.

Executive Compensation Philosophy

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

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

We are aware that incentive compensation arrangements can be structured in such a way as to encourage undue risk-taking by executives, who make decisions that tend to maximize short-term compensation at the expense of the long-term interests of the enterprise. We believe that in the past our incentive compensation plans have motivated management to act in ways that are consistent with the long-term interests of our shareholders: promoting growth while maintaining substantial cash reserves, avoiding debt, managing expenses and carefully evaluating potential acquisitions. We have structured current incentive compensation arrangements for executive officers in a manner consistent with past practices, and believe that those arrangements, described in detail below, contribute to our long-term goals without encouraging undue risk-taking.

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Elements of Compensation

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

In our approach to executive compensation we generally have emphasized bonus plans and stock options, as we believe those components have the greatest potential for directly aligning the future interests of executive officers with

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

Base Salaries.We establish the salaries of our named executive officers at levels that we believe are, when viewed in conjunction with their potential bonus income and stock option grants, competitive and reasonable in light of their experience, prior performance and level of responsibility. The Committee reviews and establishes the salary of our Chief Executive Officer, while the Chief Executive Officer reviews and establishes the salaries of our other officers, including the named executive officers, with input from the Committee.

Salaries of our named executive officers in fiscal 20092012 are shown in the “Salary” column of the Summary Compensation Table, below.

Incentive Compensation.    Each of our named executive officers has a bonus plan established during the first quarter of a fiscal year, covering that fiscal year. The Committee establishes the bonus plan for our Chief Executive Officer. Our Chief Executive Officer, after consulting with the Committee, establishes the bonus plans for our other officers, including the other named executive officers. In each case, the bonus plan is customized for the individual executive officer. We use these bonus plans, in tandem with stock option grants, as tools to attract and retain qualified executives while at the same time aligning their interests with those of our shareholders. To accomplish this, we establish bonus plans with attainable goals, using formulas tied to important factors that positively affect return on investment.

The following summarizes the incentive compensation arrangements for the named executive officers in the fiscal years ended April 30, 20092012 and 2010:2013:

James C. Edenfield.    In both fiscal 20092012 and fiscal 2010,2013, Mr. Edenfield’s salary was maintained at $512,500. For both fiscal years, the Committee also decided to continue Mr. Edenfield’s annual bonus arrangement, which provides for a bonus equal to 5% of the increase of the fiscal year’s pre-tax earnings over the pre-tax earnings of the preceding fiscal year. For fiscal 2009, the application of2012, Mr. Edenfield received a bonus equal to $306,826 under this bonus formula resulted in no bonus paid to Mr. Edenfield.formula.

J. Michael Edenfield.    For fiscal 2009,2012, the compensation committee of the Logility boardCommittee established J. Michael Edenfield’s base salary at $295,000 and approved certain perquisites,$320,000, as set forth in the Summary Compensation Table, below. The Logility committeeCommittee also determined that he would have the opportunity to receive a bonus targeted at $370,000,$390,000 based upon Logility achieving a specified target level of operating income, with ano limitation on the maximum potential bonus of $600,000.bonus. For fiscal 2009,2012, Mr. Edenfield received a bonus equal to $185,406$499,391 under this formula.

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For fiscal 2010,2013, Company has established an incentive compensation plan for J. Michael Edenfield similar to the plan in effect for fiscal 2009.2012. His salary has been increased to $305,000,$330,000, an increase of approximately 3% over the previous year salary.salary, which is consistent with the average increase in Company employee salaries. The potential bonus is targeted at $370,000, unchanged from$400,000, an increase of $10,000 over the previous two years,year, based upon Logility achieving the specified target level of operating income. There is no limitation on the maximum potential bonus amount for fiscal 2009.2013. The level of operating income required to achieve the bonus target is 5%approximately 55.6% higher than the corresponding target in fiscal 2009,2012, and believed to be substantially highermore difficult to achieve than the operating income achieved by Logility in fiscal 2009.2012. Mr. Edenfield will not receive an incentive bonus for 20102013 unless Logility attains at least approximately 85%83% of the operating income bonus target. If that level is reached, the minimum bonus will be $110,000,$130,000, with the actual incentive bonus pro ratedpro-rated between $110,000$130,000 and $370,000$400,000 depending on the level of actual operating

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income between the minimum and the target level. If actual operating income exceeds the operating income bonus target, the bonus amount will be equal to actual operating income divided by the operating earnings bonus target amount, multiplied by $370,000.$400,000.

The above incentive plan reflects our belief that incentive compensation plans should provide for a minimum bonus if the business area for which the executive has responsibility achieves operating results that are reasonably attainable and a higher bonus if operating results reach exceptional levels. Our policy is to not provide guidance or projections as to future earnings or revenues. Accordingly, without providing any such specific guidance or projections, we believe that for Logility to achieve the results necessary for J. Michael Edenfield to reach the targeted bonus will require a level of profitability in our Logility subsidiary that would substantially exceed our expectations of Logility’s profitability in the current economic climate.

Vincent C. Klinges.    For fiscal 2009,2012, Mr. Klinges was eligible to receive a bonus equal to 2.25%2.5% of the increase in our operating income in fiscal 20092012 over fiscal 2008,2011, excluding stock option-related expenses, with a maximum bonus of $85,000$125,000 and a minimum bonus of $10,000, provided that he remained with the Company on June 30, 2009.2012. For fiscal 2009,2012, Mr. Klinges received a bonus of $10,000.$125,000. For fiscal 2010, his2013, Mr. Klinges is eligible to receive a bonus arrangement remainsequal to 2.5% of the same, except that theincrease in our operating income in fiscal 2013 over fiscal 2012, excluding stock option-related expenses, with a maximum bonus is increased to $100,000. His continuation requirement forof $175,000 and a minimum bonus eligibility isof $10,000, provided that he remains with the Company on June 30, 2010.2013. Mr. Klinges’ salary has been increased by $12,000 to $202,000$231,000 for fiscal 2010,2013, an increase of approximately 3%5.7% over the previous year salary.

Jeffrey W. CoombsJames R. McGuone.    For the fiscal year ended April 30, 2009,2012, Mr. CoombsMcGuone was giveneligible to receive a bonus plan that provided for a bonus determined under the following formula, with each component based upon the performanceequal to 1.5% of the portionincrease in our operating income in fiscal 2012 over fiscal 2011, with a maximum bonus of our ERP software division$100,000, provided that he manages, in the fiscal year ended April 30, 2009 compared to the performance in the previous fiscal year: (i) $2,000 for each 1% increase in total revenue; plus (ii) $2,000 for each 1% increase in license fees; plus (iii) $2,000 for each 1% increase in operating income contribution. The minimum bonus was $10,000 if the bonus amount as computed under the above formula was less than that amount. There was no minimum level of operating performance required to earn the minimum bonus. The maximum bonus under this plan was $70,000. To be eligible for a bonus, it was required that Mr. Coombs remain an employee ofremained with the Company on June 30, 2009.2012. For fiscal 2009,2012, Mr. CoombsMcGuone received a bonus of $10,000. On August 18, 2008,$100,000. For fiscal 2013, Mr. McGuone is eligible to receive a bonus equal to 1.5% of the increase in our Boardoperating income in fiscal 2013 over fiscal 2012, with a maximum bonus of Directors reviewed$125,000, provided that he remains with the classificationCompany on June 30, 2013. Mr. McGuone’s salary has been increased by $12,000 to $205,996 for fiscal 2013, an increase of Mr. Coombs as an executive officer as that term is defined under SEC rules. The Board determined that Mr. Coombs’ responsibilities more appropriately are classified as those of a divisional officer rather than an executive officer atapproximately 6.2% over the corporate level for SEC disclosure purposes. Mr. Coombs’ fiscal 2009 compensation is included in the Summary Compensation Table, below, because he was classified as an executive officer for a portion of that fiscal year. Due to the changed classification, his fiscal 2010 compensation was not reviewed by the Committee.previous year salary.

Bonuses paid to our named executive officers in fiscal 20092012 are shown in the “Bonuses” column of the Summary Compensation Table, below.

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

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The Committee typically grants stock options to executive officers once annually, usually during the month of June or July, while the salary and bonus plans for executives are being considered and finalized. The option exercise prices are fixed as of the close of trading of Class A shares on Nasdaq on the date on which the

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Committee meets or acts to finalize its option decisions, which is the date of grant. Options granted to executives during the past several years have terms of six years and vest ratably over a five-year period. We expect this practice to continue.

The Committee did not undertake a quantitative analysis in determining the levels of stock option grants to named executive officers for the 20092012 or 20102013 fiscal years. The Committee developed its decisions on stock option grants based on a qualitative analysis considering the following factors:

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In July 2008,June 2011, consistent with the above factors and objectives, the Committee granted stock options to the named executive officers in the following amounts: J. Michael Edenfield – 120,000 shares; James C. Edenfield – 100,000 shares; J. Michael Edenfield – 80,00060,000 shares; Vincent C. Klinges – 50,000 shares; and Jeffrey W. CoombsJames R. McGuone – 20,000 shares.

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In June 2009,July 2012, the Committee, after again considering the above factors and objectives, granted stock options to the named executive officers in the following amounts: J. Michael Edenfield – 120,000 shares; James C. Edenfield – 100,00060,000 shares; J. Michael Edenfield – 80,000 shares; and Vincent C. Klinges – 50,000 shares. The Committee also at that time granted stock options in the amount of 20,000 shares toshares; and James R. McGuone. Mr. McGuone was named by the Board as the Company’s Vice President and General Counsel effective May 2009. The Board also determined at that time that he would be designated an executive officer of the Company for SEC reporting purposes.– 20,000 shares.

Personal Benefits and Perquisites.    We provide a variety of health, retirement and other benefits to all employees. Our executive officers are eligible to participate in the benefit plans on the same basis as all other employees. These benefit plans include medical, dental, life and disability insurance. Our Chief Executive Officer, James C. Edenfield, receives the use of an automobile owned by the Company and we also pay the cost of two club memberships for him. J. Michael Edenfield, our Executive Vice President and Chief Operating Officer and the Chief Executive Officer of Logility, receives an automobile allowance reimbursement for medical insurance coverage obtained through the Company and paid by him, and is reimbursed for the cost of one club membership. Otherwise, our executive officers do not receive any personal benefits or perquisites that are not available on a non-discriminatory basis to all employees except for limited supplemental insurance expense reimbursement.employees. The perquisites of the named executive officers in fiscal 20092012 were as set forth in the “All Other Compensation” column and footnote 2 to the Summary Compensation Table, below.

Pension Benefits.    We do not provide pension benefit plans to our employees or to our named executive officers.

Non-Qualified Defined Contribution or Other Non-Qualified Deferred Compensation Plans.    We do not provide non-qualified contribution plans or other non-qualified deferred compensation options to any of our employees, or toincluding our named executive officers.

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

Impact of Regulatory Requirements

Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), generally disallows a tax deduction to a public company for compensation in excess of $1 million paid to the company’s chief executive officer and any other executive officer required to be reported to its stockholdersshareholders under the Securities Exchange Act of 1934 (the “Exchange Act”) by reason of such executive officer being one of the four most highly compensated executive officers. However, qualifying performance-based compensation is not subject to the deduction limitation if certain requirements are met. Section 409A of the Code provides for certain requirements that a plan that provides for the deferral of compensation must meet, including requirements relating to when payments under such a plan may be made, acceleration of benefits, and the timing of elections under such a plan. Failure to satisfy these requirements will generally lead to an accelerated of timing of inclusion in income of deferred compensation, as well as certain penalties and interest.

Although we consider the tax implications of Section 162(m) and Section 409A of the Code, we do not have a formal policy in place requiring that part or all compensation must qualify under these sections,this section, in order to preserve flexibility with respect to the design of our compensation programs.

Compensation Committee Report

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management, and based on the Committee’s review and discussions with management, has recommended to the

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full Board of Directors that the Compensation Discussion and Analysis be included in the our Annual Report on Form 10-K for the year ended April 30, 2009,2012, as well as the Proxy Statement for the 20092012 Annual Meeting.

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Respectfully submitted by the Compensation Committee of the Board of Directors

John J. Jarvis (Chairman)

Thomas L. Newberry

Compensation Policies and Risk

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

Compensation Committee Interlocks and Insider Participation

Dr. Jarvis and Dr. Newberry have been selected by the Board of Directors to serve on the Compensation Committee. NeitherSince the beginning of fiscal 2012, neither member of the Committee washas been an officer or employee of the Company or had any relationship with the Company requiring disclosure under Securities and Exchange Commission regulations. Dr. Newberry was an officer of the Company until 1989 and since that time has served as Board Chairman.

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Summary Compensation Table

The following table reflects compensation paid to the Company’s Chief Executive Officer, Chief Financial Officer and each of the other executive officers of the Company (the “named executive officers”) for fiscal 2007,2010, fiscal 20082011 and fiscal 2009.2012.

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Employment Agreements

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

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Change of Control Agreements

We do not have contracts that provide for compensation of our executive officers, or any of our other employees, that are triggered by change of control events. StockHowever, a change of control may accelerate the vesting of stock option grants to our employees do, however, include provisions that can cause the vesting of those options to be accelerated in the event of a change of control, as defined in the applicableunder our stock option plan.plans.

Stock Options

Stock Option Plans

We haveAs of April 30, 2012, we had outstanding stock options granted under fivefour stock option plans. We adopted the 1991 EmployeeThe 2001 Stock Option Plan (the “Employee Option“2001 Plan”) and the Directors and Officers Stock Option Plan (the “Directors and Officers Option Plan”)was adopted in 1991. These plans2001 and terminated effective September 1, 2000 when we replaced them with the 2001 Stock Option Plan. OptionsMay 16, 2010. Any options outstanding under the Employee Option Plan and the Directors and Officers Option2001 Plan remain in effect, but since the termination of these plansthis plan we have not been able to grant new options under them.it. All directors of the Company and employees of the Company and its subsidiaries, totaling 291337 persons as of April 30, 2009,2012, are eligible to participate in the 2001 Stock Option2011 Equity Compensation Plan. We also have outstanding options granted under the Logility, Inc. 1997 Stock Plan and the Logility, Inc. 2007 Stock Plan (the “Logility Plans”). The following sections describe these stock option plans.

1991 Employee Stock Option Plan.    We designed this plan to provide additional incentives to increase employees’ efforts on our behalf and remain in our employ. We selected participants from key personnel, but no director, officer or 10% shareholder of the Company was eligible to participate. These options are exercisable at any time within the option period, but no more than ten years from the grant date. As of April 30, 2009, there were outstanding under this plan options to purchase 273,705 Class A shares.

Directors and Officers Stock Option Plan.    We designed this plan to provide our directors and officers and those of our subsidiaries with additional incentives to increase their efforts on our behalf and, for employees, to remain in our employ. We selected participants from among the directors and officers of the Company or a subsidiary. We determined the number of options granted under this plan to officers on a case by case basis. The option prices for officer option grants were equal to the closing market price of the shares on the grant dates and became exercisable over a four-year period from the grant date. Each non-employee member of our Board of Directors received an automatic grant of nonqualified stock options to purchase 5,000 shares on April 30 and October 31 of each year. The option prices for director option grants were equal to the closing market price of the shares on the grant dates and were exercisable one year after grant. Once vested, these options are exercisable at any time within the option period, but no more than ten years from the date of grant. As of April 30, 2009 there were outstanding under this plan options to purchase 145,000 Class A shares.

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2001 Stock Option Plan.    The 2001 Stock Option PlanThis plan became effective September 1, 2000, and was amended in 2008 and 2009 to increase the number of authorized shares. We designed this plan to attract and retain the best available talent and encourage the highest level of performance by officers, employees, directors, advisors and consultants, and to provide them with incentives to put forth maximum efforts for the success of our business. We grantgranted options to purchase Class A shares under this plan in the form of incentive stock options and non-qualified stock options. We determinedetermined the number of options we grantgranted under this plan on an individual basis, except with respect to non-employee directors, who receivereceived grants of non-qualified options to purchase 5,000 shares upon election and 3,000 shares at the end of each fiscal quarter. The price of each grant iswas equal to the closing market price of the shares on the date of grant. As of the close of business on June 30, 2009, the market value of Class A shares was $5.76 per share.

In February 2005, the Board reduced the duration of standard stock option grants from ten years to six years, both for employee stock options and stock options granted to non-employee directors. At that time, the option vesting schedule was increased, in general, from four to five years. Stock options we grantgranted to a person who ownsowned 10% or more of the combined voting power of all classes of capital stock of the Company at the time of grant arewere limited to a five-year term (with a four-year vesting schedule) if the option is to bewas classified as an incentive stock option. In the event of a change in control, all options automatically become fully vested.

As of April 30, 2012, under this plan option holders had exercised 3,031,800 option shares, there were 2,034,403 option shares outstanding, and no shares remained available for stock option grants. The 2001 Plan expired on May 16, 2010. Accordingly, no stock options have been granted after that date under this plan.

Logility Plans.    On June 29, 2009 we successfully completed our tender offer to acquire all of the outstanding shares of common stock of Logility, Inc. that we did not previously own, followed by the merger of Logility, Inc. with our wholly-owned subsidiary, ASI Acquisition, Inc., effective July 9, 2009 (the “Merger Date”). Immediately prior to the commencement of the tender offer, there were outstanding options to purchase 600,000 shares of Logility common stock (“Logility Options”) granted under the Logility Plans. Prior to the Merger Date, 374,000 of the Logility Options were exercised, leaving Logility Options to purchase 226,000 shares. The Logility Options had been granted over the ten years prior to the Merger Date and had a variety of exercise prices. All of the remaining Logility Options except options to purchase 6,788 shares of Logility stock were fully vested or by their terms became fully vested upon the effectiveness of the merger.

Effective as of the Merger Date, we adopted the Logility Plans as equity plans of American Software, and each outstanding Logility Option was converted into an option to purchase our Class A shares (“Replacement Options”). As of April 30, 2012, the Replacement Options provided in the aggregate for the

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purchase of 252,506 Class A shares. The Replacement Options are held by eight employees and three former independent directors of Logility, Inc. No additional options will be granted under the Logility Plans. Accordingly, any shares that are subject to Replacement Options that are terminated, expire unexercised, are forfeited or are surrendered will not be available for issuance of new stock options. While the Logility Plans provide for the granting of stock appreciation rights, no stock appreciation rights have been granted and none will be granted in the future.

2011 Equity Compensation Plan.    The 2011 Equity Compensation Plan became effective on August 16, 2010. We have authorized a total of 5,275,0002,500,000 Class A shares and 500,000 stock appreciation rights for issuance pursuant to options granted under this plan. As of April 30, 2009,2012, under this plan option holders had exercised 1,651,57612,200 option shares, there were 2,845,4081,395,657 option shares outstanding, and 778,0161,092,143 shares remained available for stock option grants. The 2001 Stock Option Plan is proposed to be amended and is more fully described in “Proposal 2: Amendment of 2001 Stock Option Plan,” below.

Logility Plans.    See “Proposal 3: Ratification of Actions Pertaining to Logility Stock Options – Description of Logility Plans as Adopted by American Software” for a description of the terms of the Logility Plans.

Stock Option Committees

Two separate committees administer the 2001 Stock Option Plan and the Logility Plans:our stock option plans: (i) the Special Stock Option Committee (comprised of John J. Jarvis and Thomas L. Newberry, as members of the Compensation Committee) is responsible for option grants to officers and directors, and (ii) the Stock Option Committee (comprised of James C. Edenfield and Thomas L. Newberry) is responsible for other option grants. The members of these Committees are not eligible to participate in the portion of the plan that they administer, except pursuant to the formula option grant program for non-employee directors. Under the plans, the functions of these committees are to grant options and establish the terms of those options, as well as to construe and interpret the plans and adopt rules in connection with options that the particular committee grants. ForExcept for the Logility Plans,2011 Equity Compensation Plan, the function of these committees is limited to continuing and interpreting the plans.

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Fiscal 20092012 Grants of Stock Options

The following table discloses the potential payouts under the stock options awarded to the named executive officers during the fiscal year ended April 30, 2009.2012.

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