SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
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
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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:
_________________________________________________________________
[MANATRON LOGO]
2970 South 9th Street
Kalamazoo, Michigan 49009
September 9, 1996
To Our Shareholders:
You are cordially invited to attend the Annual Meeting of
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 October 10, 1996, at 4 p.m., local time.
On the following pages, you will find the Notice of Annual
Meeting of Shareholders and the Proxy Statement. The Proxy Statement and
enclosed form of proxy are being furnished to shareholders on or about
September 9, 1996. A report on Manatron's activities and its outlook for
the future will also be presented at the meeting.
It is important that your shares be represented and voted at the
annual meeting, regardless of the size of your holdings. Whether or not
you plan to attend the annual meeting, we urge you to SIGN, DATE, AND
RETURN AS SOON AS POSSIBLE the enclosed proxy card. Sending a proxy will
not affect your right to vote in person in the event you attend the
meeting.
Respectfully,
/S/ RANDALL L. PEAT
Randall L. Peat
Chairman of the Board of Directors
___________________________________________________________________________
YOUR VOTE IS IMPORTANT. EVEN IF YOU PLAN TO ATTEND THE MEETING,
PLEASE SIGN, DATE, AND RETURN THE ENCLOSED PROXY PROMPTLY.
___________________________________________________________________________
[MANATRON LOGO]
2970 South 9th Street
Kalamazoo, Michigan 49009
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To our Shareholders:
The Annual Meeting of 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 October 10, 1996, at 4 p.m., local
time, for the following purposes:
1. To elect three directors for three-year terms expiring in 1999.
2. To transact any other business that may properly come before the
meeting.
Only shareholders of record as of the close of business on
August 30, 1996, are entitled to notice of and to vote at the annual
meeting.
A copy of the Annual Report to Shareholders for the fiscal year
ended April 30, 1996, is enclosed with this Notice. The following Proxy
Statement and enclosed proxy are being furnished to shareholders on or
about September 9, 1996.
BY ORDER OF THE BOARD OF DIRECTORS
/S/ JANE M. RIX
Kalamazoo, Michigan Jane M. Rix
September 9, 1996 Secretary
___________________________________________________________________________
YOUR VOTE IS IMPORTANT. EVEN IF YOU PLAN TO ATTEND THE MEETING,
PLEASE SIGN, DATE, AND RETURN THE ENCLOSED PROXY PROMPTLY.
___________________________________________________________________________
MANATRON, INC.
2970 SOUTH 9TH STREET
KALAMAZOO, MICHIGAN 49009
ANNUAL MEETING OF SHAREHOLDERS
SEPTEMBER 9, 1996
PROXY STATEMENT
This Proxy Statement and the enclosed proxy are being furnished
to shareholders of common stock of Manatron, Inc. ("Manatron" or the
"Company") on or about September 9, 1996, in connection with the
solicitation of proxies by the Board of Directors to be voted at the Annual
Meeting of Shareholders to be held on October 10, 1996, at 4 p.m., local
time, and at any adjournment of that meeting. The annual meeting will be
held at the Amway Grand Plaza Hotel, on the corner of Pearl and Monroe
Streets, in Grand Rapids, Michigan.
The purpose of the annual meeting is to consider and vote upon
the election of three directors for three-year terms expiring in 1999.
Proxies in the accompanying form, if properly executed, duly returned to
the Company, and not revoked, will be voted at the annual meeting. If a
shareholder specifies a choice, the shares represented by proxy will be
voted as specified. If no choice is specified, the shares represented by
proxy will be voted for the election of all nominees named in this Proxy
Statement and in accordance with the discretion of the persons named
as proxies on any other matters that may come before the meeting or any
adjournment of the meeting. For purposes of determining the presence or
absence of a quorum for the transaction of business at the meeting, all
shares for which a proxy or vote is received, including abstentions and
shares represented by a broker vote on any matter, will be counted as
present and represented at the meeting.
Any shareholder executing and returning the enclosed form of
proxy may revoke it at any time before it is exercised by delivering a
written notice of revocation to the Secretary of the Company at the address
set forth above or by attending and voting at the annual meeting.
The Company has no knowledge of any matter to be presented for
consideration at the annual meeting other than that stated in the Notice of
Annual Meeting of Shareholders. If any other matter should properly come
before the meeting, the persons named in the proxy will have discretionary
authority to vote in accordance with their judgment.
ELECTION OF DIRECTORS
The Board of Directors proposes that the following three
individuals be elected as directors for three-year terms expiring at the
1999 annual meeting:
Randall L. Peat
Paul R. Sylvester
Stephen C. Waterbury
This Proxy Statement contains more information about the director
nominees. All nominees are presently directors of the Company whose terms
will expire at the 1996 annual meeting. Unless otherwise directed by a
shareholder's proxy, the persons named as proxies intend to vote for the
nominees identified above. Each of the nominees has consented to being
named in this Proxy Statement and to serve if elected. In the event that
any nominee is unable to serve or is otherwise unavailable for election,
which is not now anticipated, the Board of Directors may or may not select
a substitute nominee. If a substitute nominee is selected, all proxies
will be voted for the election of the substitute nominee designated by the
Board of Directors. 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 plurality of the shares present in person or represented by
proxy and voting on the election of directors 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 on the election, and the number of shares of which
a plurality is required will be reduced by the number of shares not voted.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU
VOTE FOR THE ELECTION OF ALL NOMINEES AS DIRECTORS
VOTING SECURITIES
Holders of record of common stock at the close of business on
August 30, 1996, are entitled to notice of and to vote at the Annual
Meeting of Shareholders and at any adjournment of the meeting. As of
August 30, 1996, 2,864,994 shares of the Company's 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. Shares cannot be voted unless the shareholder
is present at the annual meeting or represented by proxy.
-2-
OWNERSHIP OF COMMON STOCK
The following table sets forth information as to each person
known to the Company to have been the beneficial owner of more than 5% of
the Company's outstanding shares of Common Stock as July 31, 1996:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL
OWNERSHIP OF COMMON STOCK<F1>
SOLE VOTING
AND
NAME AND ADDRESS OF DISPOSITIVE PERCENT OF
BENEFICIAL OWNER POWER<F2> CLASS<F3>
<S> <C> <C>
Randall L. Peat
47801 - 45th Street
Paw, Paw, Michigan 49079<F4> 550,435 17.00%
Allen F. Peat
3640 Bal Harbor Blvd., Apt 513
Punta Gorda, Florida 33950<F4> 510,174 15.76%
Richard J. Holloman
4204 Sterling Trace
Winterville, North Carolina 28590 207,919 6.42%
Douglas A. Peat
1084 Josiane
Kalamazoo, Michigan 49009 201,399 6.22%
_______________
<FN>
<F1> Based on information provided by each person listed.
<F2> These numbers include shares subject to options that are exercisable
within 60 days after July 31, 1996, granted under the Company's
1986 Incentive Stock Option Plan, 1989 Stock Option Plan, and 1994 and
1995 Long-Term Incentive Plans.
<F3> These percentages represent the number of shares owned by each
beneficial owner as of July 31, 1996, plus the shares allocated
to a person's ESOP account, plus the shares that may be acquired by
each beneficial owner through the exercise of outstanding stock
options within 60 days by each as of July 31, 1996, as a percentage
of the total of all outstanding shares as of July 31, 1996, plus
the total of all shares that may be acquired through the exercise
of outstanding stock options within 60 days as of July 31, 1996.
-3-
<F4> Messrs. Randall L. Peat and Allen F. Peat were parties to a
Shareholder and Voting Trust Agreement entered into in 1986 pursuant
to which Randall L. Peat deposited one-half of his shares with
Allen F. Peat as trustee ("Trustee"). The term of the voting trust
expired on July 13, 1996. During the term, the Trustee was granted
the exclusive right to vote the deposited shares, which totaled
233,350 shares, or approximately 8.14% of the issued and outstanding
shares at July 31, 1996. The agreement also granted an option
to the other party and to Manatron to purchase the shares if one of
the parties died, became disabled, terminated employment with Manatron, or
sought to dispose of his shares. The address of the voting trust was
2970 South 9th Street, Kalamazoo, Michigan 49009.
</FN>
</TABLE>
SECURITIES OWNERSHIP OF MANAGEMENT
The following table sets forth the number of shares of Common
Stock beneficially owned as of July 31, 1996, by each of Manatron's
directors and nominees for director, each of the named executive officers,
and all of Manatron's directors and officers as a group:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
OF COMMON STOCK<F1>
SOLE VOTING
AND
NAME OF DISPOSITIVE PERCENT OF
BENEFICIAL OWNER POWER<F2> CLASS<F3>
<S> <C> <C>
Randall L. Peat<F4><F5> 550,435 17.00%
Allen F. Peat<F4> 510,174 15.76%
Richard J. Holloman 207,919 6.42%
Douglas A. Peat 201,399 6.22%
Paul R. Sylvester<F5> 65,498 2.02%
Gene Bledsoe<F5> 19,001 <F*>
Jane M. Rix 5,848 <F*>
Melvin J. Trumble 13,194 <F*>
-4-
Harry C. Vorys 18,265 <F*>
Stephen C. Waterbury 16,222 <F*>
All directors and executive
officers as a group 1,615,776 49.91%
__________________
<FN>
<F*> Less than 1%.
<F1> The number of shares stated is based on information provided by each
person listed and includes shares personally owned of record by the
person and shares which, under applicable regulations, are considered
to be otherwise beneficially owned by the person.
<F2> These numbers include shares held directly and shares subject to
options which are exercisable within 60 days after July 31, 1996,
that were awarded under the Company's 1986 Incentive Stock Option
Plan, 1989 Stock Option Plan, and 1994 and 1995 Long-Term Incentive
Plans. The number of shares subject to options which are exercisable
within 60 days after July 31, 1996, for each listed person is as
follows:
Randall L. Peat 10,000
Allen F. Peat 27,863
Richard J. Holloman 19,750
Douglas A. Peat 22,076
Paul R. Sylvester 30,000
Gene Bledsoe 2,050
Jane M. Rix 4,000
Melvin J. Trumble 10,000
Harry C. Vorys 10,041
Stephen C. Waterbury 4,254
All directors and executive 147,034
officers as a group
<F3> These percentages represent the number of shares owned by each
beneficial owner as of July 31, 1996, plus the shares allocated
to a person's ESOP account, plus the shares that may be acquired
by each beneficial owner through the exercise of outstanding
stock options within 60 days by each as of July 31, 1996, as
a percentage of the total of all outstanding shares as of
July 31, 1996, plus the total of all shares that may be
acquired through the exercise of outstanding stock options
within 60 days as of July 31, 1996.
<F4> Messrs. Allen F. Peat and Randall L. Peat were parties to a
Shareholder and Voting Trust Agreement entered into in 1986 pursuant
to which Randall L. Peat deposited one-half of his shares with
Allen F. Peat as trustee ("Trustee"). The term of the voting trust
-5-
expired on July 13, 1996. During the term, the Trustee was granted
the exclusive right to vote the deposited shares, which totaled
233,350 shares, or approximately 8.14% of the issued and outstanding
shares at July 31, 1996. The agreement also granted an option to
the other party and to Manatron to purchase the shares if one of the
parties died, became disabled, terminated employment with Manatron, or
sought to dispose of his shares. The address of the voting trust was
2970 South 9th Street, Kalamazoo, Michigan 49009.
<F5> Messrs. Gene Bledsoe, Randall L. Peat, and Paul R. Sylvester are
members of the Administrative Committee of the Manatron, Inc.
Salary Deferral and Employee Stock Ownership Plan (the "Plan").
Paul R. Sylvester, President, Chief Executive Officer, Chief
Financial Officer, and director of the Company, is the trustee
of the ESOP portion of the Plan and holds the shares of Common
Stock for the ESOP. The 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 Committee disclaims beneficial ownership of shares held by
the ESOP (except any 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 Committee as individuals
unless the shares have been allocated to the person's account under
the ESOP. As of July 31, 1996, 14,284 shares have been allocated
to participants and 128,574 shares have not yet been allocated
under the ESOP.
</FN>
</TABLE>
BOARD OF DIRECTORS
The Company's Board of Directors consists of 10 directors, three
of whom are standing for reelection. The Board of Directors is divided
into three classes, with each class to be as nearly equal in number as
possible. Each class of directors serves a term of office of three years,
with the term of each class expiring at the Annual Meeting of Shareholders
in each successive year.
Biographical information is presented below for each person who
either is nominated for election as a director at the 1996 annual meeting or
is continuing as an incumbent director. Unless otherwise noted, each director
and nominee for director has had the same principal employment for the last
five years.
-6-
NOMINEES FOR ELECTION TO TERMS EXPIRING IN 1999
RANDALL L. PEAT (age 48) has been a director since 1972. Mr.
Peat, a co-founder of the Company, became Chairman of the Board of
Directors on October 17, 1995. Mr. Peat previously held the position of
President of the Company's Judicial Information Systems Division. Mr.
Peat is the brother of Allen F. Peat, a director of the Company, and is
the uncle of Douglas L. Peat, Executive Vice President and director of
the Company.
PAUL R. SYLVESTER (age 37) has been a director since 1987. Mr.
Sylvester became President and Chief Executive Officer of the Company
on March 1, 1996, and has served as its Vice President - Finance and
Chief Financial Officer since 1987. Mr. Sylvester has also been the
Company's Treasurer since 1993.
STEPHEN C. WATERBURY (age 46) has been a director since 1991.
Mr. Waterbury is a Partner at the law firm of Warner Norcross & Judd LLP
located in Grand Rapids, Michigan.
INCUMBENT DIRECTORS WHOSE TERMS EXPIRE IN 1998
GENE BLEDSOE (age 50) has been a director since 1993. Mr.
Bledsoe has been the Managing Partner of the Casal Group since 1985, a
computer industry marketing services and management consulting firm based
in Dallas, Texas. Mr. Bledsoe also served as the Company's interim
President and Chief Executive Officer from October 17, 1995, through
February 29, 1996.
JANE M. RIX (age 48) has been a director and the Company's
Secretary since 1993. Ms. Rix, who has been with the Company since
1977, is primarily responsible for purchasing and total quality
management in addition to her Corporate Secretary duties.
ALLEN F. PEAT (age 60) has been a director since 1972. Mr.
Peat, a co-founder of the Company, served as the Company's Chairman of
the Board, President, and Chief Executive Officer until October 17, 1995.
Mr. Peat is the brother of Randall L. Peat, Chairman of the Board of
Directors of the Company, and is the father of Douglas A. Peat, Executive
Vice President and director of the Company.
HARRY C. VORYS (age 71) has been a director since 1986. Prior to
his retirement in July 1990, Mr. Vorys 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. Mr. Vorys is currently a
Director of Shoreline Financial Corporation, the holding company for
Shoreline Bank.
-7-
INCUMBENT DIRECTORS WHOSE TERMS EXPIRE IN 1997
DOUGLAS A. PEAT (age 34) has been a director since 1991. Mr.
Peat is a regional Vice President who is primarily responsible for sales
and customer service in the State of Michigan. Mr. Peat was appointed
Executive Vice President on October 6, 1994, and has been employed by the
Company in various other sales and marketing positions since 1985. Mr.
Peat is the son of Allen F. Peat, a director of the Company, and is the
nephew of Randall L. Peat, Chairman of the Board of Directors of the
Company.
RICHARD J. HOLLOMAN (age 42) has been a director since 1992.
Mr. Holloman founded Specialized Data Systems, Inc., ("SDS") in 1980 and
served as its President until April 1995. Mr. Holloman became a director
of the Company in March 1992 when Manatron acquired SDS. Mr. Holloman is
currently Vice President of Administration and Marketing for Vision
Software, Inc. ("Vision") located in Wilmington, North Carolina. Vision
designs, develops, and distributes Emergency 911 and public safety
software and related services to local governments nationwide. In
addition, Mr. Holloman is the President and owner of Specialized
Appraisal Services, a small mass appraisal company located in
Greenville, North Carolina.
MELVIN J. TRUMBLE (age 54) has been a director since 1994.
Mr. Trumble is Senior Vice President of the Company's Appraisal Division,
formerly Sabre Systems and Services ("Sabre"), which the Company acquired
in November 1994. Prior to the acquisition, Mr. Trumble served as the
General Manager of Sabre's real estate appraisal, mapping, and systems
business.
BOARD COMMITTEES AND MEETINGS
The Company's Board of Directors, which is responsible for the
overall management of the business and affairs of the Company, held five
meetings since the last annual meeting of shareholders. Each director
attended 75% or more of the aggregate of the total number of Board of
Directors meetings and the total number of committee meetings of which
they were members. The Board of Directors has five standing committees:
the Audit Committee, the Compensation Committee, the Stock Option
Committee, the Nominating Committee, and the Executive Committee. The
members of each committee are appointed by the Board of Directors.
AUDIT COMMITTEE. The Audit Committee is responsible for (i)
recommending to the Board of Directors the selection of independent
auditors; (ii) reviewing and approving the scope of the yearly audit plan
and proposed budget for audit fees; (iii) reviewing the results of the
annual audit with the independent auditors; (iv) reviewing the Company's
-8-
internal controls with the independent auditors; (v) reviewing the
recommendations of independent auditors for accounting or operational
improvements; (vi) reviewing nonaudit services and special engagements to
be performed by the independent auditors; and (vii) reporting to the Board
of Directors on the Audit Committee's activities and findings and making
recommendations to the Board of Directors on these findings. Messrs. Gene
Bledsoe, Harry C. Vorys, and Stephen C. Waterbury are members of the Audit
Committee. The Audit Committee met once since the last annual meeting of
shareholders.
COMPENSATION COMMITTEE. The responsibilities of the Compensation
Committee include (i) recommending the cash and other incentive
compensation, if any, to be paid to the Company's executive officers; and
(ii) reviewing awards under stock-based compensation plans approved by the
Stock Option Plan Committee. The Compensation Committee consists of
Messrs. Harry C. Vorys (Chairman), Gene Bledsoe, and Stephen C. Waterbury.
The Compensation Committee met four times since the last annual meeting of
shareholders.
STOCK OPTION COMMITTEE. The Stock Option Committee is
responsible for (i) the administration and award of stock options and
restricted stock under the Company's stock plans; and (ii) reviewing all
material proposed option plan changes. In addition, the Stock Option Plan
Committee determines the key employees to whom options will be granted, the
number of shares covered by each option, the exercise price of each option
and other matters associated with option awards. Messrs. Harry C. Vorys
and Stephen C. Waterbury are members of the Stock Option Committee.
The committee met two times since the last annual meeting of
shareholders.
NOMINATING COMMITTEE. The Nominating Committee considers and
evaluates the qualifications of potential candidates for the Board of
Directors and recommends appropriate candidates to the full Board of
Directors. The Nominating Committee consists of Messrs. Gene Bledsoe,
Harry C. Vorys, and Stephen C. Waterbury. The committee met once
since the last annual meeting of shareholders. The Nominating
Committee will consider candidates suggested by shareholders for
nomination to the Board of Directors. A shareholder wishing to make
a suggestion should submit that suggestion in writing to Mr. Randall L.
Peat, Chairman of the Board of Directors.
EXECUTIVE COMMITTEE. The Executive Committee has the authority
to exercise the powers of the Board of Directors in managing the Company's
business affairs and property during intervals between meetings of the
Board of Directors. The Executive Committee consists of Messrs. Gene
Bledsoe, Randall L. Peat, and Paul R. Sylvester. The committee met once
since the last annual meeting of shareholders.
-9-
COMPENSATION OF DIRECTORS
Nonemployee directors receive a $5,000 annual retainer fee plus
compensation in accordance with the following: $500 for attendance at each
meeting of the Board of Directors and $250 for attendance at each committee
meeting. Directors who are also employees of the Company or its
subsidiaries receive no annual retainer and are not compensated for
attendance at board or committee meetings.
Under the terms of the Company's 1989 Stock Option Plan, each
nonemployee director serving on the Board of Directors on October 3, 1991,
was granted an option to purchase 1,000 shares of Common Stock for each
full year of service as a director. After that date, each nonemployee
director who has served a full year of service as a director receives an
additional 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% 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.
EXECUTIVE COMPENSATION
The following table sets forth certain information concerning the
compensation earned during each of the last three years in the fiscal year
ended April 30, 1996, by the Company's current, interim, and former Chief
Executive Officer and all other officers whose salary and bonus for the
fiscal year ended April 30, 1996, equaled $100,000 or more ("Named
Executive Officers"):
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG-TERM COMPENSATION
ANNUAL COMPENSATION AWARDS
NUMBER OF
SECURITIES
UNDERLYING ALL OTHER
NAME AND PRINCIPAL OPTIONS COMPENSATION
POSITION YEAR SALARY BONUS <F1> <F2>
<S> <C> <C> <C> <C> <C>
Paul R. Sylvester 1996 $ 99,167 $15,000 70,000 $ 9,016<F4>
President, Chief 1995 88,015 10,000 22,062 1,978<F5>
Executive Officer and 1994 75,173 6,475 16,012 1,496
Chief Financial Officer<F3>
Gene Bledsoe 1996 51,500<F7> -- 1,000 --
Interim President and
Chief Executive Officer<F6>
-10-
Allen F. Peat, former 1996 89,923 40,000 27,863 372,469<F9>
Chairman of the 1995 140,907 80,000 10,500 6,500
Board, President, 1994 107,719 15,000 22,050 6,700
and Chief Executive
Officer<F8>
Melvin J. Trumble 1996 105,000 -- 30,000 2,335<F11>
Senior Vice President 1995 54,350 -- 30,000 454
of Property Systems for
Sabre Systems and
Services Division<F10>
___________________________
<FN>
<F1> The number of shares subject to stock options has been adjusted to
reflect the 5% stock dividends distributed on November 18, 1994 and
November 19, 1993.
<F2> All other compensation for the year ended April 30, 1996, includes:
(i) Company matching contributions under the Company's profit sharing
and 401(k) plan of $1,464 for Mr. Paul R. Sylvester and $1,828 for Mr.
Allen F. Peat; and (ii) amounts paid by the Company for life insurance
of $472 for Mr. Paul R. Sylvester and $4,700 for Mr. Allen F. Peat.
<F3> The information listed for Mr. Paul R. Sylvester for fiscal 1996 covers
compensation paid to him by the Company for service as Chief Financial
Officer from May 1, 1995, to February 29, 1996, and amounts for
service as President, Chief Executive Officer, and Chief Financial
Officer from March 1, 1996, to April 30, 1996.
<F4> This amount includes $7,080 paid by the Company for accrued but unused
vacation.
<F5> This amount includes $274 paid by the Company for accrued but unused
vacation.
<F6> Mr. Gene Bledsoe served as Interim President and Chief Executive
Officer of the Company from October 18, 1995 until February 29, 1996.
Mr. Paul R. Sylvester was appointed President and Chief Executive
Officer of the Company on March 1, 1996.
<F7> For his service as Interim President and Chief Executive Officer,
Mr. Gene Bledsoe earned $51,500, of which half of the amount was paid
in cash and half in Company stock based upon a price of $1.63 per
share.
<F8> The information listed for Mr. Allen F. Peat for fiscal 1996 covers
compensation paid to him by the Company for service as President and
Chief Executive Officer from May 1, 1995, to October 17, 1995.
-11-
<F9> Includes $365,941 paid to Mr. Allen F. Peat in connection with his
retirement from the Company. This amount includes a severance
payment of $240,000, other deferred compensation payments
of $73,846, a forgiven debt of $45,333, and a Company car valued at
$6,762.
<F10> The Company acquired Sabre Systems and Service on November 11, 1994,
and thus no compensation was paid by the Company to Mr. Melvin J.
Trumble in fiscal 1994.
<F11> This amount includes $1,010 paid by the Company for accrued but
unused vacation
</FN>
</TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
The Company's stock option plans are administered by the Stock
Option Committee of the Board of Directors which has authority to
determine the individuals to whom and the terms upon which options will be
granted, the number of shares subject to each option, and the form of
consideration that may be paid upon the exercise of an option.
The following table sets forth the stock options granted to the
Company's current, interim, and former Chief Executive Officer and the
named executive officers during fiscal year 1996:
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
PERCENT OF
TOTAL
NUMBER OF OPTIONS POTENTIAL REALIZABLE VALUE
SECURITIES GRANTED TO AT ASSUMED ANNUAL RATES
UNDERLYING EMPLOYEES EXERCISE OF STOCK PRICE APPRECIATION
OPTIONS IN FISCAL PRICE PER EXPIRATION FOR OPTION TERM
NAME GRANTED<F1> YEAR<F2> SHARE DATE 0% 5% 10%
<S> <C> <C> <C> <C> <C> <C> <C>
Paul R. Sylvester 70,000 17.14% $1.63 02-28-06 $ 0 $71,540 $181,286
Gene Bledsoe 1,000 0.24 2.88 10-12-05 0 1,808 4,582
Melvin J. Trumble 30,000 7.34 1.63 02-28-06 0 30,660 77,694
_______________
<FN>
<F1> On October 11, 1995, and February 29, 1996, the Company granted certain
of its executive officers options to purchase shares of the Company's
Common Stock over a ten year period pursuant to the 1995 Long-Term
Incentive Plan. Executive officers are entitled to exercise their
options at a price determined by the Stock Option Committee, which is
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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.
<F2> The Company granted options representing 408,500 shares to employees
during fiscal 1996.
</FN>
</TABLE>
The following table sets forth the total number of options exercised
by the current, interim, and former Chief Executive Officer and the Named
Executive Officers as of April 30, 1996:
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING
UNEXERCISED
NUMBER OF OPTIONS
SHARES VALUE AT FISCAL YEAR-
ACQUIRED ON REALIZED END
NAME EXERCISE <F1> EXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C>
Paul R. Sylvester 5,787 $5,064 30,000 40,000
Gene Bledsoe -- -- 2,050 --
Allen F. Peat -- -- 27,863 --
Melvin J. Trumble -- -- 10,000 20,000
_______________
<FN>
<F1> 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.
</FN>
</TABLE>
-13-
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's executive compensation program is administered by
the Compensation Committee of the Board of Directors (the "Committee").
The 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 Committee
submits its recommendations on such matters to the full Board of Directors
for ratification. The Committee consists of three directors, none of whom
is a current or former employee of the Company.
COMPENSATION PHILOSOPHY
The Committee's executive compensation philosophy is to provide
competitive levels of compensation as well as incentives to achieve
superior financial performance. The Committee's policies are designed to
achieve four primary objectives: (i) align management's compensation with
the Company's achievement of annual and long-term performance goals; (ii)
reward above average performance by the Company; (iii) recognize individual
initiative and achievement; and (iv) assist the Company in attracting and
retaining 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.
Manatron'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 also seek to align the interests of
executive officers and other key employees with the interests of
shareholders through stock ownership. The Committee believes that it is in
the Company's best interest to generate rewards for senior executives and
key employees, which may result in above-average performance measured in
terms of profit growth and total shareholder return.
Executive officer compensation is comprised of three primary
components: a base salary and benefits, an annual performance bonus, and
participation in stock option plans. Each component of compensation is
designed to accomplish one or more of the compensation objectives.
Benefits offered to executive officers include participation in the
Manatron, Inc. Salary Deferral and Employee Stock Ownership Plan, which
covers substantially all employees, the Employee Stock Purchase Plan,
and the Company's various health, life, and disability insurance benefit
plans.
Congress has amended the Internal Revenue Code of 1986, to add
Section 162(m) which provides that publicly held corporations may not
deduct compensation paid to certain executive officers in excess of $1
million annually, with certain exemptions. The Company has examined its
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executive compensation policies in light of Section 162(m) and the
regulations adopted by the Internal Revenue Service to implement this
section. It is not expected that any portion of the Company's deduction
for employee remuneration will be disallowed in fiscal year 1997 or in
future years by reason of awards granted in fiscal year 1997.
BASE SALARY
The Company seeks to attract and retain well-qualified executives
by providing base salaries and benefit packages at levels which are
considered to be competitive. In setting the base salaries of the
Company's executive officers, the Committee considers the skill and
experience required by an individual's position, job performance,
accountability and tenure. Although the Committee refers to base salaries
at other comparable companies to help establish guidelines, the Company's
current operating performance is considered most important in determining
the base salaries of management.
The 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.
ANNUAL BONUS PLAN
To provide incentives and rewards for achievement of short-term
individual and Company goals, the Company had a discretionary annual bonus
program for key employees which was a key component of officer compensation.
In fiscal 1996, the Committee awarded Mr. Paul R. Sylvester a bonus of
$15,000 and Mr. Allen F. Peat a bonus of $40,000.
The Committee intends to implement a formal, written annual bonus
plan for fiscal 1997.
STOCK OPTIONS
The Stock Option Committee of the Board of Directors 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 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
-15-
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 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 1996,
the Stock Option Committee awarded incentive stock options for an aggregate
of 101,000 shares to the four Named Executive Officers. The exercise prices
of these options ranged between $1.63 to $2.88 per share.
CHIEF EXECUTIVE OFFICER COMPENSATION
The Committee considers current operating performance to be a key
determinant in establishing the base salary of the Chief Executive Officer.
The Committee also considers the individual's performance, skill and
experience, accountability, length of service and current economic
conditions. The Committee also believes that incentive compensation,
designed to reward performance, should represent a significant percentage
of the Chief Executive Officer's potential compensation.
Mr. Paul R. Sylvester was appointed President and Chief Executive
Officer on March 1, 1996. Mr. Sylvester received compensation of $20,000
for his service as Chief Executive Officer from March 1, 1996 to April 30,
1996.
Mr. Gene Bledsoe served as Interim President and Chief Executive
Officer of the Company from October 18, 1995 until February 29, 1996. For
his service to the Company, Mr. Bledsoe earned $51,500, of which half of the
amount was paid half in cash and half in Company stock based upon a price
of $1.63 per share.
Mr. Allen F. Peat served as President and Chief Executive Officer of
the Company from May 1, 1995 until his retirement on October 17, 1995. Mr.
Peat received compensation of $137,236 for his service in fiscal 1996.
The Company executed an agreement with Mr. Peat on October 17, 1995, which
is further described in this Proxy Statement under the heading "Employment
Agreements, Termination of Employment and Change in Control Agreements."
All recommendations of the Committee attributable to
compensation in the 1996 fiscal year were unanimous and were approved and
adopted by the Board of Directors without modification.
The Committee welcomes written comment from the Company's
shareholders concerning its compensation programs. Comments should be
marked "personal and confidential" and addressed to the Compensation
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Committee of the Board of Directors, Manatron, Inc., 2970 South 9th
Street, Kalamazoo, Michigan 49009.
Respectfully submitted,
Gene Bledsoe
Harry C. Vorys
Stephen C. Waterbury
-17-
EMPLOYMENT AGREEMENTS, TERMINATION OF EMPLOYMENT AND
CHANGE IN CONTROL ARRANGEMENTS
MR. ALLEN F. PEAT'S AGREEMENTS. On July 17, 1986, the Company
entered into an employment agreement (the "Employment Agreement") with Mr.
Allen F. Peat to employ him as President and Chief Executive Officer until
July 16, 2000. The Employment Agreement provided 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 was
intended that Mr. Peat's monthly salary and fringe benefits would
not be less than those received in the prior year. Mr. Peat's
annual bonus was determined in accordance with a formula approved by the
Board of Directors, which could not exceed 60% of his annual salary.
Effective October 17, 1995, the Company and Mr. Peat
entered into an agreement setting forth the terms pursuant to which Mr.
Peat retired as Chairman, President, and Chief Executive Officer
(the "Agreement"). The Agreement terminated Mr. Peat's Employment
Agreement and provided for severance compensation, deferred compensation,
and other payments totaling approximately $1.3 million to be paid through
December 1999.
Mr. Peat retains all rights of a retired employee of
Manatron under Manatron's existing 401(k) plan, employee stock plan, and
other qualified benefit plans, if any.
The Agreement contains standstill provisions restricting Mr.
Peat's ability to (i) acquire the Company's Common Stock; (ii) acquire
control of the Company; (iii) solicit proxies for particular
purposes; (iv) subject his shares to a voting trust or similar
agreement; and (v) participate in or encourage a group which seeks
to acquire, hold, or dispose of the Company's Common Stock.
Notwithstanding the above standstill provisions, Mr. Peat is
free to vote his existing shares as he determines and to dispose of any
of the existing shares. Any transferee of Mr. Peat's shares shall
take such shares free of the restriction imposed by the Agreement.
The Agreement did not affect Mr. Peat's service as a
director and Mr. Peat has not resigned as a director of Manatron
and will receive, during his term as a director, director's fees and other
benefits comparable to the fees and benefits paid to outside directors who
are not and have not been employees of Manatron.
-18-
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 fiscal year 1996 and the Company intends to
continue to use these firms in fiscal year 1997.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company is leasing its office in Greenville, North Carolina
under a five-year agreement expiring on July 31, 1999, consisting of
approximately 4,700 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 $4,000 per month. HBH Partnership is
responsible for taxes, maintenance, and insurance on the leased property.
The term of this lease was 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, former Chairman of the Board, President,
and Chief Executive Officer for $3.50 per share, which approximated market
value on that date. The ESOP borrowed $500,000 from a bank to finance the
stock purchase. The Company has guaranteed the 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, plus interest at the bank's prime rate. As of April 30, 1996,
$425,000 remained outstanding under the loan agreement.
The Company has made two loans to Paul R. Sylvester, President,
Chief Executive Officer and Chief Financial Officer, totaling $111,250,
and two loans to Douglas A. Peat, Executive Vice President, totaling $111,250.
The proceeds of the loans for each individual were used to purchase shares
of Company Common Stock. Messrs. Sylvester and Peat are 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. Messrs. Sylvester and Peat are
obligated to repay the full amount of their respective loans of $61,250
without interest on September 1, 1999, unless the loans become due
earlier. Each of the loans becomes due before their respective repayment
dates if Messrs. Sylvester or Peat sell the Common Stock purchased with
the proceeds of the respective loan.
-19-
STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder
return on Manatron Common Stock to the Standard & Poor's 500 Stock Index
and an industry index comprised of the common stock of nine companies in
the computer software industry (the "Peer Group"), assuming an investment
of $100 over a five-year period ended April 30, 1996, using 1991 as a base
period. The Standard & Poor's 500 Stock Index is a broad equity market
index published by Standard & Poor's. The Peer Group was selected by the
Company and includes the companies listed in the footnotes to the graph
below. 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.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL SHAREHOLDER RETURN
[GRAPH]
________________________
* The Peer Group includes Barrister Information Systems Corp.; Bolt,
Beranek & Newman, Inc.; Business Records Corporation; Cerner Corp.;
Computrac, Inc.; Microlog Corp.; Symix Systems I; Alpha Technologies, Inc.;
and Systems & Computer Technology Corp.
-20-
The dollar values for total shareholder return plotted in the
graph above are shown in the table below:
<TABLE>
<CAPTION>
1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
Manatron $100.00 $163.11 $121.54 $203.07 $158.38 $ 79.19
S & P 500 100.00 114.03 124.56 131.19 154.10 200.66
Peer Index 100.00 127.65 178.84 302.66 412.92 422.85
</TABLE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 1996 fiscal year, the Company
believes that its directors and officers complied with all applicable
reporting and filing requirements during the Company's last fiscal year.
SELECTION OF AUDITORS
The Company selected Arthur Andersen LLP, independent auditors,
as its principal auditors for fiscal year 1996. 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 1997
fiscal year financial audit prior to December 31, 1996.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the next annual
meeting of shareholders must be received by the Company no later than
May 12, 1997, to be considered for inclusion in the proxy statement and
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form of proxy relating to that meeting. 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 Secretary of Manatron,
Inc., 2970 South 9th Street, Kalamazoo, Michigan 49009.
SOLICITATION OF PROXIES
The Company will bear all costs of the preparation and
solicitation of proxies, including the charges and expenses of brokerage
firms, banks, trustees, or other nominees for forwarding proxy materials to
beneficial owners. Solicitation of proxies will be made initially by mail.
In addition, directors, officers, and employees of the Company and its
subsidiaries may solicit proxies personally or by telephone or facsimile
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. at an estimated cost of $2,000,
plus expenses and disbursements, to assist in the solicitation of proxies.
By Order of the Board of Directors
/S/ JANE M. RIX
Kalamazoo, Michigan Jane M. Rix
September 9, 1996 Secretary
-22-
[FRONT]
PROXY PROXY
MANATRON, INC.
2970 SOUTH 9TH STREET
KALAMAZOO, MICHIGAN 49009
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder hereby appoints GENE BLEDSOE,
RANDALL L. PEAT, and PAUL R. SYLVESTER, and each of them, each with full
power of substitution, proxies to represent the shareholder listed on the
reverse side of this Proxy and to vote all shares of Common Stock of
Manatron, Inc. that the shareholder would be entitled to vote on all
matters which come before the Annual Meeting of Shareholders to be held at
the Amway Grand Plaza Hotel, on the corner of Pearl and Monroe Streets, in
Grand Rapids, Michigan, on Thursday, October 10, 1996, at 4 p.m., and any
adjournment of that meeting.
IF THIS PROXY IS PROPERLY EXECUTED, THE SHARES REPRESENTED BY
THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THE
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR THE ELECTION OF ALL
NOMINEES NAMED ON THIS PROXY AS DIRECTORS. THE SHARES REPRESENTED BY THIS
PROXY WILL BE VOTED IN THE DISCRETION OF THE PROXIES ON ANY OTHER MATTERS
THAT MAY COME BEFORE THE MEETING.
PLEASE SIGN, DATE, AND RETURN THIS
PROXY PROMPTLY USING THE ENCLOSED ENVELOPE.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
A-1
[BACK]
MANATRON, INC.
PLEASE MARK YOUR VOTE IN THE FOLLOWING MANNER USING DARK INK ONLY. [X]
1. ELECTION OF DIRECTORS
Nominees: Randall L. Peat,
Paul R. Sylvester,
and Stephen C. Waterbury For All
For Withheld Except
(INSTRUCTION: TO WITHHOLD AUTHORITY
TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE THROUGH THAT NOMINEE'S NAME IN
THE LIST ABOVE.) [ ] [ ] [ ]
Your Board of Directors Recommends that
You Vote FOR ALL NOMINEES
Dated: _________________, 1996
______________________________
______________________________
Signature of Shareholder(s)
IMPORTANT -- Please sign
exactly as your name(s)
appears on this Proxy. When
signing on behalf of a
corporation, partnership,
estate, or trust, indicate
title or capacity of person
signing. IF SHARES ARE HELD
JOINTLY, EACH HOLDER SHOULD
SIGN.
A-2
