SEC Form DEF 14A filed by American Software Inc.
☐ | Preliminary Proxy Statement |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
☑ | Definitive Proxy Statement |
☐ | Definitive Additional Materials |
☐ | Soliciting Material Pursuant to §240.14a-12 |
(Name of Registrant as Specified In Its Charter) |
(Name of Person(s) Filing Proxy Statement, if other than the Registrant) |
☑ | No fee required. |
☐ | Fee paid previously with preliminary materials. |
☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a6(i)(1) and 0-11. |
1. | To elect eight directors of the Company. |
2. | To ratify the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the fiscal year ending on April 30, 2025. |
3. | To conduct an advisory vote on the compensation of our named executive officers. |
4. | To approve the adoption of the 2024 Equity Compensation Plan. |
5. | To approve the Reclassification for the purpose of eliminating the Company’s dual-class share structure. |
6. | To approve the amendment and restatement of the Company’s Amended and Restated Articles of Incorporation to give effect to the Reclassification. |
7. | To approve the amendment and restatement of the Company’s Amended and Restated Articles of Incorporation to give effect to the indemnification of directors and officers amendment. |
8. | To approve the amendment and restatement of the Company’s Amended and Restated Articles of Incorporation to give effect to the blank check preferred stock amendment. |
9. | To consider and transact such other business as may properly come before the Annual Meeting. |
Time and Date: | | | 3:00 p.m. Eastern Daylight Time on Tuesday, August 20, 2024 |
Place: | | | 470 East Paces Ferry Road, N.E., Atlanta, Georgia 30305 |
Record Date: | | | Monday, July 1, 2024 |
Voting: | | | Holders of Class A Shares as of the Record Date are entitled to vote. Each share of Class A common stock is entitled to one vote for each Class A director nominee and one vote for each of the proposals. |
Entry: | | | You are entitled to attend the Annual Meeting only if you were a shareholder as of the close of business on the Record Date or hold a valid proxy for the Annual Meeting. You should be prepared to present valid photo identification for admittance. If you do not provide photo identification, you will not be admitted to the Annual Meeting. Please let us know if you plan to attend the Annual Meeting by marking the appropriate box on the enclosed proxy card if you requested to receive printed proxy materials, or, if you vote by telephone or over the internet, by indicating your plans when prompted. |
Proposals | | | Board Voting Recommendation | | | Page Reference |
1. To elect each of H. Allan Dow, W. Dennis Hogue, Thomas L. Newberry, V, Celena Matlock, Matthew G. McKenna, James B. Miller, Jr., Lizanne Thomas and Nicole Wu as Class A directors. | | | For | | | |
2. To ratify the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending on April 30, 2025. | | | For | | | |
3. To approve, on an advisory basis, the compensation of our named executive officers. | | | For | | | |
4. To approve the adoption of the 2024 Equity Compensation Plan. | | | For | | | |
5. To approve the Company’s Reclassification. | | | For | | | |
6. To approve the amendment and restatement of the Company’s Amended and Restated Articles of Incorporation to give effect to the Reclassification. | | | For | | | |
7. To approve the amendment and restatement of the Company’s Amended and Restated Articles of Incorporation to give effect to the indemnification of directors and officers amendment. | | | For | | | |
8. To approve the amendment and restatement of the Company’s Amended and Restated Articles of Incorporation to give effect to the blank check preferred stock amendment. | | | For | | |
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Over the Internet, which you are encouraged to do if you have access to the Internet | | | By telephone | | | For those shareholders who request a paper proxy card in the mail, by completing, signing and returning the proxy | | | By attending the Annual Meeting and voting in person |
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NAME OF NOMINEE | | | AGE | | | PRINCIPAL OCCUPATION; DIRECTORSHIPS | | | INDEPENDENT | | | YEAR FIRST ELECTED DIRECTOR | | | COMMITTEES1 |
H. Allan Dow | | | 60 | | | Chief Executive Officer and President of American Software, Inc. | | | No | | | 2020 | | | N/A |
W. Dennis Hogue | | | 71 | | | Chief Executive Officer of Hogue Enterprises, Inc.; Former Senior Partner and Managing Director of ChampionScott Partners | | | Yes | | | 2001 | | | AC CC NGC |
Thomas L. Newberry, V | | | 57 | | | Author; Founder and Chief Executive Officer of The 1% Club, Inc. | | | Yes | | | 2001 | | | AC CC |
Celena Matlock | | | 52 | | | Chief Audit, Risk & ESG Officer of Sierra Space | | | Yes | | | 2023 | | | AC CC |
Matthew G. McKenna | | | 67 | | | Principal of McKenna & Associates, LLC | | | Yes | | | 2017 | | | AC CC NGC |
James B. Miller, Jr. | | | 84 | | | Chairman and Director of Ameris Bancorp, the parent company of Ameris Bank | | | Yes | | | 2002 | | | AC±† CC± |
Lizanne Thomas | | | 67 | | | Partner (retired), Jones Day | | | Yes | | | 2019 | | | AC CC NGC± |
Nicole Wu | | | 45 | | | Chief Financial Officer of PDI Technologies, Inc. | | | Yes | | | 2023 | | | AC CC |
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FOR - | Election of H. Allan Dow, W. Dennis Hogue, Thomas L. Newberry, V, Celena Matlock, Matthew G. McKenna, James B. Miller, Jr., Lizanne Thomas and Nicole Wu as directors. |
FOR - | Ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the fiscal year ending on April 30, 2025. |
FOR - | Approval of the advisory resolution regarding the compensation of our named executive officers. |
FOR - | Approval of the adoption of the 2024 Equity Compensation Plan. |
FOR - | Approval of the Company’s Reclassification. |
FOR - | Approval of the amendment and restatement of the Company’s Amended and Restated Articles of Incorporation to give effect to the Reclassification. |
FOR - | Approval of the amendment and restatement of the Company’s Amended and Restated Articles of Incorporation to give effect to the indemnification of directors and officers amendment. |
FOR - | Approval of the amendment and restatement of the Company’s Amended and Restated Articles of Incorporation to give effect to the blank check preferred stock amendment. |
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• | business expertise and skills; |
• | understanding of the Company’s business and industry; |
• | judgment and integrity; |
• | educational and professional background; and |
• | commitments to other businesses and responsibilities |
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H. Allan Dow | |||
Age: 60 Director Since: 2020 | | | Mr. Dow was elected as our President in March 2017 and was elected Chief Executive Officer in May 2020. Mr. Dow has served as president of Logility, Inc. (“Logility”), a provider of collaborative supply chain planning solutions and a wholly owned subsidiary of the Company, since August 2015. Mr. Dow also served as Logility’s Executive Vice President of Sales from September 2000 to July 2015. Mr. Dow holds a Bachelor of Science degree in Chemical Engineering from the University of Maine. Mr. Dow brings to the Board, among other skills and qualifications, his leadership experience as Chief Executive Officer and President of the Company, as well as his track record of sound business judgment and achievement, as demonstrated in over 30 years of experience in strategic planning, sales development, implementation services, and product innovation, particularly in the streamlining, acceleration and optimization of supply chain and retail planning enterprises. |
W. Dennis Hogue | |||
Age: 71 Director Since: 2001 | | | Mr. Hogue has served as Chief Executive Officer of Hogue Enterprises, Inc., a commercial manufacturing company, since January 2005. Previously, he served as a Senior Partner and Managing Director of ChampionScott Partners, a global management consulting firm specializing in technology and technology-enabled companies, from November 2013 to September 2019. Since November 2007, Mr. Hogue has also 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 from more than twelve years with the Company, from 1983 to 1996, where he served as Group Vice President and in other positions, enable him to provide our Board with strong and capable leadership. |
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Celena Matlock | |||
Age: 52 Director Since: 2023 | | | Ms. Matlock has served as Chief Audit, Risk and ESG Officer of Sierra Space, a privately held aerospace company, since March 2023. Ms. Matlock previously served as Senior Vice President, ESG, Internal Audit & Compliance for Sierra Space from January 2022 to July 2023. Prior to joining Sierra Space, Ms. Matlock served as the Senior Vice President, Internal Audit to Aerion Supersonic, an aircraft manufacturer, from January 2021 to January 2022, as an executive consultant at a variety of companies across industries, with an emphasis on diversity, equity and inclusion, and in several executive positions at Warner Media. Prior to that, Ms. Matlock held several executive positions at Turner Broadcasting System, from 2003 to 2014, in financial compliance. Ms. Matlock holds a Bachelor of Business Administration, Accounting from Boston University. Among other things, Ms. Matlock’s strong enterprise risk management, financial and IT controls, diversity, equity & inclusion (DEI), and internal audit background make her well-suited to serve on the Board of Directors. |
Matthew G. McKenna | |||
Age: 67 Director Since: 2017 | | | Mr. McKenna has served as Principal of McKenna & Associates, LLC, a management and consulting advisory firm, since July 2016. Mr. McKenna previously served as Managing Director of Strategy&, a global strategy consulting firm and subsidiary of PricewaterhouseCoopers, from July 2015 to June 2016, and as Senior Executive Advisor of Booz & Company, a global management consulting firm, from January 2008 to June 2015. Prior to serving at Booz & Company, Mr. McKenna held a variety of positions at Booz Allen Hamilton over a 22-year period, including Managing Partner of the company’s Houston office and Energy Operations Sector Practice Leader. From 1981 to 1985, Mr. McKenna served as a Supply Chain Applications Consultant for the Company. Mr. McKenna holds a B.S. in Engineering from the Georgia Institute of Technology and an MBA from Harvard University. Mr. McKenna brings to the Board of Directors significant strategy development and implementation experience gained from his long career in management consulting. |
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James B. Miller, Jr. | |||
Age: 84 Director Since: 2002 | | | Mr. Miller has served as our Chairman since February 2024. Mr. Miller is currently the Chairman and a member of the board of directors of each of Ameris Bancorp, a publicly held bank holding corporation, and its wholly-owned subsidiary. Prior to July 2019, Mr. Miller was the Chairman of the Board and Chief Executive Officer of Fidelity Southern Corporation, a publicly held bank holding corporation and the parent corporation of Fidelity Bank, positions he held since 1979. He became Chairman of Fidelity Bank in 1998 and served as President of Fidelity Bank from 1977 to 1997 and from 2003 to 2004. Mr. Miller is also the chairman of Brandenburg Trust Co. and managing partner of several 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 extensive leadership experience at two publicly traded bank holding corporations and their wholly-owned subsidiary banks, as well as his board experience with other companies in a variety of industries, bring to the Board the business and financial acumen of an experienced senior executive. We believe his financial expertise and legal background and his prior service on the audit committee of Interface, Inc., a publicly held textile manufacturing company, make him well-qualified to serve on our Board, and in particular to serve as chair of our Audit Committee. The Board has determined that Mr. Miller is an “audit committee financial expert.” |
Thomas L. Newberry, V | |||
Age: 57 Director Since: 2001 | | | Mr. Newberry founded The 1% Club, Inc. in October 1992 and has acted as its Chief Executive Officer since that time. The 1% Club sponsors programs designed to assist entrepreneurs and their families in accomplishing their goals. He is also the author of motivational books and audio programs dedicated to improving performance in business operations and salesmanship. Mr. Newberry earned a Bachelor of Science degree from Georgia State University in 1989. Mr. Newberry’s experience as an entrepreneur and a business executive, combined with his leadership in the field of executive performance and motivation, allow him to provide unique and important insights to the Board of Directors whenever the Board addresses motivational and management issues. |
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Lizanne Thomas | |||
Age: 67 Director Since: 2019 | | | Ms. Thomas retired at the end of 2023 as Partner and Chair of the Governance and Activism practice of the global law firm Jones Day after 41 years of service. In addition to leading the firm’s corporate governance and activism practice, she has substantial experience in public company mergers and acquisitions, having led many of the firm’s multi-billion dollar transactions. Ms. Thomas served in various senior management roles at Jones Day, including most recently as Partner-in-Charge of the firm’s Southeast U.S. Region from 2014 through 2022. Ms. Thomas serves on the board of directors of the Southern Company, a publicly traded power utility company, and is a trustee for several non-profit organizations. She previously served on the Boards of Popeyes Louisiana Kitchen, Inc., Atlantic Capital Bancshares and Krispy Kreme Doughnuts, Inc. Among her many honors and distinctions, in 2016, Ms. Thomas was named one of the top 100 directors by the National Association of Corporate Directors (NACD). Ms. Thomas holds a B.A. from Furman University and received her law degree from Washington and Lee University, where she served as Managing Editor of the Law Review. Ms. Thomas’s substantial corporate governance experience and extensive mergers and acquisitions experience make her well-qualified to serve on the Board. |
Nicole Wu | |||
Age: 45 Director Since: 2023 | | | Since 2019, Ms. Wu has served as the Chief Financial Officer of PDI Technologies, Inc., a cloud-based technology company serving convenience retail and petroleum wholesale clients that has successfully grown both organically and via acquisitions during her tenure. Prior to PDI Technologies, Ms. Wu served as the Chief Financial Officer to eVestments, Inc., leading a number of M&A transactions including the sale of that company to NASDAQ. Previously, Ms. Wu held several executive positions at General Electric in division finance, internal audit, and acquisition integrations. Ms. Wu holds a Bachelor of Science in Business from Shanghai Jiao Tong University in Shanghai, China. Ms. Wu’s extensive financial and accounting acumen, and her knowledge of and experience with tax, audit and M&A matters makes her well-qualified to serve on the Board. |
THE BOARD OF DIRECTORS RECOMMENDS THAT CLASS A SHAREHOLDERS VOTE “FOR” MR. DOW, MR. HOGUE, MS. MATLOCK, MR. MCKENNA, MR. MILLER, MR. NEWBERRY, MS. THOMAS AND MS. WU |
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BOARD DIVERSITY MATRIX (As of July 8, 2024) | ||||||||||||
Total Number of Directors | | | 8 | |||||||||
| | Female | | | Male | | | Non- Binary | | | Did Not Disclose Gender | |
Part I: Gender Identity | | | | | | | | | ||||
Directors | | | 3 | | | 4 | | | — | | | 1 |
Part II: Demographic Background | | | | | | | | | ||||
African American or Black | | | 1 | | | — | | | — | | | — |
Alaskan Native or Native American | | | — | | | — | | | — | | | — |
Asian | | | 1 | | | — | | | — | | | — |
Hispanic or Latinx | | | — | | | — | | | — | | | — |
Native Hawaiian or Pacific Islander | | | — | | | — | | | — | | | — |
White | | | 1 | | | 4 | | | — | | | — |
Two or More Races or Ethnicities | | | — | | | — | | | — | | | — |
LGBTQ+ | | | — | | | — | | | — | | | — |
Did Not Disclose Demographic Background | | | — | | | — | | | — | | | 1 |
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF KPMG AS ITS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING ON APRIL 30, 2025. |
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Vincent C. Klinges | |||
Age: 61 | | | Mr. Klinges joined American Software in February 1998 as Vice President of Finance. In September 1999, Mr. Klinges was promoted to Chief Financial Officer, and also became the Chief Financial Officer of Logility, Inc, a provider of collaborative supply chain planning solutions and a wholly owned subsidiary of the Company. From July 1995 to February 1998, Mr. Klinges was employed by Indus International, Inc. (formerly known as TSW International, Inc.), a data management company, as Controller. From November 1986 to July 1995, Mr. Klinges held various positions with Dun & Bradstreet, Inc., a publicly traded data management company, including Controller of its software subsidiary, Sales Technologies. Mr. Klinges holds a Bachelor of Business Administration from St. Bonaventure University. |
James C. Edenfield | |||
Age: 89 | | | Mr. Edenfield is a co-founder of the Company and served as our Executive Chairman from September 2014 to February 2024. In February 2024, Mr. Edenfield retired from service as Executive Chairman and Director of the Board and Treasurer of the Company. Mr. Edenfield previously served as Chief Executive Officer and President from November 1989 to May 2014 and as Co-Chief Executive Officer prior to that time. Prior to founding the Company, Mr. Edenfield held several executive positions with, and was a director of, Management Science America, Inc., an Atlanta-based applications software development and sales company. Mr. Edenfield holds a Bachelor of Industrial Engineering degree from the Georgia Institute of Technology. As a co-founder and Executive Chairman of the Company, and with more than 40 years of experience in our industry, Mr. Edenfield provided essential insight and guidance to our Board of Directors from an insider perspective regarding the strategic direction of the Company. |
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• | Provide compensation opportunities that are competitive with those of companies of a similar size. |
• | Create a strong connection between executives’ compensation and our annual and long-term financial performance. |
• | Include performance-based incentive compensation that offers an opportunity for above-average financial reward to executives without creating incentives for undue business risks. |
• | Design incentive compensation benchmarks that closely align the interests of executive officers with those of our shareholders. |
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Name | | | Fiscal 2024 ($) | | | Fiscal 2025 ($) | | | Percent Change |
James C. Edenfield(1) | | | 297,658 | | | — | | | — |
H. Allan Dow | | | 741,000 | | | 741,000 | | | — |
Vincent C. Klinges | | | 421,000 | | | 421,000 | | | — |
(1) | Mr. Edenfield retired from the Company, effective February 21, 2024. |
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Financial Performance Metric | | | Minimum Performance Goal ($) | | | Target Performance Goal ($) | | | Actual Fiscal 2024 Performance ($) | | | Achievement % |
Revenue | | | 108,500 | | | 118,300 | | | 102,515 | | | (0%) |
Recurring Revenue | | | 90,000 | | | 94,000 | | | 86,712 | | | (0%) |
Adjusted EBITDA | | | 13,050 | | | 14,550 | | | 8,547 | | | (0%) |
Financial Performance Metric | | | Minimum Bonus Amount ($) | | | Target Bonus Amount ($) | | | Weighting | | | Actual Bonus Award ($) |
Revenue | | | 13,933 | | | 139,333 | | | 33.33% | | | — |
Recurring Revenue | | | 13,933 | | | 139,333 | | | 33.33% | | | — |
Adjusted EBITDA | | | 13,933 | | | 139,333 | | | 33.33% | | | — |
Total | | | | | | | 100% | | | — |
Financial Performance Metric | | | Minimum Bonus Amount ($) | | | Target Bonus Amount ($) | | | Weighting | | | Actual Bonus Award ($) |
Revenue | | | 46,667 | | | 466,667 | | | 33.33% | | | — |
Recurring Revenue | | | 46,667 | | | 466,667 | | | 33.33% | | | — |
Adjusted EBITDA | | | 46,667 | | | 466,667 | | | 33.33% | | | — |
Total | | | | | | | 100% | | | — |
Financial Performance Metric | | | Minimum Bonus Amount ($) | | | Target Bonus Amount ($) | | | Weighting | | | Actual Bonus Award ($) |
Revenue | | | 8,800 | | | 88,000 | | | 33.33% | | | — |
Recurring Revenue | | | 8,800 | | | 88,000 | | | 33.33% | | | — |
Adjusted EBITDA | | | 8,800 | | | 88,000 | | | 33.33% | | | — |
Total | | | | | | | 100% | | | — |
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• | Executive Chairman Recommendations. Prior to his retirement, the Compensation Committee placed substantial weight on the stock option grant recommendations of the Executive Chairman in fiscal 2024, particularly as to stock option grants to named executive officers other than himself. The Compensation Committee considered several factors, including our former Executive Chairman’s intimate knowledge of the role and performance level of each of the named executive officers over an extended time period, demonstrated skill in retaining and motivating our officers and key employees, and emphasis on and effectiveness in managing the business of the Company on a fiscally conservative basis. In part because of these factors, the Compensation Committee ultimately decided to grant stock options in accordance with our former Executive Chairman’s stock option grant recommendations. |
• | Current and Past Years’ Financial Results. The Compensation Committee observed that our operating performance in fiscal 2024 failed to meet expectations, resulting in none of the three annual target performance goals being met. Based on this performance, the Compensation Committee determined to eliminate salary increases to our named executive officers for fiscal 2025. To continue incentivizing improved performance in fiscal 2025, the Compensation Committee will continue to provide a significant percentage of our executives’ overall compensation in the form of equity, which further aligns our executives’ interests with those of our shareholders. |
• | Perceived Value of Named Executive Officers. The stock option grants to the named executive officers were not at the same level for each individual. The Compensation Committee considered the roles of the named executive officers and their ability, individually, to influence our profitability and position in the marketplace. In fiscal 2024, this resulted in the largest stock option grant being made to Mr. Dow (300,000 shares), followed by a smaller grant to Mr. Klinges (150,000 shares). Our former Executive Chairman, Mr. James C. Edenfield, received a Restricted Stock Unit (“RSU”) grant equal to $240,000. In the Compensation Committee’s judgment, these equity awards reasonably reflected the relative ability of officers holding these positions to affect the performance of the Company. |
• | Current and Past Years’ Compensation Packages. The Compensation Committee establishes the overall compensation package of our Chief Executive Officer and President and, prior to his retirement, our Executive Chairman. Until May 29, 2024, the Compensation Committee advised on, but did not have the authority to establish, the compensation packages of our other named executive officers, except for stock option grants. As of May 29, 2024, however, the Compensation Committee now establishes compensation packages for all named executive officers, including stock option grants. Compensation packages for each of our executive officers are established after considering, among other things, the Company’s performance and prior modifications to each executive officer’s compensation. |
▪ | In reviewing the compensation package of H. Allan Dow, the Compensation Committee noted that his fiscal 2024 salary remained flat, as compared to the prior year, and his fiscal 2024 target bonus remained flat for the prior year. Mr. Dow’s salary for fiscal 2025 remained flat at $741,000 and the target bonus decreased to $1,175,000, respectively. |
▪ | In reviewing the compensation package of Vince Klinges, the Compensation Committee noted that his fiscal 2024 salary remained flat, as compared to the prior year, and his fiscal 2024 target bonus remained flat, compared to the prior year. Mr. Klinges’ salary for fiscal 2025 remained flat at $421,000 and his target bonus decreased to $225,000, respectively. |
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Name | | | Fiscal Year | | | Salary ($) | | | Bonus ($) | | | Stock Awards ($) | | | Option Awards(2) ($) | | | Non- Equity Incentive Plan Compen- sation ($) | | | Change in Pension Value and Nonqualified Deferred Compen- sation Earnings ($) | | | All Other Compen- sation(3) ($) | | | Total ($) |
James C. Edenfield, Executive Chairman and Treasurer(1) | | | 2024 | | | 297,658 | | | — | | | 240,000 | | | — | | | — | | | — | | | 2,628(4) | | | 540,286 |
| 2023 | | | 548,448 | | | 124,209 | | | — | | | 319,412 | | | — | | | — | | | 5,872 | | | 997,941 | ||
| 2022 | | | 554,698 | | | 283,599 | | | — | | | 427,057 | | | — | | | — | | | 13,727 | | | 1,279,081 | ||
H. Allan Dow, Chief Executive Officer and President | | | 2024 | | | 741,000 | | | — | | | — | | | 1,095,258 | | | — | | | — | | | 19,682(5) | | | 1,855,940 |
| 2023 | | | 741,000 | | | 404,793 | | | — | | | 1,597,060 | | | — | | | — | | | 18,716 | | | 2,759,912 | ||
| 2022 | | | 720,000 | | | 951,548 | | | — | | | 2,135,283 | | | — | | | | | 18,620 | | | 3,825,451 | |||
Vincent C. Klinges, Chief Financial Officer | | | 2024 | | | 421,000 | | | — | | | — | | | 547,629 | | | — | | | — | | | 4,421(6) | | | 973,050 |
| 2023 | | | 421,000 | | | 77,062 | | | — | | | 798,530 | | | — | | | — | | | 3,966 | | | 1,300,558 | ||
| 2022 | | | 400,000 | | | 179,115 | | | — | | | 1,067,642 | | | — | | | — | | | 4,048 | | | 1,650,805 |
(1) | Mr. Edenfield retired from the Company, effective February 21, 2024. |
(2) | The value of stock option awards in this column represents the aggregate grant date fair value of stock option grants made during the year computed in accordance with Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) Topic 718, Compensation-Stock Compensation. For discussion of relevant assumptions used in calculating the grant date fair value, see Note 6 to the Company’s Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended April 30, 2024. |
(3) | Amounts shown as “All Other Compensation” are attributable to perquisites, other personal benefits, and other items of compensation that are not reported elsewhere in the Summary Compensation Table. |
(4) | Mr. Edenfield’s other compensation includes $2,122 in club membership dues and $506 in matching contributions to the Company’s 401(k) plan. |
(5) | Mr. Dow’s other compensation includes $13,260 for a car allowance and $6,422 in matching contributions to the Company’s 401(k) plan. |
(6) | Mr. Klinges’ other compensation includes $4,421 in matching contributions to the Company’s 401(k) plan. |
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Name | | | Multiple |
James C. Edenfield(1) | | | 2x |
H. Allan Dow | | | 2x |
Vincent C. Klinges | | | 1.5x |
(1) | Mr. Edenfield retired from the Company, effective February 21, 2024. Accordingly, his retention agreement has terminated. |
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Name | | | Grant Date | | | All Option Awards: Number of Securities Underlying Options (#)(1) | | | Exercise or Base Price of Option Awards ($/Sh)(2) | | | Closing Market Price ($/Sh) | | | Grant Date Fair Value of Option Awards ($)(3) |
James C. Edenfield | | | — | | | — | | | — | | | — | | | — |
H. Allan Dow | | | 9/27/2023 | | | 300,000 | | | 11.40 | | | 11.40 | | | 1,095,258 |
Vincent C. Klinges | | | 9/27/2023 | | | 150,000 | | | 11.40 | | | 11.40 | | | 547,629 |
(1) | The stock options vest ratably on the first, second, third, fourth, and fifth anniversaries of the option grant date and expire in six years. |
(2) | The exercise price is determined based on the closing price of the shares as traded on the NASDAQ Stock Market on the grant date. |
(3) | For purposes of FASB ASC Topic 718, Compensation–Stock Compensation and this table, the grant date fair value of options is determined using the Black-Scholes option valuation model. The following assumptions were made with respect to options issued to Messrs. Dow and Klinges on September 27, 2023: exercise price equal to fair market value of stock on the grant date ($11.40); dividend yield (3.86%); expected volatility rate (43.81%); risk-free interest rate (4.67%); and expected option term of 5 years. |
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| | Option Awards | | | Stock Awards | |||||||||||||||||||
Name | | | Number of Securities Underlying Unexercised Options Exercisable (#) | | | Number of Securities Underlying Unexercised Options Unexercisable (#) | | | Option Exercise Price ($)(1) | | | Option Expiration Date(2) | | | Number of shares or units of stock that have not vested (#) | | | Market value of shares or units of stock that have not vested ($) | | | Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#) | | | Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($) |
James C. Edenfield | | | 18,000 | | | 0 | | | 13.68 | | | 6/15/2024 | | | | | | | | | ||||
| 31,200 | | | 18,000 | | | 14.55 | | | 8/21/2025 | | | | | | | | | ||||||
| 36,000 | | | 36,000 | | | 15.56 | | | 6/24/2026 | | | | | | | | | ||||||
| 24,000 | | | 36,000 | | | 22.00 | | | 8/18/2027 | | | | | | | | | ||||||
| 12,000 | | | 48,000 | | | 16.00 | | | 6/13/2028 | | | | | | | | | ||||||
| | | | | | | | | 21,053(3) | | | 240,000 | | | | | ||||||||
H. Allan Dow | | | 300,000 | | | 0 | | | 13.68 | | | 6/15/2024 | | | | | | | | | ||||
| 240,000 | | | 60,000 | | | 14.55 | | | 8/21/2025 | | | | | | | | | ||||||
| 180,000 | | | 120,000 | | | 15.56 | | | 6/24/2026 | | | | | | | | | ||||||
| 120,000 | | | 180,000 | | | 22.00 | | | 8/18/2027 | | | | | | | | | ||||||
| 60,000 | | | 240,000 | | | 16.00 | | | 6/13/2028 | | | | | | | | | ||||||
| 0 | | | 300,000 | | | 11.40 | | | 9/27/2029 | | | | | | | | | ||||||
Vincent C. Klinges | | | 80,000 | | | 0 | | | 13.68 | | | 6/15/2024 | | | | | | | | | ||||
| 68,000 | | | 17,000 | | | 14.55 | | | 8/21/2025 | | | | | | | | | ||||||
| 60,000 | | | 40,000 | | | 15.56 | | | 6/24/2026 | | | | | | | | | ||||||
| 60,000 | | | 90,000 | | | 22.00 | | | 8/18/2027 | | | | | | | | | ||||||
| 30,000 | | | 120,000 | | | 16.00 | | | 6/13/2028 | | | | | | | | | ||||||
| 0 | | | 150,000 | | | 11.40 | | | 9/27/2029 | | | | | | | | |
(1) | The number of shares underlying options awarded and the related exercise prices shown in the table are the amounts on the applicable grant date. |
(2) | The stock option grants expire in six years and vest ratably on the first, second, third, fourth and fifth anniversaries of the option grant date. |
(3) | Reflects RSUs that vest over one year. |
25 | American Software, Inc. 2024 Proxy Statement | | |
| | Option Awards | ||||
Name | | | Number of Shares Acquired on Exercise (#) | | | Value Realized on Exercise ($) |
James C. Edenfield | | | — | | | — |
H. Allan Dow | | | 18,253 | | | 35,228 |
Vincent C. Klinges | | | — | | | — |
Name | | | Cash Severance(1) ($) | | | Estimated Value of Accelerated Equity Awards ($) | | | Total ($) |
James C. Edenfield(2) | | | 843,734 | | | 1,479,623 | | | 2,323,357 |
H. Allan Dow | | | 2,291,586 | | | 7,823,162 | | | 10,114,748 |
Vincent C. Klinges | | | 747,093 | | | 3,307,831 | | | 4,054,924 |
(1) | Consists of a multiple of the executive’s annual base salary plus the executive’s bonus for the prior year as of the date of the change in control. See “Compensation Discussion and Analysis—Retention Agreements” for the multiples applicable to each named executive officer. |
(2) | Mr. Edenfield retired from the Company, effective February 21, 2024. Effective as of February 21, 2024, he is no longer eligible for such potential payments upon termination or change of control. |
26 | American Software, Inc. 2024 Proxy Statement | | |
• | The median of the total annual compensation of all employees of our Company (other than Mr. Dow) was $117,877; |
• | The total annual compensation of Mr. Dow, as reported in the Summary Compensation Table shown elsewhere in this Proxy Statement, was $1,855,940; and |
• | Based on this information and calculated in a manner consistent with Item 402(u) of Regulation S-K, for fiscal 2024, the reasonable estimate of the ratio of the total annual compensation of Mr. Dow, to the median of the total annual compensation of all employees, was 16 to 1. |
• | Reference Date. We chose April 30, 2024, the last day of our fiscal year, as the date to identify our “median employee.” |
• | Employee Population. Our employee population on April 30, 2024, after taking into consideration the adjustment permitted by SEC rules relating to independent contractors, consisted of approximately 331 individuals. Although independent contractors are part of our workforce, they are not employees of the Company and accordingly, were not included in our employee population. |
• | No Exclusions or Adjustments. Although permitted by SEC rules, we did not exclude any of our employees from our employee population in order to determine the median employee, nor did we make any cost-of-living adjustments in identifying the median employee. |
• | Annualized Compensation. We annualized the compensation of all employees. |
• | Relative Compensation. With respect to the annual total compensation of Mr. Dow, as required by SEC rules, we used the amount reported in the “Total” column of our 2024 Summary Compensation Table included in this Proxy Statement and incorporated by reference under Item 11 of Part III of our Annual Report. |
27 | American Software, Inc. 2024 Proxy Statement | | |
| | | | | | | | | | Value of Initial Fixed $100 investment based on: | | | | | ||||||||||
Year | | | Summary Compensation Table Total for CEO | | | Compensation Actually Paid to CEO | | | Average Summary Compensation Table Total for non-CEO NEOs | | | Average Compensation Actually Paid to Non-CEO NEOs | | | Total Shareholder Return | | | Peer Group Total Shareholder Return | | | Net Income ($mm) | | | Adj. EBITDA ($mm) |
(a) | | | (b) | | | (c) | | | (d) | | | (e) | | | (f) | | | (g) | | | (h)(i) | | | (j)(k) |
2024 | | | $ | | | | | | | | | $ | | | $ | | | $ | | | $ | |||
2023 | | | | | ( | | | | | | | | | | | | | |||||||
2022 | | | | | | | | | | | | | | | | | ||||||||
2021 | | | | | | | | | | | | | | | | |
(a) | Refers to the Company’s fiscal year. |
(b) | Reflects compensation amounts reported in the Summary Compensation Table (“SCT”) in the Fiscal 2024 Executive Compensation Section of this Proxy Statement for our CEO, |
(c) | “Compensation actually paid” to our CEO in each of 2024, 2023, 2022 and 2021 reflects the respective amounts set forth in column (b) of the table above, adjusted as set forth in the table below, as determined in accordance with SEC rules. “Compensation Actually Paid” may not reflect the actual amount of compensation earned by or paid to the CEO during the applicable year. Allan Dow was CEO for all years presented. For a complete discussion of the Company’s executive compensation program and the Committee’s philosophy and approach, please refer to the Compensation Discussion and Analysis beginning on page 15. |
Amounts Deducted or Added to CEO Compensation Reported in SCT | |||||||||||||||||||||
| | | | | | Equity Addition to SCT Total for CEO | | | |||||||||||||
Year | | | SCT Total | | | Less Equity Deductions from SCT | | | Value of Current Year Equity Awards at April 30 value | | | Change in value of unvested prior year awards at April 30 | | | Change in value of prior year awards vested in current year | | | Total Equity Addition to SCT | | | Total Compensation Actually Paid |
| | | | (1) | | | (2) | | | (3) | | | (4) | | | | | (5) | |||
2024 | | | $ | | | ( | | | | | ( | | | ( | | | | | |||
2023 | | | | | ( | | | | | ( | | | | | ( | | | ( | |||
2022 | | | | | ( | | | | | ( | | | | | | | |||||
2021 | | | | | ( | | | | | | | | | | |
(1) | Represents the grant date fair value of equity-based awards made during each fiscal year. |
(2) | Represents the year-end fair value of equity-based awards that were made during the fiscal year. |
(3) | Represents the change in fair value during the fiscal year of equity-based awards granted in prior fiscal years that were still unvested as of year-end, with such change in fair value reflecting the change in the year-end stock price during each year. |
(4) | Represents the change in fair value during the fiscal year of equity-based awards granted in prior fiscal years that vested during the year, with such change in fair value reflecting the change in stock price from the prior fiscal year-end until the vesting date. |
(5) | The amounts in this column are calculated by subtracting the amounts under “Less Equity Deduction from SCT” from, and adding the amounts under “Total Equity Addition to SCT” to, the amounts under “SCT Total” with respect to our CEO. |
(d) | Reflects an average of compensation amounts reported in the “Summary Compensation Table” for our non-CEO named executive officers (“NEOs”), for the respective years shown. Included in the averages for the years shown is compensation for James C. Edenfield and Vincent Klinges. |
(e) | Average “compensation actually paid” for our non-CEO NEOs in each of 2024, 2023, 2022 and 2021 reflects the respective amounts set forth in column (d) of the table above, adjusted as set forth in the table below, as determined in accordance with SEC rules. Average “Compensation Actually Paid” may not reflect the actual amount of compensation earned by or paid to the NEOs during the applicable year. |
28 | American Software, Inc. 2024 Proxy Statement | | |
Amounts Deducted or Added to Non-CEO NEO Average Compensation Reported in SCT | |||||||||||||||||||||
| | | | | | Equity Addition to SCT Average for Non-CEO NEOs | |||||||||||||||
Year | | | SCT Average | | | Less Equity Deductions from SCT | | | Value of Current Year Equity Awards at April 30 value | | | Change in value of unvested prior year awards at April 30 | | | Change in value of prior year awards vested in current year | | | Total Equity Addition to SCT | | | Average Compensation Actually Paid |
| | | | (1) | | | (2) | | | (3) | | | (4) | | | | | (5) | |||
2024 | | | $ | | | ( | | | | | ( | | | ( | | | | | |||
2023 | | | | | ( | | | | | ( | | | | | ( | | | ||||
2022 | | | | | ( | | | | | ( | | | | | | | |||||
2021 | | | | | ( | | | | | | | | | | |
(1) | Represents the grant date fair value of equity-based awards made during each fiscal year. |
(2) | Represents the year-end fair value of equity-based awards that were made during the fiscal year. |
(3) | Represents the change in fair value during the fiscal year of equity-based awards granted in prior fiscal years that were still unvested as of year-end, with such change in fair value reflecting the change in the year-end stock price during each year. |
(4) | Represents the change in fair value during the fiscal year of equity-based awards granted in prior fiscal years that vested during the year, with such change in fair value reflecting the change in stock price from the prior fiscal year-end until the vesting date. |
(5) | The amounts in this column are calculated by subtracting the amounts under “Less Equity Deduction from SCT” from, and adding the amounts under “Total Equity Addition to SCT” to, the amounts under “SCT Average” with respect to our Non-CEO NEOs. |
(f) | For the relevant fiscal year, represents the cumulative total shareholder return (TSR) of the Company for the measurement periods ending on April 30, 2024, 2023, 2022 and 2021, respectively. |
(g) | Based on the NASDAQ Computer Index included in our stock performance graph in our annual report to shareholders. |
(h) | Reflects “Net Income” in the Company’s Consolidated Income Statements included in the Company’s Annual Reports for the measurement periods ending on April 30, 2024, 2023, 2022 and 2021, respectively. |
(i) | Net Income based on continuing operations. |
(j) | The Company-selected measure is |
(k) | Adjusted EBITDA based on continuing operations. |
29 | American Software, Inc. 2024 Proxy Statement | | |
Relationships between Pay and Performance | ||||||||||||
| | 2021 | | | 2022 | | | 2023 | | | 2024 | |
CEO Compensation Actually Paid (in millions) | | | $4.4 | | | $2.5 | | | ($0.0) | | | $0.9 |
Average NEO Compensation Actually Paid (in millions) | | | $1.7 | | | $1.0 | | | $0.2 | | | $0.4 |
| | | | | | | | |||||
Company Net Income (in millions) | | | $8.1 | | | $12.8 | | | $10.4 | | | $11.4 |
% Yearly Change | | | 20% | | | 58% | | | -19% | | | 10% |
| | | | | | | | |||||
Company Adjusted EBITDA (in millions) | | | $10.0 | | | $17.3 | | | $13.7 | | | $8.5 |
% Yearly Return | | | -15% | | | 73% | | | -21% | | | -38% |
| | | | | | | | |||||
Company Total Shareholder Return | | | $129 | | | $108 | | | $78 | | | $69 |
% Yearly Return | | | 29% | | | -16% | | | -28% | | | -12% |
3 year CAGR | | | | | | | | | -31% | |||
| | | | | | | | |||||
Peer Total Shareholder Return | | | $163 | | | $159 | | | $166 | | | $241 |
% Yearly Return | | | 63% | | | -2% | | | 4% | | | 45% |
3 year CAGR | | | | | | | | | 80% |
30 | American Software, Inc. 2024 Proxy Statement | | |
Name | | | Fees Earned or Paid in Cash ($) | | | Stock Awards ($) | | | Option Awards ($) | | | Non- Equity Incentive Compen- sation ($) | | | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | | | All Other Compen- sation ($) | | | Total ($) |
W. Dennis Hogue | | | 70,000 | | | 119,997 | | | — | | | — | | | — | | | — | | | 189,997 |
James B. Miller, Jr. | | | 80,000 | | | 119,997 | | | — | | | — | | | — | | | — | | | 199,997 |
Thomas L. Newberry, V | | | 70,000 | | | 119,997 | | | — | | | — | | | — | | | — | | | 189,997 |
Matthew G. McKenna | | | 70,000 | | | 119,997 | | | — | | | — | | | — | | | — | | | 189,997 |
Lizanne Thomas | | | 75,000 | | | 119,997 | | | — | | | — | | | — | | | — | | | 194,997 |
Nicole Wu | | | 70,000 | | | 144,997 | | | — | | | — | | | — | | | — | | | 214,997 |
Celena Matlock | | | 52,500 | | | 144,996 | | | — | | | — | | | — | | | — | | | 197,496 |
31 | American Software, Inc. 2024 Proxy Statement | | |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL, ON AN ADVISORY BASIS, OF THE FOREGOING RESOLUTION REGARDING THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AS PRESENTED IN THIS PROXY STATEMENT. |
32 | American Software, Inc. 2024 Proxy Statement | | |
33 | American Software, Inc. 2024 Proxy Statement | | |
| | Fiscal 2022 | | | Fiscal 2023 | | | Fiscal 2024 | |
Awards Granted | | | 1,458,500 | | | 1,549,000 | | | 1,580,613 |
Less: Forfeitures | | | 232,000 | | | 273,500 | | | 202,400 |
Net Shares Awarded | | | 1,226,500 | | | 1,275,500 | | | 1,378,213 |
Weighted Average Number of Shares of Common Stock Outstanding | | | 33,364,684 | | | 33,761,316 | | | 33,689,056 |
Net Burn Rate | | | 3.68% | | | 3.78% | | | 4.09% |
Three-year Average Net Burn Rate | | | | | 3.85% | | |
34 | American Software, Inc. 2024 Proxy Statement | | |
35 | American Software, Inc. 2024 Proxy Statement | | |
36 | American Software, Inc. 2024 Proxy Statement | | |
37 | American Software, Inc. 2024 Proxy Statement | | |
38 | American Software, Inc. 2024 Proxy Statement | | |
39 | American Software, Inc. 2024 Proxy Statement | | |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE FOREGOING PROPOSAL REGARDING THE APPROVAL AND ADOPTION OF THE 2024 EQUITY COMPENSATION PLAN. |
40 | American Software, Inc. 2024 Proxy Statement | | |
41 | American Software, Inc. 2024 Proxy Statement | | |
42 | American Software, Inc. 2024 Proxy Statement | | |
43 | American Software, Inc. 2024 Proxy Statement | | |
• | valid existence and corporate power and authority of the Company relative to the execution, delivery and performance of the Reclassification Agreement and enforceability of the Reclassification Agreement; |
• | capital structure of the Company; |
• | the absence of conflicts with, or violations of, the organizational documents of the Company, any note, bond, mortgage, indenture, deed of trust, license, contract, undertaking, agreement, lease or other instrument or obligation to which the Company or any of its subsidiaries is a party (other than any compensation or similar plan or arrangement), or any governmental order or law applicable to the Company; |
• | the Board’s authorization and approval of the Second Amended and Restated Articles of Incorporation, the Reclassification Agreement and related transaction documents and the Reclassification, and the recommendation to Company shareholders that they approve and adopt the Reclassification Proposals; |
• | receipt by the Board of Directors of an opinion from Houlihan Lokey; |
• | absence of certain litigation; and |
• | absence of finders’ fees. |
• | valid title to the Class B Shares owned of record by Mr. Edenfield; |
• | requisite individual capacity of Mr. Edenfield relative to the execution, delivery and performance of the Reclassification Agreement and enforceability of the Reclassification Agreement; |
• | the absence of conflicts with, or violations of, organizational documents of Mr. Edenfield or any governmental order or law applicable to Mr. Edenfield; |
• | consents and approvals relating to the Reclassification; |
• | absence of certain litigation; and |
• | absence of finders’ fees. |
44 | American Software, Inc. 2024 Proxy Statement | | |
• | in support of any proposal submitted by the Board of Directors for approval at the Annual Meeting, including the Reclassification Proposals; |
• | unless otherwise directed in writing by the Board of Directors, to oppose any action, agreement or transaction that would reasonably be expected to be inconsistent with or contrary to the terms and conditions of the Reclassification Proposals or result in any of the conditions precedent set forth in the Reclassification Agreement not being satisfied on or prior to April 30, 2025 (subject to certain exceptions and requirements); |
• | unless otherwise directed in writing by the Board of Directors, against any proposal submitted for approval at the Annual Meeting by means other than by the Board of Directors; and |
• | against any other action, agreement or transaction involving the Company or any of its subsidiaries, including any change in the present capitalization of the Company or any amendment or other change to the Company’s charter (other than the Reclassification Amendment) or bylaws, that is intended, or would reasonably be expected, to prevent or impair or delay the consummation of the Reclassification or the other transactions contemplated by the Reclassification Agreement or the performance by the Company or by Mr. Edenfield of its obligations under the Reclassification Agreement. |
• | agreed to waive his right to nominate any individual for election to serve as a Class B Director on the Board of Directors; |
• | irrevocably appointed each of H. Allan Dow, Vincent Klinges and Mark Grant as Mr. Edenfield’s proxy and attorney-in-fact with authority to vote Mr. Edenfield’s shares at the Annual Meeting; |
• | agreed to not grant any other proxies or enter into any voting trusts, transfer any Class B Shares (except in limited circumstances) or enter into any hedging, derivative or swap transactions; and |
• | agreed to notify the Company of his acquisition of any additional Class A Shares or Class B Shares. |
45 | American Software, Inc. 2024 Proxy Statement | | |
• | the adoption and approval of the Reclassification Proposals by the affirmative vote of the holders representing (a) a majority of the issued and outstanding Class A Shares and Class B Shares held by all holders of Class A Shares and Class B Shares, voting as a single voting class, and (b) a majority of the issued and outstanding Class A Shares held by the Unaffiliated Common Shareholders (as defined in the Reclassification Agreement), voting as a separate voting class; and |
• | the absence of any governmental order or law preventing, prohibiting or enjoining the Reclassification or the Reclassification Amendment from becoming effective. |
• | the accuracy of the representations and warranties of Mr. Edenfield (subject to a materiality standard); |
• | Mr. Edenfield shall have performed in all material respects all of the obligations under the Reclassification Agreement required to be performed by Mr. Edenfield at or before to the closing; and |
• | the Company’s receipt of a certificate from Mr. Edenfield certifying that the conditions set forth above have been satisfied. |
• | the accuracy of the representations and warranties of the Company (subject to a materiality standard); |
• | the Company shall have performed in all material respects all of the obligations under the Reclassification Agreement required to be performed by the Company at or before the closing; and |
• | Mr. Edenfield’s receipt of a certificate from the Company that the conditions set forth above have been satisfied. |
• | if the closing contemplated by the Reclassification Agreement does not occur on or prior to April 30, 2025; |
• | if requisite shareholder approvals of the Reclassification Proposals are not obtained in accordance with the terms of the Reclassification Agreement at the Annual Meeting; or |
• | if any permanent legal restraint has been issued or come into effect that permanently prevents, prohibits or enjoins the consummation of the Reclassification or the Reclassification Amendment from becoming effective, and such legal restraint has become final and non-appealable. |
46 | American Software, Inc. 2024 Proxy Statement | | |
47 | American Software, Inc. 2024 Proxy Statement | | |
48 | American Software, Inc. 2024 Proxy Statement | | |
49 | American Software, Inc. 2024 Proxy Statement | | |
• | reviewed the following agreements and documents: |
• | a draft, dated April 8, 2024, of the Reclassification Agreement; |
• | a draft, dated April 8, 2024, of the Amended and Restated Articles of Incorporation of the Company (the “New Amended and Restated Articles”); and |
• | the Amended and Restated Articles of Incorporation of the Company, dated January 14, 1983; |
• | reviewed certain publicly available business and financial information relating to the Company that Houlihan Lokey deemed to be relevant; |
• | spoke with certain members of the management of the Company and certain of its representatives and advisors regarding the business, operations and capital structure of the Company, the Reclassification and related matters; |
• | considered the publicly available financial terms of certain transactions that Houlihan Lokey deemed to be relevant; |
• | reviewed the current and historical market prices and trading volume for the Class A Shares, and the current and historical market prices and trading volume of the publicly traded securities of certain other companies that Houlihan Lokey deemed to be relevant; and |
• | conducted such other financial studies, analyses and inquiries and considered such other information and factors as Houlihan Lokey deemed appropriate. |
50 | American Software, Inc. 2024 Proxy Statement | | |
51 | American Software, Inc. 2024 Proxy Statement | | |
52 | American Software, Inc. 2024 Proxy Statement | | |
• | The implied aggregate premium relative to the applicable company’s total market capitalization at the time of transaction announcement, or the “Implied Aggregate Premium as % of Market Cap,” calculated as (x) the product of (i) (a) the value of the aggregate cash and stock consideration received per high-vote share less (b) the low-vote stock closing price on the trading day prior to announcement, multiplied by (ii) the number of high-vote shares, and divided by (y) the market capitalization of the company on the trading day prior to announcement (based on low-vote shares outstanding multiplied by low-vote stock price plus high-vote shares outstanding multiplied by high-vote stock price, where both classes traded publicly, and all shares outstanding multiplied by low-vote stock price, where the high-vote class did not trade publicly); |
• | The implied aggregate premium relative to the market capitalization attributable solely to low-vote shares at the time of transaction announcement, or the “Implied Aggregate Premium as % of Low Vote Market Cap,” calculated as (x) the product of (i) (a) the value of the aggregate cash and stock consideration received per high-vote share less (b) the low-vote stock closing price on the trading day prior to announcement, multiplied by (ii) the number of high-vote shares, and divided by (y) the low-vote market capitalization of the company on the trading day prior to announcement (based on low-vote shares outstanding multiplied by low-vote stock price); and |
• | The implied per share consideration relative to the low-vote share price, or the “Implied Per Share Consideration Relative to Low Vote Share Price,” calculated as (i) (a) the value of the aggregate cash and stock consideration received per high-vote share, less (b) the low-vote stock closing price on the trading day prior to announcement, divided by (ii) the low-vote stock closing price on the trading day prior to announcement. |
53 | American Software, Inc. 2024 Proxy Statement | | |
Date Announced | | | Company |
June 2023 | | | MSC Industrial Direct Co., Inc. |
May 2023 | | | Monro, Inc.1 |
June 2022 | | | Constellation Brands, Inc. |
February 2021 | | | Citizens, Inc. |
December 2016 | | | Forest City Realty Trust, Inc. |
January 2016 | | | Stewart Information Services Corporation2 |
August 2015 | | | Hubbell Incorporated |
September 2005 | | | Sotheby’s Holdings, Inc. |
June 2005 | | | Kaman Corporation |
April 2003 | | | Commonwealth Telephone Enterprises LLC |
October 2002 | | | The Reader’s Digest Association, Inc. |
August 2002 | | | Methode Electronics, Inc. |
November 2000 | | | Continental Airlines |
May 1999 | | | PacifiCare Health Systems, LLC |
1. | Vote of 60% of high vote class was required to effect any shareholder action, providing an effective veto. |
2. | High vote class entitled to elect four of nine directors and six of nine directors must approve any board action, providing an effective veto. |
| | Implied Aggregate Premium as % of Market Cap | | | Implied Aggregate Premium as % of Low Vote Market Cap | | | Implied Per Share Consideration Relative to Low Vote Share Price | |
Low | | | 0.8% | | | 0.8% | | | 5.1% |
Median | | | 3.4% | | | 3.9% | | | 30.1% |
Mean | | | 3.3% | | | 3.7% | | | 62.0% |
High | | | 7.6% | | | 7.8% | | | 258.8% |
54 | American Software, Inc. 2024 Proxy Statement | | |
• | The premium paid per high-vote share relative to the consideration paid per low-vote share in the transaction, or “High Vote/Low Vote Premium.” |
• | The implied aggregate premium relative to the total consideration received in the applicable transaction, excluding such premium, or the “Implied Aggregate Premium as % of Transaction Consideration (Ex-Premium),” calculated as (i) the aggregate premium paid to high-vote shareholders (relative to consideration received by low-vote shareholders), divided by (ii) the implied equity value in the transaction, less the aggregate premium paid to the high-vote shareholders (relative to the consideration received by the low-vote shareholders). |
| | High Vote/Low Vote Premium | | | Implied Aggregate Premium as % of Transaction Consideration (Ex-Premium) | |
Low | | | 4.7% | | | 0.5% |
Median | | | 18.3% | | | 2.3% |
Mean | | | 31.2% | | | 2.7% |
High | | | 72.0% | | | 5.6% |
55 | American Software, Inc. 2024 Proxy Statement | | |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE FOREGOING PROPOSAL REGARDING THE APPROVAL AND ADOPTION OF THE RECLASSIFICATION. |
56 | American Software, Inc. 2024 Proxy Statement | | |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE FOREGOING PROPOSAL REGARDING THE APPROVAL AND ADOPTION OF THE RECLASSIFICATION AMENDMENT. |
57 | American Software, Inc. 2024 Proxy Statement | | |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE FOREGOING PROPOSAL REGARDING THE APPROVAL AND ADOPTION OF THE INDEMNIFICATION AMENDMENT. |
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE FOREGOING PROPOSAL REGARDING THE APPROVAL AND ADOPTION OF THE BLANK CHECK AMENDMENT. |
61 | American Software, Inc. 2024 Proxy Statement | | |
| | SHARES BENEFICIALLY OWNED | | | PERCENT OF CLASS | |||||||
NAME OF BENEFICIAL OWNER OR DESCRIPTION OF GROUP | | | CLASS A | | | CLASS B | | | CLASS A(1) | | | CLASS B(1) |
Beneficial owners of more than 5%: James C. Edenfield | | | 193,200(2) | | | 1,821,587 | | | * | | | 100% |
Kayne Anderson Rudnick Investment Management LLC | | | 2,193,363(3) | | | | | 7.0% | | | ||
BlackRock, Inc. | | | 2,584,010(4) | | | | | 8.2% | | | ||
The Vanguard Group | | | 2,375,735(5) | | | | | 7.6% | | | ||
| | | | | | | | |||||
Directors and Named Executive Officers: | | |||||||||||
James C. Edenfield | | | 193,200(2) | | | 1,821,587 | | | * | | | 100% |
W. Dennis Hogue | | | 119,756(6) | | | -0- | | | * | | | — |
Celena Matlock | | | 14,091 | | | | | | | |||
Matthew G. McKenna | | | 101,350(7) | | | -0- | | | * | | | |
James B. Miller, Jr. | | | 191,351(8) | | | -0- | | | * | | | — |
Thomas L. Newberry, V | | | 57,740(9) | | | -0- | | | * | | | — |
Lizanne Thomas | | | 77,228(10) | | | -0- | | | * | | | — |
Nicole Wu | | | 11,769 | | | | | | | |||
H. Allan Dow | | | 853,368(11) | | | -0- | | | 2.65% | | | — |
Vincent C. Klinges | | | 368,838(12) | | | -0- | | | 1.16% | | | — |
ALL DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP (9 PERSONS) | | | 1,959,831(13) | | | 1,821,587 | | | 5.96% | | | 100.0% |
* | Denotes less than 1%. |
(1) | Share percentages are based on an aggregate of 31,459,011 Class A Shares outstanding as of June 5, 2024, plus options exercisable within 60 days of August 5, 2024. There were 1,821,587 Class B Shares outstanding as of June 5, 2024. |
(2) | Includes 133,200 shares that may be acquired upon the exercise of Mr. Edenfield’s own stock options exercisable within 60 days and 60,000 shares held by the James C. and Norma T. Edenfield Foundation, Inc., as to which Mr. Edenfield has shared voting and investment power. |
(3) | Based on Schedule 13G/A dated February 13, 2024. Of this amount, the reporting person has sole voting power as to 1,017,393 shares, shared voting power as to 673,489 shares, sole dispositive power as to 1,519,874 shares, and shared dispositive power as to 673,489 shares. Kayne Anderson Rudnick Investment Management’s reported address is 2000 Avenue of the Stars, Suite 1110, Los Angeles, CA 90067. |
(4) | Based on Schedule 13G/A dated January 26, 2024. Of this amount, the reporting person has sole voting power as to 2,549,263 shares and sole dispositive power as to 2,584,010 shares. BlackRock’s reported address is 50 Hudson Yards, New York, NY 10001. |
(5) | Based on Schedule 13G/A dated February 9, 2023. Of this amount, the reporting person has shared voting power as 49,049 shares, sole dispositive power as to 2,297,148 shares and shared dispositive power as to 78,587 shares. Vanguard’s reported address is 100 Vanguard Blvd., Malvern, PA 19355. |
(6) | Includes 75,000 shares subject to options exercisable within 60 days. |
62 | American Software, Inc. 2024 Proxy Statement | | |
(7) | Includes 69,000 shares subject to options exercisable within 60 days. |
(8) | Includes 75,000 shares subject to options exercisable within 60 days. |
(9) | Includes 48,000 shares subject to options exercisable within 60 days. |
(10) | Includes 66,000 shares subject to options exercisable within 60 days. |
(11) | Includes 720,000 shares subject to options exercisable within 60 days. |
(12) | Includes 268,000 shares subject to options exercisable within 60 days. |
(13) | Includes 1,454,200 shares subject to options exercisable within 60 days. |
63 | American Software, Inc. 2024 Proxy Statement | | |
64 | American Software, Inc. 2024 Proxy Statement | | |
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A-i | American Software, Inc. 2024 Proxy Statement | | |
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A-ii | American Software, Inc. 2024 Proxy Statement | | |
A-1 | American Software, Inc. 2024 Proxy Statement | | |
A-2 | American Software, Inc. 2024 Proxy Statement | | |
A-3 | American Software, Inc. 2024 Proxy Statement | | |
A-4 | American Software, Inc. 2024 Proxy Statement | | |
A-5 | American Software, Inc. 2024 Proxy Statement | | |
A-6 | American Software, Inc. 2024 Proxy Statement | | |
A-7 | American Software, Inc. 2024 Proxy Statement | | |
A-8 | American Software, Inc. 2024 Proxy Statement | | |
A-9 | American Software, Inc. 2024 Proxy Statement | | |
A-10 | American Software, Inc. 2024 Proxy Statement | | |
A-11 | American Software, Inc. 2024 Proxy Statement | | |
A-12 | American Software, Inc. 2024 Proxy Statement | | |
| | if to the Company, to: | |
| | ||
| | American Software, Inc. | |
| | 470 East Paces Ferry Road, N.E. | |
| | Atlanta, GA 30305 | |
| | Attention: General Counsel | |
| | Email: [On file with the Company] | |
| | ||
| | with a copy, which shall not constitute notice, to: | |
| | ||
| | Baker, Donelson, Bearman, Caldwell & Berkowitz, P.C. | |
| | [On file with the Company] | |
| | ||
| | if to the Class B Shareholder, to: | |
| | ||
| | James C. Edenfield | |
| | [On file with the Company] | |
| | ||
| | with a copy, which shall not constitute notice, to: | |
| | ||
| | Hendrick, Rascoe, Zitron & Long, LLC | |
| | [On file with the Company] |
A-13 | American Software, Inc. 2024 Proxy Statement | | |
| | AMERICAN SOFTWARE, INC. | ||||
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| | By: | | | /s/ H. Allan Dow | |
| | Name: | | | H. Allan Dow | |
| | Title: | | | President | |
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| | CLASS B SHAREHOLDER | ||||
| | | | |||
| | /s/ James C. Edenfield | ||||
| | Name: | | | James C. Edenfield |
A-14 | American Software, Inc. 2024 Proxy Statement | | |
B-1 | American Software, Inc. 2024 Proxy Statement | | |
(a) | Authorized Classes of Stock. The aggregate number of shares of capital stock which the Corporation shall have the authority to issue shall be 60,000,000 shares, of which 50,000,000 shares shall be shares of Common Stock (as defined below) and 10,000,000 shares shall be shares of Preferred Stock (as defined below). |
(b) | Common Stock. |
i. | Reclassification of Class B Common Stock. Immediately upon the filing and effectiveness of these Second Amended and Restated Articles of Incorporation with the Secretary of State of the State of Georgia (the “Effective Time”), automatically and without further action on the part of the Corporation or the holders of capital stock of the Corporation, each share of Class B Common Stock, having a par value of Ten Cents ($0.10) per share, of the Corporation (the “Former Class B Common Stock”), issued and outstanding or held by the Corporation as treasury stock as of immediately prior to the Effective Time shall be reclassified and exchanged into 1.2 validly issued, fully paid and non-assessable shares of Class A Common Stock (the “Reclassification Consideration”), having a par value of Ten Cents ($0.10) per share of the Corporation (the “Class A Common Stock”). The procedures for exchanging or transferring, as applicable, the certificated and book-entry shares of Former Class B Common Stock following the Effective Time and for receiving the Reclassification Consideration upon such exchange or transfer are set forth in that certain Reclassification Agreement by and among the Corporation and the persons named therein, dated April 10, 2024, as it may be amended from time to time. After giving effect to the foregoing reclassification of the Former Class B Common Stock into Class A Common Stock, the Class A Common Stock is hereby referred to as “Common Stock”. |
ii. | Voting Rights. Except as otherwise provided herein or by law, each holder of Common Stock shall have one vote in respect of each share of Common Stock held of record on each matter submitted to a vote of the shareholders of the Corporation. |
iii. | Liquidation. In the event of a liquidation, dissolution or winding-up of the Corporation or other similar event, the remaining assets of the Corporation available to shareholders shall be distributed equally per |
B-2 | American Software, Inc. 2024 Proxy Statement | | |
iv. | Dividends. The holders of Common Stock shall be entitled to receive dividends as and when declared by the Board of Directors of the Corporation (the “Board”) out of funds legally available therefor. Holders of Common Stock shall be entitled to share equally, share for share, in dividends declared on Common Stock. |
(c) | Preferred Stock. |
i. | Shares of preferred stock, having a par value of Ten Cents ($0.10) per share, of the Corporation (the “Preferred Stock”) may be issued from time to time in one or more series. The Board is hereby authorized to provide by resolution or resolutions from time to time for the issuance, out of the unissued shares of Preferred Stock, of one or more series of Preferred Stock, without shareholder approval, by filing an amendment pursuant to the applicable law of the State of Georgia (the “Preferred Stock Designation”), setting forth such resolution and, with respect to each such series, establishing the number of shares to be included in such series, and fixing the voting powers, full or limited, or no voting power of the shares of such series, and the designation, preferences and relative, participating, optional or other special rights, if any, of the shares of each such series and any qualifications, limitations or restrictions thereof. The powers, designation, preferences and relative, participating, optional and other special rights of each series of Preferred Stock, and the qualifications, limitations and restrictions thereof, if any, may differ from those of any and all other series at any time outstanding. The authority of the Board with respect to each series of Preferred Stock shall include, but not be limited to, the determination of the following: |
(A) | the designation of the series, which may be by distinguishing number, letter or title; |
(B) | the number of shares of the series, which number the Board may thereafter (except where otherwise provided in the Preferred Stock Designation) increase or decrease (but not below the number of shares thereof then outstanding); |
(C) | the amounts or rates at which dividends will be payable on, and the preferences, if any, of shares of the series in respect of dividends, and whether such dividends, if any, shall be cumulative or noncumulative; |
(D) | the dates on which dividends, if any, shall be payable; |
(E) | the redemption rights and price or prices, if any, for shares of the series; |
(F) | the terms and amount of any sinking fund, if any, provided for the purchase or redemption of shares of the series; |
(G) | the amounts payable on, and the preferences, if any, of shares of the series in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation; |
(H) | whether the shares of the series shall be convertible into or exchangeable for, shares of any other class or series, or any other security, of the Corporation or any other corporation, and, if so, the specification of such other class or series or such other security, the conversion or exchange price or prices or rate or rates, any adjustments thereof, the date or dates at which such shares shall be convertible or exchangeable and all other terms and conditions upon which such conversion or exchange may be made; |
(I) | restrictions on the issuance of shares of the same series or any other class or series; |
(J) | the voting rights, if any, of the holders of shares of the series generally or upon specified events; and |
(K) | any other powers, preferences and relative, participating, optional or other special rights of each series of Preferred Stock, and any qualifications, limitations or restrictions of such shares, |
B-3 | American Software, Inc. 2024 Proxy Statement | | |
B-4 | American Software, Inc. 2024 Proxy Statement | | |
| | | | LOGILITY HOLDINGS, INC. | |||||
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| | | | By: | | | |||
| | | | | | Harold Allan Dow, Chief Executive Officer | |||
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ATTEST: | | | | | |||||
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By: | | | | | | | |||
| | James McGuone, Secretary | | | | |
B-5 | American Software, Inc. 2024 Proxy Statement | | |
C-1 | American Software, Inc. 2024 Proxy Statement | | |
C-2 | American Software, Inc. 2024 Proxy Statement | | |
C-3 | American Software, Inc. 2024 Proxy Statement | | |
C-4 | American Software, Inc. 2024 Proxy Statement | | |
C-5 | American Software, Inc. 2024 Proxy Statement | | |
C-6 | American Software, Inc. 2024 Proxy Statement | | |
C-7 | American Software, Inc. 2024 Proxy Statement | | |
C-8 | American Software, Inc. 2024 Proxy Statement | | |
C-9 | American Software, Inc. 2024 Proxy Statement | | |
C-10 | American Software, Inc. 2024 Proxy Statement | | |
C-11 | American Software, Inc. 2024 Proxy Statement | | |
C-12 | American Software, Inc. 2024 Proxy Statement | | |
C-13 | American Software, Inc. 2024 Proxy Statement | | |
C-14 | American Software, Inc. 2024 Proxy Statement | | |
1. | reviewed the following agreements and documents: |
a. | A draft, dated April 8, 2024, of the Agreement; |
b. | A draft, dated April 8, 2024, of the Amended and Restated Articles of Incorporation of the Company (the “New Amended and Restated Articles”); and |
c. | The Amended and Restated Articles of Incorporation of the Company, dated January 14, 1983; |
2. | reviewed certain publicly available business and financial information relating to the Company that we deemed to be relevant; |
3. | spoken with certain members of the management of the Company and certain of its representatives and advisors regarding the business, operations and capital structure of the Company, the Transaction and related matters; |
4. | considered the publicly available financial terms of certain transactions that we deemed to be relevant; |
5. | reviewed the current and historical market prices and trading volume for the Class A Common Stock, and the current and historical market prices and trading volume of the publicly traded securities of certain other companies that we deemed to be relevant; and |
6. | conducted such other financial studies, analyses and inquiries and considered such other information and factors as we deemed appropriate. |
D-1 | American Software, Inc. 2024 Proxy Statement | | |
D-2 | American Software, Inc. 2024 Proxy Statement | | |
D-3 | American Software, Inc. 2024 Proxy Statement | | |