SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
(Amendment No. ____)
Filed by the Registrant __X__
Filed by a Party other than the Registrant ____
Check the appropriate box:
____ Preliminary Proxy Statement
____ Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
__X__ Definitive Proxy Statement
____ Definitive Additional Materials
____ Soliciting Material Pursuant to <section> 240.14a-11(c) or <section>
240.14a-12
MANATRON, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
____________________________________________________
(NAME OF PERSON(S) FILING PROXY STATEMENT IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
__X__ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
____ $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
____ Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
_______________________________________________________________
2) Aggregate number of securities to which transaction applies:
_______________________________________________________________
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it was
determined):
_______________________________________________________________
4) Proposed maximum aggregate value of transaction:
________________________________________________________________
5) Total fee paid:
__________________________________________________________________
____ Fee paid previously with preliminary materials.
____ Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
__________________________________________________________________
2) Form, Schedule or Registration Statement No.:
__________________________________________________________________
3) Filing Party:
__________________________________________________________________
4) Date Filed:
__________________________________________________________________
-2-
[Manatron letterhead]
September 20, 1995
TO THE SHAREHOLDERS
OF MANATRON, INC.:
You are cordially invited to attend the Annual Meeting of the
Shareholders of Manatron, Inc. The meeting will be held at the Amway
Grand Plaza Hotel, on the corner of Pearl and Monroe Streets, in Grand
Rapids, Michigan, on Thursday, October 12, 1995, at 4 p.m., local time.
On the following pages, you will find the Notice of Annual
Meeting and the Proxy Statement, as well as information on matters to be
considered at the meeting. A report on Company activities will also be
presented at the meeting.
It is important that your shares be represented and voted at the
meeting, regardless of the size of your holdings. We therefore urge you
to SIGN, DATE, AND RETURN AS SOON AS POSSIBLE the enclosed proxy card in
the postage-paid envelope furnished for that purpose. Please do this
whether or not you plan to attend the meeting. Sending a proxy will not
affect your right to vote in person in the event you attend the meeting.
Respectfully,
/s/ Allen F. Peat
Allen F. Peat
Chairman of the Board,
President, and Chief Executive Officer
YOUR VOTE IS IMPORTANT
PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY
-3-
[Manatron letterhead]
NOTICE OF 1995 ANNUAL MEETING OF SHAREHOLDERS
AND PROXY STATEMENT
NOTICE OF ANNUAL MEETING
The Annual Meeting of the Shareholders of Manatron, Inc., will be
held at the Amway Grand Plaza Hotel, on the corner of Pearl and Monroe
Streets, in Grand Rapids, Michigan, on Thursday, October 12, 1995, at 4
p.m., local time, for the following purposes:
1. To elect five directors as set forth in the Proxy Statement.
2. To consider and approve the 1995 Long-Term Incentive Plan.
3. To transact any other business that may properly come before the
meeting.
Only shareholders of record as of the close of business on
September 1, 1995, are entitled to notice of, and to vote at, the meeting.
You are requested to sign, date and return the accompanying proxy
card in the enclosed, self-addressed envelope, regardless of whether you
expect to attend the meeting in person. You may withdraw your proxy at
the meeting if you are present and desire to vote your shares in person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Jane M. Rix
Jane M. Rix
Secretary
Kalamazoo, Michigan
September 20, 1995
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. WE URGE ALL
SHAREHOLDERS, REGARDLESS OF THE NUMBER OF SHARES OF STOCK OWNED, TO SIGN,
DATE AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE. NO
POSTAGE IS NECESSARY IF MAILED IN THE UNITED STATES.
MANATRON, INC.
2970 SOUTH 9TH STREET
KALAMAZOO, MICHIGAN 49009
ANNUAL MEETING OF SHAREHOLDERS
OCTOBER 12, 1995
PROXY STATEMENT
This Proxy Statement and the enclosed proxy are being furnished
to the shareholders of Manatron, Inc. (the "Company" or "Manatron") in
connection with the solicitation by the Manatron Board of Directors of
proxies to be used at the Annual Meeting of Shareholders to be held on
Thursday, October 12, 1995, at 4 p.m., local time, at the Amway Grand
Plaza Hotel, on the corner of Pearl and Monroe Streets, in Grand Rapids,
Michigan, and at any adjournment of that meeting. It is anticipated that
this Proxy Statement and the enclosed form of proxy will be first sent to
shareholders on or about September 20, 1995.
Proxies in the accompanying form that are properly executed, duly
returned to management and not revoked will be voted at the annual meeting
and any adjournment thereof in accordance with the wishes expressed on the
proxies. If no choice is specified, the designated proxies will vote the
shares represented by the proxy for the election of the five director
nominees named in this Proxy Statement, for approval of the 1995 Long-Term
Incentive Plan, and in accordance with their judgment with respect to any
other matter that may properly come before the meeting or any adjournment.
Any shareholder executing and returning the form of proxy that
accompanies this Proxy Statement may revoke the proxy at any time before
it has been exercised by delivering a written notice of revocation to the
Secretary of the Company, executing a subsequent proxy or attending the
meeting and voting in person. If the proxy is returned properly executed
and is received in time for voting, the shares represented by the proxy
will be voted at the meeting unless the proxy is revoked.
VOTING SECURITIES AND SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
September 1, 1995, has been fixed by the Board of Directors as
the record date for determining the shareholders who are entitled to vote
at the Annual Meeting. On that date, 2,945,523 shares of the Company'
common stock, no par value ("Common Stock"), were issued and outstanding.
Shareholders are entitled to one vote on each matter presented for
shareholder action for each share of Common Stock registered in their
names at the close of business on the record date.
The following table contains information with respect to
ownership of Common Stock by all directors, all nominees for election as
directors, the Named Executive Officer (as defined in the Summary
Compensation Table), all executive officers and directors as a group, and
by each person known to the Company to own beneficially more than 5% of
the Company's outstanding Common Stock. The content of this table is
based upon information supplied by the Company's officers, directors and
nominees for election as directors, and represents the Company's
understanding of circumstances in existence as of April 30, 1995, except
as otherwise noted.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
Total
Name of Shares Stock Beneficial Percent of
Beneficial Owner Owned<FN1> Options<FN2> Ownership Class<FN3>
<S> <C> <C> <C> <C>
Allen F. Peat<FN4><FN8> 770,955<FN5> 49,913 820,868 24.83%
Randall L. Peat<FN4><FN8> 540,262 11,025 551,287 16.68%
Richard J. Holloman<FN6> 185,952 21,750 207,702 6.28%
Gene Bledsoe 1,102 1,050 2,152 *
Douglas A. Peat<FN7><FN8> 154,629 22,076 176,705 5.35%
Jane M. Rix 1,485 7,250 8,735 *
Paul R. Sylvester 52,600 22,062 74,662 2.26%
Melvin J. Trumble 3,000 30,000 33,000 1.00%
Harry C. Vorys 8,224 9,041 17,265 *
Stephen C. Waterbury 11,968 3,254 15,222 *
All Directors and Executive Officers as a Group
(11 persons)<FN9> 1,620,428 190,939 1,811,367 58.12%
<FN>
__________________
* Less than 1%.
<FN1> Except as otherwise disclosed, shares owned represent shares of Common
Stock for which the beneficial owner has sole voting and investment power.
-2-
<FN2> The options listed have been granted pursuant to the Company's 1986, 1989
and 1994 Stock Option and Long-Term Incentive Plans. Options granted by
the Company under the 1986 and 1989 Plans are immediately and fully
exercisable. One-third of the options granted by the Company under the
1994 Plan are generally exercisable immediately with the remaining two-
thirds becoming exercisable twelve and twenty-four months after the date
of the grant, respectively.
<FN3> The Percent of Class represents the number of shares owned by each
beneficial owner as of April 30, 1995 plus the shares that may be acquired
by each beneficial owner through the exercise of outstanding stock options
within sixty (60) days by each as of April 30, 1995, as a percentage of
the total of all outstanding shares as of April 30, 1995 plus the total of
all shares that may be acquired through the exercise of outstanding stock
options within sixty (60) days as of April 30, 1995. For purposes of such
calculation, it was assumed that Douglas A. Peat owned the number of
shares shown above as of April 30, 1995.
<FN4> Messrs. Allen F. Peat and Randall L. Peat are parties to a Shareholder and
Voting Trust Agreement entered into in 1986 pursuant to which Randall L.
Peat has deposited one-half of his shares with Allen F. Peat as trustee
("Trustee"). The term of the voting trust expires on July 13, 1996.
During the term, the Trustee is granted the exclusive right to vote the
deposited shares, which total 233,350 shares, or approximately 8% of the
issued and outstanding shares at April 30, 1995. The agreement also
grants an option to purchase the shares to the other party and to Manatron
if the other party dies, becomes disabled, terminates employment with
Manatron or seeks to dispose of his shares. The address of the voting
trust and the business address of Allen F. Peat and Randall L. Peat is
2970 South 9th Street, Kalamazoo, Michigan 49009.
<FN5> Includes 574 shares owned by spouse.
<FN6> The business address for this individual is 3011 South Memorial Drive,
Greenville, North Carolina 27834.
<FN7> Stock ownership information for Douglas A. Peat is as of September 12,
1995. The business address for Mr. Peat is 2970 South 9th Street,
Kalamazoo, Michigan 49009.
<FN8> Allen F. Peat, Randall L. Peat, and Douglas A. Peat are members of the
ESOP Committee of the Company. Paul R. Sylvester, Vice President-Finance,
Chief Financial Officer, Treasurer and Director of the Company, is trustee
of the ESOP portion of the Manatron, Inc. Employee Stock Ownership and
Salary Deferral Plan (the "ESOP") and holds shares of the Company for the
ESOP. The ESOP Committee has the power to direct the trustee as to the
voting of the shares held by the ESOP Trust that have not been allocated
to individual accounts. Each of the members of the ESOP Committee
disclaims beneficial ownership of shares held by the ESOP (except any
-3-
shares allocated to the person's individual account under the ESOP), and
the ESOP shares are not reported as beneficially owned by the members of
the ESOP Committee as individuals unless the shares have been allocated to
the person's individual account under the ESOP. Currently, no shares have
been allocated to any person's account under the ESOP.
<FN9> In calculating aggregate amounts for all directors and executive
officers as a group it was assumed that Douglas A. Peat owned the
number of shares shown above as of April 30, 1995.
</FN>
</TABLE>
As of the date of this Proxy Statement no person other than Allen
F. Peat, Randall L. Peat, Douglas A. Peat, and Richard J. Holloman is
known by management to be the beneficial owner of more than 5 percent of
the Company's Common Stock.
ELECTION OF DIRECTORS
The Company's Articles of Incorporation specify that the Board of
Directors shall consist of at least three members, with the exact number
to be determined by the Board. The Board has currently fixed the number
of directors at ten. The Articles of Incorporation also specify that the
Board of Directors be divided into three classes serving three-year terms
as nearly equal in number as possible, with the term of office of one
class expiring each year.
Messrs. Gene Bledsoe, Allen F. Peat, and Harry C. Vorys and Ms.
Jane M. Rix, incumbent directors previously elected by the shareholders,
are nominees for re-election to three-year terms expiring at the Annual
Meeting of Shareholders in 1998. Mr. Melvin J. Trumble is a first time
nominee for election to a two-year term expiring at the Annual Meeting of
the Shareholders in 1997.
Unless otherwise directed by a shareholder's proxy, the persons
named as proxies in the accompanying proxy will vote for the nominees
identified above. In the event any of those nominees is no longer a
candidate at the time of the Annual Meeting of Shareholders (a situation
which is not now anticipated), the Board of Directors may or may not
designate a substitute nominee. If a substitute nominee is selected, all
proxies will be voted for the election of the substitute nominee. If a
substitute nominee is not selected, all proxies will be voted for the
election of the remaining nominees. Proxies will not be voted for a
greater number of persons than the number of nominees named in this Proxy
Statement. A vote of the shareholders holding a plurality of the shares
voting is required to elect directors. For the purpose of counting votes
on this proposal, abstentions, broker non-votes and other shares not voted
will not be counted as shares voted.
-4-
The Board of Directors recommends a vote FOR the election of the
nominees identified above.
A brief description of each nominee for director and the existing
directors is provided below. Unless otherwise noted, each director and
nominee for director has had the same principal employment for over five
years.
<TABLE>
<CAPTION>
NOMINEE FOR TERM EXPIRING IN 1997
Name, Age Business Experience for
and Position the Past 5 Years
<S> <C>
Melvin J. Trumble (53) Mr. Trumble is the Senior Vice
Senior Vice President - President of Property Systems
Property Systems; for the Sabre Systems and
Director since 1994 Services Division of the
Company which was acquired in
November of 1994. Prior to the
acquisition, Mr. Trumble served
as the General Manager of
Sabre's real estate appraisal,
mapping and systems business.
</TABLE>
<TABLE>
<CAPTION>
NOMINEES FOR TERMS EXPIRING IN 1998
Name, Age Business Experience for
and Position the Past 5 Years
<S> <C>
Gene Bledsoe (49) Mr. Bledsoe has been the
Director since 1993 Managing Partner of the Casal
Group since 1985. The Casal
Group is a computer industry
marketing services and
management consulting firm
based in Dallas, Texas.
Jane M. Rix (47) Ms. Rix joined the Company in
Secretary; Director 1977. In addition to serving
since 1993 as the Corporate Secretary, she
is responsible for purchasing
and manages the Company's
"Total Quality" process.
-5-
Allen F. Peat (59) Mr. Peat co-founded the Company
Chairman of the Board, in 1969. Mr. Peat has final
President, and Chief authority, subject to the
Executive Officer; control of the Board of
Director since 1972 Directors, over the general
policy, business and affairs of
the Company.
Harry C. Vorys (70) Mr. Vorys, prior to his
Director since 1986 retirement in July of 1990, was
an Executive Vice President and
Director of Citizens Trust and
Savings Bank of South Haven,
Michigan, which has since been
merged into Shoreline Bank. He
is currently a Director for
Shoreline Financial
Corporation, the holding
company for Shoreline Bank.
</TABLE>
-6-
<TABLE>
<CAPTION>
DIRECTORS WHOSE TERMS EXPIRE IN 1997
Name, Age Business Experience for
and Position the Past 5 Years
<S> <C>
Douglas A. Peat (33) Mr. Peat, who is primarily
Executive Vice President; responsible for all marketing
Director since 1991 activities on a company-wide
basis and all sales and customer
service activities for the State
of Michigan, has been employed
by the Company in various sales
positions since 1985. He served
as Dealer Marketing Manager from
1987 through 1991. He was
appointed Vice President-
Marketing in 1991 and Executive
Vice President in 1994.
Richard J. Holloman (41) Mr. Holloman founded Specialized
Director since 1992 Data Systems, Inc., ("SDS") in
1980 and until he resigned in
April 1995, served as its
President. He became a Director
in March of 1992 when SDS was
acquired by Manatron. Mr.
Holloman is currently the
President and owner of
Specialized Appraisal Services,
a small mass appraisal company
located in Greenville, North
Carolina.
</TABLE>
<TABLE>
<CAPTION>
DIRECTORS WHOSE TERMS EXPIRE IN 1996
Name, Age Business Experience for
and Position the Past 5 Years
<S> <C>
Randall L. Peat (47) Mr. Peat, a co-founder of the
President, Judicial Company, serves as President of
Information Systems; the Company's Judicial
Director since 1972 Information Systems Division.
-7-
Paul R. Sylvester (36) Mr. Sylvester has been the
Vice President - Company's Vice President -
Finance, Chief Finance and Chief Financial
Financial Officer, and Officer since 1987. He was
Treasurer; Director appointed as Treasurer in 1993.
since 1987
Stephen C. Waterbury (45) Mr. Waterbury is a partner at
Director since 1991 Warner Norcross & Judd LLP, a
law firm with which he has been
associated since 1979.
</TABLE>
Allen F. Peat and Randall L. Peat are brothers. Douglas A. Peat
is the son of Allen F. Peat and the nephew of Randall L. Peat. There are
no other family relationships between the nominees, directors and
executive officers of the Company.
Messrs. Allen F. Peat and Randall L. Peat may be deemed to be
control persons under rules issued by the Securities and Exchange
Commission by virtue of their individual shareholdings, beneficial
ownership of shares and participation in the Voting Trust Agreement
described under "Voting Securities and Security Ownership of Certain
Beneficial Owners and Management" above.
APPROVAL OF THE 1995 LONG-TERM INCENTIVE PLAN
The Board of Directors firmly believes that the Company's long-
term interests are best advanced by aligning the interests of its key
business leaders and employees with the interests of its shareholders.
Therefore, to attract and retain directors, officers, and other key
management employees of exceptional abilities, and in recognition of the
significant and extraordinary contributions to the long-term performance
and growth of the Company and its subsidiaries made by these individuals,
on July 13, 1995, the Board of Directors adopted, subject to shareholder
approval, the 1995 Long-Term Incentive Plan (the "1995 Incentive Plan").
The 1995 Incentive Plan is intended to supplement the Company's 1986
Incentive Stock Option Plan, 1989 Stock Option Plan, 1994 Long-Term
Incentive Plan and the Restricted Stock Plan (collectively, the "Prior
Plans"). Because the Prior Plans have limited authorized shares remaining
for future stock option grants and restricted stock awards, the Board of
Directors believes that the adoption and implementation of the 1995
Incentive Plan is now advisable to make additional shares available for
stock option grants and restricted stock awards.
The Board of Directors contemplates that the 1995 Incentive Plan
would primarily be used to grant stock options. However, the 1995
Incentive Plan would also permit grants of restricted stock and tax
benefit rights if determined to be desirable to advance the purposes of
-8-
the 1995 Incentive Plan. Stock options, restricted stock and tax benefit
rights are referred to as "Incentive Awards." By combining in a single
plan these types of incentives commonly used in long-term incentive
compensation programs, it is intended that the 1995 Incentive Plan would
provide significant flexibility to the Stock Option Plan Committee of the
Board of Directors to tailor specific long-term incentives that would best
promote the objectives of the 1995 Incentive Plan, and in turn promote the
interests of the Company's shareholders.
The following is a summary of the principal features of the 1995
Incentive Plan. The summary is qualified in its entirety by reference to
the terms of the 1995 Incentive Plan, the complete text of which is
attached as Appendix A to this Proxy Statement.
Persons eligible to receive Incentive Awards under the 1995
Incentive Plan (with certain limitations discussed below) include
directors and corporate officers (currently 10 persons) and other key
employees (currently approximately 50 persons) of the Company and its
subsidiaries. Other individuals eligible to participate in the 1995
Incentive Plan may join the Company in the future. A maximum of 500,000
shares of Common Stock (subject to certain antidilution adjustments) would
be available for Incentive Awards under the 1995 Incentive Plan. Shares
to be issued under the 1995 Incentive Plan would be authorized and
unissued shares. Because directors, officers and key employees of the
Company and its subsidiaries may receive awards under the 1995 Incentive
Plan, they may be deemed to have an interest in the 1995 Incentive Plan.
The 1995 Incentive Plan would not be qualified under Section 401(a) of the
Internal Revenue Code of 1986, as amended (the "Code") and would not be
subject to the Employee Retirement Income Security Act of 1974.
The 1995 Incentive Plan would be administered by the Company's
Stock Option Plan Committee (the "Committee"), which is currently
comprised of two nonemployee directors, neither of whom participates or is
eligible to participate in any long-term incentive plan of the Company or
its subsidiaries, except for nondiscretionary stock option grants based
upon a specified formula, and both of whom must be "outside directors" as
defined in the rules issued pursuant to Section 162(m) of the Code. The
Committee would make determinations, subject to the terms of the 1995
Incentive Plan, as to the persons to receive Incentive Awards, the amount
of Incentive Awards to be granted to each person, the terms of each grant,
and all other determinations necessary or advisable for administration of
the 1995 Incentive Plan. A current option plan of the Company provides
that each non-employee director who has served a full year of service as a
director shall receive an option for 1,000 shares of Common Stock issued
as of the date of the Annual Meeting of Shareholders each year. The
Committee could amend the terms of Incentive Awards granted under the 1995
Incentive Plan from time to time in a manner consistent with the 1995
Incentive Plan; provided, however, that no amendment could be effective
relating to a particular Incentive Award without the consent of the
-9-
relevant participant, except to the extent the amendment operated solely
to the benefit of the participant.
Under the 1995 Incentive Plan, participants could be granted
stock options. A stock option is the right to purchase a specified number
of shares of Common Stock for a stated price at specified times. Certain
stock options that could be granted to employees under the 1995 Incentive
Plan may qualify as incentive stock options as defined in Section 422(b)
of the Code. Other stock options, including all stock options that could
be granted to directors who are not employees, would not be incentive
stock options within the meaning of the Code. Stock options could be
granted at any time prior to the termination of the 1995 Incentive Plan
according to its terms or by action of the Committee.
The Committee would set forth the terms of individual grants of
stock options in stock option agreements, which agreements would contain
such terms and conditions, consistent with the provisions of the 1995
Incentive Plan, as the Committee determined appropriate. These
restrictions may include vesting requirements to encourage long-term
ownership of shares. The Company will receive no consideration upon the
award of options. The option price per share would be determined by the
Committee and would be a price equal to or higher than the "market value"
of the Company's Common Stock on the date of grant. "Market Value" means
the last reported sales price of shares of Common Stock as reported on the
NASDAQ system on the date of grant, or if no shares were traded on that
date, the last preceding date on which shares were traded. On
September 8, 1995, the last reported sales price of Common Stock on the
NASDAQ National Market System was $2.75 per share. When exercising all or
a portion of an option, a participant could pay the exercise price with
cash or, with the consent of the Committee, shares of common stock. If
shares of Common Stock are used to pay the exercise price and the
Committee consents, a participant may use the value of shares received
upon exercise for further exercises in a single transaction, permitting a
participant to fully exercise an option with a relatively small initial
cash or stock payment. The Committee could also authorize payment of all
or a portion of the option price in the form of a promissory note or
installments on such terms as the Committee approved. The Board of
Directors could restrict or suspend the power of the Committee to permit
such loans and could require that adequate security be provided. The
Committee could also designate any option that it grants under the Plan a
"reload option." Upon exercise of a reload option, the participant would
automatically receive new options from the Company with an option price
equal to the market value of the Common Stock on the date of exercise of
the reload option.
Although the term of each stock option would be determined by the
Committee, no stock option would be exercisable under the 1995 Incentive Plan
after the expiration of 10 years from the date it was granted. Options
generally would be exercisable for limited periods of time in the event an
option holder was terminated from employment with the Company without cause,
-10-
died, or became disabled. If an option holder was terminated for cause, the
option holder would forfeit all rights to exercise any outstanding options.
Options granted to participants under the 1995 Incentive Plan could not be
transferred except by will or by the laws of descent and distribution. There
is no specified limit on the number of options that could be granted to any
individual participant under the 1995 Incentive Plan, except that (i) each
non-employee director who served a full term for the prior year shall
automatically receive annual grants of 1,000 shares on the date of the Annual
Meeting of Shareholders; and (ii) no participant could be granted, during any
calendar year, incentive awards for more than twenty-five percent (25%) of the
total shares of Common Stock authorized for issuance under the Plan.
Because the number of participants and the market value of Common
Stock on the grant date cannot presently be determined, the benefits or
amounts that will be received by participants under the 1995 Incentive Plan
also are not determinable. If the 1995 Incentive Plan had been in effect for
the fiscal year ended April 30, 1995, and assuming that there were no shares
available for non-employee director stock option grants under the Prior Plans,
no benefits would be determinable, except stock option awards to non-employee
directors would have been as follows:
<TABLE>
<CAPTION>
NEW PLAN BENEFITS
1995 LONG-TERM INCENTIVE PLAN
Dollar Value at Number of Securities
Group September 1, 1995<FN1> Underlying Options
<S> <C> <C>
Non-Executive Director Group $0 3,000<FN2>
(three eligible persons)
All Others $0 0
<FN>
<FN1> The dollar value of a stock option is determined by calculating the
spread between the exercise price of the stock option and the current
value of Common Stock. In this table, the dollar value is $0 because
the market value as of September 8, 1995 has not increased from the
market value of the Common Stock on October 6, 1994 (the date of the
1994 Annual Meeting of Shareholders).
<FN2> Includes stock options to purchase 1,000 shares of the Company's
Common Stock for each of the three persons who served as non-employee
directors on October 6, 1994, and who would have been entitled to a
stock option grant on that date under the 1995 Incentive Plan if the
1995 Incentive Plan was effective on that date.
</FN>
</TABLE>
-11-
Under current federal income tax laws, no income would be
realized when an option was granted pursuant to the 1995 Incentive Plan.
A participant exercising an incentive stock option would not recognize
income at the time of the exercise. The difference between the market
value and the exercise price would, however, be a tax preference item for
the purpose of calculating alternative minimum tax. Upon sale of the
stock, so long as the participant held the stock for at least one year
after the exercise of the option and at least two years after the grant of
the option, the participant's basis would equal the option price, and the
participant would pay tax on the difference between the sale price and the
option price as capital gain, in which case the Company would not be
entitled to any deduction for compensation income. If, prior to the
expiration of either of the above holding periods, the participant sold
shares acquired under an incentive stock option, the tax deferral would be
lost, and the participant would recognize compensation income equal to the
difference between the option price and the fair market value of the
shares sold at the time of exercise, but not more than the maximum amount
that would not result in a loss on the disposition (generally the
difference between the option price and the price at which the shares are
sold). The Company would then receive a corresponding deduction for
federal income tax purposes. Additional gains, if any, would be
recognized by the participant as short- or long-term capital gain.
If a participant exercised stock options that were not incentive
stock options, the participant would recognize compensation income in the
year of exercise equal to the difference between the stock option price
and the fair market value of the shares on the date of exercise. The
Company would receive a corresponding deduction for federal income tax
purposes. The optionee's tax basis in the shares acquired would be
increased by the amount of compensation income recognized. Sale of the
stock after exercise would result in recognition of short- or long-term
capital gain or loss.
In addition to the authority to grant stock options under the
1995 Incentive Plan, the 1995 Incentive Plan would allow the Committee to
award restricted stock. Restricted stock would be subject to such terms
and conditions, consistent with the provisions of the 1995 Incentive Plan,
as the Committee from time to time determined. As with stock option
grants, the Committee would set forth the terms of individual awards of
restricted stock in restricted stock agreements. If a participant entered
into competition with the Company, or if a participant's employment or
director or officer status was terminated during the restricted period set
by the Committee for any reason other than death, retirement, or
disability, then any shares of restricted stock still subject to
restrictions would be forfeited. Unless the Committee provided otherwise
in a restricted stock agreement, if a participant's employment or director
or officer status was terminated during the restricted period (i) by
reason of death or disability, the restrictions applied to the
participant's shares would terminate automatically as of the date of death
or disability, or (ii) by reason of retirement, then any shares of
-12-
restricted stock still subject to restrictions on the retirement date
would be forfeited.
Without Committee authorization, a recipient of restricted stock
could not sell, exchange, transfer, pledge, assign, or otherwise dispose
of such stock other than to the Company or by will or the laws of descent
or distribution. In addition, the Committee could impose other
restrictions on shares of restricted stock. However, holders of
restricted stock would enjoy all other rights of shareholders with respect
to restricted stock, including the right to vote restricted shares at
shareholders' meetings and the right to receive all dividends paid with
respect to restricted stock. Any securities received by a holder of
restricted stock pursuant to a stock dividend, stock split,
recapitalization, or reorganization would be subject to the same terms,
conditions, and restrictions that are applicable to the restricted stock
for which such shares are received.
Generally, a participant would not recognize income upon the
award of restricted stock. However, a participant would be required to
recognize compensation income on the value of restricted stock at the time
the restricted stock vested (when the restrictions lapse). At the time
the participant recognized this compensation income, the Company would be
entitled to a corresponding deduction for federal income tax purposes. If
restricted stock was forfeited by a participant, the participant would not
recognize income, and the Company would not receive a deduction. Prior to
the lapse of restrictions, dividends paid on restricted stock would be
reported as compensation income to the participant, and the Company would
receive a corresponding deduction.
A participant could, within thirty days after the date of an
award of restricted stock, elect to report compensation income for the tax
year in which the award of restricted stock occurred. If the participant
made such an election, the amount of compensation income would be the
value of the restricted stock at the time of the award. Any later
appreciation in the value of the restricted stock would be treated as
capital gain and realized only upon the sale of the restricted stock.
Dividends received after such an election was made would be taxable as
dividends and not treated as additional compensation income. If, however,
restricted stock was forfeited after the participant had made an election
as described above, the participant would not be allowed any deduction for
the amount earlier taken into income. Upon the sale of restricted stock,
a participant would realize capital gain (or loss) in the amount of the
difference between the sale price and the value of the stock previously
reported by the participant as compensation income.
The Committee could also grant tax benefit rights under the 1995
Incentive Plan. As with options and restricted stock, the Committee would
set forth the terms and conditions of tax benefit rights granted and the
participants to receive tax benefit rights. A tax benefit right would
entitle a participant to receive a cash payment from the Company or a
-13-
subsidiary to encourage the participant to exercise his or her options.
The amount of the payment could not exceed the amount calculated by
multiplying the ordinary income, if any, realized by the participant for
federal tax purposes as a result of the exercise of a non-incentive stock
option, or as a result of the disqualifying disposition of shares acquired
under an incentive stock option, by the maximum federal income tax rate
(including any surtax or similar charge or assessment) for corporations,
plus the applicable state and local tax imposed on the exercise of the
option or disqualifying disposition. Tax benefit rights could be granted
only with respect to a stock option issued and outstanding or to be issued
under the 1995 Incentive Plan or the Prior Plans. A participant could
refuse the issuance of tax benefit rights if the effect of the tax benefit
right would be to disqualify an incentive stock option, change the date of
the grant or exercise price or impair the participant's existing stock
options. An officer or employee subject to Section 16 of the Exchange Act
could not exercise an option to which a tax benefit right has attached for
a period of six months from the date of grant of the tax benefit right.
Whenever Incentive Awards are made under the 1995 Incentive Plan,
the Company could withhold from any cash otherwise payable to the
participant or require the participant to remit to the Company an amount
sufficient to satisfy all applicable federal, state, and local withholding
taxes. Withholding could be satisfied by withholding Common Stock to be
received upon exercise or by delivery to the Company of previously owned
Common Stock.
The Board of Directors could terminate the 1995 Incentive Plan at
any time, and could from time to time amend the 1995 Incentive Plan as it
deemed proper and in the best interests of the Company, provided that
without shareholder approval no such amendment could: materially increase
either the benefits to participants under the 1995 Incentive Plan or the
number of shares that could be issued under the 1995 Incentive Plan;
materially modify eligibility requirements; reduce the option price
(except pursuant to certain anti-dilution provisions set forth in the 1995
Incentive Plan); or impair any outstanding Incentive Award without the
consent of the participant, except according to the terms of the Incentive
Award. Subject to shareholder approval, the 1995 Incentive Plan would
take effect on July 13, 1995 and, unless previously terminated by the
Board of Directors, the 1995 Incentive Plan would terminate on July 12,
2005. No award could be made under the 1995 Incentive Plan after that
date.
The Company intends to register shares covered by the 1995
Incentive Plan under the Securities Act of 1933 before any Incentive Award
would vest or become exercisable.
The affirmative vote of the holders of a majority of shares of
Common Stock present in person or by proxy and voting on this proposal is
required to approve the 1995 Incentive Plan. For purposes of counting
votes on this proposal, abstentions, broker non-votes and other shares not
-14-
voted will not be counted as voted on this proposal, and the number of
shares of which a majority is required will be reduced by the number of
shares not voted. The Board of Directors has determined that the 1995
Incentive Plan is in the best interests of the Company and its
shareholders. The shares represented by proxies received will be voted
FOR approval of the adoption of the 1995 Incentive Plan unless a vote
against such approval or to abstain from voting is specifically indicated
in the proxy.
The Board of Directors recommends a vote FOR approval of the 1995
Long-Term Incentive Plan.
ORGANIZATION OF THE BOARD
The Board of Directors has five standing committees: the Audit
Committee, the Compensation Committee, the Stock Option Plan Committee,
the Nominating Committee, and the Executive Committee. None of the
Committees has a designated chairman.
The Audit Committee consists of Gene Bledsoe, Harry C. Vorys and
Stephen C. Waterbury. The Audit Committee met once during fiscal year
1995. Each year the Committee reviews the prior year's audit and the
upcoming audit plan submitted by the independent auditors with respect to
the scope of procedures performed, internal controls, and recommendations
for accounting or operational improvements.
The Compensation Committee consists of Gene Bledsoe, Harry C.
Vorys and Stephen C. Waterbury. The Compensation Committee, which
establishes the compensation of the executive officers, met twice during
fiscal 1995.
The Stock Option Plan Committee consists of Harry C. Vorys and
Stephen C. Waterbury. This committee, which met four times during fiscal
1995, is responsible for the administration and award of stock options and
restricted stock under the Company's stock plans.
The Nominating Committee and the Executive Committee have
recently been created by the Board of Directors. Neither of those
Committees held meetings during fiscal year 1995.
The Nominating Committee consists of Allen F. Peat, Douglas A.
Peat, and Paul R. Sylvester. The Nominating Committee will consider and
evaluate the qualifications of potential candidates for the Board of
Directors and recommend appropriate candidates to the full Board of
Directors.
The Executive Committee consists of Allen F. Peat, Randall L.
Peat, Douglas A. Peat, and Paul R. Sylvester. The Executive Committee has
the authority to exercise the powers of the Board of Directors in the
-15-
management of the business affairs and property of the Company during
intervals between meetings of the Board of Directors.
The Board of Directors met on four occasions during the last
fiscal year. Each director attended more than 75 percent of the aggregate
of the total number of meetings of the Board of Directors and the total
number of meetings held by each committee of the Board on which he or she
served.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the annual compensation, long-term
compensation and all other compensation for the Company's chief executive
officer, the only officer of the Company whose salary and bonus for the
fiscal year ended April 30, 1995 equalled $100,000 or more (the "Named
Executive Officer").
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term Compensation
Annual Compensation Awards
Securities
Underlying All Other
Name and Principal Salary Bonus Options Compensation
Position Year ($) ($) (#)<FN1> ($)<FN2>
<S> <C> <C> <C> <C> <C>
Allen F. Peat 1995 140,907 80,000 10,500 6,500
Chairman of the 1994 107,719 15,000 22,050 6,700
Board, President, 1993 97,400 -- 17,363 7,600
and Chief Executive
Officer
<FN>
_________________________________________
<FN1> The number of shares subject to stock options has been adjusted to reflect
the five percent stock dividends distributed on November 19, 1993 and
November 18, 1994.
<FN2> All other compensation of the Named Executive Officer for the year ended
April 30, 1995 includes: (a) Company matching contributions under the
Company's profit sharing and 401(k) plan of $1,800; and (b) amounts paid by
the Company for life insurance on the Named Executive Officer of $4,700.
Mr. Peat owns the life insurance policy.
</FN>
</TABLE>
-16-
STOCK OPTIONS GRANTED
The following table sets forth the stock option grants to the Named
Executive Officer in fiscal year 1995:
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
Potential Realizable Value
Percent of at Assumed Annual Rates
Total of Stock Price Appreciation
Number of Options For Option Term<FN2>
Securities Granted To
Underlying Employees Exercise or
Options in Fiscal Base Price Expiration
Name Granted Year ($/Sh)<FN1> Date 5% ($) 10% ($)
<S> <C> <C> <C> <C> <C> <C>
Allen F. Peat 10,500 6.62% $4.26 08/17/04 $ 7,200 $20,800
<FN>
<FN1> The exercise price of the options grants reflected in the above table is
equal to 100% of the market value of the Company's Common Stock on the
date of grant, or 110% of market value for holders of more than 10% of
the Company's Common Stock. Options may be subject to a vesting schedule
or may become exercisable immediately after grant. Options generally
expire five to ten years after grant.
<FN2> The potential realizable value amounts shown illustrate the values that
might be realized upon exercise immediately prior to the expiration of
their term using 5 percent and 10 percent appreciation rates set by the
Securities and Exchange Commission, compounded annually and, therefore,
are not intended to forecast possible future appreciation, if any, of the
Company's Common Stock price. Additionally, these values do not take
into consideration the provisions of the options providing for
nontransferability or termination of the options following termination of
employment.
</FN>
</TABLE>
OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table sets forth the aggregated option exercises in fiscal
year 1995 and the outstanding options at April 30, 1995 for the Named Executive
Officer:
-17-
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
Number of
Securities Value of
Underlying Unexercised
Unexercised in-the-money
Options Options
at Fiscal Year- at Fiscal Year-
Share Value End End ($)
Acquired on Realized Exercisable/ Exercisable/
Name Exercise (#) ($)<FN1> Unexercisable Unexercisable<FN2>
<S> <C> <C> <C> <C>
Allen F. Peat -- -- 49,913/0 $ 0/0
<FN>
<FN1> Value realized is calculated based on the difference between the
option exercise price and the closing market price of the Company's
Common Stock on the date of exercise, multiplied by the number of
shares to which the exercise relates.
<FN2> Value is calculated based on the difference between the (i) option
exercise price and (ii) the market price at April 30, 1995, the end
of the Company's fiscal year, multiplied by the number of shares
subject to unexercised options. The closing price of the Company's
Common Stock as reported on NASDAQ National Market System on April
30, 1995, was $3.25.
</FN>
</TABLE>
EMPLOYMENT AGREEMENT
Mr. Allen F. Peat has an employment agreement with the Company which
expires on July 16, 2000. The agreement provides for, among other things,
a monthly salary, annual bonus and other fringe benefits, as determined
from time to time by the Board of Directors. For any given year, it is
intended that monthly salary and fringe benefits will in no event be less
than those received in the prior year. The annual bonus is determined in
accordance with a formula approved by the Board, but in no event can it
exceed 60 percent of the individual's annual salary.
COMPENSATION OF DIRECTORS
Directors who are employees of the Company do not receive
compensation for services as directors. Directors who are not employees
-18-
of the Company may receive an annual retainer of $5,000, plus $500 for
each Board meeting attended and $250 for each Committee meeting attended.
Under the terms of the Company's 1989 Stock Option Plan, each non-
employee director serving on the Board of Directors on October 3, 1991,
was granted an option to purchase 1,000 shares for each full year of
service as a Company director. After that date, each non-employee
director who has served a full year of service as a director has received
an option for 1,000 shares of Common Stock issued as of the date of the
Annual Meeting of Shareholders each year. The per share exercise price of
the options granted to directors is 100 percent of the market value of the
Common Stock on the date each option is granted. The term of each option
may not exceed 10 years.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's executive compensation program is administered by the
Compensation Committee of the Board of Directors (the "Compensation
Committee"). The Compensation Committee develops compensation policies
for the Company and evaluates annual salaries and incentive compensation
plans for the executive officers. It also reviews awards under certain
stock-based compensation plans as approved by the Stock Option Plan
Committee. The Compensation Committee submits its recommendations on such
matters to the full Board of Directors (the "Board") for ratification.
The Compensation Committee consists of three directors, none of whom is a
current or former employee of the Company.
COMPENSATION POLICIES FOR EXECUTIVE OFFICERS
The Compensation Committee's executive compensation philosophy is to
provide competitive levels of compensation, align officers' pay with the
Company's achievement of annual and long-term performance goals, reward
above average performance by the Company, recognize individual
accomplishment, and allow the Company to attract and retain quality
executive officers. The Committee believes that a substantial portion of
the annual compensation of each officer must relate to, and be contingent
upon, the performance of the Company.
The Company's basic compensation policies are designed to enhance
shareholder value by rewarding executive officers for profitable growth of
the Company and increases in the value of its Common Stock. The Company's
executive compensation policies seek to align the interests of executive
officers and other key employees with the interests of shareholders
through stock ownership to encourage increases in shareholder value. The
Compensation Committee believes that above-average performance, measured
in terms of profit growth and total shareholder return, should generate
rewards for senior executives and key employees.
-19-
Executive officer compensation is comprised of three primary
components: a base salary and benefits; an annual performance bonus (the
"Annual Bonus Plan"); and participation in stock option plans to align the
financial interests of the officers with those of the Company's
shareholders. Each of these components is designed to accomplish one or
more of the compensation objectives. Benefits offered to executive
officers include participation in a Profit Sharing and 401(k) Plan, which
covers substantially all employees, the Employee Stock Purchase Plan and
the Company's various health and life insurance benefit plans.
Based on a recommendation of the Compensation Committee, the Company
has retained Management Resource Center, Inc., executive compensation
consultants, to review compensation paid to top executives in light of
both the performance of the Company and the compensation paid to similar
executives in peer companies. During fiscal 1996, management will
prepare, with the assistance of the outside compensation consultants, an
analysis of the Company's current compensation programs and executive
compensation recommendations. The analysis will be presented to the
Compensation Committee, which will meet with representatives of Management
Resource Center, Inc. to discuss executive compensation practices in other
companies and the computer industry, and to assure that management's
recommendations are consistent with the best interests of the Company's
shareholders.
BASE SALARY
The Company seeks to attract and retain executives by providing base
salaries that are generally competitive. The skill and experience
required by the position, job performance, accountability, tenure and
current economic conditions affect what individuals earn as a base salary.
The Committee considers pay levels at other comparable companies to help
establish guidelines, but the Company's current operating performance is
considered most important in determining the base salaries of senior
executives.
The Compensation Committee believes current base salaries for
executive officers have not kept pace with and are below average for
executives in similar positions. It is the Committee's intention to
increase base salaries of officers to more competitive levels as profits
improve. Nonetheless, incentive compensation based upon criteria designed
to reward executives for performance which enhances shareholder value will
continue to represent a substantial percentage of potential executive
compensation.
In general, the Company adjusts executive officer salaries on an
annual basis. The annual adjustments are determined by considering the
Company's performance, each officer's performance, any increased
responsibilities of the officer and current economic conditions.
-20-
ANNUAL BONUS PLAN
The Annual Bonus Plan is a key component of officer compensation.
Participation is limited to executive officers employed with the Company
at the time the annual goals are established, numbering eight in 1995.
The Annual Bonus Plan provides that each participant receive a specified
percentage of current year income before income taxes. In addition,
discretionary bonuses are paid for exceptional performance or the
achievement of significant corporate objectives.
No annual bonuses were earned for fiscal 1995. During fiscal 1995
certain bonuses were paid in connection with the completion of an
acquisition based on a discretionary evaluation of the performance and
effort of each recipient.
STOCK OPTIONS
The Stock Option Committee of the Board periodically grants stock
options to executive officers of the Company. These stock options provide
the recipient the right to acquire shares of the Company's Common Stock at
its fair market value on the date of grant. The options generally become
exercisable immediately after the date of grant and expire five to ten
years following the date of grant. The number of shares covered by each
grant is designed to provide the executive officers a substantial
incentive to operate the business from the perspective of an owner,
thereby closely aligning their interests to those of the Company's
shareholders. Although the Compensation Committee believes that stock
ownership by executive officers and other key employees is beneficial, the
Company currently has no target ownership level for Common Stock holdings
by officers. The Stock Option Committee generally does not take into
account in its decisions the amount and value of options currently held by
the officer. In fiscal 1995, the Stock Option Committee awarded incentive
stock options for an aggregate of 69,500 shares to 7 executive officers.
The exercise prices of these options ranged between $3.13 to $4.26 per
share.
CHIEF EXECUTIVE OFFICER COMPENSATION
The Compensation Committee considers current operating performance to
be a key determinant in establishing the base salary of the Chief
Executive Officer (the "CEO"). Also given consideration are the
individual's performance, skill and experience, accountability, length of
service and current economic conditions. The Compensation Committee also
believes that incentive compensation, designed to reward performance,
should represent a significant percentage of the CEO's potential
compensation. The CEO received a base salary of $140,907 for fiscal 1995.
In addition, an $80,000 special cash bonus was granted to the CEO in
recognition of his role in negotiating and closing the acquisition of
Sabre Systems and Services which had been one of the Company's principal
competitors prior to its acquisition by the Company. None of the
-21-
corporate officers received an annual bonus based on the fiscal 1995
financial performance of the Company.
Respectfully submitted,
Gene Bledsoe
Harry C. Vorys
Stephen C. Waterbury
-22-
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee is composed of Gene Bledsoe,
Harry C. Vorys and Stephen C. Waterbury. Stephen C. Waterbury is a
partner in the law firm of Warner Norcross & Judd LLP, and Gene Bledsoe is
the Managing Partner of the Casal Group, a computer industry marketing
services and management consulting firm. The services of these firms were
utilized by the Company in 1995 and will continue to be utilized in fiscal
year 1996.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's directors
and officers and persons owning greater than 10% of the outstanding shares
of Common Stock to file reports of ownership and changes in ownership of
shares of Common Stock with the Securities and Exchange Commission.
Directors, officers and greater than 10% beneficial owners are required by
Securities and Exchange Commission regulations to furnish the Company with
copies of all Section 16(a) reports they file. Based on its review of the
copies of such reports received by it, or written representations from
certain reporting persons that no reports on Form 5 were required for
those persons for the 1995 fiscal year, the Company believes that all
applicable reporting and filing requirements were satisfied during the
Company's last fiscal year.
STOCK PERFORMANCE
Set forth below is a line graph comparing the cumulative total
shareholder return on the Company's Common Stock, based on the market
price of the Common Stock, assuming $100 invested on April 30, 1990 and
assuming reinvestment of dividends, against the Standard & Poor's 500
Stock Index and an industry index comprised of the common stock of eleven
companies in the computer software industry (the "Peer Group") for the
five-year period from April 30, 1990 to April 30, 1995. The Peer Group
selected by the Company includes Barrister Information Systems Corp.;
Bolt, Beranek & Newman, Inc.; Business Records Corporation; Cerner Corp.;
Computrac, Inc.; Microlog Corp.; Symbolics, Inc.; Symix Systems I;
Synercom Technology, Inc. (now known as Alpha Technologies, Inc.); Systems
& Computer Technology Corp.; and Xyvision, Inc. Cumulative total return
is measured by dividing (i) the sum of (A) the cumulative amount of
dividends for the measurement period, assuming dividend reinvestment, and
(B) the difference between the share price at the end and the beginning of
the measurement period; by (ii) the share price at the beginning of the
measurement period.
-23-
COMPARISON OF CUMULATIVE TOTAL RETURN
Assumes initial investment of $100 and reinvestment of dividends
[GRAPH]
The dollar values for total shareholder return plotted in the
graph above are shown in the table below:
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
Manatron $100.00 $ 82.61 $134.74 $100.40 $167.75 $130.84
S & P 500 100.00 117.62 134.12 146.51 154.30 181.26
Peer Index 100.00 110.41 140.94 197.44 334.14 455.87
</TABLE>
TRANSACTIONS WITH MANAGEMENT
Until September 12, 1994, the Company leased from Allen F. Peat,
Chairman of the Board, President and Chief Executive Officer, a portion of
its Kalamazoo, Michigan corporate offices consisting of approximately
3,300 square feet for approximately $1,900 per month. The Company was
responsible for taxes, maintenance, and insurance on the leased property.
On September 12, 1994, the Company purchased the premises from Mr. Peat
for $200,000 in cash. The price was based on an independent appraisal of
the property's fair market value. The appraisal was performed by
Stratford Appraisal Incorporated of Kalamazoo, Michigan.
The Company is leasing its office in Greenville, North Carolina
under a five-year agreement expiring on July 31, 1999, consisting of
approximately 4,600 sq. ft. from HBH Partnership, of which Richard J.
Holloman, former President of SDS and a Director of the Company, is a one-
third owner, for approximately $3,800 per month. HBH Partnership is
responsible for taxes, maintenance and insurance on the leased property.
The terms of these leases and the purchase of the Kalamazoo
property were not negotiated at arm's-length and may be deemed to involve
a conflict of interest. However, in the opinion of management, the terms
are at least as favorable to the Company as the terms which would be
available to the Company in an arm's-length transaction.
On June 29, 1995, the Company's ESOP purchased 142,858 shares of
Common Stock from Allen F. Peat, Chairman of the Board, President and
Chief Executive Officer for $3.50 per share. The ESOP borrowed $500,000
from a bank to finance the stock purchase. The Company has guaranteed the
-24-
ESOP's loan and is obligated to make contributions sufficient to enable
the ESOP to repay the loan, including interest. The loan is repayable in
quarterly installments of $25,000, beginning September 30, 1995, plus
interest at the bank's prime rate.
The Company has made two loans to Paul R. Sylvester, Vice
President - Finance, Chief Financial Officer, Treasurer and Director,
totalling $172,500. The proceeds of the loans were used to purchase
shares of Common Stock in the Company from another executive officer. Mr.
Sylvester is obligated to repay the full amount of the first loan of
$50,000 without interest on March 1, 1998, unless the loan becomes due
earlier. Mr. Sylvester is obligated to repay the full amount of the
second loan of $122,500 without interest on September 1, 1999, unless the
loan becomes due earlier. Each of the loans becomes due before their
respective repayment dates if Mr. Sylvester sells the Common Stock
purchased with the proceeds of the respective loan.
SELECTION OF AUDITORS
The Company selected Arthur Andersen LLP, independent auditors,
as its principal auditors for fiscal year 1995. Representatives of Arthur
Andersen LLP are expected to be present at the Annual Meeting of
Shareholders, will be provided with the opportunity to make a statement if
they desire to do so, and are expected to be available to respond to
appropriate questions. Consistent with its past practice, the Company
expects to finalize the selection of its principal auditors for its 1996
fiscal year financial audit prior to December 31, 1995.
NOMINATIONS OF DIRECTOR CANDIDATES
Nominations of candidates for election as directors of the
Company at any meeting of shareholders called for election of directors
(an "Election Meeting") may be made by any shareholder entitled to vote at
such Election Meeting. Any shareholder who intends to make a nomination
at the Election Meeting is required to deliver, not less than 120 days
prior to the date of the Election Meeting in the case of an annual
meeting, and not more than seven days following the date of notice of the
meeting in the case of a special meeting, a notice to the Secretary of the
Company setting forth (i) the name, age, business address and residence
address of each nominee proposed in such notice; (ii) the principal
occupation or employment of each nominee; (iii) the number of shares of
capital stock of the Company which are beneficially owned by each nominee;
(iv) a statement that each nominee is willing to be nominated; and
(v) such other information concerning each nominee as is required under
the rules of the Securities and Exchange Commission for inclusion in a
proxy statement soliciting proxies for the election of such nominees. If
the chairman of the Election Meeting determines that a nomination was not
made in accordance with the foregoing procedures, such nomination will be
void.
-25-
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the next annual
meeting of shareholders must be received by the Company to be considered
for inclusion in its Proxy Statement and form of proxy relating to that
meeting by May 23, 1996. Shareholder proposals should be made in
accordance with Rule 14a-8 issued under the Securities Exchange Act of
1934, as amended, and should be addressed to Allen F. Peat, Chairman of
the Board, Manatron, Inc., 2970 South 9th Street, Kalamazoo, Michigan
49009.
OTHER BUSINESS
The Company's Annual Report to Shareholders, including financial
statements, is being mailed to shareholders with this Proxy Statement.
The Board of Directors is not aware of any matters to
be presented for action at the Annual Meeting, other than as set forth in
this Proxy Statement. If other business should come before the meeting,
the persons named as proxies in the accompanying proxy intend to vote the
shares in accordance with their judgment and discretionary authority to do
so as indicated in the proxy.
SOLICITATION OF PROXIES
The cost of the solicitation of proxies will be paid by the
Company. In addition to the use of the mails, proxies may be solicited
personally or by telephone by directors, officers and employees of the
Company without additional compensation. Proxies may be solicited by
nominees and other fiduciaries who may mail materials or otherwise
communicate with beneficial owners of shares held by them. The Company
has retained Corporate Investor Communications, Inc., 111 Commerce Road,
Carlstadt, New Jersey 07072, to aid in the solicitation from brokers and
other nominee shareholders. It is not anticipated that the fee to be paid
to Corporate Investor Communications, Inc. will exceed $2,500 plus
expenses.
/s/ Jane M. Rix
Jane M. Rix
Secretary
Kalamazoo, Michigan
September 20, 1995
-26-
APPENDIX A
MANATRON, INC.
1995 LONG-TERM INCENTIVE PLAN
SECTION 1
ESTABLISHMENT OF PLAN; PURPOSE OF PLAN
1.1 ESTABLISHMENT OF PLAN. The Company hereby establishes the 1995
LONG-TERM INCENTIVE PLAN (the "Plan") for its directors, corporate and
Subsidiary officers and other key employees. The Plan permits the grant
or award of Options, Restricted Stock, and Tax Benefit Rights.
1.2 PURPOSE OF PLAN. The purpose of the Plan is to provide
directors, officers and key management employees of the Company and its
Subsidiaries with an increased incentive to make significant and
extraordinary contributions to the long-term performance and growth of the
Company and its Subsidiaries, to join the interests of directors, officers
and key employees with the interests of the Company's shareholders through
the opportunity for increased stock ownership, and to attract and retain
directors, officers and key employees of exceptional ability. The Plan is
further intended to provide flexibility to the Company in structuring
long-term incentive compensation to best promote the foregoing objectives.
SECTION 2
DEFINITIONS
The following words have the following meanings unless a different
meaning is plainly required by the context:
2.1 "Act" means the Securities Exchange Act of 1934, as amended.
2.2 "Board" means the Board of Directors of the Company.
2.3 "Code" means the Internal Revenue Code of 1986, as amended.
2.4 "Committee" means the Stock Option Plan Committee of the Board or
such other committee as the Board shall designate to administer
the Plan. The Committee shall consist of at least two members of
the Board appointed by the Board all of whom shall be
"disinterested persons" as defined in Rule 16b-3 under the Act
and "outside directors" as defined in the rules promulgated
pursuant to Section 162(m) of the Code.
2.5 "Common Stock" means the common stock, no par value, of the
Company.
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2.6 "Company" means Manatron, Inc., a Michigan corporation.
2.7 "Competition" means participation, directly or indirectly, in the
ownership, management, financing or control of any business that
is the same as or similar to the present or future businesses of
the Company or its parent or any Subsidiary. Such participation
could be by way of employment, consulting services, directorship
or officership. Ownership of less than five percent (5%) of the
shares of any corporation whose shares are traded publicly on any
national or regional stock exchange or over the counter shall not
be deemed Competition.
2.8 "Incentive Award" means the award or grant of an Option,
Restricted Stock or Tax Benefit Right to a Participant under the
Plan.
2.9 "Market Value" of any security on any given date means: (a) if
the security is listed for trading on one or more national
securities exchanges (including the NASDAQ National Market
System), the last reported sales price on the principal such
exchange on the date in question, or if such security shall not
have been traded on such principal exchange on such date, the
last reported sales price on such principal exchange on the first
day prior thereto on which such security was so traded; or (b) if
the security is not listed for trading on a national securities
exchange (including the NASDAQ National Market System) but is
traded in the over-the-counter market, the mean of highest and
lowest bid prices for such security on the date in question, or
if there are no such bid prices for such security on such date,
the mean of the highest and lowest bid prices on the first day
prior thereto on which such prices existed; or (c) if neither (a)
nor (b) is applicable, the value as determined by any means
deemed fair and reasonable by the Committee, which determination
shall be final and binding on all parties.
2.10 "Option" means the right to purchase Common Stock at a stated
price for a specified period of time. For purposes of the Plan,
an Option may be either an incentive stock option within the
meaning of Section 422(b) of the Code or a nonstatutory stock
option.
2.11 "Participant" means directors, corporate officers and other key
employees of the Company and its Subsidiaries who the Committee
determines are eligible to participate in the Plan and who are
designated to be granted an Incentive Award under the Plan.
2.12 "Reload Options" means Options granted to Participants that, upon
exercise, commit the Company to automatically grant to the
Participant on the date of exercise additional options.
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2.13 "Restricted Period" means the period of time during which
Restricted Stock awarded under the Plan is subject to
restrictions. The Restricted Period may differ among
Participants and may have different expiration dates with respect
to shares of Common Stock covered by the same Incentive Award.
2.14 "Restricted Stock" means Common Stock awarded to a Participant
under Section 6 of the Plan.
2.15 "Retirement" means the voluntary termination of all employment by
a Participant.
2.16 "Subsidiary" means any corporation of which a majority of the
outstanding voting stock is directly or indirectly owned or
controlled by the Company, or by one or more Subsidiaries.
2.17 "Tax Benefit Right" means any right granted to a Participant
under Section 7 of the Plan.
SECTION 3
ADMINISTRATION
3.1 POWER AND AUTHORITY. The Committee shall administer the Plan,
shall have full power and authority to interpret the provisions of the
Plan, and shall have full power and authority to supervise the
administration of the Plan. All determinations, interpretations and
selections made by the Committee regarding the Plan shall be final and
conclusive. The Committee shall hold its meetings at such times and
places as it deems advisable. Action may be taken by a written instrument
signed by all of the members of the Committee, and any action so taken
shall be fully as effective as if it had been taken at a meeting duly
called and held. The Committee shall make such rules and regulations for
the conduct of its business as it deems advisable. The members of the
Committee shall be paid reasonable fees for their services.
3.2 GRANTS OR AWARDS TO PARTICIPANTS. In accordance with and subject
to the provisions of the Plan, the Committee shall have the authority to:
determine whether and when Incentive Awards will be granted, the persons
to be granted Incentive Awards, the amount of Incentive Awards to be
granted to each person and the terms of the Incentive Awards to be
granted; vary and amend vesting schedules, if any; permit delivery or
withholding of stock in payment of the exercise price or to satisfy tax
withholding obligations; and Waive any restrictions or conditions
applicable to any Incentive Award. Incentive Awards shall be granted or
awarded by the Committee, and Incentive Awards may be amended by the
Committee consistent with the Plan, provided that no such amendment may
become effective without the consent of the Participant, except to the
extent that the amendment operates solely to the benefit of the
Participant.
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3.3 INDEMNIFICATION OF COMMITTEE MEMBERS. Each person who is or
shall have been a member of the Committee shall be indemnified and held
harmless by the Company from and against any cost, liability or expense
imposed or incurred in connection with such person's or the Committee's
taking or failing to take any action under the Plan. Each such person
shall be justified in relying upon information furnished in connection
with the Plan's administration by any appropriate person or persons.
SECTION 4
SHARES SUBJECT TO THE PLAN
4.1 NUMBER OF SHARES. Subject to adjustment as provided in
subsection 4.2 of the Plan, a maximum of 500,000 shares of Common Stock
shall be available for any form of Incentive Awards under the Plan. Such
shares shall be authorized and unissued shares.
4.2 ADJUSTMENTS. If the number of shares of Common Stock outstanding
changes by reason of a stock dividend, stock split, recapitalization,
merger, consolidation, combination, exchange of shares or any other change
in the corporate structure or shares of the Company, the aggregate number
and class of shares available for grants or awards under the Plan,
together with the Option prices, shall be appropriately adjusted. No
fractional shares shall be issued pursuant to the Plan, and any fractional
shares resulting from adjustments shall be eliminated from the respective
Incentive Award, with an appropriate cash adjustment for the value of any
Incentive Awards eliminated. If an Incentive Award is canceled,
surrendered, modified, expired or terminated during the term of the Plan
but prior to the exercise or vesting of the Incentive Award in full, the
shares subject to but not delivered under such Incentive Award shall be
available for other Incentive Awards.
4.3 LIMITS ON GRANTS. No Participant shall be granted, during any
calendar year, Incentive Awards for more than twenty-five percent (25%) of
the total shares of Common Stock authorized for issuance under the Plan.
The purpose of this subsection 4.3 is to ensure that the Plan provides
performance based compensation under Section 162(m) of the Code. This
subsection 4.3 shall be interpreted or amended to achieve that purpose.
SECTION 5
OPTIONS
5.1 GRANT. A Participant may be granted one or more Options under the
Plan. Options shall be subject to such terms and conditions, consistent
with the other provisions of the Plan, as shall be determined by the
Committee in its sole discretion. The Committee may vary, among
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Participants and among Options granted to the same Participant, any and
all of the terms and conditions of the Options granted under the Plan.
Subject to subsection 4.3, the Committee shall have complete discretion in
determining the number of Options granted to each Participant. The
Committee may designate whether or not an Option is to be considered an
incentive stock option as defined in Section 422(b) of the Code.
5.2 GRANTS TO NON-EMPLOYEE DIRECTORS. Options to non-employee
directors shall be granted under this Plan only pursuant to this
subsection 5.2 and only when and to the extent that there are insufficient
shares for such grants under the Company's 1989 Stock Option Plan or 1994
Long-Term Incentive Plan. Each non-employee director who has served a
full year's term for the prior year shall automatically receive an Option
to purchase 1,000 shares of the Company's Common Stock at one hundred
percent (100%) of the Market Value on the date of grant. Such Options
shall be issued on the date of each annual meeting of the Company's
shareholders. These formula grant provisions may be amended by the Board
from time to time but not more than once in any six-month period, except
as necessary or desirable to comply with the Employee Retirement Income
Security Act, the Code or the rules thereunder.
5.3 OPTION AGREEMENTS. Each Option shall be evidenced by an Option
agreement containing such terms and conditions, consistent with the
provisions of the Plan, as the Committee from time to time determines.
5.4 OPTION PRICE. The per share Option price shall be determined by
the Committee but shall be equal to or greater than one hundred percent
(100%) of the Market Value on the date of grant. The date of grant of an
Option shall be the date the Option is authorized by the Committee or such
future date specified by the Committee as the date for issuing the Option.
5.5 MEDIUM AND TIME OF PAYMENT. The exercise price for each share
purchased pursuant to an Option granted under the Plan shall be payable in
cash or, if the Committee consents, in shares of Common Stock (including
Common Stock to be received upon a simultaneous exercise). The time and
terms of payment may be amended with the consent of the Participant before
or after exercise of the Option, but such amendment shall not reduce the
Option price. The Committee may from time to time authorize payment of
all or a portion of the Option price in the form of a promissory note or
installments according to such terms as the Committee may approve. The
Board may restrict or suspend the power of the Committee to permit such
loans and may require that adequate security be provided.
5.6 RELOAD OPTIONS. The Committee may designate whether any Option
granted to a Participant is a Reload Option. Unless the Reload Option
Agreement provides otherwise, the Option price for Options granted
automatically to the Participant upon exercise of a Reload Option shall be
equal to the Market Value on the date the Participant exercised the Reload
Option, and the number of shares of common stock subject to the new option
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shall be equal to the number of shares for which the Reload Option was
exercised. The Committee may, in its discretion, add Reload Option
features to options outstanding under this Plan and other option plans of
the Company.
5.7 OPTIONS GRANTED TO TEN PERCENT SHAREHOLDERS. No Option granted
to any Participant who at the time of such grant owns, together with stock
attributed to such Participant under Section 424(d) of the Code, more than
ten percent (10%) of the total combined voting power of all classes of
stock of the Company or any of its Subsidiaries may be designated as an
incentive stock option, unless such Option provides an exercise price
equal to at least one hundred ten percent (110%) of the Market Value of
the Common Stock, and the exercise of the Option after the expiration of
five years from the date of grant of the Option is prohibited by its
terms.
5.8 LIMITS ON EXERCISABILITY. Options shall be exercisable for such
periods as may be fixed by the Committee, not to exceed ten years from the
grant date. At the time of the exercise of an Option, the holder of the
Option, if requested by the Committee, must represent to the Company that
the shares are being acquired for investment and not with a view to the
distribution thereof. The Committee may in its discretion require a
Participant to continue service with the Company and its Subsidiaries for
a certain length of time prior to an Option becoming exercisable and may
eliminate such delayed vesting provisions. The Committee may also vary,
among Participants and among Options granted to the same Participant, any
and all of the terms and conditions of Options granted under the Plan.
5.9 TRANSFERABILITY.
(a) GENERAL. Unless the Committee otherwise consents or unless
the terms of the Option agreement provide otherwise, no Option granted
under the Plan may be sold, transferred, pledged, assigned or
otherwise alienated or hypothecated, other than by will or by the laws
of descent and distribution. In addition, all Options granted to a
Participant during the Participant's lifetime shall be exercisable
during the Participant's lifetime only by such Participant, his
guardian, or legal representative.
(b) OTHER RESTRICTIONS. The Committee may impose such
restrictions on any shares of Common Stock acquired pursuant to the
exercise of an Option under the Plan as it deems advisable, including,
without limitation, restrictions under applicable federal or state
securities laws.
5.10 TERMINATION OF EMPLOYMENT OR DIRECTOR OR OFFICER STATUS.
(a) GENERAL. If a Participant ceases to be employed by or an
officer or director of the Company or one of its Subsidiaries for any
reason other than the Participant's death, disability or termination
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for cause, the Participant may exercise an Option only for a period of
three months after such termination of employment, director or officer
status, but only to the extent the Participant was entitled to
exercise the Option on the date of termination, unless the Committee
otherwise consents or the terms of the Option agreement provide
otherwise. For purposes of the Plan, the following shall not be
deemed a termination of employment or termination as a director or
officer: (i) a transfer of an employee from the Company to any
Subsidiary; (ii) a leave of absence, duly authorized in writing by the
Company, for military service or for any other purpose approved by the
Company if the period of such leave does not exceed 90 days; (iii) a
leave of absence in excess of 90 days, duly authorized in writing by
the Company, provided the employee's right to reemployment is
guaranteed either by statute or contract; or (iv) a termination of
employment with continued service as a director or officer.
(b) DEATH. If a Participant dies either while an employee or
officer of the Company or one of its Subsidiaries or after the
termination of employment other than for cause but during the time
when the Participant could have exercised an Option under the Plan, or
if a director dies while serving as a director of the Company or after
ceasing to be a director but during such time as the director (or
former director) could have exercised an Option under the Plan, the
Option issued to such Participant shall be exercisable by the personal
representative of such Participant or other successor to the interest
of the Participant for a period of three months after the
Participant's death, but only to the extent that the Participant was
entitled to exercise the Option on the date of death or termination of
employment or director status, whichever first occurred, unless the
Committee otherwise consents or the terms of the Option agreement
provide otherwise.
(c) DISABILITY. If a Participant ceases to be an employee,
officer or director of the Company or one of its Subsidiaries due to
the Participant's disability, the Participant may exercise an Option
for a period of one year following such termination of employment or
status as a director or officer, but only to the extent the
Participant was entitled to exercise the Option on the date of such
event, unless the Committee otherwise consents or the terms of the
Option agreement provide otherwise.
(d) TERMINATION FOR CAUSE. If a Participant is terminated for
cause, the Participant shall have no further right to exercise any
outstanding unexercised Option issued under the Plan.
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SECTION 6
RESTRICTED STOCK
6.1 GRANT. A Participant may be granted Restricted Stock under the
Plan. Restricted Stock shall be subject to such terms and conditions,
consistent with the other provisions of the Plan, as shall be determined
by the Committee in its sole discretion. Restricted Stock shall be
awarded on the condition that the Participant remain in the employ of the
Company or one of its Subsidiaries during the Restricted Period. Such
condition shall have no effect on the right of the Company or any
Subsidiary to terminate the Participant's employment at any time. No
payment is required from a Participant for an award of Restricted Stock.
6.2 RESTRICTED STOCK AGREEMENTS. Each award of Restricted Stock
shall be evidenced by a Restricted Stock agreement containing such terms
and conditions, consistent with the provisions of the Plan, as the
Committee from time to time determines.
6.3 TERMINATION OF EMPLOYMENT OR DIRECTOR OR OFFICER STATUS.
(a) GENERAL. If a Participant enters into Competition with the
Company or ceases to be employed by or an officer or director of the
Company or one of its Subsidiaries for any reason other than the
Participant's death, disability or Retirement, then any shares of
Restricted Stock still subject to restrictions on the date of such
termination shall automatically be forfeited and returned to the
Company. For purposes of the Plan, the following shall not be deemed
a termination of employment or termination as a director or officer:
(i) a transfer of an employee from the Company to any Subsidiary; (ii)
a leave of absence, duly authorized in writing by the Company, for
military service or for any other purpose approved by the Company if
the period of such leave does not exceed 90 days; (iii) a leave of
absence in excess of 90 days, duly authorized in writing by the
Company, provided the employee's right to reemployment is guaranteed
either by statute or contract; or (iv) a termination of employment
with continued service as a director or officer.
(b) DEATH OR DISABILITY. Unless the terms of the Restricted
Stock agreement or grant provide otherwise, in the event a Participant
terminates employment or director or officer status with the Company
because of death or disability during the Restricted Period, the
Participant's right to all of the Participant's Restricted Stock shall
vest as of the date of death or disability, and the Participant's
Restricted Stock may be transferred free of any restrictions under the
Plan, except any restrictions as the Company may reasonably specify to
ensure compliance with federal and state securities laws.
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(c) RETIREMENT. Unless the Committee otherwise consents or
unless the terms of the Restricted Stock agreement or grant provide
otherwise, in the event a Participant terminates employment or
director or officer status with the Company because of Retirement
during the Restricted Period, then any shares of Restricted Stock
still subject to restrictions on the date of Retirement shall
automatically be forfeited and returned to the Company.
6.4 RESTRICTIONS ON TRANSFERABILITY.
(a) GENERAL. Unless the Committee otherwise consents or unless
the terms of the Restricted Stock agreement provide otherwise, shares
of Restricted Stock shall not be sold, exchanged, transferred, pledged
or otherwise disposed of by a Participant during the Restricted Period
other than to the Company pursuant to subsection 6.3 or 6.4(b) or by
will or the laws of descent and distribution.
(b) SURRENDER TO THE COMPANY. If any sale, exchange, transfer,
pledge or other disposition, voluntary or involuntary, of Restricted
Stock that has not vested shall be made or attempted during the
Restricted Period, except as provided above in subsections 6.3 and
6.4(a), the Participant's right to the Restricted Stock shall
immediately cease and terminate, and the Participant shall promptly
surrender to the Company all such Restricted Stock in the
Participant's possession.
(c) OTHER RESTRICTIONS. The Committee may impose other
restrictions on any shares of Common Stock acquired pursuant to an
award of Restricted Stock as the Committee deems advisable, including,
without limitation, restrictions under applicable federal or state
securities laws.
6.5 RIGHTS AS A SHAREHOLDER. During the Restricted Period, a
Participant shall have all rights of a shareholder with respect to his
Restricted Stock, including (a) the right to vote any shares at
shareholders' meetings; (b) the right to receive, without restriction, all
cash dividends paid with respect to such Restricted Stock; and (c) the
right to participate with respect to such Restricted Stock in any stock
dividend, stock split, recapitalization or other adjustment in the Common
Stock of the Company or any merger, consolidation or other reorganization
involving an increase or decrease or adjustment in the Common Stock of the
Company. Any new, additional or different shares or other security
received by the Participant pursuant to any such stock dividend, stock
split, recapitalization or reorganization shall be subject to the same
terms, conditions and restrictions as those relating to the Restricted
Stock for which such shares were received.
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6.6 DEPOSIT OF CERTIFICATES; LEGENDING OF RESTRICTED STOCK.
(a) DEPOSIT OF CERTIFICATES. Any certificates evidencing shares
of Restricted Stock awarded pursuant to the Plan shall be registered
in the name of the relevant Participant and deposited, together with a
stock power endorsed in blank, with the Company. In the discretion of
the Committee, any such certificates may be deposited in a bank
designated by the Committee or delivered to the Participant.
Certificates for shares of Restricted Stock that have vested shall be
delivered to the Participant upon request within a reasonable period
of time. The Participant shall sign all documents necessary or
appropriate to facilitate such delivery.
(b) LEGEND. Any certificates evidencing shares of Restricted
Stock awarded pursuant to the Plan shall bear the following legend:
The shares represented by this certificate were issued
subject to certain restrictions under the Manatron,
Inc. 1995 Long-Term Incentive Plan (the "Plan"). A
copy of the Plan is on file in the office of the
Secretary of Manatron, Inc. This certificate is held
subject to the terms and conditions contained in a
restricted stock agreement that includes a prohibition
against the sale or transfer of the stock represented
by this certificate except in compliance with that
agreement, and that provides for forfeiture upon
certain events.
6.7 REPRESENTATIONS AND WARRANTIES. A Participant who is awarded
Restricted Stock shall represent and warrant that the Participant is
acquiring the Restricted Stock for the Participant's own account and
investment and without any intention to resell or redistribute the
Restricted Stock. The Participant shall agree not to resell or
redistribute such Restricted Stock after the Restricted Period except upon
such conditions as the Company may reasonably specify to ensure compliance
with federal and state securities laws.
SECTION 7
TAX BENEFIT RIGHTS
7.1 GRANT. A Participant may be granted Tax Benefit Rights under the
Plan to encourage a Participant to exercise Options and provide certain
tax benefits to the Company. A Tax Benefit Right entitles a Participant
to receive from the Company or a Subsidiary a cash payment not to exceed
the amount calculated by multiplying the ordinary income, if any, realized
by the Participant for federal tax purposes as a result of the exercise of
a nonqualified stock option, or the disqualifying disposition of shares
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acquired under an incentive stock option, by the maximum federal income
tax rate (including any surtax or similar charge or assessment) for
corporations, plus the applicable state and local tax imposed on the
exercise of the Option or the disqualifying disposition.
7.2 RESTRICTIONS. A Tax Benefit Right may be granted only with
respect to a stock option issued and outstanding or to be issued under the
Plan or any other plan of the Company or its Subsidiaries that has been
approved by the stockholders as of the date of the Plan and may be granted
concurrently with or after the grant of the stock option. Such rights
with respect to outstanding stock options shall be issued only with the
consent of the Participant if the effect would be to disqualify an
incentive stock option, change the date of grant or the exercise price, or
otherwise impair the Participant's existing stock options. A stock option
to which a Tax Benefit Right has been attached shall not be exercisable by
an officer or employee subject to Section 16 of the Act for a period of
six months from the date of the grant of the Tax Benefit Right.
7.3 TERMS AND CONDITIONS. The Committee shall determine the terms
and conditions of any Tax Benefit Rights granted and the Participants to
whom such rights will be granted with respect to stock options under the
Plan or any other plan of the Company. The Committee may amend, cancel,
limit the term of, or limit the amount payable under a Tax Benefit Right
at any time prior to the exercise of the related stock option, unless
otherwise provided under the terms of the Tax Benefit Right. The net
amount of a Tax Benefit Right, subject to withholding, may be used to pay
a portion of the stock option price, unless otherwise provided by the
Committee.
SECTION 8
GENERAL PROVISIONS
8.1 NO RIGHTS TO AWARDS. No Participant or other person shall have
any claim to be granted any Incentive Award, and there is no obligation of
uniformity of treatment of Participants or holders or beneficiaries of
Incentive Awards. The terms and conditions of the Incentive Awards of the
same type and the determination of the Committee to grant a waiver or
modification of any Incentive Award and the terms and conditions thereof
need not be the same with respect to each Participant.
8.2 WITHHOLDING. The Company or a Subsidiary shall be entitled to
(a) withhold and deduct from future wages of a Participant (or from other
amounts that may be due and owing to a Participant from the Company or a
Subsidiary), or make other arrangements for the collection of, all legally
required amounts necessary to satisfy any and all federal, state and local
withholding and employment-related tax requirements attributable to an
Incentive Award, including, without limitation, the grant, exercise or
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vesting of, or payment of dividends with respect to, an Incentive Award or
a disqualifying disposition of Common Stock received upon exercise of an
incentive stock option; or (b) require a Participant promptly to remit the
amount of such withholding to the Company before taking any action with
respect to an Incentive Award. Unless the Committee determines otherwise,
withholding may be satisfied by withholding Common Stock to be received
upon exercise or by delivery to the Company of previously owned Common
Stock. The Company may establish such rules and procedures concerning
timing of any withholding election as it deems appropriate to comply with
Rule 16b-3 under the Act.
8.3 COMPLIANCE WITH LAWS; LISTING AND REGISTRATION OF SHARES. All
Incentive Awards granted under the Plan (and all issuances of Common Stock
or other securities under the Plan) shall be subject to applicable laws,
rules and regulations, and to the requirement that if at any time the
Committee determines, in its sole discretion, that the listing,
registration or qualification of the shares covered thereby upon any
securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as
a condition of, or in connection with, the granting of such Incentive
Award or the issue or purchase of shares thereunder, such Incentive Award
may not be exercised in whole or in part, or the restrictions on such
Incentive Award shall not lapse, unless and until such listing,
registration, qualification, consent or approval shall have been effected
or obtained free of any conditions not acceptable to the Committee.
8.4 NO LIMIT ON OTHER COMPENSATION ARRANGEMENTS. Nothing contained
in the Plan shall prevent the Company or any Subsidiary from adopting or
continuing in effect other or additional compensation arrangements,
including the grant of options and other stock-based awards, and such
arrangements may be either generally applicable or applicable only in
specific cases.
8.5 NO RIGHT TO EMPLOYMENT. The grant of an Incentive Award shall
not be construed as giving a Participant the right to be retained in the
employ of the Company or any Subsidiary. The Company or any Subsidiary
may at any time dismiss a Participant from employment, free from any
liability or any claim under the Plan, unless otherwise expressly provided
in the Plan or in any written agreement with a Participant.
8.6 GOVERNING LAW. The validity, construction and effect of the Plan
and any rules and regulations relating to the Plan shall be determined in
accordance with the laws of the State of Michigan and applicable federal
law.
8.7 SEVERABILITY. In the event any provision of the Plan shall be
held illegal or invalid for any reason, the illegality or invalidity shall
not affect the remaining parts of the Plan, and the Plan shall be
construed and enforced as if the illegal or invalid provision had not been
included.
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SECTION 9
EFFECTIVE DATE AND DURATION OF THE PLAN
This Plan shall take effect July 13, 1995, subject to approval by the
shareholders at the 1995 Annual Meeting of Shareholders, or any
adjournment thereof or at a special meeting of shareholders. Unless
earlier terminated by the Board of Directors, the Plan shall terminate on
July 12, 2005. No Incentive Award shall be granted under this Plan after
such date.
SECTION 10
TERMINATION AND AMENDMENT
The Board may terminate the Plan at any time, or may from time to time
amend the Plan as it deems proper and in the best interests of the
Company, provided that without shareholder approval no such amendment may
(a) materially increase either the benefits to Participants under the Plan
or the number of shares that may be issued under the Plan; (b) materially
modify the eligibility requirements; (c) reduce the Option price (except
pursuant to adjustments under subsection 4.2); or (d) impair any
outstanding Incentive Award without the consent of the Participant, except
according to the terms of the Incentive Award. No termination, amendment,
or modification of the Plan shall become effective with respect to any
Incentive Award previously granted under the Plan without the prior
written consent of the Participant holding such Incentive Award unless
such amendment or modification operates solely to the benefit of the
Participant.
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PROXY
MANATRON, INC. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
2970 South 9th Street DIRECTORS
Kalamazoo, Michigan The undersigned acknowledges receipt of a Notice
of Annual Meeting and a Proxy Statement and
appoints ALLEN F. PEAT, DOUGLAS A. PEAT,
and PAUL R. SYLVESTER, and each of them
Proxy to the undersigned each with full power
of substitution, to vote all stock of the
undersigned, at the ANNUAL MEETING OF
SHAREHOLDERS of MANATRON, INC. at Grand Rapids,
Michigan, on October 12, 1995 or at any
adjournment of that meeting as specified
below:
______________________
The Board of Directors recommends a vote FOR the following items:
(1) ELECTION OF DIRECTORS ___ VOTE FOR ALL nominees listed below
(except as marked to the contrary
below)
___ WITHHOLD AUTHORITY to vote for all
nominees listed below
Gene Bledsoe Allen F. Peat Melvin J. Trumble
Jane M. Rix Harry C. Vorys
(INSTRUCTION: To withhold authority to vote for any of the nominees, write the
name of the nominee(s) on the space provided below.)
_______________________________________________________________
(2) PROPOSED 1995 LONG-TERM INCENTIVE PLAN ____ FOR ____ AGAINST
____ ABSTAIN
(3) In their discretion, the Proxies are authorized to vote upon all other
matters that properly may be presented at the meeting or at any adjournment.
(Continued on other side)
The Shares represented by this proxy will be voted as specified. If no
specification is made, the shares will be voted for election of the board
nominees as directors, for approval of the proposed 1995 Long-Term
Incentive Plan, and in accordance with the judgment of the proxies with
respect to any other matter which may come before the meeting.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
X____________________________ X____________________ DATED:__________, 1995
Signature(s) of Shareholder(s)
NOTE: Signatures should be identical with the names typed on the proxy. Joint
owners must each sign personally. Persons signing as attorney, executor,
administrator, trustee or guardian must give full title as such. If a
corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
