Shareholders' Equity

12 Months Ended

Apr. 30, 2012

Shareholders' Equity [Abstract]

Shareholders' Equity

(7) Shareholders’ Equity

Except for the election or removal of Directors and class votes as required by law or the Articles of Incorporation, holders of both classes of common stock vote as a single class on all matters with each Class A common share entitled to cast one-tenth vote per share and each Class B common share entitled to cast one vote per share. Neither class has cumulative voting rights. Holders of Class A common shares, as a class, are entitled to elect 25% of the board of directors (rounded up to the nearest whole number of Directors) if the number of outstanding Class A common shares is at least 10% of the number of outstanding shares of both classes of common stock. No cash or property dividend may be paid to holders of Class B common shares during any fiscal year of the Company unless a dividend of $0.05 per share has been paid in such year on each outstanding Class A common share. This $0.05 per share annual dividend preference is noncumulative. Dividends per Class B common share during any fiscal year may not exceed dividends paid per Class A common share during each year. Each Class B common share is convertible at any time into one Class A common share at the option of the shareholder.

Stock Option Plans

As of April 30, 2012, the Company has outstanding stock options granted pursuant to four stock option plans. The 2001 Stock Option Plan (the “2001 Option Plan”) became effective on September 1, 2000. This Plan was terminated and replaced by the 2011 Equity Compensation Plan (the “2011 Option Plan”) effective May 17, 2010. Options outstanding under the 2001 Option Plan remain in effect, but no new options may be granted under the plan. Effective July 9, 2009, we adopted the Logility, Inc. 1997 Stock Plan and the Logility, Inc. 2007 Stock Plan as equity plans of American Software, although we will not grant any additional stock options under these plans.

Under the 2011 Option Plan, options to purchase Class A common shares are granted in the form of both incentive stock options and non-qualified stock options. The number of options granted under this plan is determined with each grant. By resolution of the Board of Directors, non-employee directors receive 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 such grants is equal to the closing market price of the shares on the date of grant. Options are exercisable based on the terms of such options, but no more than 6 years after the date of grant (or 5 years for incentive stock options granted to any person who owns 10% or more of the combined voting power of all classes of capital stock of the Company at the time of grant). A total of 2,500,000 shares are authorized for issuance pursuant to options granted under this Plan. When stock options are exercised, it is the Company’s policy to issue stock from authorized shares rather than from treasury shares.

Incentive and nonqualified options exercisable at April 30, 2012, 2011 and 2010 totaled 1,690,101, 2,121,592, and 2,459,820, respectively. Options available for grant at April 30, 2012, for the 2011 Option Plan are 1,092,143 shares.

A summary of changes in outstanding options for the year ended April 30, 2012 is as follows:

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value
Outstanding at May 1, 2011		3,832,661		$	6.01
Granted		697,500			8.16
Exercised		(986,875	)		5.11
Forfeited/cancelled		(10,564	)		5.40
Outstanding at April 30, 2012		3,532,722		$	6.69		3.2	$	6,115,806
Exercisable at April 30, 2012		1,690,101		$	6.58		2.2	$	3,220,141

The weighted-average grant date fair value of stock options granted during the years ended April 30, 2012, 2011, and 2010 are $3.14, $1.85, and $1.89 per share, respectively. The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions for the years ended April 30, 2012, 2011, and 2010:

	2012			2011			2010
Dividend yield		5.6	%		5.9	%		5.7	%
Expected volatility		55.4	%		53.6	%		50.8	%
Risk-free interest rate		2.7	%		3.0	%		3.4	%
Expected term		4.3 years			4.2 years			4.2 years

The expected volatility is based on the historical volatility and other factors. The Company uses historical data to estimate stock option exercise and forfeiture rates. The expected term represents the period over which the share-based awards are expected to be outstanding. Beginning after December 31, 2007, the expected term was estimated using historical data. The dividend yield is an estimate of the expected dividend yield on the Company’s stock. The risk-free rate is based on U.S. Treasury yields in effect at the time of the grant for the expected term of the stock options.

Options issued after May 1, 2007 with graded vesting are valued as a single award. The total value of the award is expensed on a straight-line basis over the vesting period with the amount of compensation cost recognized at any date at least equal to the portion of the grant date value of the award that is vested at that date. During the years ended April 30, 2012, 2011, and 2010, we issued 986,875, 754,301 and 124,570 shares of common stock, respectively, resulting from the exercise of stock options. The total intrinsic value of options exercised during the years ended April 30, 2012, 2011 and 2010 based on market value at the exercise dates was $3,592,358, $1,910,835 and $267,680, respectively. The fair value of grants vested during the years ended April 30, 2012, 2011 and 2010 was $1,082,363, $962,781 and $1,205,049, respectively. As of April 30, 2012, unrecognized compensation cost related to unvested stock option awards approximated $3.3 million and is expected to be recognized over a weighted average period of 1.8 years.

Stock Repurchases

On August 19, 2002, our Board of Directors approved a resolution authorizing the repurchase of up to 2.0 million shares of our Class A common stock. These repurchases have been and will be made through open market purchases at prevailing market prices. The timing of any repurchases will depend upon market conditions, the market price of our common stock and management’s assessment of our liquidity and cash flow needs. There were no shares repurchased during the fiscal year ended April 30, 2012. For this repurchase plan, through April 30, 2012, we have repurchased 813,710 shares of common stock at a cost of approximately $4.1 million. Under all repurchase plans as of April 30, 2012, we have repurchased 4,348,663 shares of common stock at a cost of approximately $23.5 million.