SCHEDULE 14A
(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934

Filed by the Registrant [X]

Filed by a Party other than the Registrant [  ]

Check the appropriate box:

AMERICAN MANAGEMENT SYSTEMS, INCORPORATED

N/A

Payment of Filing Fee (Check the appropriate box):

AMERICAN MANAGEMENT SYSTEMS, INCORPORATED

4050 Legato Road
Fairfax, Virginia 22033

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

     NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of AMERICAN MANAGEMENT SYSTEMS, INCORPORATED will be held at 4050 Legato Road, Fairfax, Virginia 22033 on Friday, June 7, 2002, at 10:00 a.m. local time, for the following purposes:

     To elect six (6) directors to hold office until the next Annual Meeting of Stockholders of American Management Systems, Incorporated and until their successors are elected and qualified;

     To approve two (2) amendments to the 1996 Amended Stock Option Plan F; and

     To transact such other business as may properly come before the meeting or any adjournment(s) or postponement(s) thereof.

     Only stockholders of record at the close of business on April 19, 2002, will be entitled to notice of, and to vote at, the meeting or any adjournment(s) or postponement(s) thereof.

     Stockholders are cordially invited to attend the meeting in person. IF YOU WILL NOT BE ABLE TO ATTEND THE MEETING IN PERSON, PLEASE INDICATE YOUR CHOICE ON THE MATTERS TO BE VOTED UPON, DATE AND SIGN THE ENCLOSED PROXY, AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. ALTERNATIVELY, YOU MAY VOTE BY TELEPHONE AT 1-800-435-6710 OR VIA THE INTERNET AT HTTP://WWW.ePROXY.COM/AMSY. Instructions regarding telephone and Internet voting are included on the Proxy.

By Order of the Board of Directors,

Frank A. Nicolai Secretary

May 7, 2002

AMERICAN MANAGEMENT SYSTEMS, INCORPORATED
4050 Legato Road
Fairfax, Virginia 22033

PROXY STATEMENT

Annual Meeting of Stockholders
June 7, 2002

Table of Contents

GENERAL

     The enclosed Proxy is being solicited by the Board of Directors (the “Board of Directors” or the “Board”) of AMERICAN MANAGEMENT SYSTEMS, INCORPORATED (the “Corporation” or “AMS”) in connection with the annual meeting of stockholders of the Corporation to be held June 7, 2002 (the “Annual Meeting”), or any adjournment(s) or postponement(s) thereof. The entire expense of solicitation of proxies will be borne by the Corporation, except that certain expenses for Internet access will be incurred by stockholders who choose to vote over the Internet. Solicitation will be primarily by mail. However, directors, executive officers, and employees of the Corporation may also solicit by telephone, personal contact or electronic communication. The Corporation will reimburse brokers and other persons holding shares in their names, or in the names of nominees, for their expenses of sending proxy materials to beneficial owners and obtaining their proxies. It is anticipated that the Proxy Statement and Proxy first will be mailed to stockholders on or about May 7, 2002.

     Any stockholder giving a Proxy by mail, via telephone or via the Internet has the power to revoke it at any time before it is voted by giving written notice of revocation to the Secretary of the Corporation or by delivering a proxy in accordance with applicable law bearing a later date to the Secretary of the Corporation. If you attend the Annual Meeting, you may, if you wish, revoke your Proxy by voting in person. Proxies solicited herein will be voted, and if the person solicited specifies in the Proxy a choice with respect to matters to be acted upon, the shares will be voted in accordance with such specification. If no choice is indicated, the Proxy will be voted “FOR” the election of the nominees listed on pages 2 to 4 under the caption “Information Concerning Nominees for Director”; and “FOR” the approval of the amendments to the 1996 Amended Stock Option Plan F (the “Plan F Amendments”).

VOTING PROCEDURE

     As of April 19, 2002, there were outstanding 41,908,029 shares of the Corporation’s Common Stock, $0.01 par value per share (the “Common Stock”). Each share of Common Stock is entitled to one vote at the Annual Meeting. Only stockholders of record at the close of business on April 19, 2002 will be entitled to vote at the Annual Meeting.

     Votes cast in person or by Proxy at the Annual Meeting, abstentions and Broker Non-votes (as defined below) will be tabulated by the election inspectors appointed for such Meeting and will be counted for purposes of determining whether a quorum is present. Directors will be elected by the affirmative vote of the holders of a plurality of the shares present (in person or represented by Proxy) and voted on the election of directors at the Annual Meeting. The proposal to approve the Plan F Amendments and any other matter submitted to a vote at the Annual Meeting will be approved by the affirmative vote of the holders of a majority of the shares present (in person or represented by Proxy) and entitled to vote on each such matter. The election inspectors will treat abstentions on a particular matter as shares that are present and entitled to vote for purposes of determining the approval of such matter. Abstentions, therefore, will have the same effect as a vote against a particular matter. If a broker submits a Proxy indicating that it does not have discretionary authority as to certain shares to vote on a particular matter (a “Broker Non-vote”), those shares will not be treated as present and entitled to vote for purposes of determining the approval of such matter.

ELECTION OF DIRECTORS

     In April 2002, the Board of Directors voted to reduce the number of directors constituting the Board from ten members to six members. Accordingly, six directors are to be elected at the Annual Meeting, each to hold office until the next annual meeting of stockholders of the Corporation and until his or her successor is elected and qualified. The directors will be elected by the affirmative vote of the holders of a plurality of the shares present (in person or represented by Proxy) and voted on the election of directors. Unless otherwise directed, it is the intention of the persons named in the Proxy to vote such Proxy for the election of the nominees listed under the caption “Information Concerning Nominees for Director” on pages 2 to 4. In the event that any nominee should be unable to accept the office of director, which is not anticipated, it is intended that the persons named in the Proxy will vote for the election of such other person in the place of such nominee for the office of director as the Board of Directors may recommend. Descriptive information as to each nominee is set forth below under the caption “Information Concerning Nominees for Director.”

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” ALL OF THE NOMINEES
DESCRIBED BELOW FOR ELECTION AS DIRECTORS.

INFORMATION CONCERNING NOMINEES FOR DIRECTOR

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INFORMATION CONCERNING EXECUTIVE OFFICERS

     Information concerning Alfred T. Mockett, Chairman of the Stock Option/Award Committee, Chairman of the Board and Chief Executive Officer and William M. Purdy, President and Chief Operating Officer, is set forth above under the caption “Information Concerning Nominees for Director.”

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PRINCIPAL STOCKHOLDERS

     The following table sets forth the number and percentage of outstanding shares of Common Stock beneficially owned as of April 19, 2002 by (i) each director of the Corporation, (ii) each executive officer of the Corporation, (iii) all such executive officers and directors as a group, and (iv) all persons or entities known by the Corporation to own more than 5% of the Common Stock. Unless otherwise noted below, each person and entity named in the table has sole voting and sole investment power with respect to each of the shares beneficially owned by such person or entity.

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(1)		The amount of beneficial ownership includes stock options granted to directors and executive officers which have vested and are or will become exercisable within 60 days of April 19, 2002. Accordingly, Mr. Altobello has 16,416 options vested and exercisable; Mr. Forese has 15,166 options vested and exercisable; Mr. Gross has 7,500 options vested and exercisable; Dr. Leonard has 13,333 options vested and exercisable; Mr. Lewis has 14,000 options vested and exercisable; Mr. Malek has 16,749 options vested and exercisable; Mr. Mockett has 100,000 options vested and exercisable; Ms. Morea has 15,058 options vested and exercisable; Mr. Nicolai has 7,500 options vested and exercisable; Mr. Purdy has 21,750 options vested and exercisable; Dr. Schillereff has 10,933 options vested and exercisable; Mr. Seidel has 34,000 options vested and exercisable; Mr. Spoon has 13,166 options vested and exercisable; Mr. Turner has 9,000 options vested and exercisable; and neither of Mr. Brittain nor Mr. Irvin has options that are vested and exercisable. All executive officers and directors as a group (sixteen persons) have beneficial ownership of 294,571 options vested and exercisable within 60 days of April 19, 2002.
(2)		The percentages of Common Stock were calculated to include stock options vested and exercisable. The number of shares of Common Stock was calculated as of April 19, 2002.
(3)		Indicates a director of the Corporation.
(4)		Indicates an executive officer of the Corporation.
(5)		The amount includes 64,875 shares beneficially owned by Mr. Gross’ wife. Mr. Gross disclaims beneficial ownership with respect to the shares owned by his wife, who has the sole power to vote and dispose of such shares. The amount also includes 362,310 shares jointly owned by Mr. and Mrs. Gross, who share joint power to vote and dispose of such shares. Lastly, the amount includes 55,350 shares each owned by two trusts, totaling 110,700 shares, for the benefit of Mr. Gross’ son and daughter, respectively, of which Mr. and Mrs. Gross are co-trustees. Mr. and Mrs. Gross share joint power to vote and dispose of such shares.
(6)		The amount includes 64,124 shares beneficially owned by Ms. Nicolai with respect to which she has sole voting and dispositive power. Mr. Nicolai disclaims beneficial ownership with respect to the shares owned by Ms. Nicolai.
(7)		The amount includes 5,210 shares each owned by two trusts, totaling 10,420 shares, for the benefit of Mr. Seidel’s two daughters. Mr. Seidel does not have the power to vote or dispose of any such shares, and, accordingly, disclaims beneficial ownership with respect to them.
(8)		The amount includes 3,000 shares that are jointly owned by Mr. Spoon and his spouse, who share joint power to vote and dispose of such shares.

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(9)		Based solely on the February 14, 2002 filing on Schedule 13G of Westport Asset Management, Inc. (“Westport”), it is the Corporation’s understanding that (i) Westport is a registered investment adviser and a parent holding company, (ii) Westport owns 50% of Westport Advisors LLC, which is also a registered investment advisor (“Westport LLC”), (iii) Westport has sole voting and sole dispositive power with respect to 1,051,500 of the reported shares, Westport and Westport LLC share voting power with respect to 1,829,500 of the reported shares, and Westport and Westport LLC share dispositive power with respect to 2,182,700 of the reported shares, and (iv) the reported shares do not include 12,600 shares owned in the personal securities accounts of employees of Westport and Westport LLC.
(10)		Based solely on the February 5, 2002 filing on Schedule 13G of Merrill Lynch & Co., Inc. (“ML”), it is the Corporation’s understanding that (i) ML is a registered investment adviser and a parent holding company, (ii) ML’s operating division is comprised of a number of entities, including Fund Asset Management, L.P. (“FAM”), Merrill Lynch Investment Managers Limited (“MLIM Limited”), Merrill Lynch Investment Managers, L.P. (“MLIM LP”) and QA Advisor L.L.C. (“QA”), each of which are also registered investment advisors, (iii) ML does not have sole voting or sole dispositive power with respect to any of the reported shares and (iv) ML shares voting power and dispositive power with FAM, MLIM Limited, MLIM LP and/or QA with respect to all of the reported shares.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires that the Corporation’s directors, executive officers, and persons who own more than 10% of a registered class of the equity securities of the Corporation (“reporting persons”) file with the Securities and Exchange Commission (the “Commission”) initial reports of ownership, and reports of changes in ownership, of shares of stock, and options to purchase such shares, of the Corporation. Reporting persons are required by Commission rules to furnish the Corporation with copies of all Section 16(a) reports they file.

     Based solely upon a review of Section 16(a) reports furnished to the Corporation for the fiscal year ended December 31, 2001 (the “2001 fiscal year”), and representations by reporting persons that no other reports were required for the 2001 fiscal year, all Section 16(a) reporting requirements were met, except as follows. During 2001, Alfred T. Mockett filed a Form 3 one day late.

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EXECUTIVE COMPENSATION

Summary Compensation Table

     The following table summarizes the compensation paid or accrued by the Corporation during the two fiscal years ended December 31, 2001, to the following executive officers of the Corporation (“named executive officers”). No named executive officers were executive officers of the Corporation prior to 2000.

(1)		Each of these awards of shares of Common Stock is associated with performance under individual or group incentive compensation plans and was made by the appropriate Board committee pursuant to a stockholder-approved stock option plan unless otherwise indicated.
(2)		All amounts represent the final cash payment for successful completion of multi-year performance indicators of individual incentive compensation plans.
(3)		These amounts represent the Corporation’s contribution to special individual retirement accounts pursuant to the AMS Simplified Employee Pension/IRA Plan (the “IRA Plan”).
(4)		This amount consists of a hiring bonus, which is payable over two years, and a pro-rated annual bonus for 2001, which was paid in 2002. With respect to the hiring bonus, an initial payment of $880,000 was paid

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		to Mr. Mockett in December 2001. The remaining $120,000 will be paid on December 31, 2002.
(5)		This award represents a hiring grant of 177,000 deferred stock units, which are rights to receive restricted stock, on December 1, 2001. Based on the closing price of Common Stock at December 31, 2001, the deferred stock units were worth $3,200,160. The deferred stock units vest ratably on each of the first, second, third and fourth anniversary of December 1, 2001. The deferred stock units will be credited with dividend equivalents if AMS pays dividends on Common Stock. Dividends may be paid on the restricted stock once received.
(6)		This amount consists of awards of options to purchase Common Stock, which were granted in connection with the terms of an employment agreement.
(7)		This amount represents an executive retention award made pursuant to the executive’s employment agreement with AMS.
(8)		This award represents a grant by the Compensation Committee upon the appointment of the executive to a new position as Chief Operating Officer and President.
(9)		This amount was awarded based on the achievement of annual performance goals under a multi-year incentive compensation plan.
(10)		This amount represents a special hiring bonus.

Option Grants in Fiscal 2001

     Shown below is information concerning stock option grants to the Corporation’s named executive officers who were granted options on Common Stock during the Corporation’s 2001 fiscal year.

(1)		Each option grant was awarded with an exercise price equal to the market value of the Common Stock on the date of the grant.
(2)		Such option grant represents a hiring grant and was made by the appropriate Board committee. One quarter of the options will vest on each of the third, fifth, seventh and eighth anniversaries of December 1, 2001.
(3)		Such option grant was made under Plan F by the appropriate Board committee. The options vested in their entirety on December 1, 2001.
(4)		Such option grant was made under Plan F upon the appointment of the executive to a new position.

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Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Values

     Shown below is information with respect to exercises by the Corporation’s named executive officers during the Corporation’s 2001 fiscal year of options to purchase shares of Common Stock pursuant to Plan F, and earlier stock option plans. Also shown is information with respect to certain unexercised options to purchase shares of Common Stock held by the Corporation’s named executive officers as of the end of the Corporation’s 2001 fiscal year.

(1)

Based on the market value of the Common Stock on the last trading day of 2001 (as measured by the closing bid price of $18.08 on the National Market of The Nasdaq Stock Market), minus the option’s exercise price.

Long-Term Incentive Plan Awards in Last Fiscal Year

     No long-term incentive plan awards were made to AMS’s named executive officers during the Corporation’s 2001 fiscal year.

Employment, Change in Control and Separation Agreements with Named Executive Officers

     Employment Agreements. AMS has employment agreements with Alfred T. Mockett, William M. Purdy, Larry R. Seidel, Donna S. Morea and Paul A. Turner.

     The initial term of the employment agreement with Mr. Mockett began on December 1, 2001, and will end on November 30, 2004. At the end of each term, the agreement will renew automatically for an additional one-year term unless either party terminates the agreement within one year of the end of the then-current term. Under the employment agreement, Mr. Mockett’s annualized base salary for 2001 was $800,000. The base salary will be reviewed annually by the Compensation Committee; provided, however, that the Compensation Committee may not reduce the base salary without Mr. Mockett’s consent. In addition to his base salary, the employment agreement provides Mr. Mockett with a pro-rated annual bonus for 2001 equal to 70% of his base salary, or about $47,000, and performance-based annual bonuses for 2002 and later years with a target percentage of 70% of his base salary. In addition, Mr. Mockett will be eligible to participate in long-term incentive compensation plans having an annual potential value of approximately 150% of his base salary plus target annual bonus. Under his employment agreement, Mr. Mockett was also granted a stock option for 100,000 shares of AMS Common Stock, plus $1 million in cash payable in part in 2001 and 2002. The stock option is fully vested and has an exercise price per share of $15.30. The employment agreement also provides for hiring grants to compensate Mr. Mockett for the loss of retirement benefits and restricted stock caused by his termination of employment with his previous employer. These grants consist of a right to receive 177,000 shares of AMS Common Stock in the form of deferred stock units, and a stock option for 417,000 shares of AMS Common Stock. The deferred stock units vest over Mr. Mockett’s first four years of employment. The stock option vests over Mr. Mockett’s third through eighth years of employment, and has an exercise price per share of $15.30. Any unvested grants will vest automatically if AMS fails to extend the term of the employment agreement at the end of a term. The employment agreement also contains confidentiality and non-solicitation provisions.

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     AMS may terminate Mr. Mockett’s employment for cause if, after notice and a hearing by the Board, the Board determines that he has engaged in conduct justifying termination for cause (as defined in the agreement). If AMS terminates Mr. Mockett’s employment without cause, AMS must provide certain severance benefits, including a cash severance benefit equal to 200% of his base salary plus his average annual bonus or target annual bonus, whichever is greater. Upon such termination without cause, AMS will retain 25% of the severance benefit for 12 months to help enforce compliance with the confidentiality and non-solicitation provisions in the employment agreement. Any constructive termination of employment by AMS is treated as an involuntary termination without cause. In order to receive the cash severance benefit, Mr. Mockett must execute a waiver of substantially all employment-related claims against AMS.

     The employment agreements with Messrs. Seidel and Turner and Ms. Morea are substantially similar to each other. The initial term of each agreement began on January 1, 2001, and will end on June 30, 2002.

     Under the employment agreements, each of Messrs. Seidel and Turner and Ms. Morea was entitled to a base salary of $375,000 for 2001. The Compensation Committee increased the amount of their base salaries to $400,000 during 2001. No increase in salary was granted for 2002. In addition to his or her base salary, each such named executive officer received a retention bonus of $150,000 on June 30, 2001, and will receive an additional retention bonus of $250,000 if he or she is an employee in good standing on June 30, 2002. The arrangement for retention bonuses was made during the period of uncertainty surrounding the search for a new Chief Executive Officer. The employment agreements provide that Messrs. Seidel and Turner and Ms. Morea will be eligible to participate in incentive compensation plans. The employment agreements also contain confidentiality and non-solicitation provisions.

     AMS may terminate the employment of any of Messrs. Seidel and Turner and Ms. Morea for cause if, after notice and a hearing by the Board, the Board determines that such named executive officer has engaged in conduct justifying termination for cause (as defined in their respective agreements). If AMS terminates any such named executive officer without cause, AMS must provide certain severance benefits, including a cash severance benefit that equals 250% of the executive’s base salary if the termination occurs on or before June 30, 2002 and 100% of the executive’s base salary if the termination occurs after June 30, 2002. Upon such termination without cause, AMS will retain 25% of any severance benefit for 12 months to help enforce compliance with the confidentiality and non-solicitation provisions in the employment agreements. Any constructive termination of employment by AMS is treated as an involuntary termination without cause. In order to receive the cash severance benefit, the executive must execute a waiver of substantially all employment-related claims against AMS.

     AMS has notified Messrs. Seidel and Turner and Ms. Morea that it will not extend the term of the employment agreements beyond June 30, 2002, and is preparing new agreements that will replace the existing agreements.

     The employment agreement with Mr. Purdy contains substantially the same provisions as the employment agreements with Messrs. Seidel and Turner and Ms. Morea, with the following differences. First, the initial term of the agreement extends through December 31, 2004. Second, the employment agreement provides that Mr. Purdy’s base salary for 2002 is increased to $600,000 to reflect his promotion to Chief Operating Officer of AMS, and provides for him to receive performance-based annual bonuses for 2002 and later years, with a target percentage of 60% of his base salary. Third, the employment agreement provides for long-term incentive compensation plans for Mr. Purdy with an annual potential value of approximately 125% of his base salary plus target annual bonus. Finally, the employment agreement provides that, if AMS terminates Mr. Purdy without cause, his severance benefit will be 200% of his base salary. In addition to his base salary, Mr. Purdy received a retention bonus of $150,000 on June 30, 2001, and will receive an additional retention bonus of $250,000 if he is an employee in good standing on June 30, 2002.

     Change in Control Retention Agreements. AMS also has change in control retention agreements with Messrs. Purdy, Seidel and Turner and Ms. Morea. Under these agreements, if AMS terminates any of such named executive officers for any reason, other than gross misconduct, or if any such executive terminates employment with AMS for good reason not involving gross misconduct, and the termination is within one year of a change in control, AMS will be required to make a payment to that executive. The payment to each such named executive officer is equal to two times the sum of the executive’s base salary immediately before the change in control, plus

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two shares of incentive compensation, which are calculated based on the target percentage set forth in such executive’s incentive compensation plan, plus an amount to compensate for any excise taxes on the payment. In order to receive the payment, the executive must execute a waiver of substantially all employment-related claims against AMS. Such named executive officers may not receive severance benefits under both their employment agreements and their change in control retention agreements. The new employment agreements with the named executive officers will include a similar change in control severance benefit. Thus, the existing change in control retention agreements will be terminated once the new employment agreements go into effect in July 2002.

     Mr. Mockett’s employment agreement provides a change in control severance benefit similar to the benefits provided in the change in control retention agreements with Messrs. Purdy, Seidel and Turner and Ms. Morea, except that the combined severance benefit and change-in-control benefit is 300% of Mr. Mockett’s base compensation plus target annual bonus.

     Separation Agreement. In February 2002, AMS entered into a letter agreement with Gregory S. Hero, former Executive Vice President of AMS, in connection with his departure. Under the terms of the agreement, AMS was obligated to pay Mr. Hero a severance benefit of $1,331,250 (less taxes).

EQUITY COMPENSATION

     The following table summarizes the equity compensation plan information of the Corporation for the fiscal year ended December 31, 2001.

(1)

The Corporation has a Restricted Stock Plan that has 342,300 shares awarded (and no additional shares available for award) which vest over a period of 2-3 years. If employees leave the Corporation prior to vesting, their shares are forfeited. In addition, the Corporation has awarded 177,000 deferred stock units to the chief executive officer of the Corporation that vest over a period of 1-4 years.

     Narrative descriptions of the plans are contained in Note 5 to the Corporation’s consolidated financial statements for the year ended December 31, 2001, which is part of the Corporation’s 2001 Annual Report on Form 10-K.

     Notwithstanding anything to the contrary set forth in any of AMS’s previous filings under the Securities Act of 1933, as amended, or the Exchange Act that might incorporate future filings, including this Proxy Statement, in whole or in part, the following Compensation Committee report, Audit Committee report and Performance Graph shall not be incorporated by reference into any such filings.

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COMPENSATION COMMITTEE REPORT OF EXECUTIVE COMPENSATION

Composition and Responsibilities of Compensation Committee

     The Compensation Committee of the Board is responsible for developing and making recommendations to the Board with respect to AMS’s executive compensation policies generally. It is composed entirely of outside directors who have never served as officers of AMS or its affiliates (the “Outside Directors”). The Compensation Committee approves the compensation plans for AMS’s executive officers, including the Chief Executive Officer (the “CEO”), and on an annual basis determines the compensation to be paid to the executive officers. The Compensation Committee is responsible for the granting and administration of stock options and incentive compensation granted to the executive officers.

     The Compensation Committee has furnished the following report for fiscal 2001:

Compensation Objectives and Philosophy

     The objectives of AMS’s executive compensation program are to provide a level of compensation that will attract and retain executives capable of achieving long-term success for AMS’s stockholders and to structure their compensation packages such that a significant portion generally is tied to the achievement of particular individual and corporate performance targets.

Executive Officer Compensation

     General. AMS’s executive compensation program consists of three main components: (i) annual base salary, (ii) the potential for an annual cash bonus based on Corporation pre-tax income, corporate, business unit, and individual performance, or some combination of these factors, and (iii) the opportunity to earn stock options, which are intended to encourage the achievement of superior results over time and to align executive officer and stockholder interests. In addition to research and recommendations furnished by AMS’s senior management, the Compensation Committee has relied, among other things, on information furnished through executive compensation surveys conducted by recognized compensation consulting firms, and information known to various members of the Board. It also has received advice and counsel from a recognized executive compensation consulting firm. The Compensation Committee compares salaries and other elements of executive compensation with the compensation paid to executives in technology and consulting firms that are actual competitors of AMS. Many of these companies are in the Goldman Sachs Technology Index, the peer index chosen by AMS for comparison in the “Stockholder Return Performance Graph” below. They include, for example, consulting and system integration companies.

     The executive officers, including the CEO, are eligible for the same benefits, including group health and life insurance and participation in the IRA Plan, as are available generally to AMS’s professional staff, except for the additional benefits set forth in their employment agreements and change in control retention agreements, and except that they do not participate in AMS’s Employee Stock Purchase Plan. In addition, executive officers whose compensation is subject to Section 162(m) (“Section 162(m)”) of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”) are not eligible to receive profit-sharing awards under AMS’s Restricted Stock and Stock Bonus Plan (the “Restricted Stock Plan”), a stock award plan. AMS does not provide material perquisites to any of its executive officers.

     Annual Base Salary. The Compensation Committee determines the annual base salary of each of AMS’s executive officers, including the CEO. The same principles are applied in setting the salaries of all executive officers to ensure that salaries are competitively established. Salaries are determined by considering the executive officer’s individual achievements, duties and responsibilities within AMS and his or her business unit, and the executive officer’s impact on the operations and profitability of AMS. Unlike with respect to AMS’s incentive compensation arrangements, the Compensation Committee does not consider achievement of specific corporate performance factors in establishing base salaries for its executive officers, except that, based on weaker than expected corporate performance in 2001, no merit increases in base salaries were granted for 2002.

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     Incentive Compensation Plans. In 2001, AMS adopted and the stockholders approved the American Management Systems, Incorporated 2001 Executive Incentive Compensation Plan (the “2001 IC Plan”). The 2001 IC Plan was designed to provide compensation that fit within the statutory exemption in Section 162(m) for performance-based compensation. Based on corporate performance in 2001, no compensation was paid out under the 2001 IC Plan.

Policy on Deductibility of Compensation

     Under Section 162(m), the allowable deduction for compensation paid or accrued with respect to persons who as of the end of the year are employed as the chief executive officer and each of the four most highly compensated executive officers of a publicly-held corporation is limited to no more than $1 million per year. This limitation does not apply to compensation payable under certain performance-based compensation plans approved by stockholders, including stock options issuable under Plan F or earlier stock option plans and the 2001 IC Plan. The Compensation Committee makes every reasonable effort to minimize the adverse effects of Section 162(m) on the after-tax income of AMS, but occasionally authorizes grants and payments that are subject to the limitations of that section when such actions are consistent with the Compensation Committee’s goals.

Chief Executive Officer Compensation

     The Chief Executive Officer’s annual base salary is established by the Compensation Committee using the same criteria as discussed above for the executive officers, except that under his employment agreement his base salary may not be reduced during the term of the agreement. As specified in the employment agreement, Mr. Mockett received a salary of $66,667 after beginning work on December 1, based on an annualized base salary for 2001 of $800,000. His base salary has not changed for 2002. As specified in the employment agreement, Mr. Mockett also received a stock option for 100,000 shares of AMS Common Stock, a pro-rated annual bonus of $46,666, plus a signing bonus of $1 million in cash payable in part in 2001 and 2002. Mr. Mockett’s employment agreement also provides for hiring grants to compensate Mr. Mockett for the loss of retirement benefits and restricted stock caused by his termination of employment with his previous employer. These grants consist of a right to receive 177,000 shares of AMS Common Stock in the form of deferred stock units, and a stock option for 417,000 shares of AMS Common Stock.

     William M. Purdy, who served as Interim Chief Executive Officer of the Corporation from October 2000 until December 2001, received an annual base salary of $400,000 for 2001. In addition to his base salary, Mr. Purdy received a retention bonus of $150,000 on June 30, 2001, and will receive an additional retention bonus of $250,000 if he is an employee in good standing on June 30, 2002. He also received for his new position a stock option grant for 72,500 shares of AMS Common Stock, which vests over a period of four years.

Daniel J. Altobello (Chairman) James J. Forese Dorothy Leonard W. Walker Lewis Frederic V. Malek Alan G. Spoon

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AUDIT COMMITTEE REPORT

     The Audit Committee of the Board of Directors is composed of four independent directors and operates under a written charter adopted by the Board of Directors in June 2000. The members of the Committee are James J. Forese (Chairman), Daniel J. Altobello, Dorothy Leonard and Alan G. Spoon. The Committee recommends to the Board of Directors the selection of the Corporation’s independent auditors.

     Management is responsible for the Corporation’s internal controls and the financial reporting process. The independent auditors are responsible for performing an independent audit of the Corporation’s consolidated financial statements in accordance with generally accepted auditing standards and to issue a report thereon. The Audit Committee’s responsibility is to monitor and oversee these processes.

     In this context, the Audit Committee has met and held discussions with management and the independent auditors. Management represented to the Audit Committee that the Corporation’s consolidated financial statements were prepared in accordance with generally accepted accounting principles, and the Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent auditors. The Audit Committee discussed with the independent auditors matters required to be discussed by Statements on Auditing Standards No. 61 (Communication with Audit Committees).

     The Corporation’s independent auditors also provided to the Audit Committee the written disclosures required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees), and the Audit Committee discussed with the independent auditors the firm’s independence.

     Based upon the Audit Committee’s discussion with management and the independent auditors and the Audit Committee’s review of the representations of management and the Communication with Audit Committees Report from the independent auditors, the Audit Committee recommended that the Board of Directors include the audited consolidated financial statements in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2001 filed with the Commission.

James J. Forese (Chairman) Daniel J. Altobello Dorothy Leonard Alan G. Spoon

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STOCKHOLDER RETURN PERFORMANCE GRAPH

     The following graph and table provide a comparison of the cumulative total return on the Common Stock of the Corporation for the five-year period beginning December 31, 1996, with returns on the Standard & Poor’s 500 Composite Index, the Computer Software Sector Index of the Hambrecht & Quist Technology Stock Index (the “Original Index”) and the Services Sector Index of the Goldman Sachs Technology Index (the “GSTI Services Index”). As of April 5, 2002, the Original Index was discontinued. As a result, the Corporation has chosen to use the GSTI Services Index, which is composed largely of consulting and system integration companies, because the Corporation believes that the GSTI Services Index most accurately reflects the Corporation’s true line of business. The graph and table assume that the value of the investment in the Common Stock of the Corporation and each of the aforementioned indices on December 31, 1996, was $100 and that all cash dividends were reinvested, although the Corporation has never paid cash dividends on the Common Stock. The historical stock price performance of the Common Stock of the Corporation shown below is not necessarily indicative of future stock price performance.

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COMMITTEES AND COMPENSATION OF THE BOARD OF DIRECTORS

Committees and Meetings

     The Corporation has a standing Executive Committee, Stock Option/Award Committee, Compensation Committee, Audit Committee and Nominating Committee.

     The Executive Committee is presently composed of four directors, all of whom are executive officers of the Corporation: Patrick W. Gross (Committee Chairman), Alfred T. Mockett, William M. Purdy and Frank A. Nicolai. The Executive Committee generally has the power to authorize all corporate actions that the Board of Directors has the power to authorize, except as may be limited by law. The Executive Committee did not meet during 2001.

     The Stock Option/Award Committee is presently composed of two directors, both of whom are executive officers of the Corporation: Alfred T. Mockett (Committee Chairman) and William M. Purdy. The Stock Option/Award Committee administers the Corporation’s employee stock option plans, except as noted below. These directors are eligible to receive options under the plans, but options, if any, awarded to them are granted and administered by the Compensation Committee. The Stock Option/Award Committee also administers the Restricted Stock Plan. Directors and executive officers are not eligible to participate in the profit sharing programs under the Restricted Stock Plan. The Stock Option/Award Committee meets as required and met twice during 2001.

     The Compensation Committee is presently composed of the six Outside Directors: Daniel J. Altobello (Committee Chairman), James J. Forese, Dorothy Leonard, W. Walker Lewis, Frederic V. Malek, and Alan G. Spoon. The Compensation Committee is responsible for developing and making recommendations to the Board of Directors with respect to the Corporation’s executive compensation policies generally. The Compensation Committee approves the compensation plans for the Corporation’s executive officers, including the Chief Executive Officer, and on an annual basis determines the compensation to be paid to the executive officers. The Compensation Committee alone is responsible for the granting and administration of stock options granted to the executive officers and to the Controller. In 2001, the Compensation Committee met four times.

     The Audit Committee is presently composed of four Outside Directors: James J. Forese (Committee Chairman), Daniel J. Altobello, Dorothy Leonard, and Alan G. Spoon. All of the members of the Audit Committee are independent in accordance with Rule 4200(a)(14) of the National Association of Securities Dealers’ listing standards. The Audit Committee has the responsibility for making recommendations to the Board of Directors as to the independent accountants of the Corporation; for reviewing with the independent accountants, upon completion of their audit, the scope of their examination, any recommendations they may have for improving internal accounting controls, management systems, or choice of accounting principles, and other matters; and for reviewing generally the accounting control procedures of the Corporation. The Board adopted a written charter for the Audit Committee in June 2000. The Audit Committee met four times in 2001.

     The Nominating Committee is presently composed of three Outside Directors: W. Walker Lewis, Frederic V. Malek and Alan G. Spoon (Committee Chairman). The Nominating Committee is responsible for making recommendations to the Board of Directors with respect to stockholder proposals, nominations for elections of directors, officers, senior management succession plans and appointments of such other employees as may be referred to the Nominating Committee. The Nominating Committee recommends nominees whose election as directors at the annual stockholders meeting will be recommended by the Board of Directors. The Nominating Committee was created in December 2001 and, as a result, did not meet during the 2001 fiscal year.

     The Board of Directors met six times during 2001. All members attended all of the meetings of the Board and Committees on which they serve.

Compensation

     Directors who also serve as executive officers of the Corporation are not separately compensated for attending Board meetings. Outside Directors were entitled to receive a meeting fee of $6,000 per Board meeting attended, plus travel expenses, and such fees and expenses were, in fact, paid for all meetings attended during fiscal

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2001. In addition, Outside Directors were paid an annual retainer of $6,000 during fiscal 2001. Under the Corporation’s Outside Directors Stock-for-Fees Plan (the “Stock-for-Fees Plan”), which was approved by stockholders in May 1995, Outside Directors can elect to have the annual meeting fees and retainer, which would otherwise be paid to the Outside Directors in cash, paid in the form of Common Stock. Alternatively, Outside Directors can elect to defer receipt of the annual meeting fees and retainer pursuant to the Corporation’s Outside Director Deferred Compensation Plan (the “Deferred Compensation Plan”). Under the terms of the Deferred Compensation Plan, Outside Directors making such an election would be credited with earnings on amounts deferred at an interest rate based on a corporate bond index and such interest rate would be increased by 300 basis points if the Corporation achieved certain annual performance goals. Mr. Lewis elected to have his meeting fees for the six Board meetings he attended during 2001 paid in the form of Common Stock pursuant to the Stock-for-Fees Plan.

     The following is a summary of the stock options that have been granted to Outside Directors pursuant to the Corporation’s stock option plans. The number of shares subject to grant, and subject to outstanding options, are adjusted when stock splits occur. All options granted to Outside Directors vest at the rate of 1/60th a month for each month the Outside Director continues to serve as a director, except as otherwise indicated.

     Under AMS’ 1996 Stock Option Plan F, as amended, the Compensation Committee is permitted to grant stock options to Outside Directors on a discretionary basis. On September 21, 2001, each Outside Director was granted 7,500 options to purchase shares of Common Stock, all of which vested immediately upon the date of grant. In addition to those granted on September 21, 2001, Ms. Leonard was granted 5,000 options under Plan F on August 1, 2001 and Mr. Spoon was granted 5,000 options under Plan F on September 20, 2001. In 2001, the Compensation Committee also awarded extra fees to the outside directors for their valuable service in connection with the search for AMS’s Chief Executive Officer. Specifically, Mr. Altobello received $60,000, each of Mr. Forese and Ms. Leonard received $35,000 and each of Messrs. Malek, Spoon and Walker received $25,000.

COMPENSATION COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION

     Daniel J. Altobello, James J. Forese, Dorothy Leonard, W. Walker Lewis, Frederic V. Malek, and Alan G. Spoon served as members of the Compensation Committee during fiscal year 2001 and continue to serve as members. Mr. Altobello is Chairman of the Compensation Committee.

     During 2001, there were no Compensation Committee interlocks, and there was no insider participation in the executive compensation decisions of the Corporation.

     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     In anticipation of the resignation of Frank Nicolai effective July 1, 2002, the Corporation has entered into a consulting arrangement with Mr. Nicolai under which Mr. Nicolai will provide consulting services to the Corporation for a period of 24 months and will receive $50,000 per month in consideration of those services. Payments under the consulting agreement would accelerate if a successor to the Corporation did not assume the Corporation's obligations under the agreement.

PROPOSAL TO APPROVE AMENDMENTS TO 1996 AMENDED STOCK OPTION PLAN F

Introduction and Summary Description of Proposed Amendments

     AMS’s 1996 Stock Option Plan F (“Plan F”) was adopted by the Board on April 3, 1996, and was approved by AMS’s stockholders on May 10, 1996. Plan F was first amended in 1997 and was further amended in 1999, 2000 and 2001. Plan F was again amended by the Board on February 22, 2002 and April 28, 2002, subject in certain respects to stockholder approval of the amendments at the annual meeting of stockholders on June 7, 2002. AMS’s stockholders now are being asked to approve certain of the amendments to Plan F that were approved by the Board on February 22, 2002 and April 28, 2002 (the “Amendments”). The Amendments would (i) clarify the existing prohibition against repricing options by any means without stockholder approval and (ii) change the limitation on the maximum number of shares of AMS Common Stock that may be subject to options granted under the Plan to any “covered employee” from 100,000 shares over the lifetime of the plan to 500,000 during any two consecutive calendar years.

     The Board believes that the Amendments will further the purposes of Plan F, which are (i) to offer to those employees who contribute materially to the successful operation of AMS additional incentive and encouragement to remain in the employ of AMS by increasing their personal participation in AMS through stock ownership, (ii) to

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provide an alternative means of compensating key employees whose performances contribute significantly to the success of AMS, and (iii) to attract and retain directors who have not at any time been officers or employees of AMS (i.e., Outside Directors) and to compensate the Outside Directors for service to AMS.

     The text of Plan F, as proposed to be amended (the “Proposed Plan”) and incorporating the Amendments in italics, is set forth in Exhibit A to this Proxy Statement, and the following description of Plan F is qualified by reference to such text.

Summary Description of Plan F

     Plan F as currently in effect (the “Current Plan”) provides that options to purchase shares of AMS Common Stock may be granted to any key employee (including officers and directors) of AMS and its subsidiaries who meets minimum salary and other requirements established by the Board. “Outside Directors” also are eligible to receive options under the Current Plan. The Current Plan defines “Outside Directors” generally as directors who have not at any time been officers or employees of AMS. As of April 19, 2002, 2,178 key employees (i.e., ten executive officers, eight Senior Vice Presidents, 162 Vice Presidents, 571 Senior Principals, and 1,427 Principals, including persons in comparable positions) and six Outside Directors were eligible to participate in the Current Plan.

     The Current Plan provides that it shall be administered by the Board or the Stock Option/Award Committee, or, in the case of certain officers, directors and covered employees (within the meaning of Section 162(m)), by the Compensation Committee. In accordance with the provisions of the Current Plan, the Board or the appropriate Committee has the authority to determine which employees shall be granted options, whether the options are nonqualified stock options (“NSOs”) or incentive stock options (“ISOs”), the times at which options are granted, the exercise prices of options, the numbers of shares subject to options, the times at which or the periods over which options vest, the times at which options terminate, and whether the exercise price of an option will be paid in cash or stock.

     Under the Current Plan, options may be granted to key employees and Outside Directors as the Board or the appropriate Committee may determine. The Current Plan authorizes the issuance of options to purchase a maximum of 5,800,000 shares, subject to adjustment for future capital changes. Of this number, 1,543,405 shares remained available as of April 19, 2002 for issuance pursuant to options granted thereunder. The maximum number of shares that may be subject to options granted under the Current Plan to any “covered employee” (as defined in Section 162(m)) during the life of such Plan is 100,000 shares, subject to adjustment for future capital changes. The Proposed Plan would change this limit to 500,000 shares during any two consecutive calendar years.

     Under the Current Plan, options are exercisable only to the extent that they are vested. For employees, the Board or the appropriate Committee selects a vesting schedule over a period of up to ten years or provides for vesting upon the attainment of specified performance goals or other events. For Outside Directors, the Board or the appropriate Committee selects a vesting schedule or provides for immediate vesting. Under the Current Plan, all options expire no later than ten years after the date of grant.

     Options may be amended under the Current Plan to advance the date on which the option vests. If an option is so amended, the amendment also may provide that the shares that would not have been vested under the original vesting schedule shall be subject to repurchase for a period of time by AMS at the original exercise price upon termination of employment of the employee for any reason. If AMS is merged, consolidated, sold, liquidated, or dissolved, the Current Plan also provides for the automatic acceleration of the vesting of options that would have vested within one year of any such event.

     The exercise price of all NSOs granted under the Current Plan is the fair market value of the Common Stock on the date of grant of the option. The exercise price of ISOs is determined by the appropriate Committee and must be at least equal to the fair market value of the Common Stock on the date the ISO is granted, except ISOs granted to ten percent stockholders, in which case the price may not be less than 110% of fair market value. For purposes of the Current Plan, the fair market value of the Common Stock is the closing bid price of the Common Stock as quoted in the National Market of The Nasdaq Stock Market on the date of grant of the option, or, if there is no trade on such date, on the most recent date on which the Common Stock was traded. On April 19,

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2002, the closing bid price of the Common Stock was $19.40 per share. The Proposed Plan would specifically state that no adjustment to decrease the exercise price of an outstanding option granted under the Plan, whether by amending the exercise price of the outstanding stock option or by canceling the outstanding stock option and reissuing a replacement or substitute stock option having a lower exercise price, may be made without stockholder approval (except for changes to reflect a stock split or similar transaction, as permitted under the Plan).

     An option is exercised by giving written notice to AMS, specifying the full number of shares of Common Stock to be purchased and tendering payment to AMS of the exercise price. Payment for shares issued upon the exercise of an option may consist of cash or delivery of a properly executed exercise notice, together with irrevocable instructions to a broker to promptly deliver to AMS the number of sales or loan proceeds required to pay the exercise price. Under the Current Plan, the Board or the appropriate Committee also has the authority to permit an optionee to pay the exercise price for shares using shares of the Common Stock owned for at least six months, or a combination of cash and such previously-owned stock.

     An option is not transferable during the lifetime of the optionee, other than by will, by the laws of descent and distribution, or pursuant to a qualified domestic relations order (“QDRO”). Unless transferred under a QDRO, an option is exercisable during the optionee’s lifetime only by the optionee.

     Upon termination of an employee’s employment with AMS, all options held by the employee that are not vested and exercisable on the date of termination expire. If the Board or the appropriate Committee determines that an employee has committed certain defined acts of misconduct, such as embezzlement, fraud, dishonesty, breach of fiduciary duty or deliberate disregard of AMS’s rules resulting in loss, damage or injury to AMS, neither the employee nor his or her estate is entitled to exercise any option whatsoever.

     To the extent that options held by an employee are vested and exercisable upon the employee’s termination of employment, shares subject to the options may be purchased during the “exercise period,” after which the options expire. The “exercise period” for NSOs ends on the earlier of (i) the date on which the NSOs expire by their terms and (ii) (a) except in the case of death, disability, or resignation following completion of ten or more years of continuous service, thirty days after termination, or (b) in the case of death, disability, or resignation following completion of ten or more years of continuous service, one year after termination. The “exercise period” for ISOs ends on the earlier of (i) the date on which the ISOs expire by their terms and (ii) (a) except in the case of death or disability, thirty days after termination and (b) in the case of death or disability, one year after termination.

     Upon termination of an Outside Director as a member of the Board due to death or disability, all options held by the Outside Director will become fully vested and exercisable. Upon termination due to resignation immediately following completion of a period of ten or more years of continuous service, all options held by the Outside Director that are not already vested and exercisable continue to vest during the “exercise period” as if the Outside Director had remained a member of the Board during that period. Upon termination for any other reason, all options held by the Outside Director that are not vested and exercisable on the date of such termination expire.

     To the extent that options held by an Outside Director are vested and exercisable upon termination or become vested and exercisable during the “exercise period”, shares subject to the options may be purchased during such period, after which the options expire. The “exercise period” for this purpose ends on the earlier of (i) the date on which the stock option expires by its terms, or (ii) (A) when termination is due to death, disability, or resignation immediately following completion of a period of ten or more years of continuous service, one year after termination, or (B) when termination is due to any other reason, thirty days after termination.

     The 30-day exercise period following termination of employment or termination as a member of the Board can be extended up to six months in an option agreement.

     Under the Current Plan, the Board may, at any time, amend such Plan or the terms of options granted under such Plan, except that, among other things, no amendment may be made without approval of the stockholders to the extent required by Section 162(m).

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Tax Consequences

     Information regarding the federal income tax consequences to AMS and to optionees of options granted under Plan F follows. This information is not intended to be exhaustive and is only intended to briefly summarize the federal income tax statutes, regulations and currently available agency interpretations thereof, and is intended to apply to Plan F as normally operated. It is recommended that optionees consult their own professional tax advisors for personal and specific advice about options.

     An optionee has no tax consequences from the grant of an NSO. Upon exercise of an NSO, the optionee has compensation income taxable at ordinary income tax rates on the amount by which the fair market value of the shares received as of the date of exercise exceeds the exercise price. AMS is entitled to a deduction equal to the amount of compensation income to the optionee. Upon the sale of Common Stock acquired through the exercise of an NSO, any difference between the amount realized and the fair market value of the Common Stock as of the date of exercise will be capital gain or loss.

     An employee is not taxed upon the grant of an ISO. Except for the possible imposition of the alternative minimum tax, an optionee is not taxable on the exercise of an ISO, either. Unlike the exercise of an NSO, AMS is not entitled to a deduction with respect to an ISO unless the optionee engaged in a “disqualifying disposition,” which is described below. Upon a sale of shares acquired upon exercise of an ISO, the employee recognizes capital gain or loss, as the case may be, equal to the difference between the amount realized on the sale and the exercise price, provided the sale occurs at least two years after the grant of the ISO and at least one year after the exercise of the ISO. If these holding periods are not satisfied, the sale of shares acquired upon exercise of an ISO is a “disqualifying disposition.” If the sale is a disqualifying disposition, the excess of the fair market value of the shares on the date the ISO was exercised over the exercise price is compensation income taxable at ordinary income tax rates, and any excess of the sale price of the shares over the fair market value of the shares on the date the ISO was exercised is capital gain. AMS is entitled to a deduction equal to the amount of compensation income taxable to the optionee. The excess of the fair market value of the shares at the time of exercise over the exercise price of the ISO increases the optionee’s alternative minimum taxable income.

     If an optionee who is subject to the “short-swing profit liability” rules under Section 16(b) of the Exchange Act purchases shares of AMS Common Stock within six months before the optionee exercises an option, the tax consequences of exercising the option that normally occur on the option exercise date may be delayed. In such a case, unless the optionee makes an election under Section 83(b) of the Internal Revenue Code to avoid the delay, the tax consequences that normally occur on the exercise date of an option will occur on the first date on which a sale of the shares of Common Stock acquired upon exercise of the option would not subject the optionee to liability under Section 16(b) of the Exchange Act.

Vote Required

     The affirmative vote of the holders of a majority of the shares of Common Stock present at the Annual Meeting or represented by Proxy and entitled to vote to approve the Amendments is required for approval of such amendments. The Board has unanimously adopted a resolution approving the Amendments, and directed that they be submitted to the stockholders for their consideration. The members of the Board and AMS’s executive officers have advised AMS that they intend to vote all shares in their control in favor of the Amendments. In the event that the Amendments are not approved by the stockholders of AMS at the Annual Meeting, the Board will reconsider the Amendments; unless and until the Board takes further action with respect to the Amendments, Plan F will remain in effect in accordance with its terms.

     THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE APPROVAL OF THE AMENDMENTS TO THE 1996 AMENDED STOCK OPTION PLAN F (ITEM 2 ON THE PROXY).

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INDEPENDENT PUBLIC ACCOUNTANTS

General

     A representative from Deloitte & Touche LLP, independent certified public accountants to the Corporation, is expected to be present at the Annual Meeting, will have an opportunity to make a statement should the representative desire to do so, and is expected to be available to respond to appropriate questions during such Meeting.

     The Board of Directors has not yet appointed an accounting firm to audit the accounts of the Corporation for the fiscal year ending December 31, 2002. The Board of Directors, upon the recommendation of the Audit Committee, expects to make such appointment at its regularly scheduled meeting in September 2002.

Audit Fees

     During the 2001 fiscal year, the Corporation retained its principal independent accountant, Deloitte & Touche LLP, to provide services in the following categories and amounts:

(1)

This amount includes $649,373 for tax strategy consulting and $103,968 for other consulting services.

     The Audit Committee has considered whether the provision of non-audit services by the Corporation’s principal independent accountant is compatible with maintaining the principal accountant’s independence.

OTHER MATTERS

     The Board of Directors does not know of any matters to be presented at the Annual Meeting other than those stated above. If any other business should come before the Annual Meeting, including a vote to adjourn or postpone such Meeting, the persons named in the enclosed Proxy will vote thereon at the Meeting, or any adjournment or postponement thereof, as they determine to be in the best interests of the Corporation.

PROPOSALS FOR 2003 ANNUAL MEETING OF STOCKHOLDERS

     Under the rules of the Commission, the date by which proposals of stockholders of the Corporation intended to be presented at the 2003 annual meeting of stockholders must be received by the Corporation for inclusion in the proxy statement and form of proxy to be distributed by the Board of Directors is January 7, 2003. Stockholder proposals should be submitted to Frank A. Nicolai, Secretary, American Management Systems, Incorporated, 4050 Legato Road, Fairfax, Virginia 22033.

     Under the Corporation’s By-laws (the “By-laws”), a stockholder must follow certain procedures to nominate persons for election as directors or to propose other business to be considered at an annual meeting of stockholders. These procedures provide that stockholders desiring to make nominations for directors and/or to bring a proper subject before a meeting must do so by notice timely received by the Secretary of the Corporation. The Secretary of the Corporation generally must receive notice of any such proposal not less than sixty days and no more than ninety days prior to the anniversary of the preceding year’s annual meeting of stockholders. In the case of proposals for the 2003 annual meeting of stockholders, the Secretary of the Corporation generally must receive notice of any such proposal no earlier than March 9, 2003, and no later than April 8, 2003 (other than proposals intended to be included in the proxy statement and form of proxy, which, as noted above, must be received by

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January 7, 2003). Generally, such stockholder notice must set forth (a) as to each nominee for director, all information relating to such nominee that is required to be disclosed in solicitations or proxies for election of directors under the proxy rules of the Commission; (b) as to any other business, a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest in such business of such stockholder; and (c) as to the stockholder, (i) the name and address of such stockholder, (ii) the number of shares of Common Stock which are owned beneficially and of record by such stockholder, (iii) a representation that the stockholder is a holder of record of Common Stock entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such nomination or other business, and (iv) a representation as to whether the stockholder intends, or is part of a group which intends, to solicit proxies from other stockholders in support of such nomination or other business. The chairman of the annual meeting shall have the power to declare that any proposal not meeting these and any other applicable requirements imposed by the By-laws shall be disregarded. A copy of the By-laws may be obtained without charge on written request to Frank A. Nicolai, Secretary, American Management Systems, Incorporated, 4050 Legato Road, Fairfax, Virginia 22033.

     In addition, the form of proxy solicited by the Board of Directors in connection with the 2003 annual meeting of stockholders will confer discretionary authority to the named proxies to vote on any proposal, unless with respect to a particular proposal the Secretary of the Corporation receives notice of such matter no earlier than March 9, 2003, and no later than April 8, 2003, and such notice complies with the other requirements described in the preceding paragraph.

ANNUAL REPORT

     A copy of the 2001 Annual Report of the Corporation (which includes condensed financial data and a letter to stockholders) accompanies this Proxy Statement. Also enclosed is a copy of the Corporation’s Annual Report on Form 10-K which contains all of the financial information (including the Corporation’s audited financial statements), and certain general information regarding the Corporation. An additional copy of the Corporation’s 2001 Annual Report on Form 10-K may be obtained without charge by writing to Frank A. Nicolai, Secretary, American Management Systems, Incorporated, 4050 Legato Road, Fairfax, Virginia 22033.

BY ORDER OF THE BOARD OF DIRECTORS,

Frank A. Nicolai

Secretary

May 7, 2002
Fairfax, Virginia

     STOCKHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING ARE REMINDED TO DATE, SIGN, AND RETURN THE ENCLOSED PROXY IN THE POSTAGE-PAID ENVELOPE PROVIDED OR CAST YOUR VOTES BY TELEPHONE AT 1-800-435-6710 OR VIA THE INTERNET AT HTTP://WWW.ePROXY.COM/AMSY. INSTRUCTIONS REGARDING TELEPHONE AND INTERNET VOTING ARE INCLUDED ON THE PROXY.

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EXHIBIT A

AMERICAN MANAGEMENT SYSTEMS, INCORPORATED
1996 AMENDED STOCK OPTION PLAN F

(As Amended Effective As Of April 28, 2002)

I.    Purposes

     There are three purposes of the 1996 Stock Option Plan F (the “Plan”). The first is to offer to those employees who contribute materially to the successful operation of AMERICAN MANAGEMENT SYSTEMS, INCORPORATED (the “Corporation”) additional incentive and encouragement to remain in the employ of the Corporation by increasing their personal participation in the Corporation through stock ownership. The second purpose is to provide an alternative means of compensating key employees whose performances contribute significantly to the success of the Corporation. The third is to attract and retain directors who have not at any time been officers or employees of the Corporation (“Outside Directors”) and to compensate such Outside Directors for service to the Corporation. The Plan provides a means whereby optionees may purchase shares of the $0.01 par value common stock of the Corporation (the “Common Stock”) pursuant to options. The options may be either one of two types, (1) “incentive stock options” which will qualify as such under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), or under any applicable successor statute, or (2) “nonqualified stock options,” that is, options which are not intended to qualify as incentive stock options under Section 422 of the Code.

II.   Administration

     Except as otherwise provided in this Section II, the Plan shall be implemented and administered by the Board of Directors of the Corporation (the “Board”) or a Stock Option/Award Committee appointed by the Board and composed of three or more directors of the Corporation.

     The Stock Option/Award Committee may be delegated the authority and discretion to adopt and revise such rules and regulations as it shall deem necessary for the administration of the Plan, and to determine, consistent with the provisions of the Plan, the employees to be granted options, whether such options shall be nonqualified stock options or incentive stock options, the times at which options shall be granted, the exercise price of the shares subject to each option (subject to paragraph D of Section VI), the number of shares subject to each option, the vesting schedule of options or whether the options shall be immediately vested, the times when options shall terminate, and whether the exercise price of options shall be paid in cash or stock. Acts of a majority of the members of the Stock Option/Award Committee at a meeting at which a quorum is present, or acts approved in writing by a majority of the members of the Stock Option/Award Committee, shall be the valid acts of the Stock Option/Award Committee. The Stock Option/Award Committee’s actions, including any interpretation or construction of any provisions of the Plan or any option granted hereunder, shall be final, conclusive and binding unless otherwise determined by the Board at its next regularly scheduled meeting. No adjustment to decrease the exercise price of an outstanding stock option granted under the Plan, whether by amending the exercise price of the outstanding stock option or by canceling the outstanding stock option and reissuing a replacement or substitute stock option having a lower exercise price, may be made without shareholder approval (except as provided in paragraph G of Section VI hereof).

     Notwithstanding any other provision of this Section or the Plan or any documentation governing incentive compensation plans pursuant to which officers may elect to receive options under this Plan, a committee composed of at least two Non-Employee Directors, within the meaning of Rule 16b-3(b)(3) of the Securities and Exchange Commission who also are “outside directors” within the meaning of Section 162(m) of the Code (the “Compensation Committee”), shall have the authority (a) to make awards to directors of the Corporation who are not Outside Directors, to all persons who are “officers” of the Corporation as defined for purposes of Sections 16(a) and 16(b) of the Securities Exchange Act of 1934, as amended (the “Act”), and to “covered employees,” within the meaning of

A-1

Section 162(m) of the Code and (b) to perform all other functions of the Board or Stock Option/Award Committee, as the case may be, with respect to outstanding awards to any of such directors, officers, and covered employees including without limitation amendments to this Plan or such outstanding awards which affect such persons.

     No member of the Board, the Stock Option/Award Committee or the Compensation Committee, as the case may be, shall be liable for any action or determination made in good faith with respect to the Plan or any option granted under it.

III.   Eligibility; Participation; Special Limitations

     All key employees (including officers and directors) of the Corporation, or any corporation in which the Corporation owns stock possessing more than 50 percent of the voting power (a “Subsidiary”), who meet minimum salary and other requirements established by the Board, shall be eligible to receive options under the Plan. All Outside Directors also shall be eligible to receive options under the Plan. An employee who has been granted an option may be granted an additional option or options or rights under the Plan if the Board, the Stock Option/Award Committee or the Compensation Committee, as the case may be, shall so determine. The granting of an option under the Plan shall not affect any outstanding stock option previously granted to an employee under the Plan or any other plan of the Corporation.

     Nothing contained in the Plan, or in any option granted pursuant to the Plan, shall (i) confer upon any employee the right to continued employment, or shall interfere in any way with the right of the Corporation or a Subsidiary to terminate the employment of such employee at any time or (ii) confer upon any Outside Director the right to continued membership on the Board, or shall interfere in any way with the right of the Corporation to terminate the membership on the Board of such Outside Director.

     In no event, however, shall an incentive stock option be granted to any person who then owns (as that term is defined in Section 424 of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Corporation or of any of its Subsidiaries, unless the exercise price as determined under paragraph D of Section VI hereof is equal to at least 110% of the fair market value of the stock subject to the incentive stock option as of the date of grant and unless the term during which such incentive stock option may be exercised does not exceed five years from the date of the grant thereof. Options will not be treated as incentive stock options to the extent that the aggregate fair market value (determined as of the date the option is granted) of the Common Stock with respect to which options are exercisable for the first time by an employee during any calendar year (under all incentive stock option plans of the Corporation and its Subsidiaries) exceeds $100,000.

IV.   Basis of Grant

     Options shall be granted to employees either (a) on the basis of awards earned under the Corporation’s incentive compensation programs for groups of key employees, as in effect from time to time, or (b) as the Board, the Stock Option/Award Committee or the Compensation Committee, as the case may be, may determine from time to time. If options are granted based on (a) hereof, then performance bonuses and options based thereon shall be earned based on the employee’s success in meeting predetermined performance standards during one or more years (the “Performance Period”). Options shall be granted under (a) hereof, if at all, at the time that the Corporation determines in its judgment that the employee has met or will meet the employee’s predetermined performance standards for the Performance Period.

     Options shall be granted to Outside Directors as the Compensation Committee may determine from time to time.

V.    Number of Shares and Options

     A.     Shares of Stock Subject to the Plan. The number of shares authorized to be issued pursuant to options granted under the Plan is 5,800,000 shares, subject to adjustment in accordance with the provisions of paragraph G of Section VI hereof. Shares subject to options granted under the Plan may be authorized and unissued shares or shares previously acquired or to be acquired by the Corporation and held in treasury. Any shares subject to an option that are not issued by reason of expiration, forfeiture or settlement in cash or by reason of tendering or withholding shares to pay all or a portion of the exercise price or to satisfy all or a portion of the related tax withholding obligations and any shares that are purchased by the Corporation with the amount of cash option proceeds received upon the exercise of options may again be subject to an option granted under the Plan.

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     B.     Maximum Number of Options. The maximum number of shares which may be subject to options granted under the Plan to any “covered employee” for purposes of Section 162(m) of the Code during any two (2) consecutive calendar years shall be 500,000 shares, subject to adjustment in accordance with paragraph G of Section VI hereof.

VI.    Terms and Conditions of Options

     A.     Option Agreement. Each option granted pursuant to the Plan shall be evidenced by an agreement (“Option Agreement”) between the Corporation and the optionee receiving the option. Option Agreements (which need not be identical) shall state whether the option is an incentive stock option or a nonqualified stock option, shall designate the number of shares and the exercise price of the options to which they pertain, shall set forth the vesting schedule of the options or state that the options are vested immediately. The Option Agreements shall be in writing, dated as of the date the option is granted, and shall be executed on behalf of the Corporation by such officers as the Board, the Stock Option/Award Committee or the Compensation Committee, as the case may be, shall authorize. Option Agreements generally shall be in such form and contain such additional provisions as the Board, the Stock Option/Award Committee or the Compensation Committee, as the case may be, shall prescribe, but in no event shall they contain provisions inconsistent with the provisions of the Plan.

     B.     Exercise of Options. Options are exercisable only to the extent they are vested. Options granted to employees shall vest either immediately or periodically pursuant to a schedule selected by the Board, the Stock Option/Award Committee or the Compensation Committee, as the case may be, at the same time the option is granted, except that the maximum vesting period shall be ten (10) years for nonqualified stock options and for incentive stock options. The Option Agreement shall either state that the options are fully vested upon grant and immediately exercisable in full or shall set forth the vesting schedule selected by the Board, the Stock Option/Award Committee or the Compensation Committee, as the case may be.

     Options granted to Outside Directors shall vest either immediately or periodically pursuant to a schedule selected by the Compensation Committee at the same time the option is granted, provided that upon termination of an Outside Director as a member of the Board of Directors by reason of death or disability, all options held by such Outside Director shall vest fully as of the date of termination.

     Optionees may exercise at any time or from time to time all of any portion of a vested option.

     C.     Repurchase Amendment. Options granted to employees or Outside Directors may be amended to advance the date on which the option shall vest. If an option is so amended, the amendment also may provide that the shares which would not have been vested under the vesting schedule set forth in the Option Agreement shall be subject to repurchase by the Corporation for a specified period of time at the original exercise price if the employment of the optionee is terminated for any reason prior to expiration of the repurchase period. The amendment shall be evidenced by a written agreement (the “Repurchase Amendment”) between the Corporation and the optionee, shall be executed on behalf of the Corporation by such officers as the Board, the Stock Option/Award Committee or the Compensation Committee, as the case may be, shall authorize, and shall be in such form and contain such provisions as the Board, the Stock Option/Award Committee or the Compensation Committee, as the case may be, shall prescribe.

     D.     Exercise Price.

       1. Incentive stock options. The price at which incentive stock options granted pursuant to the Plan may be exercised shall be determined by the Board, the Stock Option/Award Committee or the Compensation Committee, as the case may be, which price shall be at least equal to the fair market value of the underlying Common Stock at the date at the options are granted. In the case of incentive stock options granted to a person who owns, immediately after the grant of such incentive stock option, stock possessing more than 10% of the total combined voting power of all classes of stock of the Corporation or of any of its Subsidiaries (as more fully set forth in Section III hereof), the purchase price of the Common Stock covered by such incentive stock option shall not be less than 110% of the fair market value of such stock on the date of grant.

       2. Nonqualified Stock Options. The price at which all nonqualified stock options granted pursuant to the Plan may be exercised shall be the fair market value of the Common Stock on the date of grant.

       3. Fair Market Value. For purposes of the Plan the term “fair market value” shall be defined as the closing bid price of the Common Stock quoted over the National Association of Securities Dealers Automated Quotation System (“NASDAQ”) in the national market on the date of grant of the option or if there is no trade on such

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date, the closing bid price on the last preceding date upon which such Common Stock was traded. In the event that the Common Stock is not traded over NASDAQ, the term fair market value shall be defined as the closing bid price of the Common Stock published in the National Daily Stock Quotation Summary on the date of grant of the option, of if there are no quotations published on such date, on the most recent date upon which such Common Stock was quoted. In the event that the Common Stock is listed upon an established stock exchange or exchanges, such fair market value shall be deemed to be the highest closing price of the Common Stock on such stock exchange or exchanges on the date the option is granted, or if no sale of the Common Stock shall have been made on any exchange on that date, then the next preceding day on which there was a sale of such stock.

       4. Payment. Payment of the exercise price may be (i) in cash, (ii) by delivery to the Corporation of (x) irrevocable instructions to deliver to a broker the stock certificates representing the shares for which the option is being exercised, and (y) irrevocable instructions to the broker to sell such shares and promptly deliver to the Corporation the portion of the proceeds equal to the exercise price, or in the sole discretion of the Board or Committee, (iii) by exchange of Common Stock of the Corporation, or, (iv) partly in cash and partly by exchange of such Common Stock, provided that for purposes of (iii) and (iv) the value of such Common Stock shall be the fair market value on the date of exercise, and further provided that such Common Stock shall have been held by the optionee for a period of at least six (6) months prior to the date of exercise.

     The Board, the Stock Option/Award Committee or the Compensation Committee, as the case may be, may permit deferred payment of all or any part of the purchase price of the shares purchased pursuant to the Plan, provided the par value of the shares must be paid in cash.

     E.     Suspension or Termination of Options. Subject to earlier termination as provided below, all stock options shall expire, and all rights granted under Option Agreements shall become null and void, on the date specified in the Option Agreement, which date shall be no later than ten (10) years after the stock options are granted.

     Upon termination of an employee’s employment with the Corporation or a Subsidiary for any reason, all options held by the employee that are not vested and exercisable on the date of termination shall expire, and all rights granted under the Option Agreement shall become null and void. To the extent that stock options held by the employee are vested and exercisable on the date of termination, shares subject to the stock options may be purchased during the “exercise period,” after which the stock options shall expire, and all rights granted under the Option Agreement shall become null and void. The “exercise period” for shares subject to a nonqualified stock option held by an employee, his heirs, legatees or legal representatives, as the case may be, ends on the earlier of (i) the date on which the stock option expires by its terms, or (ii) (A) when termination is due to death, disability, or resignation immediately following completion of a period of ten (10) or more years of continuous service, one (1) year after the date of the employee’s termination of employment, or (B) when termination is due to any other reason, thirty (30) days after the date of termination. The “exercise period” for shares subject to an incentive stock option held by an employee, his heirs, legatees or legal representatives, as the case may be, ends on the earlier of (i) the date on which the incentive stock option expires by its terms, or (ii) (A) when termination is due to death or disability one (1) year after the date of the employee’s termination of employment, or (B) when termination is due to any other reason, thirty (30) days after the date of termination.

     Upon termination of an Outside Director as a member of the Board due to (i) resignation immediately following completion of a period of ten (10) or more years of continuous service as an Outside Director, (ii) death or (iii) disability, all options held by the Outside Director that are not vested and exercisable on the date of termination shall continue to vest during the “exercise period” (defined below), as if the Outside Director had remained a member of the Board during that period. Upon termination of an Outside Director as a member of the Board for any other reason, all options held by the Outside Director that are not vested and exercisable on the date of termination shall expire, and all rights granted under the Option Agreement shall become null and void. To the extent that stock options held by the Outside Director are vested and exercisable on the date of termination, or become vested and exercisable during the “exercise period” as provided above, shares subject to the stock options may be purchased during that period, after which the stock options shall expire, and all rights granted under the Option Agreement shall become null and void. The “exercise period” for shares subject to a stock option held by an Outside Director, his heirs, legatees or legal representatives, as the case may be, ends on the earlier of (i) the date on which the stock option expires by its terms, or (ii) (A) when termination is due to death, disability, or resignation immediately following completion of a period of ten (10) or more years of continuous service as an Outside Director, one (1) year after the date of termination of the Outside Director’s service as a member of the Board, or (B) when termination is due to any other reason, thirty (30) days after the date of termination.

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     An Option Agreement may provide for an exercise period following termination of employment or termination as a member of the Board of up to six (6) months in lieu of the thirty (30)-day period specified above.

     If the Director of Human Resources of the Corporation or his or her designee reasonably believes an optionee other than an Outside Director has committed an act of misconduct as described in this paragraph, the Director of Human Resources may suspend the optionee’s rights to exercise any option pending a determination by the Board. If the Board determines an optionee other than an Outside Director has committed an act of embezzlement, fraud, dishonesty, nonpayment of any obligation owed to the Corporation, breach of fiduciary duty or deliberate disregard of Corporation rules resulting in loss, damage or injury to the Corporation, or if an optionee makes an unauthorized disclosure of any trade secret or confidential information, engages in any conduct constituting unfair competition, induces any customer to breach a contract with an optionee or induces any principal for whom the Corporation acts as agent to terminate such agency relationship, neither the optionee nor his or her estate shall be entitled to exercise any option whatsoever. In making such determination, the Board shall act fairly and shall give the optionee an opportunity to appear and present evidence on his or her behalf at a hearing before a committee of the Board. For any optionee who is an “officer” for purposes of Section 16 of the Act, the determination shall be made by the Board, the Stock Option/Award Committee or the Compensation Committee, whichever is responsible for administration of the Plan with respect to the optionee.

     F.     Non-Transferability of Options. Options pursuant to the Plan are not transferable by the optionee otherwise than by will or the laws of descent and distribution, or pursuant to a qualified domestic relations order as defined by the Code, Title I of the Employee Retirement Income Security Act of 1974, as amended, or the rules thereunder. Except as permitted by the preceding sentence, no option nor any right granted under an Option Agreement shall be transferred, assigned, pledged, hypothecated or disposed of in any other way (whether by operation of law or otherwise), or be subject to execution, attachment or similar process, and each option shall be exercisable during the optionee’s lifetime only by the optionee. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of such options or of such other rights contrary to the provisions hereof, or to subject such options or such other rights to execution, attachment or similar process, such options and such other rights shall immediately terminate and become null and void.

     G. Adjustment Provisions. Except as otherwise provided in this paragraph G, in the event of changes in the Common Stock by reason of any stock split, combination of shares, stock dividend, reclassification, merger, consolidation, reorganization, recapitalization or similar adjustment, or by reason of the dissolution or liquidation of the Corporation, appropriate adjustments may be made in (i) the aggregate number of or class of shares available under the Plan, and (ii) the number, class and exercise price of shares remaining subject to all outstanding options. Whether any adjustment or modification is to be made as a result of the occurrence of any of the events specified in this section, and the extent thereof, shall be determined by the Board, whose determination shall be binding and conclusive. Notwithstanding the previous sentence, in the event of a stock split, stock dividend or other event that is functionally equivalent to a stock split or stock dividend, (i) the number of shares subject to then-outstanding options will be adjusted so that upon exercise of the option, the holder of each option will be entitled to receive the number of shares or other securities which the holder would have been entitled to receive after the event had the option been exercised immediately before the earlier of the date of the consummation of the event or the record date of the event (the “event date”), (ii) the price of each share subject to then-outstanding options will be adjusted proportionately so that the aggregate purchase price for all then-outstanding options will be the same immediately after the event date as before the event date, (iii) an appropriate and proportionate adjustment will be made as of the event date in the maximum number of shares that may be issued pursuant to options granted under the Plan, (iv) any adjustment with respect to then-outstanding incentive stock options will be made in a transaction that does not constitute a modification under Section 424(h)(3) of the Code, and (v) any option to purchase fractional shares resulting from an adjustment will be eliminated. Existence of the Plan or of Option Agreements pursuant to the Plan shall in no way impair the right of the Corporation or its stockholders to make or effect any adjustments, recapitalizations, reorganizations or other changes in the Corporation’s capital structure or its business, or any merger, consolidation, dissolution or liquidation of the Corporation, or any issue of bonds, debentures, preferred or prior preference stock ahead of or affecting the Common Stock of the Corporation, or any grant of options on its stock not pursuant to the Plan.

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VII.    Rights as a Shareholder

     Optionees shall not have any of the rights and privileges of shareholders of the Corporation in respect of any of the shares subject to any option granted pursuant to the Plan unless and until a certificate, if any, representing such shares shall have been issued and delivered.

VIII.  Withholding

     To the extent required by applicable federal, state, local or foreign law, an optionee shall make arrangements satisfactory to the Corporation for the satisfaction of any withholding tax obligations that arise by reason of an option exercise or the disposition of shares acquired upon exercise of an incentive stock option. The Corporation shall not be required to issue shares until such obligations are satisfied. The Board, the Stock Option/Award Committee, or the Compensation Committee, as the case may be, may permit these obligations to be satisfied by having the Corporation withhold a portion of the shares of Common Stock that otherwise would be issued upon exercise of the option, or to the extent permitted, by permitting the optionee to tender shares owned by the optionee.

IX.   Receipt of Prospectus

     Upon the execution of an Option Agreement, each optionee receiving options pursuant to the Plan shall be given a Prospectus, as filed by the Corporation under the Securities Act of 1933, including any exhibits thereto, describing the Plan. Each Option Agreement shall contain an acknowledgment by the optionee that the requirements of this section have been met.

X.    Successors

     The provisions of the Plan shall be binding upon, and inure to the benefit of, all successors of any optionee, including, without limitation, his estate and the executors, administrators or trustees thereof, his heirs and legatees, and any receiver, trustee in bankruptcy or representative of creditors of such optionee.

XI.   Termination and Amendment of the Plan

     The Plan shall remain in effect until January 1, 2006, unless sooner terminated as hereinafter provided. The Board shall have complete power and authority at any time to terminate the Plan or to make such modification or amendment thereof as it deems advisable and may from time to time suspend, discontinue or abandon the Plan, provided that no such action by the Board shall adversely affect any right or obligation with respect to any grant theretofore made, and, further provided that without approval by vote of the shareholders, the Board shall not adopt any amendment that would (i) materially modify the requirements as to the exercise price of stock options, (ii) increase the number of shares which may be issued under the Plan (except as provided in paragraph G of Section VI hereof), (iii) materially modify the requirements as to eligibility for participation in the Plan, or (iv) modify the material terms of the Plan as to “covered employees” within the meaning of Section 162(m) of the Code.

XII.  Indemnification of Committee

     In addition to such other rights of indemnification as they may have as directors or as members of the Board, the Stock Option/Award Committee or the Compensation Committee, as the case may be, the members of the Board, the Stock Option/Award Committee or the Compensation Committee shall be indemnified by the Corporation against the reasonable expenses, including attorneys’ fees actually and necessarily incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan, Option Agreements or any option granted hereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by legal counsel selected by the Corporation) or paid by them in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such member is liable for negligence or misconduct in the performance of his duties; provided that within sixty (60) days after institution of any such action, suit or proceeding a member shall in writing offer the Corporation the opportunity, at its own expense, to defend the same.

XIII.  Merger of the Corporation

     Unless the options issued pursuant to this Plan are assumed in a transaction to which Section 424(a) of the Code applies, if the Corporation shall (i) merge or consolidate with another corporation under circumstances where the Corporation is not the surviving corporation, (ii) sell all, or substantially all of its assets, or (iii) liquidate or dissolve, then each option shall terminate on the date and immediately prior to the time such merger, consolidation,

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sale, liquidation or dissolution becomes effective or is consummated, provided that the holder of the option shall have the right immediately prior to the effectiveness or consummation of such merger, consolidation, sale, liquidation or dissolution, to exercise any or all of the vested portion of the option, unless such option has otherwise expired or been terminated pursuant to its terms or the terms hereof. In the event of such merger, consolidation, sale, liquidation or dissolution, any portion of an outstanding option which would have vested within one year after the date on which such merger, consolidation, sale, liquidation or dissolution becomes effective or is consummated shall vest immediately prior to the effectiveness or consummation of such merger, consolidation, sale, liquidation or dissolution and shall be part of the vested portion of the option which the holder of the option may exercise.

XIV.   Approval of Plan; Effective Date

     The Plan was adopted by the Board on April 3, 1996, and was approved by the stockholders on May 10, 1996. The Plan was amended by the Board on February 21, 1997, and the amendments were approved by the stockholders on May 9, 1997. The Plan was further amended by the Board on March 3, 1999, and the amendments were approved by the stockholders on May 21, 1999. The Plan was further amended by the Board on February 26, 1999, February 25, 2000, and May 11, 2001. The Plan was further amended by the Board on February 22, 2002, and April 28, 2002, subject in certain respects to stockholder approval of the amendments at the annual meeting of stockholders on June 7, 2002.

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APPENDIX 1

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

X		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the Fiscal Year Ended December 31, 2001

OR

		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the Transition Period From:                                                        To:

Commission File No.: 0-9233

American Management Systems, Incorporated
(Exact name of registrant as specified in its charter)

4050 Legato Road
Fairfax, Virginia 22033

(Address of principal executive office)

Registrant’s Telephone No., Including Area Code: (703) 267-8000

Securities Registered Pursuant to Section 12(b) of the Act: None

Securities Registered Pursuant to Section 12(g) of the Act: Common Stock

Par Value $0.01

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes      X     No          

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.          

The aggregate market value of voting stock held by non-affiliates of the Registrant as of March 25, 2002 was $759,842,384.

As of March 25, 2002, 40,245,889 shares of common stock were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive Proxy Statement to be issued in conjunction with the registrant’s Annual Meeting of Stockholders to be held June 7, 2002 are incorporated by reference into Part III of this Form 10-K.

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CONTENTS