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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended April 30, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to ______________
Commission File Number: 0-15264
MANATRON, INC.
(Exact Name of Registrant as Specified in Its Charter)
MICHIGAN 38-1983228
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
2970 SOUTH 9TH STREET
KALAMAZOO, MICHIGAN 49009
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (616) 375-5300
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, No Par Value
(Title of Class)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes __X__ No ______
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
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The aggregate market value of the Common Stock held by nonaffiliates of the
Registrant based on the last sale price on July 23, 1997, was approximately
$2,449,702.
As of July 24, 1997, 2,840,019 shares of the Registrant's Common Stock, no
par value, were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the definitive proxy statement for the Registrant's annual
shareholders' meeting to be held October 9, 1997, are incorporated by
reference into Part III of this report.
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PART I
ITEM 1. BUSINESS.
GENERAL
Manatron, Inc. ("Manatron" or the "Company") originally was
organized in 1969 as a partnership and later was incorporated in Michigan
in 1972. Manatron initially provided in-house data processing services for
local governmental units located in Michigan. Subsequently, the Company
expanded its business into Indiana in 1972, into Illinois in 1975, and into
Missouri in 1981. In 1982, Manatron's business was extended further to
include advanced microcomputer-based "turn-key" data processing systems for
governments. These "turn-key" data processing systems used both general
purpose computer hardware produced by leading manufacturers and proprietary
software developed or purchased by the Company.
In 1990, Manatron acquired PC-based tax and vehicle registration
software developed for use in Georgia from Charter Micro Applications,
Inc., of Savannah, Georgia. Enhanced versions of this software still are
being used by approximately 16 counties in Georgia. In March of 1992,
Manatron acquired by merger all of the outstanding stock of Specialized Data
Systems, Inc. ("SDS"), a then 10-year old computer software company located
in Greenville, North Carolina. SDS had installed its PC-based software
(primarily fund accounting, payroll, property tax billing, and utility
billing) in approximately 300 cities and 50 counties in the Southeastern
United States. Today, the Company still is serving 369 customers with
enhanced versions of SDS software and with software products that Manatron
and Sabre Systems and Service ("Sabre") have developed.
In July of 1993, Manatron acquired all of the outstanding stock
of ATEK Information Services, Inc. ("ATEK"), a then 25-year old computer
software company located in Canton, Ohio and Indianapolis, Indiana. Like
Manatron, ATEK served local governments with a similar suite of products
and services; however, ATEK's software primarily operated on Digital
Equipment Corporation ("DEC") VAX or Alpha computers. ATEK, which had been
Manatron's largest competitor in Indiana and Ohio during the prior 10
years, installed software in approximately 50 counties in Indiana and 20
counties in Ohio to perform various functions such as financial accounting,
property tax billing, child support accounting, and court accounting.
Today, 79 out of 92 counties in Indiana and 71 out of 88 counties in Ohio
are utilizing enhanced versions of ATEK software in addition to the
software products that Manatron and Sabre have developed.
In December of 1993, Manatron acquired substantially all of the
assets of City Computer Solutions, Inc. ("CCS"), a small computer software
company located in Birmingham, Alabama. CCS has marketed its software and
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services to 81 cities and counties in Alabama and other surrounding
Southern states. CCS's software primarily operated on BTOS and UNIX based
computers. These customers have been potential upgrade targets for new
Manatron products and services.
In May of 1994, Manatron acquired substantially all of the assets
of Horizon Systems and Software, Inc. of Farmington Hills, Michigan
("Horizon"), a small computer software company which focused on the
judicial information system services business. At the time of acquisition,
Horizon had 18 customer sites in Eastern Michigan and Indiana. The Company
has discontinued support of the Horizon software and few of these customers
have elected to upgrade to Manatron's judicial information system.
In November of 1994, Manatron acquired substantially all of the
assets of the Ohio-based Real Estate Services Division from Moore Business
Forms, Inc., known as Sabre, which had been another major competitor of the
Company. At that time, Sabre was the second largest provider of mass
appraisal services to local governments in the country with a strong
presence in Indiana and Ohio, one of Manatron's major market areas. In
addition to Indiana and Ohio, Sabre also has a presence in Connecticut,
Massachusetts, New Hampshire, New York, Pennsylvania, Rhode Island, and
more recently, South Carolina and Virginia. In addition, Sabre has
developed property tax and appraisal software which it markets along
with property mapping services, hardware, and support services. Sabre's
software primarily functions on DEC VAX or Alpha hardware, although recent
developmental efforts have been focused on providing appraisal systems
which function in a client server environment.
In February of 1995, Manatron acquired substantially all of the
assets of MSL Business Computers, Inc. of Harrisburg, Illinois ("MSL"), a
small software company with approximately 10 county installations. MSL's
software, which primarily consisted of fund accounting, payroll, taxes, and
appraisal, operated on International Business Machine Corporation ("IBM")
System 36 and AS/400 computers. In addition to expanding the Company's
presence in Southern Illinois, this acquisition provided Manatron with
three additional technically skilled employees for the Illinois region and
the opportunity to sell Manatron and Sabre software to this new base of
customers.
As a result of all of these acquisitions, the Company has been
focusing its efforts on upgrading its large customer base and consolidating
the common software products into single Open Window Series products that
utilize the Microsoft Windows operating system and other modern development
tools. Currently, the Company serves over 1,686 customers in 29 states
with concentration in the Midwest, Northeastern, and Southeastern regions
of the United States.
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PRODUCTS
The Company designs, markets, installs, and maintains advanced
computer-based "turn-key" data processing systems primarily for city,
county, and township governmental units. Manatron's data processing
systems employ general purpose computer hardware produced by leading
manufacturers in connection with proprietary software developed or
purchased by the Company. The Company specializes in keeping its
application software in compliance with the varying requirements of state
statutes. A significant feature of the Company's software is that the
applications are tied together, thus eliminating duplication of functions.
For example, assessed values computed in either the land information system
or the appraisal system are updated automatically in the property tax
system.
The Company's software systems provide simplified data entry
through the display of information on monitors and prompting messages. The
security features of the software systems permit selected user access and
generate user reports on demand.
The following is a general description of the features and
functionality of the Company's major software product groups that it has
developed or acquired. The Company anticipates providing additional
capabilities as the products are enhanced. In connection with these
anticipated enhancements, the Company is focused on combining similar
products within each group that originally were developed by the
companies that Manatron acquired.
PROPERTY TAX BILLING, COLLECTION, AND APPRAISAL WITH MAPPING AND IMAGING
The Company has developed a unique approach to property tax
billing, collection, and appraisal, which allows government officials to
update property tax values and follow up with assessment rolls, tax rolls,
tax bills, and tax distribution in conformance with applicable state laws.
The Company works closely with state, county, and local officials to assure
compliance with legislative changes at various levels. Manatron's computer
assisted mass appraisal product ("CAMA") values property using various
valuation methods, including market, cost, and income. CAMA also
incorporates sketch, video imaging, and pen-based computers for field
appraisers. The product has advanced features that allow it to be used in
many states, thereby reducing the need for multiple appraisal products.
This software, which can be integrated with imaging, facilitates the
storage of photographs. In addition, the software permits reading of bar
codes on property tax bills. Finally, when integrated with the Company's
land information systems, the software allows for a visual inventory of
land and improvements that are taxed by the governmental unit.
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FINANCIAL MANAGEMENT
The Company has developed a comprehensive fund accounting system
consisting of subsystems such as general ledger, accounts payable, accounts
receivable, cost allocation, receipt processing, purchase order, cash
information management, payroll, human resources, inventory control, fixed
assets, equipment and vehicle maintenance, and report writer. The system,
which meets established national accounting standards, offers double or
single entry and features a flexible user defined account number structure
and chart of accounts.
UTILITY BILLING
The Company has developed utility billing software which
encompasses an integrated system from engineering through meter reading,
billing, and accounting. The system accommodates water, sewer, gas,
electric, garbage collection, and other related services. Utility billing
also allows for an unlimited number of services per customer and can
accommodate complicated electric rate tables. This software also supports
hand-held reading devices, peak-to-peak billing, budget billing, and demand
meters. The system can be used by small rural districts which tend to bill
few services, as well as larger municipal customers that bill many types of
services.
JUDICIAL INFORMATION
The Company has developed judicial information systems which are
available for all levels of government and consist of the following
modules: (i) Case Management; (ii) Court Accounting; (iii) Prosecution
Management; (iv) Probation Tracking; (v) Jury Management; (vi) Child
Support; and (vii) Voter Registration. In addition, the Company has
integrated bar coding into this suite of software to assist in capturing
data, easing production processes, and reducing errors. The Case
Management module encompasses civil, criminal, traffic fine, and court
docket functions. The Court Accounting module tracks all fines, court
costs, and bonds in addition to providing necessary reports to a
governmental unit. The Prosecution Tracking module is a management record
keeping and financial module for prosecutors in trial courts. The
Probation Tracking module is a case tracking, record keeping, and financial
system for probation departments. The Jury Management module facilitates
the selection of jurors as well as payments to jurors for jury duty. The
Child Support module provides for a complete financial accounting of
divorce, paternity, and alimony cases, including Title IV-D reporting. The
Voter Registration module oversees the legal record keeping requirements,
jury selection, and maintenance of an unlimited voting history and can be
integrated with imaging which facilitates the storage of signatures. Each
module can be used alone or can be interfaced with the other modules to
produce a complete and thorough court management system.
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MANATRON INDEXING, RECORDING, AND RETRIEVAL (MIRRS)
Manatron's indexing, recording, and retrieval system is a
software solution developed for recording information from numerous types
of documents, including deeds, mortgages, UCC financing statements, liens,
vital records, and soldiers' discharges. The software allows immediate
access to all database information and includes integrated microfilming and
imaging, automatic receipting, index printing, and statistical reports. In
addition, the software offers remote access which allows applicable
documents to be faxed from the database to abstractors and title companies.
LAND INFORMATION
The Company's land information system allows governmental
agencies to create and maintain their own electronic maps, which replace
time consuming manual maps. Overlay maps can be plotted in a matter of
minutes incorporating, for example, property ownership, zoning, and land
use, either individually or collectively. Data from a variety of sources,
including aerial photographs, census files, and detailed soil surveys, is
utilized with information from existing manual maps which are computerized
by a digitizer. In addition, textual and graphic data can be displayed and
analyzed. The textual data may be resident on the host or remote computers
with connections made through interactive record level or file transfer.
Although the Company historically has developed and maintained its own
land information system, it is now a reseller of Environmental Systems
Research Institute's land information systems known as ARC View and
ARC/INFO GIS.
Many of the software packages described above can be used in
conjunction with software enhancement options, such as the use of a laser
pen to decipher bar coding for efficient storage and retrieval of
information. In addition, laser printing and microfilm services have been
added through alliances with other companies, although Manatron has
recently begun providing these services from its Illinois office.
Laser printing and microfilm services reduce the amount of paper
needed to store documents and, accordingly, save storage space. Laser
printing produces copies that look like originals because data is
printed electronically from magnetic computer tape onto paper which results
in improved print quality, and offers the option of multiple fonts and
graphics. Microfilm, produced from computer-generated magnetic tape in
either microfiche or roll film, uses approximately 98% less storage space
than paper. Through the use of laser printing and microfilm, Manatron's
customers are able to keep historical data in a user's department, which
permits retrieval and printing, often within seconds of command.
Most of the above described Manatron systems originally were
written in COBOL and installed at customer sites using the BTOS/CTOS
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operating system and network desktop microcomputers manufactured by Unisys
Corporation ("Unisys"). Most of the ATEK and Sabre systems originally were
written in BASIC, DIBOL, and ADMINS utilizing the VMS operating system and
VAX minicomputers manufactured by DEC. Sabre also has a number of
installations utilizing its FoxPro PC CAMA product. The SDS systems were
written in CLIPPER and function on IBM compatible personal computers.
With the Company's movement toward open architecture
capabilities, many of the above described systems are now installed at
customer sites using MicroSoft Windows, Novell Netware, or Windows NT in
a stand alone or client server environment using a variety of personal
computers manufactured by DEC, IBM, Unisys, or Concentric Systems. The
new Open Window series products also utilize the scalable, client server
architecture which makes use of industry standard relational databases.
In addition, a number of the Company's larger software installations are
now functioning in a UNIX environment in which the IBM RS6000 Series,
DEC Alpha Series, and Unisys U6000 Series computers are utilized.
SERVICES
In connection with the installation of its "turn-key" systems,
the Company provides ongoing hardware integration and maintenance, software
support, training, and other customer services through regional offices
described under the caption "Properties" below. The Company has
established a regional office in each state where it has a significant
nucleus of customers to respond to its customers' needs. Each
regional office includes customer service personnel who are able to assist
with the installation of the Company's "turn-key" systems and provide
technical support on site before and after installation. In addition,
Company personnel respond on a daily basis to customer telephone inquiries
regarding the use of Manatron systems. A number of regional offices also
are staffed with employees who are trained to identify and respond to
customers' hardware and other technical problems.
With the acquisition of Sabre, Manatron now provides mass real
estate services to local governments. The real estate services are a
natural product extension for the Company, as many Manatron "turn-key"
systems customers also contract periodically for mass appraisal services.
Sabre is one of the two largest vendors of mass appraisal services in the
United States. A typical mass appraisal engagement is performed under a
fixed-price contract over an 18- to 24-month time frame. Using the
advanced technology of its appraisal software products, Sabre has developed
a flexible methodology for appraisal delivery, which enables Sabre
to service jurisdictions of any size and accommodate the specific
requirements of an individual client. Through physical inspection,
computer analysis, and sound judgment of professional appraisers, Sabre
assesses a value to each parcel of property in a jurisdiction. Sabre
supports these values on behalf of the jurisdiction through the hearings
process and finalizes the tax rolls to enable the jurisdiction to create
tax bills.
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The Company also provides services for governments at its
Illinois, Michigan, and Ohio facilities, such as keypunching, creation of
digital maps, and preparation and/or printing of property tax bills.
MARKETING AND SALES
The Company primarily markets its products through its regional
offices in Alabama, Georgia, Illinois, Indiana, Michigan, Missouri, North
Carolina, Ohio, and Rhode Island. Manatron plans the opening of each new
office based on a review of marketing opportunities and financial analysis
within a particular region. The Company also markets its products through
nonexclusive dealer arrangements.
The Company's sales and marketing personnel approach various
governments with Manatron-specific solutions to their data processing and
property valuation needs and also respond to governments' proposal
requests. The Company's customer service personnel also assist with
product demonstrations in connection with these sales efforts.
Manatron's marketing efforts involve, among other things,
developing and distributing product brochures and a bimonthly newsletter,
direct mailings, telemarketing, attending conventions and conferences,
forming user groups for the purpose of determining customer needs and
expectations, conducting seminars for the purpose of demonstrating products
and services, and advertising in trade journals.
The Company is also a value-added reseller for a number of
leading hardware manufacturers such as DEC, IBM, and Unisys. In turn, the
sales forces of these manufacturers often work closely with the Company's
sales and marketing personnel in an effort to promote sales of the
Company's services and products in conjunction with sales of the hardware.
CUSTOMER BASE
The Company's customers are primarily city, township, and county
governments. The Company's sales are highly dependent on city, township,
and county governments' demand for its products and services. Although the
Company does not believe that the loss of any single customer would have a
materially adverse effect on the Company, a material decline in the
Company's sales to various governments could have such an effect.
COMPETITION
Competition for the Company's data processing systems, related
services, and mass appraisal services is intense. The Company competes
primarily on the basis of name recognition, financial stability, range of
products, and reputation for providing good customer service.
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The Company's major competitors for data processing systems and
related services are generally small local software and service firms,
which often are able to offer less expensive solutions or to develop long-
term relationships with key governmental officials. Generally, these
smaller firms can sell hardware and services at reduced amounts because of
their small amount of overhead. The Company also competes with national
software developers such as Business Records and Systems and Computer
Technologies which have greater financial, technical, and human resources
than the Company. The manufacturers of the computer hardware distributed
by the Company may begin to expand the marketing of their applications
software to compete with the Company. Manatron could be adversely
affected if a large computer manufacturer associates itself solely
with a third-party software supplier and targets the local government
data processing market.
Furthermore, applications software also is developed periodically
by or for public agencies for use by governments. If the funding and
distribution of governmentally developed or funded software becomes more
widespread, such products could compete with the Company's products.
Competition in mass appraisal services comes from a number of
small local firms and one large firm, Cole Layer and Trumble of Dayton,
Ohio, a division of Day & Zimmerman, Inc. As the largest seller of mass
appraisal services in the United States, Cole Layer and Trumble has total
sales and greater financial and other resources than the Company. Small
local firms often can offer less expensive mass appraisal services and
products than the Company or can develop long-term relationships with key
governmental officials.
Although state and local governments traditionally have lagged
behind both the federal government and the private sector in computer
automation, the application of microcomputer and personal computer
technology to local governmental units recently has been subject to rapid
development and change. The ability of the Company to develop new
applications software programs utilizing modern technology is critical to
its ability to compete successfully. Manatron reviews and updates its
software programs to meet the needs of its customers and to ensure that
the programs can be utilized on newer models of personal computers,
minicomputers, and UNIX computers.
The most significant barriers to entry into the Company's market
are time, expense, expertise, and personnel needed to develop software. As
software development and the sale of mass appraisal services are not highly
capital intensive, barriers to entry into these industries are
comparatively low. In addition, since software products have a relatively
low manufacturing cost, increased price competition may be expected in the
future.
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RESEARCH AND DEVELOPMENT
Manatron's success depends on its ability to respond quickly to
changing technology, market demands, and the needs of its customers.
Manatron emphasizes research and development and commits significant
resources to support and further its role as a leader in the markets it
serves. The Company's research and development expenditures relate
primarily to computer software development costs. Systems programming and
support expenses were approximately $2.6 million, $2 million, and $1.7
million for the fiscal years ended April 30, 1997, 1996, and 1995,
respectively. Certain of these expenses are capitalized in accordance with
Statement of Financial Accounting Standards No. 86, "Accounting for the
Costs of Computer Software to be Sold, Leased, or Otherwise Marketed" as
described in the Notes to Consolidated Financial Statements contained in
this Form 10-K.
During fiscal 1997, the Company continued to focus on the
creation of its Open Window Series financial and payroll products which
the Company currently expects to complete in fiscal 1998. In addition to
functioning in a windows environment, these products are expected to have
additional features and functionality that originated from customer
input. More importantly, as these products are introduced to its
customers, the Company will strive to reduce some of the redundancies which
currently occur because its products have often been supporting multiple
financial and payroll systems previously developed and sold by the
different companies Manatron has acquired.
During fiscal 1997, the Company also began a major retooling
effort for its product development: MiRiad-Manatron, Inc. rapid integrated
application development. This represents a shift to component-based
development based upon industry standards such as MicroSoft Distributed
Component Object Model ("DCOM"). This new methodology is expected to
reduce software development and support costs while improving product
quality. The Company completed development of its first product, Visual
Tax for Illinois Mobile Homes, using MicroSoft Visual Basic and the
MiRiad methodology.
The Company also has emphasized development of its PC CAMA
product during fiscal 1997, particularly with respect to making the product
functional in new market territories, such as Virginia and New Hampshire.
In addition, the Company improved the functionality of its Indiana
appraisal product, which was introduced in the prior fiscal year as a
result of new Indiana state legislation.
Manatron also continued to develop the integration of image
processing into its various software applications and focused on completing
its new utility billing system that the Company currently expects to release
to the Southeastern United States customers during the next fiscal year.
The Company also devoted time recently to modify its Michigan tax system as
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a result of legislative changes in the manner of calculating property taxes
in Michigan.
In the past fiscal year, the Company worked to improve
performance, add reports, offer more flexibility in terms of hardware or
database selection, and stabilize its new Open Window MIRRS product. Finally,
developmental efforts were focused in Ohio to allow customers to transition
their existing software from VAX VMS to Alpha Open VMS thereby enabling
them to take advantage of DEC's new RISC 64 bit architecture.
SUPPLIERS
The Company generally maintains a minimum of three alternate
suppliers. All computers, peripherals, disks, printers, plotters,
digitizers, operating system software, office automation software, and
other equipment required by the Company presently are available from at
least three sources. Hardware is purchased on original equipment
manufacturer or distributor terms at discounts from retail. The Company
has not experienced any significant supply problems.
BACKLOG
At April 30, 1997, the Company's backlog of orders for hardware,
software, and services (including mass real estate appraisal) was
approximately $15.5 million, compared with approximately $6 million at
April 30, 1996. The increase was due primarily to the cyclical nature
of the appraisal services market. Backlog can fluctuate significantly from
quarter to quarter primarily because of the seasonality of government ordering
patterns. Accordingly, a comparison of backlog from quarter to quarter is
not necessarily instructive and may not be indicative of eventual actual
shipments.
PATENTS AND TRADEMARKS
The Company currently does not have patent protection for its
products or services. While Manatron in the future may apply for a patent
or patents to protect its rights to certain software and related products,
no assurance can be given that such patents would be granted. The Company
treats certain proprietary materials as trade secrets, and employs and
will continue to employ procedures, techniques, and contractual
arrangements to help protect such confidential matters.
Management may seek to obtain copyright registration of its
software programs. However, these copyrights, if applied for and granted,
would provide only limited practical protection against duplication of the
media embodying the programs and related user manuals. The Company has
registered certain of its trade names, has a trade name registration
currently pending, and may apply for registration of additional trade names
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and trademarks at appropriate times in the future. No assurance can be
given that the applications for such registration will be granted.
The Company incorporates programming on software disks to make
unauthorized duplication of the software more difficult.
EMPLOYEES
As of July 1, 1997, the Company had 255 full-time employees and
39 duration employees. For assistance on specific mass appraisal projects,
the Company hires duration employees, whose employment generally lasts
for the duration of a project. Duration employees generally do not receive
the same benefits as regular full-time employees.
The Company's employees are not represented by a labor union. No
work stoppages have been experienced and management presently considers its
relations with employees to be positive.
An approximate breakdown of the Company's employees is as
follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Executive 5%
Administrative 13%
Development 13%
Sale and Marketing 6%
Service and Support 29%
Appraisal 34%
----
Total 100%
====
</TABLE>
ITEM 2. PROPERTIES.
The principal executive and administration offices are located in
a building owned by Manatron in Kalamazoo, Michigan, which consists of
approximately 12,300 square feet. The Company also rents office and/or
warehouse space in Alabama, Georgia, Illinois, Indiana, Michigan, Missouri,
New York, North Carolina, Ohio, Pennsylvania, Rhode Island, and South
Carolina, totaling approximately 60,000 square feet. Rental payments for
the Company's leased office and warehouse space for the fiscal year ended
April 30, 1997, amounted to approximately $656,000.
The Company currently leases its Greenville, North Carolina,
office from Richard J. Holloman, a director of the Company. See "Certain
Relationships and Related Transactions."
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Management considers all of its offices to be well maintained, in
good operating condition, and suitable and adequate for their intended
purposes.
ITEM 3. LEGAL PROCEEDINGS.
The Company is not a party to any pending legal proceedings other
than routine litigation incidental to its business. In the opinion of
management, the outcome of any litigation currently pending will not
materially affect the Company's financial condition or results of
operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matter was submitted during the fourth quarter of the fiscal
year covered by this Annual Report to a vote of security holders, through
the solicitation of proxies or otherwise.
SUPPLEMENTAL ITEM. EXECUTIVE OFFICERS OF THE REGISTRANT.
Executive officers of the Company are elected by the Board of
Directors at its organizational meeting following the annual meeting of
shareholders and serve until their successors are elected and qualified.
The following information includes the names and ages of the
executive officers of the Company who are not directors as of the date of
this Annual Report on Form 10-K, the officers' present position with the
Company, and the business experience of the officers during the past five
years.
Early Stephens (age 34) joined the Company in 1986 and worked as
a programmer/analyst. From 1988 until July 1997, Mr. Stephens was Project
Manager-Management Information Systems at Western Michigan University and
was responsible for the implementation of client server applications in LAN
environments. In July 1997, Mr. Stephens returned to the Company and was
named Corporate Technology Officer and is responsible for software product
development, establishment of technology standards for the Company's
products and services, and development of strategic plans.
Larry L. Terhune (age 40) joined the Company in 1992 and held the
position of Vice President-Software Development from 1993 until May 1997.
From 1995 until May 1997, Mr. Terhune was the Southeastern Regional Vice
President of the Company. Mr. Terhune currently holds the position of Vice
President-Marketing and Product Research and is responsible for development
and implementation of the Company's products and services. In addition,
Mr. Terhune oversees sales and customer service in the states of North
Carolina, South Carolina, Georgia, and Virginia. Prior to 1992, Mr.
Terhune was employed by Unisys as a software and systems manager.
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED SHAREHOLDER
MATTERS.
Manatron's Common Stock is traded over-the-counter and is
regularly quoted on The Nasdaq Stock Market under the symbol "MANA."
The following table shows the range of high and low sales price
quotations reported by The Nasdaq Stock Market for the years ended
April 30, 1997 and 1996:
<TABLE>
<CAPTION>
1997 1996
---- ----
QUARTER LOW HIGH LOW HIGH
------- --- ---- --- ----
<S> <C> <C> <C> <C> <C>
May - July $ 1 1/4 $ 2 1/4 $ 2 7/8 $ 3 5/8
August - October 7/8 2 3/8 2 5/8 3 1/2
November - January 1 3/8 2 1/8 1 1/2 3 1/16
February - April 1 1/2 2 13/16 1 5/8 2 1/8
</TABLE>
The Company historically has not paid cash dividends. The
Company, however, declared 5% stock dividends on September 16, 1994 and
September 9, 1993, to shareholders of record on October 14, 1994 and
October 15, 1993, respectively. The Company currently does not anticipate
paying cash dividends on its Common Stock in the foreseeable future, but
instead intends to retain earnings, if any, for the operation and expansion
of the Company's business.
As of July 23, 1997, the Company's Common Stock was held by
approximately 1,300 shareholders.
ITEM 6. SELECTED FINANCIAL DATA.
The following table sets forth selected financial data of the
Company for the periods indicated and has been derived from and should be
read in connection with the Company's Consolidated Financial Statements,
the related notes and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" appearing elsewhere in this Form 10-K.
The annual income statement and balance sheet data set forth below for the
years 1993 through 1997 have been derived from the Consolidated Financial
Statements of the Company audited by Arthur Andersen LLP, independent
auditors.
-14-
<PAGE>
<TABLE>
<CAPTION>
FIVE-YEAR OPERATING AND
FINANCIAL SUMMARY
---------------------------------------------------------------------------------------
YEARS ENDED APRIL 30,
---------------------
1997 1996<F1> 1995 1994 1993<F2>
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Operating Results:
Net Revenues $22,016,988 $23,946,243 $24,768,515 $18,203,653 $11,962,959
=========== =========== =========== =========== ===========
Gross Profit 8,636,635 8,427,625 9,564,453 8,634,917 5,613,196
=========== =========== =========== =========== ===========
Income (Loss) from
Operations (160,000) (2,870,606) 1,010,162 548,331 150,398
=========== =========== =========== =========== ===========
Other Income (Expense),
Net (246,659) (368,808) (245,755) 10,554 119,880
=========== =========== =========== =========== ===========
Net Income (Loss) (406,659) (3,039,414) 437,407 334,175 343,278
=========== =========== =========== =========== ===========
Earnings (Loss) Per
Share<F3> (.14) (1.03) .15 .12 .13
=========== =========== =========== =========== ===========
At Year-end:
Cash and Investments 457,691 352,074 437,327 164,445 2,211,981
=========== =========== =========== =========== ===========
Total Assets 14,854,268 16,583,187 20,988,190 14,644,452 11,931,280
=========== =========== =========== =========== ===========
Long-Term Debt 1,110,000 3,500,000 4,784,000 130,000 --
=========== =========== =========== =========== ===========
Book Value Per Share<F3> $ 1.68 $ 1.80 $ 3.06 $ 2.91 $ 2.78
=========== =========== =========== =========== ===========
-15-
<PAGE>
<FN>
- ---------------------------------------------------------------------------------------------
<F1> The 1996 results include a one-time $1.6 million management
restructuring charge, or $.54 per share, primarily related to the
retirement of Allen F. Peat, the Company's former Chairman,
President, and Chief Executive Officer, as further discussed in
the accompanying Notes to Consolidated Financial Statements.
<F2> The 1993 results include a one-time $186,000 gain, or $.07 per share,
related to the Company's adoption of SFAS 109 which was reflected as a
cumulative effect of change in accounting principle in the Company's
Consolidated Financial Statements.
<F3> All applicable per-share amounts have been retroactively restated for
the effect of the 5% stock dividends that were declared on September
16, 1994 and September 9, 1993, for shareholders of record on October
14, 1994 and October 15, 1993, respectively.
</FN>
</TABLE>
-16-
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The following section provides a narrative discussion about
Manatron's financial condition and results of operations. The comments
that follow should be read in conjunction with the Company's Consolidated
Financial Statements and related notes thereto appearing elsewhere in this
Annual Report on Form 10-K.
RESULTS OF OPERATIONS: FISCAL YEAR 1997 COMPARED TO FISCAL YEAR 1996
Net revenues of $5,549,496 for the three months ended April 30,
1997, have decreased by 7% compared to the $5,993,872 of net revenues
that were reported for the fourth quarter in the prior fiscal year.
Annual net revenues of $22,016,988 for fiscal 1997 are 8% lower than the
$23,946,243 of net revenues that were reported for the prior fiscal year.
These amounts include revenues from computer hardware and software
shipments, sales of computer forms and supplies, and various related
services such as mass real estate appraisal, software support, training,
hardware maintenance, digitizing property tax maps, and forms processing
and printing.
The year-to-date decrease in revenues primarily can be attributed
to two factors: delays in the completion of the Company's new Windows-based
appraisal, financial, and payroll products and the cyclical nature of the
Company's market for appraisal services in Indiana and Ohio. The Company
recently has started to release its new appraisal, financial, and payroll
software to a number of customers for their review and testing. In
addition, the Company signed over $6 million in long-term contracts for
appraisal services during the year ended April 30, 1997, and another $6
million in May of 1997. As a result, the backlog for these service is at
its highest level since Sabre was acquired in November of 1994.
Cost of revenues for the three months ended April 30, 1997,
decreased 12% to $3,324,509 compared to $3,763,206 for the fourth period
in the prior fiscal year. Annual cost of revenues decreased by 14% from
$15,518,618 in the prior fiscal year to $13,380,353 for the year ended
April 30, 1997. These decreases primarily are due to the reduction in net
revenues noted above and an improvement in the Company's gross profit
margins which can be attributed to a favorable change in the mix of
revenues. The prior fiscal year gross margins were approximately 37%
for the fourth quarter and 35% for the year while the current fiscal
year margins have improved to 40% and 39%, respectively. Sales of
software generally yield a much higher margin than sales of the
Company's other products and services.
Selling, general, and administrative expenses have decreased by
5% to $2,214,658 for the three months ended April 30, 1997, compared to
$2,333,502 for the comparable period in the prior fiscal year. Annual
-17-
<PAGE>
selling, general, and administrative expenses have decreased 9% from
$9,700,227 in fiscal 1996 to $8,796,635 in fiscal 1997. This decrease
primarily is due to the Company's efforts to reduce costs without
effecting the level of customer service that the Company historically
has provided.
As a result of the factors noted above, the Company reported
operating income of $10,329 for the three months ended and operating loss
of $160,000 for the year ended April 30, 1997. This is a substantial
improvement over the comparable prior year operating losses of $102,836
for the three months ended and $2,870,606 for the year ended April 30,
1996, even after the $1.6 million nonrecurring charge related to the
retirement of Allen F. Peat, the Company's former Chairman, Chief
Executive Officer, and President, is excluded from the prior year amount.
Interest expense which is included in other expense, has
decreased from $429,116 in fiscal 1996 to $305,632 in fiscal 1997 because
the Company has reduced its average outstanding indebtedness by
approximately $1.5 million.
The Company's provision (credit) for federal income taxes
generally fluctuates with the level of pretax income (loss). In addition,
the effective tax rate generally is impacted because of non-deductible
goodwill amortization related to the Company's acquisitions of ATEK and
SDS. However, as described in the accompanying Notes to Financial
Statements, the Company has established a valuation reserve of
approximately $900,000 against the future tax benefit related to the
losses for the years ended April 30, 1997 and 1996. As a result, only
$200,000 of tax credits were reflected in the accompanying Statements of
Operations for the years ended April 30, 1997 and 1996.
As a result of the factors noted above, the Company reported net
losses of $34,101 or $.01 per share for the three months ended and $406,659
or $.14 per share for the year ended April 30, 1997, versus net losses of
$186,321 or $.06 per share and $3,039,414 or $1.03 per share for the
comparable periods in the prior fiscal year. Weighted average shares
outstanding has decreased from 2,961,139 to 2,867,711 primarily because the
Company purchased approximately 150,000 shares of its common stock in March
of 1996 from Allen F. Peat in connection with his retirement.
RESULTS OF OPERATIONS: FISCAL YEAR 1996 COMPARED TO FISCAL YEAR 1995
Net revenues of $23,946,243 for the year ended April 30, 1996,
decreased by 3% as compared to net revenues of $24,768,515 that were
reported for the fiscal year ended April 30, 1995. Approximately $4.3
million of incremental net revenues for the fiscal year ended April 30,
1996, were a result of the Sabre acquisition. Since Sabre was not
acquired until November 11, 1994, the first and second quarters of
fiscal 1995 did not reflect revenue from that organization.
-18-
<PAGE>
This additional net revenue largely was offset by a $1.5 million
decrease in hardware sales, a $1.6 million decrease in software sales, and
a $1.4 million reduction in E911 service revenues. The decreases in
hardware and software sales were due to a reduction in order volume caused
in part by increased competition, market pressures on existing products,
and delays related to the introduction of the Company's new products. The
Company anticipated a reduction in E911 service revenues because most of
these long-term projects had been completed and no new ones were being
pursued.
Despite the decrease in net revenues, cost of revenues for the
fiscal year ended April 30, 1996, increased 2% to $15,518,618 over the
April 30, 1995 amount of $15,204,062. This increase was due to a reduction
in the Company's gross profit margin from 39% for the fiscal year ended
April 30, 1995, to 35% for the year ended April 30, 1996.
The margin reduction was due primarily to the decrease in
software sales noted above as well as the impact from mass real estate
appraisal contracts, which typically have a much lower margin than software
sales. Additionally, the April 30, 1996 margins on the appraisal contracts
were impacted negatively by higher than anticipated integration costs, a
few problem jobs that were a part of the Sabre acquisition, and the fact
that Sabre was in the flat part of its sales cycle.
Selling, general, and administrative expenses increased by 13% to
$9,700,227 for the year ended April 30, 1996, compared to $8,554,291 that
was reported for the year ended April 30, 1995. These increases primarily
were due to the additional personnel and related expenses associated with
the Sabre acquisition.
In addition to its normal operating expenses, the Company
recorded a nonrecurring management restructuring expense of $1.6 million
during the three months ended October 31, 1995. This expense was related
to the retirement of Allen F. Peat as Chairman, Chief Executive Officer,
and President as more fully described in Note 11 of the accompanying
Consolidated Financial Statements.
-19-
<PAGE>
As a result of the factors noted above, the Company reported an
operating loss of $2,870,606 for the year ended April 30, 1996, versus
operating income of $1,010,162 for the year ended April 30, 1995. Other
expense, which is primarily interest, increased from $245,755 in fiscal
1995 to $368,808 in fiscal 1996 due to borrowings required in connection
with the Sabre acquisition.
The tax credit for the year ended April 30, 1996, does not
reflect the tax effect of the entire loss for the year ended April 30,
1996, because the Company recorded a valuation allowance against certain
of its future tax benefits as described in Note 7 of the accompanying
Consolidated Financial Statements.
As a result of the factors noted above, the Company reported a
net loss of $3,039,414, or $1.03 per share, for the year ended April 30,
1996, versus net income of $437,407, or $.15 per share, for the year ended
April 30, 1995. Weighted average shares outstanding for both years did
not change significantly.
-20-
<PAGE>
QUARTERLY RESULTS
The following table sets forth selected unaudited quarterly
financial data for the eight quarters ended April 30, 1997:
<TABLE>
<CAPTION>
QUARTER ENDED
FISCAL 1997 FISCAL 1996
------------------------------------------------------------------------------------------------------------
JULY 31, OCTOBER 31, JANUARY 31, APRIL 30, JULY 31, OCTOBER 31, JANUARY 31, APRIL 30,
1996 1996 1997 1997 1995 1995 1996 1996
---------- ---------- ---------- ---------- ---------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Revenues $5,277,249 $5,691,262 $5,498,981 $5,549,496 $5,719,632 $ 5,595,034 $6,637,705 $5,993,872
Gross Profit 2,095,470 2,167,165 2,149,013 2,224,987 1,926,591 1,883,176 2,387,192 2,230,666
Operating Income (84,790) (60,394) (25,145) 10,329 (364,934) (2,257,008)<F1> (145,828) (102,836)
(Loss)
Other Expense, Net (64,511) (66,548) (71,170) (44,430) (93,258) (88,045) (104,020) (83,485)
Net Loss (149,301) (126,942) (96,315) (34,101) (321,692) (2,281,553)<F1> (249,848) (186,321)
Loss Per Share (.05) (.04) (.03) (.01) (.11) (.76) (.08) (.06)
<FN>
- -------------------
<F1> This amount includes a one-time management restructuring charge of
approximately $1.6 million, or $.54 per share, primarily related to
the retirement of Allen F. Peat, the Company's former Chairman,
President, and Chief Executive Officer, as further described in the
accompanying Notes to Consolidated Financial Statements.
</FN>
</TABLE>
-21-
<PAGE>
FINANCIAL CONDITION AND LIQUIDITY
Working capital of $1,574,860 at April 30, 1997, has decreased
compared to $3,043,460 at April 30, 1996. These levels reflect current
ratios of 1.19 and 1.42, respectively. The decrease is due primarily to
the reduction in revenues previously noted above which has resulted in lower
receivables. In addition, the cash generated from the collection of
receivables was used to reduce the Company's long-term debt by $2,390,000.
Shareholders' equity at April 30, 1997, decreased by $318,703 to
$4,825,667 from the balance reported at April 30, 1996, primarily because
of the $406,659 net loss. In addition, the leveraged ESOP transaction
and the issuance of stock in connection with company stock plans as more
fully described in Notes 9 and 10 to the accompanying Consolidated
Financial Statements have reduced shareholders' equity. As a result, book
value per share has decreased to $1.68 as of April 30, 1997, from $1.80 at
April 30, 1996.
The nature of the Company's business is not property or equipment
intensive. Capital expenditures, which were approximately $425,000 for
the year ended April 30, 1997, are slightly higher than the comparable
prior fiscal year amount of $369,000. These expenditures relate primarily
to the purchase of additional or new computer hardware and software for the
Company's technical and support personnel. Capital expenditures for
future periods are not anticipated to be significantly different from those
incurred in the current period.
Since the Company's revenues are generated from contracts with
local governmental entities, it is not uncommon for certain of its accounts
receivable to remain outstanding for approximately three to four months.
As of April 30, 1997, the Company owed $885,000 on its $5 million revolving
credit agreement and $325,000 on its ESOP loan, compared to $3,175,000 and
425,000, respectively at April 30, 1996. It is anticipated that the
revolving credit agreement, together with existing cash balances, and cash
generated from future operations will be sufficient for the Company to meet
its working capital requirements for at least the next 12 months.
The Company cannot determine precisely the effect of inflation on
its business. The Company continues, however, to experience relatively
stable costs for its inventory as the computer hardware market is very
competitive. The Company anticipates that inflationary price increases
related to labor and overhead will have a negative effect on cash flow and
net income to the extent that the increases cannot be offset through
improved productivity and price increases.
-22-
<PAGE>
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995
Certain information included under "Business" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
may constitute or include forward-looking statements. Such forward-looking
information involves important known and unknown risks and uncertainties
and other factors that may cause the actual results, performance, or
achievements of the Company to be materially different from any future
results, performance, or achievements expressed or implied by such forward-
looking statements. These risks and uncertainties include, but are not
limited to, uncertainties relating to economic conditions; possible future
acquisitions and divestitures; technological changes and developments in
the competitive environment in which the Company operates; spending
patterns of the Company's customers; success of the Company in
negotiations with its lenders; size, timing, and recognition of revenue
from significant orders; ability of the Company to successfully implement
its business strategy of developing and licensing client/server decision
support applications software designed to address specific industry markets;
new product introductions and announcements by the Company's competitors;
changes in Company strategy; product life cycles, cost and continued
availability of third party software and technology incorporated into the
Company's products; cancellations of maintenance and support agreements;
potential obsolescence of the Company's existing products or services;
pricing and availability of equipment, materials, inventories, and
programming; success in and expense associated with the development,
production, testing, marketing, and shipping of products, including a
failure to ship new products and technologies when anticipated, failure of
customers to accept these products and technologies when planned, and any
defects in products; perceived absolute or relative overall value of the
Company's products by the Company's customers, including features, quality,
and pricing compared to other competitive products; amount, and rate of
growth in, the Company's selling, general and administrative expenses;
occurrence of any expenditures and expenses, including depreciation and
research and development expenses; costs and other effects of legal and
administrative cases and proceedings (whether civil or criminal),
settlements, and investigators, claims, and changes in those items;
developments or assertions by or against the Company relating to
intellectual property rights; adoption of new, or changes in, accounting
policies and practices and the application of such policies and practices;
and effects or changes within the Company's organization or in compensation
and benefit plans. Since the purchase of the Company's products is
relatively discretionary and generally involves a significant commitment of
capital, in the event of any downturn in any potential customer's business
or the economy in general, purchases of the Company's products may be
deferred or canceled. Further, the Company's expense levels are based, in
part, on its expectations as to future revenue and a significant portion of
the Company's expenses do not vary with revenue. As a result, if revenue
-23-
<PAGE>
is below expectations, results of operations are likely to be materially
adversely affected. Shareholders are cautioned not to place undue reliance
on the forward-looking statements made in this Form 10-K, which speak only
as of the date hereof.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The response to this Item is set forth in Appendix A of this
Annual Report on Form 10-K and is incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The information regarding directors of the Company contained
under the captions "Board of Directors" and "Section 16(a) Beneficial
Ownership Reporting Compliance" in the definitive Proxy Statement of the
Company for its annual meeting of shareholders to be held October 9, 1997,
is incorporated by reference. The information regarding executive officers
is provided in the Supplemental Item following Item 4 in Part I of the
Annual Report.
ITEM 11. EXECUTIVE COMPENSATION.
The information contained under the captions "Compensation of
Directors," "Executive Compensation," and "Compensation Committee
Interlocks and Insider Participation" in the definitive Proxy Statement of
the Company for its annual meeting of shareholders to be held October 9,
1997, is incorporated by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information contained under the caption "Voting Securities,"
"Ownership of Common Stock," and "Securities Ownership of Management" in
the definitive Proxy Statement of the Company for its annual meeting of
shareholders to be held October 9, 1997, is incorporated by reference.
-24-
<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information under the captions "Compensation Committee
Interlocks and Insider Participation" and "Certain Relationships and
Related Transactions" in the definitive Proxy Statement of the Company for
its annual meeting of shareholders to be held October 9, 1997, is
incorporated by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
ITEM 14(A)(1). LIST OF FINANCIAL STATEMENTS. The following report,
Consolidated Financial Statements of the Company, and notes thereto are
filed as a part of this report:
- Report of Arthur Andersen LLP, Independent Public Accountants,
dated July 16, 1997
- Consolidated Balance Sheets as of April 30, 1997 and April 30,
1996
- Consolidated Statements of Operations for the years ended April
30, 1997, 1996, and 1995
- Consolidated Statements of Shareholders' Equity for the years
ended April 30, 1997, 1996, and 1995
- Consolidated Statements of Cash Flows for the years ended April
30, 1997, 1996, and 1995
- Notes to Consolidated Financial Statements
ITEM 14(A)(2). FINANCIAL STATEMENT SCHEDULES. Not applicable.
ITEM 14(A)(3). LIST OF EXHIBITS. The following exhibits are filed as a
part of this report:
EXHIBIT
NUMBER
3.1 Restated Articles of Incorporation. This exhibit is
incorporated by reference to the Registrant's Form 10-K
Annual Report for the fiscal year ended April 30, 1995.
3.2 Bylaws. This exhibit is incorporated by reference to the
Registrant's Form 10-K Annual Report for the fiscal year
ended April 30, 1995.
-25-
<PAGE>
4.1 Revolving Credit Loan Agreement. This exhibit is
incorporated by reference to the Registrant's Form 8-K
Current Report dated November 11, 1994.
4.2 First Amendment to Revolving Credit Agreement. This exhibit
is incorporated by reference to the Registrant's Form 10-K
Annual Report for the fiscal year ended April 30, 1996.
4.3 Second Amendment to Revolving Credit Agreement. This exhibit
is incorporated by reference to the Registrant's Form 10-K
Annual Report for the fiscal year ended April 30, 1996.
9 Buy and Sell and Voting Trust Agreement Concerning Stock of
Manatron, Inc. This exhibit is incorporated by reference to
the Registrant's Form 10-K Annual Report for the fiscal year
ended April 30, 1995.
10.1 Manatron, Inc. 1986 Incentive Stock Option Plan.<F*> This
exhibit is incorporated by reference to the Registrant's Form
10-K Annual Report for the fiscal year ended April 30, 1995.
10.2 Manatron, Inc. 1989 Stock Option Plan.<F*> This exhibit is
incorporated by reference to the Registrant's Form 10-K
Annual Report for the fiscal year ended April 30, 1995.
10.3 Manatron, Inc. 1995 Long-Term Incentive Plan.<F*> This
exhibit is incorporated by reference to the Registrant's
Definitive Proxy Statement for its Annual Meeting of
Shareholders held October 12, 1995.
10.4 Buy and Sell and Voting Trust Agreement Concerning Stock of
Manatron, Inc.<F*> See Exhibit 9 above.
10.5 Executive Employment Agreement with Randall L. Peat.<F*>
This exhibit is incorporated by reference to the Registrant's
Form 10-K Annual Report for the fiscal year ended April 30,
1995.
10.6 Form of Stock Purchase Warrant with Brent R. Nicklas, as
amended.<F*> This exhibit is incorporated by reference to
the Registrant's Form 10-K Annual Report for the fiscal year
ended April 30, 1995.
10.7 Manatron, Inc. Employee Stock Ownership and Salary Deferral
Plan.<F*> This exhibit is incorporated by reference to the
Registrant's Form 10-K Annual Report for the fiscal year
ended April 30, 1995.
-26-
<PAGE>
10.8 Manatron, Inc. Employee Stock Purchase Plan.<F*> This exhibit
is incorporated by reference to the Registrant's Form 10-K
Annual Report for the fiscal year ended April 30, 1993.
10.9 ATEK Information Services, Inc. Stock Purchase Agreement.
This exhibit is incorporated by reference to the Registrant's
Form 8-K Current Report dated July 28, 1993.
10.10 Stock Purchase Agreement between Ronald D. Stoynoff and Allen
F. Peat dated March 15, 1994. This exhibit is incorporated
by reference to the Registrant's Form 8-K Current Report
dated March 15, 1994.
10.11 Agreement between Manatron, Inc. and Ronald D. Stoynoff
effective as of April 1, 1994. This exhibit is incorporated
by reference to the Registrant's Form 8-K Current Report
dated March 15, 1994.
10.12 Asset Purchase Agreement between Manatron, Inc. and Moore
Business Forms, Inc. dated November 11, 1994. This exhibit
is incorporated by reference to the Registrant's Form 8-K
Current Report dated November 11, 1994.
10.13 Manatron, Inc. 1994 Long-Term Incentive Plan.<F*> This
exhibit is incorporated by reference to the Registrant's
Definitive Proxy Statement for its Annual Meeting of
Shareholders held October 6, 1994.
10.14 Agreement between Manatron, Inc. and Allen F. Peat dated
October 17, 1995.<F*> This exhibit is incorporated by
reference to the Registrant's Form 8-K Current Report dated
November 13, 1995.
10.15 Employment Agreement with Douglas A. Peat dated October 10,
1996.<F*>
10.16 Employment Agreement with Jane M. Rix dated October 10,
1996.<F*>
10.17 Employment Agreement with James W. Sanderbeck dated October
10, 1996.<F*>
10.18 Employment Agreement with Paul R. Sylvester dated October 10,
1996.<F*>
10.19 Employment Agreement with Larry L. Terhune dated October 10,
1996.<F*>
-27-
<PAGE>
10.20 Employment Agreement with Melvin J. Trumble dated October 10,
1996.<F*>
10.21 Manatron, Inc. Executive Incentive Plan for 1997.<F*>
10.22 Manatron, Inc. Executive Incentive Plan for 1998.<F*>
21 Subsidiaries of Registrant. This exhibit is incorporated by
reference to the Registrant's Form 10-K Annual Report for the
fiscal year ended April 30, 1996.
23 Consent of Independent Public Accountants.
24 Powers of Attorney.
27 Financial Data Schedule.
- ----------------------
<F*>Management contract or compensatory plan or arrangement.
The Company will furnish a copy of any exhibit listed above to
any shareholder of the Company without charge upon request to Jane M. Rix,
2970 South 9th Street, Kalamazoo, Michigan 49009.
ITEM 14(B) REPORTS ON FORM 8-K.
No current reports on Form 8-K were filed by the Company during
the last quarter of the period covered by this report.
-28-
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
MANATRON, INC.
Dated: July 29, 1997 By /S/ PAUL R. SYLVESTER
Paul R. Sylvester
President, Chief Executive Officer
and Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf
of the registrant and in the capacities and on the dates indicated.
/S/ PAUL R. SYLVESTER Date: July 29, 1997
Paul R. Sylvester
President, Chief Executive Officer,
and Chief Financial Officer
(Principal executive, financial, and
accounting officer)
/S/ RANDALL L. PEAT* Date: July 29, 1997
Randall L. Peat, Vice President
and Director
/S/ MELVIN J. TRUMBLE* Date: July 29, 1997
Melvin J. Trumble, Senior Vice
President and Director
/S/ RICHARD J. HOLLOMAN* Date: July 29, 1997
Richard J. Holloman, Director
-29-
<PAGE>
/S/ DOUGLAS A. PEAT* Date: July 29, 1997
Douglas A. Peat, Vice President -
Marketing and Director
/S/ JANE M. RIX* Date: July 29, 1997
Jane M. Rix, Secretary and
Director
/S/ STEPHEN C. WATERBURY* Date: July 29, 1997
Stephen C. Waterbury, Director
/S/ HARRY C. VORYS* Date: July 29, 1997
Harry C. Vorys, Director
/S/ GENE BLEDSOE* Date: July 29, 1997
Gene Bledsoe, Director
/S/ ALLEN F. PEAT* Date: July 29, 1997
Allen F. Peat, Director
*By /S/ PAUL R. SYLVESTER Date: July 29, 1997
Paul R. Sylvester
Attorney-in-Fact
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<PAGE>
APPENDIX A
MANATRON, INC. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
TOGETHER WITH AUDITORS' REPORT
<PAGE>
ARTHUR ANDERSON LLP
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders
of Manatron, Inc.:
We have audited the accompanying consolidated balance sheets of MANATRON,
INC. (a Michigan corporation) and Subsidiaries as of April 30, 1997 and
1996, and the related consolidated statements of operations, shareholders'
equity and cash flows for each of the three years in the period ended
April 30, 1997. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Manatron, Inc. and
Subsidiaries as of April 30, 1997 and 1996, and the results of their
operations and their cash flows for each of the three years in the period
ended April 30, 1997, in conformity with generally accepted accounting
principles.
/s/ Arthur Andersen LLP
Grand Rapids, Michigan
July 16, 1997
<PAGE>
<TABLE>
MANATRON, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF APRIL 30,
<CAPTION>
ASSETS 1997 1996
------ ---- ----
<S> <C> <C>
CURRENT ASSETS:
Cash and equivalents $ 457,691 $ 352,074
Accounts receivable, less allowances of
$775,000 in 1997 and $700,000 in 1996 4,917,325 5,538,249
Revenues earned in excess of billings and
retainages on long-term contracts 2,772,705 2,466,205
Current portions of notes receivable:
Installment notes receivable 703,667 714,576
Net investment in sales type leases 297,366 254,852
Inventories 275,142 386,980
Future tax benefit 330,000 332,000
Other current assets 320,431 182,167
----------- -----------
Total current assets 10,074,327 10,227,103
----------- -----------
NET PROPERTY AND EQUIPMENT 1,463,577 1,995,004
----------- -----------
OTHER ASSETS:
Notes receivable, less current portions:
Installment notes receivable 515,024 870,920
Net investment in sales type leases 123,000 402,000
Officers' receivable 354,013 380,233
Computer software development costs,
net of accumulated amortization 1,021,664 1,060,483
Goodwill, net of accumulated amortization 1,085,165 1,269,997
Other, net 217,498 377,447
----------- -----------
3,316,364 4,361,080
----------- -----------
$14,854,268 $16,583,187
=========== ===========
</TABLE>
-2-
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY 1997 1996
------------------------------------ ---- ----
<S> <C> <C>
CURRENT LIABILITIES:
Current portion of long-term debt $ 100,000 $ 100,000
Accounts payable 1,181,660 1,048,484
Billings in excess of revenues earned
on long-term contracts 1,749,100 1,687,561
Billings for future services 3,227,865 2,721,567
Restructuring reserve 237,728 218,294
Accrued liabilities:
Payroll and employee benefits 1,248,152 963,435
Accrued commissions 208,517 227,270
Other 546,445 217,032
----------- -----------
Total current liabilities 8,499,467 7,183,643
----------- -----------
DEFERRED INCOME TAXES 43,000 175,000
----------- -----------
LONG-TERM DEBT, less current portion 1,110,000 3,500,000
----------- -----------
OTHER LONG-TERM LIABILITIES 376,134 580,174
----------- -----------
SHAREHOLDERS' EQUITY:
Preferred stock, no par value,
2,000,000 shares authorized, none
issued - -
Common stock, no par value, 7,500,000
shares authorized, 2,874,327 and
2,862,522 shares issued and outstanding
at April 30, 1997 and 1996, respectively 5,418,203 5,444,497
Retained (deficit) earnings (149,974) 256,685
Deferred compensation (117,562) (131,812)
Unearned ESOP shares (325,000) (425,000)
----------- -----------
Total shareholders' equity 4,825,667 5,144,370
----------- -----------
$14,854,268 $16,583,187
=========== ===========
</TABLE>
The accompanying notes are an integral part of these
consolidated balance sheets.
-3-
<PAGE>
<TABLE>
MANATRON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED APRIL 30,
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
NET REVENUES:
Hardware, Software, and Supply Sales $ 5,508,705 $ 5,699,247 $ 8,998,686
Service Fees 16,508,283 18,246,996 15,769,829
----------- ----------- -----------
Total Net Revenues 22,016,988 23,946,243 24,768,515
----------- ----------- -----------
COST OF REVENUES:
Hardware, Software and Supplies 3,719,763 4,133,310 5,953,775
Services 9,660,590 11,385,308 9,250,287
----------- ----------- -----------
Total Cost of Revenues 13,380,353 15,518,618 15,204,062
----------- ----------- -----------
Gross Profit 8,636,635 8,427,625 9,564,453
SELLING, GENERAL, AND
ADMINISTRATIVE EXPENSES 8,796,635 9,700,227 8,554,291
RESTRUCTURING CHARGE - 1,598,004 -
----------- ----------- -----------
Income (loss) from operations (160,000) (2,870,606) 1,010,162
----------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest Expense (305,632) (429,116) (316,399)
Other 58,973 60,308 70,644
----------- ----------- -----------
(246,659) (368,808) (245,755)
----------- ----------- -----------
Income (loss) before provision
(credit) for federal income
taxes (406,659) (3,239,414) 764,407
----------- ----------- -----------
-4-
<PAGE>
PROVISION (CREDIT) FOR FEDERAL
INCOME TAXES - (200,000) 327,000
----------- ----------- -----------
NET INCOME (LOSS) $ (406,659) $(3,039,414) $ 437,407
=========== =========== ===========
EARNINGS (LOSS) PER SHARE $ (.14) $ (1.03) $ .15
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these
consolidated statements.
-5-
<PAGE>
<TABLE>
MANATRON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED APRIL 30, 1997, 1996, AND 1995
<CAPTION>
RETAINED TOTAL
COMMON (DEFICIT) DEFERRED UNEARNED SHAREHOLDERS'
STOCK EARNINGS COMPENSATION ESOP SHARES EQUITY
------ -------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C>
BALANCE AT APRIL 30, 1994 $ 5,110,493 $ 3,373,872 $ - $ - $ 8,484,365
Net income - 437,407 - - 437,407
Issuance of 9,119 shares
under employee stock plans 27,384 - - - 27,384
Issuance of 139,597 shares
in connection with a stock
dividend 515,180 (515,180) - - -
Issuance of 11,842 shares in
connection with an acquisition 50,329 - - - 50,329
----------- ----------- --------- --------- -----------
BALANCE AT APRIL 30, 1995 5,703,386 3,296,099 - - 8,999,485
Net loss - (3,039,414) - - (3,039,414)
Establishment of Employee Stock
Ownership Plan - - - (500,000) (500,000)
Issuance of 57,664 shares
under employee stock plans 175,874 - (142,500) - 33,374
Issuance of 15,849 shares for
payment of services 25,755 - - - 25,755
Purchase of 149,930 shares in
connection with the restructuring
charge (Note 11) (431,053) - - - (431,053)
Compensation expense (29,465) - 10,688 75,000 56,223
----------- ----------- --------- --------- -----------
BALANCE AT APRIL 30, 1996 5,444,497 256,685 (131,812) (425,000) 5,144,370
Net loss - (406,659) - - (406,659)
Issuance of 11,806 shares under
employee stock plans 18,796 - - - 18,796
Compensation expense (45,090) - 14,250 100,000 69,160
----------- ----------- --------- --------- -----------
BALANCE AT APRIL 30, 1997 $ 5,418,203 $ (149,974) $(117,562) $(325,000) $ 4,825,667
=========== =========== ========= ========= ===========
</TABLE>
-6-
<PAGE>
The accompanying notes are an integral part of these
consolidated statements.
-7-
<PAGE>
<TABLE>
MANATRON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED APRIL 30,
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (406,659) $(3,039,414) $ 437,407
Adjustments to reconcile net income (loss)
to net cash and equivalents
provided by operating activities:
Depreciation and amortization 1,819,512 1,954,125 1,687,381
Deferred income taxes (130,000) (227,000) 686,235
Deferred compensation expense 69,160 56,223 -
Change in assets and liabilities, net of
effects from acquisition (Note 2):
Decrease (increase) in:
Accounts and notes receivable 589,319 2,812,769 (1,211,321)
Revenues in excess of billings
and retainages (306,500) (112,157) 1,230,943
Inventories 111,838 345,341 351,233
Other current assets (138,264) (70,189) 119,755
Increase (decrease) in:
Accounts payable and accrued
liabilities 728,553 115,962 504,935
Billings in excess of revenues
earned 61,539 228,507 (527,040)
Billings for future services 506,298 (135,825) (149,288)
Restructuring reserves 19,434 218,294 -
----------- ----------- -----------
Net cash and equivalents provided
by operating activities 2,924,230 2,146,636 3,130,240
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Decrease (increase) in long-term receivables 661,116 122,633 (405,687)
Additions to property and equipment (424,789) (368,953) (536,263)
Investments in computer software (492,758) (439,655) (584,171)
Proceeds from sales of property and
equipment 16,426 32,848 39,176
Net cash (paid) received for acquisition - 100,000 (4,000,000)
Increase (decrease) in other assets (3,364) 6,453 (226,797)
----------- ----------- -----------
-8-
<PAGE>
Net cash and equivalents used
for investing activities (243,369) (546,674) (5,713,742)
----------- ----------- -----------
</TABLE>
-9-
<PAGE>
<TABLE>
MANATRON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED APRIL 30,
(CONTINUED)
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of debt (2,390,000) (1,364,000) (2,005,000)
Proceeds from issuance of long-term debt - - 4,834,000
Proceeds from issuance of common stock 18,796 29,664 27,384
Purchase of common stock in restructuring - (431,053) -
Purchase of common stock for ESOP - (500,000) -
Increase (decrease) in other long-term liabilities (204,040) 580,174 -
----------- ----------- -----------
Net cash and equivalents (used for)
provided by financing activities (2,575,244) (1,685,215) 2,856,384
----------- ----------- -----------
CASH AND EQUIVALENTS:
Increase (decrease) 105,617 (85,253) 272,882
Balance at beginning of year 352,074 437,327 164,445
----------- ----------- -----------
Balance at end of year $ 457,691 $ 352,074 $ 437,327
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these
consolidated statements.
-10-
<PAGE>
MANATRON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
THE COMPANY
Manatron, Inc. and its subsidiaries (the "Company" or "Manatron")
design, market, install, and maintain advanced computer-based
"turn-key" data processing systems primarily for state and local
governments, using general purpose computer hardware produced by
leading manufacturers and proprietary software developed or
purchased by Manatron. The Company also provides mass real
estate appraisal and mapping services for state and local
governments. The Company's business primarily is concentrated
in the Midwest and Southeast regions of the United States.
PRINCIPLES OF CONSOLIDATION
The accompanying Consolidated Financial Statements include the
accounts of Manatron and its wholly-owned subsidiaries, ATEK
Information Services, Inc. ("ATEK") and Specialized Data Systems,
Inc. ("SDS"). In addition, the accompanying Consolidated
Financial Statements include the accounts of Sabre Systems and
Service ("Sabre") which is a division of the Company. All
significant intercompany accounts and transactions have been
eliminated. As more fully explained in Note 2, Sabre was
acquired in November of 1994. Accordingly, the accompanying
Consolidated Financial Statements only reflect the results of
its operations since that date.
REVENUE RECOGNITION
Revenue and costs related to sales of computer hardware and
supplies are recognized when title passes, which is normally the
shipping or installation date. Revenue from software licensing
fees is recognized when the license agreements are consummated,
which generally is also the shipping or installation date. The
Company's contracts typically do not contain a right of return.
As of April 30, 1997 and 1996, the reserve for returns was not
significant.
Revenue and costs related to leases of computer hardware are
recognized in accordance with Statement of Financial Accounting
Standards No. 13, "Accounting for Leases" (see Note 3).
-11-
<PAGE>
MANATRON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
Revenue from in-house data processing, maintenance contracts, and
software support services normally is billed in advance on a
monthly, quarterly, or annual basis. These billings are
recognized as revenue on a straight-line basis over the periods
covered by the agreements. At the end of a reporting period, the
balance of billings not yet recognized as revenue are reflected
as "Billings for Future Services" in the Company's consolidated
balance sheets. Costs related to these services are expensed as
incurred.
Revenue and costs under long-term mass real estate appraisal,
mapping, and software development contracts, which typically
range from one to three years, are recognized on a percentage
of completion basis. Losses on these contracts, if any, are
recognized when they become known. As of April 30, 1997 and
1996, the reserve for contract losses was not significant.
CASH AND EQUIVALENTS
Cash and equivalents consist of money market funds and short-term
time deposits.
INVENTORIES
The Company values its inventories at the lower of cost or
market. Cost is determined using the first-in, first-out method.
The Company's inventories consist of the following at April 30:
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C> <C>
Computer hardware and repair parts $ 42,442 $141,418
Data processing supplies and
purchased software products 232,700 245,562
-------- --------
$275,142 $386,980
======== ========
</TABLE>
-12-
<PAGE>
MANATRON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
PROPERTY AND EQUIPMENT, AT COST
Net property and equipment consists of the following at April
30:
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C> <C>
Land $ 25,650 $ 25,650
Building and improvements 460,945 449,547
Furniture and fixtures 619,674 595,788
Rental equipment 428,401 398,720
Office equipment and software 3,658,845 3,468,679
Vehicles 291,122 342,936
----------- -----------
5,484,637 5,281,320
Less- Accumulated depreciation (4,021,060) (3,286,316)
----------- -----------
$ 1,463,577 $ 1,995,004
=========== ===========
</TABLE>
Depreciation of property and equipment is computed over the
estimated useful lives of the related assets using the straight-
line method for financial reporting and accelerated methods for
tax purposes. Maintenance and repair costs which do not add to
the economic useful lives of the related assets are expensed as
incurred.
The estimated useful lives of the assets used to compute
depreciation expense are as follows:
-13-
<PAGE>
MANATRON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
<TABLE>
<CAPTION>
ASSET DESCRIPTION YEARS
----------------- -----
<S> <C> <C>
Building and improvements 5-25
Furniture and fixtures 4-7
Rental equipment 3
Office equipment and software 4-7
Vehicles 3-5
</TABLE>
OFFICERS' RECEIVABLE
At April 30, 1997 and 1996, the Company had $354,013 and $380,233
in receivables from certain of its officers. These receivables
are non-interest bearing and are scheduled to be repaid in 1999.
SOFTWARE DEVELOPMENT COSTS
The Company capitalized approximately $493,000, $435,000, and
$584,000 of computer software development costs during fiscal
1997, 1996, and 1995, respectively.
Amortization of software development costs is computed using the
straight-line method over the estimated economic lives of the
products which approximate five years. Accumulated amortization
was approximately $2,926,000 and $2,395,000 as of April 30, 1997
and 1996, respectively. Amortization expense was approximately
$531,000, $465,000, and $364,000 in fiscal 1997, 1996, and 1995,
respectively, and is included in cost of revenues in the
accompanying consolidated statements of operations.
Research and development costs incurred to establish
technological feasibility were insignificant for fiscal 1997,
1996, and 1995, respectively, and have been expensed.
Substantially all of the Company's research and development
costs relate to computer software development.
-14-
<PAGE>
MANATRON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
GOODWILL
In connection with certain acquisitions, the Company has recorded
approximately $1,848,000 of goodwill which is being amortized
over a 10-year period using the straight line method.
Accumulated amortization was approximately $763,000 and $578,000
as of April 30, 1997 and 1996, respectively.
STOCK-BASED COMPENSATION
The Company accounts for stock-based compensation using the
intrinsic value method presented in Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees."
Accordingly, compensation cost for stock options is measured as
the excess, if any, of the quoted market price of the Company's
stock at the date of grant over the amount the employee must pay
to acquire the stock. The Company has provided pro forma
disclosure of the fair value at the date of grant of stock
options granted during fiscal 1997 and 1996 in Note 8 in
accordance with the requirements of Statement of Financial
Accounting Standards Board No. 123 "Accounting for Stock-Based
Compensation" ("SFAS 123").
EARNINGS PER SHARE
Earnings per share is computed based upon the weighted average
number of shares outstanding during the year. The weighted
average number of shares outstanding are 2,867,711, 2,961,139,
and 2,933,341 for fiscal 1997, 1996, and 1995, respectively.
ESTIMATES
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
-15-
<PAGE>
MANATRON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
RECLASSIFICATIONS
Certain reclassifications have been made to prior year statements
to conform to the current year presentation.
(2) ACQUISITION OF SABRE
Effective November 11, 1994, the Company acquired substantially
all of the assets of Sabre in exchange for $4 million in cash
(subject to adjustment based on the resolution of a closing net
asset statement) together with the assumption of certain
liabilities and obligations of Sabre. Of the $4 million paid
at the closing date, $3.4 million was paid to the previous
owner, and $600,000 was placed in escrow. On July 28, 1995,
the Company reached a final resolution of the closing net
asset statement which resulted in the purchase price being
reduced to $3.9 million. Sabre is based in Ohio and provides
real estate mass appraisal and property mapping services and
sells computer hardware and software to local governments.
The acquisition of Sabre was accounted for as a purchase.
Accordingly, the purchase price was allocated to the net assets
acquired based upon their fair market values. The acquisition
price was less than the book value of the net assets acquired,
therefore, no goodwill was recorded.
Pro forma unaudited operating results of the Company, assuming
the acquisition of Sabre had been made as of May 1, 1994, are
summarized below:
<TABLE>
<CAPTION>
1995
----
<S> <C> <C>
Net revenues $30,543,000
Net income $ 627,000
Earnings per share $ .21
</TABLE>
-16-
<PAGE>
MANATRON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
(2) ACQUISITION OF SABRE, continued
These pro forma results have been prepared for comparative
purposes only and include certain adjustments, such as
amortization of acquisition costs and increased interest
expense on the acquisition debt. They do not purport to be
indicative of the results of operations which actually would
have resulted had the combination been in effect on May 1, 1994,
or of future results of operations of the consolidated entities.
(3) SALES TYPE LEASES AND OPERATING LEASES
Certain of the Company's leases meet the criteria of sales type
leases as defined by Statement of Financial Accounting Standards
No. 13, "Accounting for Leases." As a result, the difference
between the normal selling price of the equipment and the cost is
recognized as profit at the inception of the lease. The sum of
the aggregate rental payments to be received plus the unguaranteed
residual value, if any, minus the selling price of the equipment
at the inception of a lease is amortized to income over the
respective lease terms using the effective interest method.
Residual values generally are not significant given that the
computer hardware market is subject to rapid technological
change.
The following are components of the net investment in sales type
leases as reflected in the accompanying consolidated balance
sheets at April 30:
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C> <C>
Future minimum rentals receivable $476,284 $751,257
Less- Unamortized unearned income (55,918) (94,405)
-------- --------
Net investment in sales type leases $420,366 $656,852
======== ========
</TABLE>
-17-
<PAGE>
MANATRON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
(3) SALES TYPE LEASES AND OPERATING LEASES, continued
Substantially all future minimum rentals receivable on sales type
leases are due in the next three fiscal years.
The Company also leases computer equipment to customers under
operating lease agreements with various terms through fiscal
2001. The accumulated depreciation on rental equipment was
$301,000 and $262,000 at April 30, 1997 and 1996, respectively.
Future minimum lease payments to be received under noncancelable
operating leases at April 30, 1997, are approximately as follows:
<TABLE>
<CAPTION>
FISCAL YEAR AMOUNT
----------- ------
<S> <C> <C>
1998 $284,000
1999 144,000
2000 90,000
2001 20,000
</TABLE>
(4) INSTALLMENT NOTES RECEIVABLE
The Company also offers its hardware and software solutions
for sale on an installment basis and, as a result, has notes
receivable totaling $1,218,691 and $1,585,496 at April 30, 1997
and 1996, respectively. The notes have various payment terms,
generally bear interest at rates approximating prime, and have
various maturity dates through January of 1999.
(5) LONG-TERM DEBT
The Company has a $5 million long-term revolving line of credit
with a bank secured by substantially all the assets of the
Company, which matures on December 1, 1999. Borrowings under
this Long-Term Credit Agreement at April 30, 1997 and 1996 were
$885,000 and $3,175,000, respectively. Interest is payable
monthly at the bank's prime rate which was 8.50% at April 30,
1997.
-18-
<PAGE>
MANATRON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
(5) LONG-TERM DEBT, continued
Additionally, the Company is required to, among other things,
collect specified levels of past due receivables, generate
minimum levels of cash flow from operations, maintain a certain
level of tangible net worth, a minimum debt-to-equity ratio, and
minimum working capital. The Company was either in compliance
with these provisions of the debt agreement as of April 30, 1997
or had obtained appropriate waivers.
Cash paid for interest approximated the amounts shown as interest
expense in the accompanying consolidated statements of
operations.
(6) RENTAL COMMITMENTS
The Company leases the majority of its office and warehouse space
under agreements with various terms through fiscal 2001. Total
rent expense reflected in the accompanying consolidated
statements of operations was approximately $656,000, $750,000, and
$575,000 for fiscal 1997, 1996, and 1995, respectively.
Future minimum rental payments under noncancelable operating
leases at April 30, 1997, are approximately as follows:
<TABLE>
<CAPTION>
FISCAL YEAR AMOUNT
----------- ------
<S> <C> <C>
1998 $488,000
1999 397,000
2000 189,000
2001 8,000
</TABLE>
-19-
<PAGE>
MANATRON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
(7) FEDERAL INCOME TAXES
The provision (credit) for federal income taxes consists of the
following:
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C> <C>
Currently payable (refundable) $ 130,000 $ 27,000 $(359,200)
Deferred provision (credit) (130,000) (227,000) 686,200
--------- --------- ---------
$ 0 $(200,000) $ 327,000
========= ========= =========
</TABLE>
The Company's effective tax rate was 6% and 43% in fiscal 1996
and 1995, respectively. A reconciliation of the amounts computed
by applying the statutory federal income tax rate of 34% to
pretax income and the provision (credit) for federal income taxes
as reflected in the accompanying consolidated statements of
operations is as follows:
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C> <C>
Computed tax (credit) expense
using the 34% statutory rate $(138,000) $(1,101,000) $260,000
Operating losses with no current
tax benefit 78,000 834,000 -
Tax-exempt interest income (17,000) (18,000) (22,000)
Non-deductible goodwill
amortization 63,000 63,000 63,000
Non-deductible meals and
entertainment 30,000 34,000 25,000
Other (16,000) (12,000) 1,000
--------- ----------- --------
$ 0 $ (200,000) $327,000
========= =========== ========
</TABLE>
-20-
<PAGE>
MANATRON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
(7) FEDERAL INCOME TAXES, continued
The tax effect and type of significant temporary differences
which gave rise to the future tax benefits and deferred income
taxes as of April 30, 1997 and 1996, are approximately as
follows:
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C> <C>
Deferred tax assets:
Valuation reserves not currently deductible $ 412,000 $ 531,000
Net operating loss carryforward 338,000 424,000
Accrued liabilities not currently deductible 390,000 308,000
Restructuring reserves not currently deductible 193,000 255,000
Alternative minimum tax credit carryforward 99,000 99,000
Other 210,000 7,000
---------- ----------
1,642,000 1,624,000
---------- ----------
Valuation Allowance (912,000) (834,000)
---------- ----------
730,000 790,000
---------- ----------
Deferred tax liabilities:
Software development costs expensed
for tax purposes (311,000) (304,000)
Property and equipment depreciation
and basis differences - (56,000)
Lease accounting method differences (132,000) (273,000)
---------- ----------
(443,000) (633,000)
---------- ----------
Net deferred tax asset $ 287,000 $ 157,000
========== ==========
</TABLE>
During 1997 and 1996, the Company recorded a valuation allowance
against certain of its future tax benefits due to the uncertainty
of their ultimate realization. As of April 30, 1997, the Company
had tax net operating loss carryforwards of approximately
-21-
<PAGE>
MANATRON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
(7) FEDERAL INCOME TAXES, continued
$995,000. These net operating loss carryforwards are available
to offset future taxable income through the following fiscal
years: $473,000 in 2010 and $522,000 in 2011. Federal income
tax refunds were approximately $261,000, $178,000, and $207,000
during fiscal 1997, 1996, and 1995, respectively.
(8) EMPLOYEE STOCK PLANS
The Manatron, Inc. Employee Stock Purchase Plan (the "Plan")
provides for eligible employees to authorize the Company to
withhold up to 10% of their base compensation for the purchase of
shares of Manatron common stock. Approximately 8% of the
Company's employees participate in the Plan. As of April 30,
1997, 33,063 shares of common stock are available for purchase.
The purchase price for each share is equal to 85% of the market
value on the day of the purchase. Shares are purchased on the
last day of each calendar quarter. No more than 5,000 shares may
be purchased in any one quarter. In addition, the market value
of shares purchased by a participant cannot exceed $25,000 in any
one year. No amounts are charged to operations related to the
Plan. Since the inception of the Plan in 1987, and through April
30, 1997, a total of 85,026 shares have been purchased by
participants at prices ranging from $1.27 to $6.27 per share.
The Manatron, Inc. Restricted Stock Plan of 1987 (the "Restricted
Plan") is intended to assist the Company in attracting, rewarding,
and retaining well-qualified directors, executive personnel, and
other key employees by offering them additional incentives to
contribute to the long-term interests of the Company. The
Restricted Plan provides for a committee appointed by the Board
of Directors to grant up to 50,000 shares of common stock subject
to certain restrictions. As of April 30, 1997, 41,300 shares
remain available for issuance under the Restricted Plan.
The Company has four stock option plans: the Manatron, Inc. 1986
Incentive Stock Option Plan, the Manatron, Inc. 1989 Stock Option
Plan, the Manatron, Inc. 1994 Long-Term Incentive Plan and the
Manatron, Inc. 1995 Long-Term Incentive Plan (the "Option Plans").
Under the Option Plans, 1,025,000 shares of common stock were
reserved for issuance. The Option Plans provide for a committee
appointed by the Board to grant to directors, officers, and other
-22-
<PAGE>
MANATRON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
(8) EMPLOYEE STOCK PLANS, continued
key employees up to 100,000 shares of common stock subject to
certain restrictions and up to 925,000 options to purchase shares
of the Company's common stock at a price which is at least equal
to the fair market value of such shares on the date of grant.
For employees of the Company owning stock with more than 10% of
the voting rights, the exercise price of the options must be at
least 110% of the fair market value of the shares on the date of
grant. The aggregate fair market value of options granted to any
employee in any calendar year cannot exceed $100,000. Options
granted under the Option Plans generally are exercisable within
limits specified at the time of grant and expire five to 10
years from the date of grant.
The Company accounts for these plans under APB Opinion No. 25.
As a result, no compensation cost has been recognized with
respect to the authorization, grant, or exercise of these options.
Had compensation costs for these plans been determined consistent
with SFAS 123, the Company's net income and earnings per share
would have been reduced to the following pro forma amounts:
<TABLE>
<CAPTION>
1997 1996
---------- ------------
<S> <C> <C> <C>
NET INCOME
----------
As Reported $(406,659) $(3,039,414)
Pro Forma (525,697) (3,062,709)
EPS
---
As Reported $ (.14) $ (1.03)
Pro Forma (.18) (1.03)
</TABLE>
Because the SFAS 123 method of accounting has not been
applied to options granted prior to January 1, 1995, the
resulting pro forma compensation cost may not be representative
of that to be expected in future years.
-23-
<PAGE>
MANATRON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
(8) EMPLOYEE STOCK PLANS, continued
A summary of the status of the Company's Option Plans at
April 30, 1997, 1996, and 1995 and changes during
the years then ended is presented in the table below.
<TABLE>
<CAPTION>
1997 1996 1995
----------------------------------- --------------------------------- --------------------------------
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE EXERCISE EXERCISE EXERCISE
SHARES PRICE PRICES SHARES PRICE PRICES SHARES PRICE PRICES
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Outstanding at
Beginning of Year 585,156 $ 2.31 $ 1.625-$5.25 348,032 $ 3.76 $ 2.50-$5.25 194,919 $4.01 $ 2.50-$5.25
Granted 40,000 $ 1.67 $1.5625-$2.3375 408,500 $ 1.65 $1.625-$2.875 158,626 $3.46 $ 2.50-$5.25
Exercised (1,000) $1.625 $ 1.625 (9,258) $ 2.59 $ 2.50-$2.875 (1,050) $3.00 $ 3.00
Forfeited (80,083) $ 3.65 $ 1.625-$5.125 (161,540) $ 3.76 $ 3.00-$5.25 (4,463) $3.39 $2.875-$4.00
Expired - $ - - (578) $2.875 $ 2.875 - $ - $ -
------- -------- -------
Outstanding at
End of Year 544,073 $ 2.07 $ 1.5625-$5.25 585,156 $ 2.31 $ 1.625-$5.25 348,032 $3.76 $ 2.50-$5.25
------- -------- -------
Exercisable at
End of Year 396,323 $ 2.22 306,156 $ 2.78 240,132 $3.82
Weighted Average
of Fair Value
of Options
Granted $ 1.27 $ 1.24
</TABLE>
-24-
<PAGE>
MANATRON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
(8) EMPLOYEE STOCK PLANS, continued
The fair value of each option grant is estimated on the date of
grant using the Black Scholes option pricing model with the
following weighted average assumptions used for grants in fiscal
1997 and 1996, respectively: risk-free interest rates ranging
from 5.97% to 6.89%; expected dividend yields of 0.0 and 0.0%;
expected lives of 10 years; expected volatility ranging from
60.50% to 63.65%.
During fiscal 1996, 40,000 shares of restricted stock were
granted that vest over a 10-year period at a market price of
$3.50. As a result, $140,000 was recorded as deferred
compensation and is being amortized over 10 years. No
restricted shares were granted in fiscal 1997 or fiscal 1995.
As of April 30, 1997, 60,000 shares of restricted common
stock may be issued and 266,446 stock options may be granted
under the Option Plans.
(9) STOCK WARRANTS
As of April 30, 1997, the Company has outstanding 25,000 warrants
for the purchase of its common stock which expire on May 3, 1998.
These warrants were issued to a public relations firm retained
during 1995 and are exercisable at $3.50 per share.
(10) EMPLOYEE BENEFIT PLANS
The Company has an Employee Stock Ownership Plan ("ESOP"), profit
sharing, and 401(k) plan covering substantially all of its
employees. The Company's contribution to the profit sharing plan
is subject to the discretion of the Board of Directors. No
contributions were approved for the years ended April 30, 1997,
1996, and 1995, due to the reduced profitability levels of the
Company.
The 401(k) plan allows eligible employees to withhold up
to 15% of their pay on a pretax basis, subject to certain IRS
limitations. This money is deposited into a trust in which the
employee has a number of investment alternatives. The Company
provides a matching contribution equal to 25% of employee
contributions not to exceed 1.25% of an employee's gross pay.
Company matching contributions charged to expense for the years
-25-
<PAGE>
MANATRON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
(10) EMPLOYEE BENEFIT PLANS, continued
ended April 30, 1997, 1996, and 1995, were approximately $74,000,
$83,000, and $60,000, respectively.
On June 29, 1995, the ESOP purchased 142,858 common shares from
Allen F. Peat, the Company's former Chairman, 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 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, 1997, seven quarterly installments have been
made. The $325,000 balance is reflected as a liability and a
like amount, considered deferred compensation, has been recorded
as a reduction of shareholders' equity in the accompanying
consolidated balance sheets.
As of April 30, 1997, 49,994 common shares have been committed to
be released for allocation to ESOP participants. Allocations
occur on December 31 of each year. The fair market value of
these shares at the time they were committed for release, which
aggregated approximately $55,000 in 1997 and $46,000 in 1996, has
been recorded as compensation expense in the accompanying
consolidated statements of operations. The difference between
these amounts and the original cost of the shares, which is
approximately $45,000 for 1997 and $29,000 for 1996, has been
charged against common stock. The fair value of the unearned
ESOP shares as of April 30, 1997 approximated $163,000.
The Board of Directors approved an additional contribution of
23,731 shares of common stock or approximately $50,000 to the
ESOP for the year ended April 30, 1997. No such contributions
were approved for the years ended April 30, 1996 and 1995 due
to the reduced profitability levels of the Company.
The Company is self-insured for all employees' medical expenses
incurred to a level of $30,000 per individual or family per year.
Employees' medical expenses incurred beyond the $30,000 level are
insured under a stop-loss coverage insurance plan. The Company
does not provide health care or other post-employment benefits to
retired employees.
-26-
<PAGE>
MANATRON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
(11) SEVERANCE AGREEMENT
The Company and Allen F. Peat entered into an agreement,
effective as of October 17, 1995, setting forth the terms
pursuant to which Mr. Peat retired as Chairman, President, and
Chief Executive Officer. The Agreement terminated Mr. Peat's
five-year employment agreement and provided for severance
compensation, deferred compensation, and other payments totaling
approximately $1.3 million to be paid through December of 1999.
The present value of these payments plus legal and professional
costs associated with the restructuring of the Company are
included in the $1.6 million restructuring charge that is
reflected in the accompanying consolidated statements of
operations. In addition, the Company assumed and paid on
March 15, 1996, the third and final installment of
approximately $750,000 owed by Mr. Peat to Ronald D. Stoynoff
pursuant to a stock purchase agreement between the two parties.
In exchange for assuming this obligation, the Company received
approximately 150,000 shares of Manatron common stock from Mr.
Peat.
The fair market value of the stock received from Mr. Peat was
approximately $431,000 and has been recorded as a reduction to
common stock in the accompanying consolidated balance sheets.
The $319,000 difference between the fair market value of the
stock and the total assumed obligation of $750,000 was
considered compensation expense and, accordingly, also was
included in the $1.6 million restructuring charge. The
remaining obligations under this agreement as of April 30,
1997, have been appropriately classified as current or
long-term liabilities in the accompanying Consolidated
Financial Statements.
(12) RELATED PARTY TRANSACTIONS
In September 1995, the Company purchased the portion of the
corporate office building it had previously leased from Allen F.
Peat. The purchase price of $200,000 was paid in cash and was
based on an independent appraisal.
-27-
<PAGE>
MANATRON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
(13) SHAREHOLDER RIGHTS PLAN
On March 11, 1997, the Board of Directors declared a dividend
distribution of one preferred stock purchase right ("Right") on
each outstanding share of common stock of the Company. Each
Right will, under certain circumstances, entitle the holder to
buy one one-hundredth (1/100) of a share of Series A preferred
stock, no par value ("Preferred Stock"), at an exercise price of
$20 per share, subject to adjustment. Each share of Preferred
Stock purchasable upon exercise of the Rights will have a minimum
preferential quarterly dividend of $1 per share and will be
entitled to an aggregate dividend of 100 times the dividend
declared on the shares of common stock. In the event of
liquidation, the holders of Preferred Stock will receive a
minimum preferred liquidation payment of $10 per share and will
be entitled to receive an aggregate liquidation payment equal to
100 times the payment made per share of common stock. Each share
of Preferred Stock will have 100 votes, voting together with the
common stock.
The Rights will be exercisable and transferable separately from
the common stock only if a person or group who does not hold 15%
or more of Manatron's outstanding common stock as of June 16,
1997, subsequently acquires 15% or more of Manatron's outstanding
common stock or if a holder of 15% or more of Manatron's
outstanding common stock as of June 16, 1997, subsequently
acquires 20% or more of Manatron's outstanding common stock or if
any person or group commences or announces an intention to
commence a tender or exchange offer the consummation of which
would give such person or group beneficial ownership of 30% or
more of Manatron's outstanding common stock.
Additionally, if the Company subsequently engages in a merger or
other business combination transaction in which the Company is
not the surviving corporation, or in which the outstanding shares
of the Company's common stock are changed or exchanged, or if 50%
or more of the Company's assets or earning power is sold, proper
provision shall be made so that each holder of a Right shall
thereafter have the right to receive, upon exercise thereof at
the then current exercise price of the Right, that number of
shares of common stock of the acquiring company which at the time
of such transaction would have a market value of two times the
-28-
<PAGE>
MANATRON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
(13) SHAREHOLDER RIGHTS PLAN, continued
exercise price of the Right. Alternatively, in the event that,
anytime following exercise of the Rights, an Acquiring Person (as
defined in the Rights Agreement between the Company and Registrar
and Transfer Company (the "Rights Agreement")) were to acquire
the Company by means of a reverse merger in which the Company and
its stock survive, or were to engage in certain "self-dealing"
transactions, or were to acquire 30% of the then outstanding
shares of common stock (except pursuant to an offer for all
outstanding shares of common stock deemed fair by the Company's
Board of Directors as provided in the Rights Agreement), each
Right not owned by such Acquiring Person (whose Rights would
thereafter be void) would become exercisable for the number of
shares of common stock which, at that time, would have a market
value of two times the then exercise price of the Right. Prior
to a person becoming an Acquiring Person, the Rights may be
redeemed at a redemption price of $.01 per Right, subject to
adjustment. On June 16, 1997, the record date for distribution
of the Rights, there were 2,874,327, shares of common stock
outstanding. The Rights are subject to amendment by the Board
and will expire on June 15, 2007. As of April 30, 1997, no
rights have become exercisable.
(14) FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amount of the Company's financial instruments
included in current assets and current liabilities approximate
their fair value due to their short-term nature. The fair value
of the notes receivable is estimated by discounting expected
future cash flows using current interest rates at which similar
loans would be made to customers with similar credit ratings and
remaining maturities. As of April 30, 1997 and 1996, the fair
value of the notes receivable approximated the carrying value.
The Company's long-term debt reprices frequently at the then-
prevailing market interest rates. As of April 30, 1997 and
1996, the carrying value approximated the fair value of the
Company's long-term debt.
-29-
<PAGE>
MANATRON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
(15) NEW STATEMENT OF FINANCIAL ACCOUNTING STANDARDS (SFAS) PRONOUNCEMENTS
SFAS NO. 128 "EARNINGS PER SHARE." This Statement specifies the
computation, presentation and disclosure requirements for earnings per
share for entities with publicly held common stock or potential common
stock. The Statement shall be effective for financial statements for
both interim and annual periods ending after December 15, 1997. After
the effective date the Company will be required to restate all prior
period EPS data. The Company does not expect the effects of the
Statement to be material.
SFAS NO. 129 "DISCLOSURE OF INFORMATION ABOUT CAPITAL STRUCTURE."
This Statement establishes standards for disclosing information about
an entity's capital structure and applies to all entities. This
Statement is effective for financial statements for periods ending
after December 15, 1997. The Company does not expect the effects of
the Statement to be material.
SFAS NO. 130 "REPORTING COMPREHENSIVE INCOME." The Statement
established standards for reporting and display of comprehensive
income and its components in a full set of general purpose financial
statements. The Statement applies to most enterprises that provide a
full set of financial statements and will require reclassification of
comparative financial statements provided for earlier periods. The
Statement is effective for fiscal years beginning after December 15,
1997. The Company does not expect the effects of the Statement to be
material.
SFAS NO. 131 "DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED
INFORMATION." This Statement establishes standards for the way that
public business enterprises report information about operating
segments in annual financial statements and requires that those
enterprises report selected information about operating segments in
interim financial reports issued to shareholders. It also establishes
standards for related disclosures about products and services,
geographic areas, and major customers. This Statement is effective
for financial statements for periods beginning after December 15, 1997
and will require comparative information for earlier years to be
restated.
-30-
<PAGE>
EXHIBIT INDEX
NUMBER ITEM
3.1 Restated Articles of Incorporation. This exhibit
is incorporated by reference to the Registrant's
Form 10-K Annual Report for the fiscal year ended
April 30, 1995.
3.2 Bylaws. This exhibit is incorporated by reference
to the Registrant's Form 10-K Annual Report for the
fiscal year ended April 30, 1995.
4.1 Revolving Credit Loan Agreement. This exhibit is
incorporated by reference to the Registrant's Form
8-K Current Report dated November 11, 1994.
4.2 First Amendment to Revolving Credit Agreement.
This exhibit is incorporated by reference to the
Registrant's Form 10-K Annual Report for the
fiscal year ended April 30, 1996.
4.3 Second Amendment to Revolving Credit Agreement.
This exhibit is incorporated by reference to the
Registrant's Form 10-K Annual Report for the
fiscal year ended April 30, 1996.
9 Buy and Sell and Voting Trust Agreement Concerning
Stock of Manatron, Inc. This exhibit is
incorporated by reference to the Registrant's Form
10-K Annual Report for the fiscal year ended April
30, 1995.
10.1 Manatron, Inc. 1986 Incentive Stock Option
Plan.<F*> This exhibit is incorporated by
reference to the Registrant's Form 10-K Annual
Report for the fiscal year ended April 30, 1995.
10.2 Manatron, Inc. 1989 Stock Option Plan.<F*> This
exhibit is incorporated by reference to the
Registrant's Form 10-K Annual Report for the fiscal
year ended April 30, 1995.
10.3 Manatron, Inc. 1995 Long-Term Incentive Plan.<F*>
This exhibit is incorporated by reference to the
Registrant's Definitive Proxy Statement for its
Annual Meeting of Shareholders held October 12,
1995.
<PAGE>
10.4 Buy and Sell and Voting Trust Agreement Concerning
Stock of Manatron, Inc.<F*> See Exhibit 9 above.
10.5 Executive Employment Agreement with Randall L.
Peat.<F*> This exhibit is incorporated by
reference to the Registrant's Form 10-K Annual
Report for the fiscal year ended April 30, 1995.
10.6 Form of Stock Purchase Warrant with Brent R.
Nicklas, as amended.<F*> This exhibit is
incorporated by reference to the Registrant's Form
10-K Annual Report for the fiscal year ended April
30, 1995.
10.7 Manatron, Inc. Employee Stock Ownership and Salary
Deferral Plan.<F*> This exhibit is incorporated by
reference to the Registrant's Form 10-K Annual
Report for the fiscal year ended April 30, 1995.
10.8 Manatron, Inc. Employee Stock Purchase Plan.<F*>
This exhibit is incorporated by reference to the
Registrant's Form 10-K Annual Report for the fiscal
year ended April 30, 1993.
10.9 ATEK Information Services, Inc. Stock Purchase
Agreement. This exhibit is incorporated by
reference to the Registrant's Form 8-K Current
Report dated July 28, 1993.
10.10 Stock Purchase Agreement between Ronald D. Stoynoff
and Allen F. Peat dated March 15, 1994. This
exhibit is incorporated by reference to the
Registrant's Form 8-K Current Report dated March
15, 1994.
10.11 Agreement between Manatron, Inc. and Ronald D.
Stoynoff effective as of April 1, 1994. This
exhibit is incorporated by reference to the
Registrant's Form 8-K Current Report dated March
15, 1994.
10.12 Asset Purchase Agreement between Manatron, Inc. and
Moore Business Forms, Inc. dated November 11, 1994.
This exhibit is incorporated by reference to the
Registrant's Form 8-K Current Report dated
November 11, 1994.
<PAGE>
10.13 Manatron, Inc. 1994 Long-Term Incentive Plan. This
exhibit is incorporated by reference to the
Registrant's Definitive Proxy Statement for its
Annual Meeting of Shareholders held October 6,
1994.
10.14 Agreement between Manatron, Inc. and Allen F. Peat
dated October 17, 1995.<F*> This exhibit is
incorporated by reference to the Registrant's
Form 8-K Current Report dated November 13, 1995.
10.15 Employment Agreement with Douglas A. Peat dated
October 10, 1996.<F*>
10.16 Employment Agreement with Jane M. Rix dated
October 10, 1996.<F*>
10.17 Employment Agreement with James W. Sanderbeck dated
October 10, 1996.<F*>
10.18 Employment Agreement with Paul R. Sylvester dated
October 10, 1996.<F*>
10.19 Employment Agreement with Larry L. Terhune dated
October 10, 1996.<F*>
10.20 Employment Agreement with Melvin J. Trumble dated
October 10, 1996.<F*>
10.21 Manatron, Inc. Executive Incentive Plan for 1997.<F*>
10.22 Manatron, Inc. Executive Incentive Plan for 1998.<F*>
21 Subsidiaries of Registrant. This exhibit is
incorporated by reference to the Registrant's Form
10-K Annual Report for the fiscal year ended
April 30, 1996.
23 Consent of Independent Public Accountants.
24 Powers of Attorney.
27 Financial Data Schedule.
- -----------------
<F*>Management contract or compensatory plan or arrangement.
<PAGE>
EXHIBIT 10.15
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("AGREEMENT") dated as of October 10,
1996, between DOUGLAS A. PEAT ("EMPLOYEE"), and MANATRON, INC., a Michigan
corporation, maintaining its principal executive offices at 2970 South 9th
Street, Kalamazoo, Michigan 49009 ("EMPLOYER").
Accordingly, the parties agree as follows:
1. EMPLOYMENT. Employer hereby employs Employee, and Employee
hereby accepts this employment, on the terms and subject to the conditions
set forth herein.
2. POSITION. Employee agrees to serve Employer in the position and
with the job description as described on Exhibit A, or to serve Employer
and its subsidiaries in such other executive or operational positions
commensurate with Employee's experience and expertise as may be determined
by Employer. Employee shall devote his full business time, energies, best
efforts, skill and attention to the duties arising out of or incident to
his position and responsibilities pursuant to this Agreement, during the
term of employment, and shall not engage in other employment or business
opportunity, unless the employment or business opportunity is disclosed to
and approved by the Chief Executive Officer in advance of the employment or
business opportunity.
3. DURATION. Employment under this Agreement shall commence on the
date set forth above and shall continue until terminated as provided in
this Agreement.
4. COMPENSATION. In consideration for his services, Employee shall
receive the following compensation:
(a) SALARY. Employee shall be paid by Employer (or, if
applicable, by an affiliate of Employer) a minimum annual salary of
$84,000 per year while this Agreement is in effect (the "BASE
SALARY"). The Base Salary shall be reviewed annually and adjusted as
the President of Employer in his discretion deems appropriate and
which shall be commensurate with Employee's position. If the
President of Employer decides to reduce Employee's Base Salary,
Employer shall provide Employee three (3) months' written notice
before the reduction shall go into effect.
(b) VACATION. Employee shall receive paid vacation in
accordance with Employer's vacation and hiring policies as in effect
from time to time.
(c) AUTOMOBILE EXPENSES. If Employee is provided with an
automobile or a car allowance for business purposes, it shall be
<PAGE>
provided in accordance with Employer's standard automobile use
policies and practices.
(d) BONUS. Employee will be eligible to participate in the
Company's Michigan Regional Bonus Plan as in effect from time to time
and may be eligible to participate in other bonus or incentive
programs at the discretion of Employer. A copy of the current plan
which Employee is eligible to participate in is attached to this
Agreement. Employee acknowledges that the terms of the bonus plan and
his right to participate in bonus plan are subject to the discretion
of Employer.
(e) BENEFITS. Employee shall receive standard benefits offered
to all employees as determined from time to time by the Board of
Directors of Employer.
(f) REIMBURSEMENT OF EXPENSES. Employer shall reimburse
Employee for all reasonable proper travel and out-of-pocket expenses
incurred by him in connection with the performance of his duties under
this Agreement in accordance with Employer's policies for
reimbursement.
5. TERMINATION OF EMPLOYMENT. This Agreement and Employee's
employment pursuant to this Agreement may be terminated prior to the
expiration of the stated term of this Agreement as follows:
(a) TERMINATION BY EMPLOYEE. Employee is free to resign from
employment at any time with or without cause, by providing thirty (30)
days' prior written notification to Employer. For purposes of this
Agreement, "With Cause" shall mean:
(i) Without Employee's express written consent, the
assignment to Employee of any duties inconsistent with Employee's
present position or positions, duties, responsibilities and
status with Employer or a subsidiary, except in connection with
Employee's termination as provided below in Sections 5(c), (d) or
(e) or by Employee other than "With Cause";
(ii) A reduction in Employee's Base Salary as in effect on
the date of this Agreement or as the same may be increased from
time to time, by more than fifteen percent (15%); or
(iii) Without Employee's express written consent, a
relocation of Employee to a location outside of Employee's
current employment location, except for required travel on
business of Employer to an extent substantially consistent with
Employee's present business travel obligations.
-2-
<PAGE>
(b) TERMINATION BY EMPLOYER. Employer may terminate Employee's
employment at any time, with or without cause and with or without
prior review, notice or warning by providing thirty (30) days' prior
written notification to Employee.
(c) DEATH. Employee's employment under this Agreement shall
terminate in the event of Employee's death. Obligations of Employer
hereunder shall terminate as of the date of Employee's termination for
death.
(d) DISABILITY. Employer may terminate this Agreement for
"Disability" if, as a result of Employee's incapacity due to physical
or mental illness, he shall have been absent from his duties with
Employer on a full-time basis for six (6) consecutive months, and if
he shall not have returned to the full time performance of his duties
within thirty (30) days after written notice after such six (6) month
period.
(e) FOR CAUSE. Employee's employment under this Agreement may
be terminated by Employer for "Cause" at any time. For purposes of
this Agreement, termination shall be considered to be for "Cause" if
based upon (i) Employee's conviction of a crime involving moral
turpitude or embezzlement; (ii) Employee's willful activities in
competition with Employer or in aid of its competitors; (iii) the
willful and continued failure to substantially perform Employee's
duties with Employer under this Agreement (other than any other such
failure resulting from Disability), after a written demand for
substantial performance is delivered to Employee that specifically
identifies the manner in which Employer believes Employee has
willfully failed to substantially perform his duties, and after
Employee has failed to resume substantial performance of his duties on
a continuous basis within fourteen (14) calendar days of receiving
such demand; or (iv) Employee willfully engaging in conduct which is
demonstrably and materially injurious to Employer, monetarily or
otherwise. For purposes of (ii), (iii) and (iv) above, no act, or
failure to act, on Employee's part shall be deemed "willful" unless
done, or omitted to be done, by the Employee not in good faith and
without reasonable belief that the action or omission was in the best
interest of Employer.
6. SEVERANCE PAY.
(a) If Employer terminates Employee under Section 5(b) without
cause or if Employee resigns from employment "With Cause" (as defined
in Section 5(a)), above, prior to the expiration of this Agreement,
Employer or its successor in interest shall pay Employee six (6)
months' severance pay of an amount equal to Employee's Base Salary and
any and all benefits in effect at the time of termination ("SEVERANCE
-3-
<PAGE>
PAY"). Employee agrees that Employee's right to receive Severance Pay
is conditioned on the prior execution by Employee of a binding general
release (in such form as Employer may determine) of any and all claims
against Employer and all co-owned entities, and their officers,
directors, employees, agents and owners.
(b) If Employee is entitled to Severance Pay pursuant to this
Section 6, the presently outstanding loans made to Employee by
Employer for the purpose of acquiring common stock of Employer will be
canceled in exchange for the common stock purchased by Employee with
the proceeds of the loan. If the cancellation and exchange results in
compensation income to Employee, Employee shall notify Employer and
Employer shall reimburse Employee an amount equal to the tax effects
of any amounts recognized as compensation income.
7. NON-COMPETITION COVENANTS OF EMPLOYEE. While employed by Employer
and during the period after termination during which Employee receives any
Severance Pay, Employee shall not:
(a) Engage, and shall have no investment, involvement or other
connection whatsoever, direct or indirect, with any corporation,
partnership, proprietorship, individual or other business entity that
is engaged, in whole or in part, in any line of business that is the
same as, similar to or directly or indirectly in competition with the
business of Employer, or its successors and assigns, as it is now, or
as it may during Employee's employment be, conducted east of the
Mississippi River ("Competing Entity"); this provision shall not,
however, restrict the right of Employee to own less than one percent
(1%) of the issued and outstanding shares of capital stock in any
company listed on a national or regional stock exchange, or whose
stock is quoted on a NASDAQ market, regardless of the nature of the
business.
(b) Be or become a shareholder, partner or other investor, or an
officer, employee, consultant, adviser or director or an agent
(whether independent or otherwise) for any Competing Entity; this
provision shall not, however, restrict the right of Employee to own
less than one percent (1%) of the issued and outstanding shares of
capital stock in any company listed on a national or regional stock
exchange, or whose stock is quoted on a NASDAQ market, regardless of
the nature of the business.
(c) Solicit either for himself or on behalf of any Competing
Entity, any "active customer of Employer" where an "active customer of
Employer" is a person or entity who or which is or has been a customer
of Employer during the term of Employee's employment or during the two
(2) years preceding Employee's termination of employment.
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<PAGE>
(d) Employee acknowledges that Employer has previously conducted
its business east of the Mississippi, and that the restrictive
covenant assumed by Employee pursuant to this section is essential to
the business of Employer and its goodwill. To the extent any part of
this covenant may be held unenforceable as set forth herein, the
restrictions set forth herein shall be severable so as to confine
their application to the geographical and time restrictions as a court
deems to be reasonable.
(e) The provisions set forth in this Section 7 shall be in
effect while Employee is employed by Employer and for the period of
time during which Employee receives Severance Pay. In the event
Employee breaches any of the terms, conditions or provisions under
this Section, the remedy available to Employer shall be the right of
Employer to receive actual damages along with the forfeiture of
Severance Pay (paid or unpaid) if such breach occurs prior to any
employment termination. If such breach occurs subsequent to any
employment termination, the sole remedy of Employer for the breach
shall be the forfeiture of the right of Employee to receive any unpaid
Severance Pay.
8. COVENANT NOT TO SOLICIT EMPLOYEES. During the period after
termination during which Employee receives any Severance Pay, Employee
shall not, directly or indirectly, induce or attempt to influence any
employee of Employer to terminate employment, except in his capacity as an
officer of Employer in the ordinary course of business or as approved by
the Board of Directors of Employer. The sole remedy of Employer for breach
of the covenant set forth in this Section 8 shall be the forfeiture of the
right of Employee to receive any unpaid Severance Pay.
9. COVENANT NOT TO DISCLOSE CONFIDENTIAL INFORMATION. Employee
agrees that all information regarding manufacturing technique, process,
formula, development or experimental work, work in process, business, trade
secret or any other secret or confidential matter relating to the products,
sales or business at Employer, including, but not limited to, customer
lists, sales records, financial statements, payroll records, ledgers,
corporate records, account numbers, contact lists and other information of
any nature whatsoever pertaining to the business of Employer are of a
proprietary and confidential nature and that none of such information shall
be disclosed, published or made use of for any purpose by Employee without
the prior written consent of Employer.
10. COVENANT NOT TO USE TRADE NAME. Employee agrees that he shall
not, directly or indirectly, be or become an investor, partner,
shareholder, officer, employee, director, consultant, adviser or agent of,
or have any other affiliation with or economic interest in, any
corporation, partnership, proprietorship or other business entity that has
"Manatron," "ATEK," "Specialized Data Systems" or "Sabre" as any part of
-5-
<PAGE>
its name or trade name except for Employer or any companies or businesses
affiliated with Employer; this provision shall not, however, restrict the
right of Employee to own less than one percent (1%) of the issued and
outstanding shares of capital stock in any company listed on a national or
regional stock exchange, or whose stock is quoted on a NASDAQ market,
regardless of the nature of the business.
11. SPECIFIC PERFORMANCE AVAILABLE. The provisions set forth in
Sections 9 and 10 shall be in effect while Employee is employed by Employer
and also following termination of employment. Employee recognizes and
acknowledges that in the event of any default in, or breach of any of, the
terms, conditions and provisions of Sections 9 or 10, Employer's remedies
at law shall be inadequate. Accordingly, Employee agrees that in such
event, Employer shall be entitled to the remedies of specific performance
and injunctive relief in addition to actual damages and any and all other
remedies and rights at law or in equity, and such rights and remedies shall
be cumulative.
12. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the parties as to Employee's employment. All prior
discussions, compensation understandings, negotiations and agreements
notwithstanding, this Agreement constitutes the parties' sole source of
rights and duties with respect to Employee's employment. This Agreement
may not be changed orally, but only by agreement in writing expressly
identifying itself as an amendment to this Agreement and signed by Employee
and Employer.
13. AGREEMENT BINDING ON SUCCESSORS. This Agreement shall be binding
upon Employer and its successors and assigns. The rights and duties of
Employee are personal to him and shall not be subject to transfer,
delegation or assignment.
14. AMENDMENT AND WAIVER. This Agreement has been authorized by
Employer's Board of Directors. No employee or officer of Employer has
authority to offer employment other than employment terminable at will, or
to limit Employer's ability to terminate employment at will in any way;
employment on any other terms may only be authorized by a written
resolution of the Board of Directors. No waiver by either party at any
time of any breach by the other party or compliance with any condition or
provision of this Agreement to be performed by the other party shall be
deemed a waiver of similar or dissimilar provisions or condition at the
time or any time prior or subsequent time.
15. SEVERABILITY. Any provision or term of this Agreement that shall
be found to be contrary to law or otherwise unenforceable, in whole or in
part, shall not affect the remaining terms of this Agreement, which shall
be continued as if the unenforceable provision were absent from this
Agreement. It is the desire and intent of the parties to this Agreement
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<PAGE>
that the provisions of this Agreement be enforced to the fullest extent
permissible under the laws and public policies applied in each jurisdiction
in which enforcement is sought.
16. GOVERNING LAW. This Agreement shall be governed, construed and
enforced in accordance with the laws of the State of Michigan.
17. ARBITRATION. Any dispute or controversy under this Agreement
shall be settled exclusively by arbitration in Kalamazoo, Michigan, in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitration award in any court
having jurisdiction. Employer will reimburse Employee for all reasonable
attorneys' fees incurred by Employee as a result of any arbitration with
regard to any issue under this Agreement (or any judicial proceeding to
compel or to enforce such arbitration): (a) which is initiated by Employee
if Employer is found in such proceeding to have violated this Agreement
substantially as alleged by Employee; or (b) which is initialed by
Employer, unless Employee is found in such proceeding to have violated this
Agreement substantially as alleged by Employer.
18. NOTICE. All notices, request, demands, consents, waivers,
instructions, approvals and the communications hereunder shall be in
writing and shall be deemed to have been given if personally delivered to
or mailed as follows:
If to Employer:
Manatron, Inc.
2970 South 9th Street
Kalamazoo, Michigan 49009
Attention: President
If to Employee:
Douglas A. Peat
1084 Josiane
Kalamazoo, Michigan 49009
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first written above.
/S/ DOUGLAS A. PEAT
Douglas A. Peat
"Employee"
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<PAGE>
MANATRON, INC.
By /S/ RANDALL L. PEAT
Randall L. Peat
Its Chairman of the Board
By /S/ PAUL R. SYLVESTER
Paul R. Sylvester
Its President and Chief Executive Officer
-8-
<PAGE>
EXHIBIT 10.16
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("AGREEMENT") dated as of October 10,
1996, between JANE M. RIX ("EMPLOYEE"), and MANATRON, INC., a Michigan
corporation, maintaining its principal executive offices at 2970 South 9th
Street, Kalamazoo, Michigan 49009 ("EMPLOYER").
Accordingly, the parties agree as follows:
1. EMPLOYMENT. Employer hereby employs Employee, and Employee
hereby accepts this employment, on the terms and subject to the conditions
set forth herein.
2. POSITION. Employee agrees to serve Employer in the position and
with the job description as described on Exhibit A, or to serve Employer
and its subsidiaries in such other executive or operational positions
commensurate with Employee's experience and expertise as may be determined
by Employer. Employee shall devote her full business time, energies, best
efforts, skill and attention to the duties arising out of or incident to
her position and responsibilities pursuant to this Agreement, during the
term of employment, and shall not engage in other employment or business
opportunity, unless the employment or business opportunity is disclosed to
and approved by the Chief Executive Officer in advance of the employment or
business opportunity.
3. DURATION. Employment under this Agreement shall commence on the
date set forth above and shall continue until terminated as provided in
this Agreement.
4. COMPENSATION. In consideration for her services, Employee shall
receive the following compensation:
(a) SALARY. Employee shall be paid by Employer (or, if
applicable, by an affiliate of Employer) a minimum annual salary of
$38,000 per year while this Agreement is in effect (the "BASE
SALARY"). The Base Salary shall be reviewed annually and adjusted as
the President of Employer in his discretion deems appropriate and
which shall be commensurate with Employee's position. If the
President of Employer decides to reduce Employee's Base Salary,
Employer shall provide Employee three (3) months' written notice
before the reduction shall go into effect.
(b) VACATION. Employee shall receive paid vacation in
accordance with Employer's vacation and hiring policies as in effect
from time to time.
<PAGE>
(c) AUTOMOBILE EXPENSES. If Employee is provided with an
automobile or a car allowance for business purposes, it shall be
provided in accordance with Employer's standard automobile use
policies and practices.
(d) BONUS. Employee may, from time to time, be eligible to
receive a bonus, as determined by Employer at Employer's discretion.
(e) Benefits. Employee shall receive standard benefits offered
to all employees as determined from time to time by the Board of
Directors of Employer.
(f) REIMBURSEMENT OF EXPENSES. Employer shall reimburse
Employee for all reasonable proper travel and out-of-pocket expenses
incurred by her in connection with the performance of her duties under
this Agreement in accordance with Employer's policies for
reimbursement.
5. TERMINATION OF EMPLOYMENT. This Agreement and Employee's
employment pursuant to this Agreement may be terminated prior to the
expiration of the stated term of this Agreement as follows:
(a) TERMINATION BY EMPLOYEE. Employee is free to resign from
employment at any time with or without cause, by providing thirty (30)
days' prior written notification to Employer. For purposes of this
Agreement, "With Cause" shall mean:
(i) Without Employee's express written consent, the
assignment to Employee of any duties inconsistent with Employee's
present position or positions, duties, responsibilities and
status with Employer or a subsidiary, except in connection with
Employee's termination as provided below in Sections 5(c), (d) or
(e) or by Employee other than "With Cause";
(ii) A reduction in Employee's Base Salary as in effect on
the date of this Agreement or as the same may be increased from
time to time, by more than fifteen percent (15%); or
(iii) Without Employee's express written consent, a
relocation of Employee to a location outside of Employee's
current employment location, except for required travel on
business of Employer to an extent substantially consistent with
Employee's present business travel obligations.
(b) TERMINATION BY EMPLOYER. Employer may terminate Employee's
employment at any time, with or without cause and with or without
prior review, notice or warning by providing thirty (30) days' prior
written notification to Employee.
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<PAGE>
(c) DEATH. Employee's employment under this Agreement shall
terminate in the event of Employee's death. Obligations of Employer
hereunder shall terminate as of the date of Employee's termination for
death.
(d) DISABILITY. Employer may terminate this Agreement for
"Disability" if, as a result of Employee's incapacity due to physical
or mental illness, she shall have been absent from her duties with
Employer on a full-time basis for six (6) consecutive months, and if
she shall not have returned to the full time performance of her duties
within thirty (30) days after written notice after such six (6) month
period.
(e) FOR CAUSE. Employee's employment under this Agreement may
be terminated by Employer for "Cause" at any time. For purposes of
this Agreement, termination shall be considered to be for "Cause" if
based upon (i) Employee's conviction of a crime involving moral
turpitude or embezzlement; (ii) Employee's willful activities in
competition with Employer or in aid of its competitors; (iii) the
willful and continued failure to substantially perform Employee's
duties with Employer under this Agreement (other than any other such
failure resulting from Disability), after a written demand for
substantial performance is delivered to Employee that specifically
identifies the manner in which Employer believes Employee has
willfully failed to substantially perform her duties, and after
Employee has failed to resume substantial performance of her duties on
a continuous basis within fourteen (14) calendar days of receiving
such demand; or (iv) Employee willfully engaging in conduct which is
demonstrably and materially injurious to Employer, monetarily or
otherwise. For purposes of (ii), (iii) and (iv) above, no act, or
failure to act, on Employee's part shall be deemed "willful" unless
done, or omitted to be done, by the Employee not in good faith and
without reasonable belief that the action or omission was in the best
interest of Employer.
6. SEVERANCE PAY. If Employer terminates Employee under Section 5(b)
without cause or if Employee resigns from employment "With Cause" (as
defined in Section 5(a)), above, prior to the expiration of this Agreement,
Employer or its successor in interest shall pay Employee six (6) months'
severance pay of an amount equal to Employee's Base Salary and any and all
benefits in effect at the time of termination ("SEVERANCE PAY"). Employee
agrees that Employee's right to receive Severance Pay is conditioned on the
prior execution by Employee of a binding general release (in such form as
Employer may determine) of any and all claims against Employer and all co-
owned entities, and their officers, directors, employees, agents and
owners.
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<PAGE>
7. NON-COMPETITION COVENANTS OF EMPLOYEE. While employed by Employer
and during the period after termination during which Employee receives any
Severance Pay, Employee shall not:
(a) Engage, and shall have no investment, involvement or other
connection whatsoever, direct or indirect, with any corporation,
partnership, proprietorship, individual or other business entity that
is engaged, in whole or in part, in any line of business that is the
same as, similar to or directly or indirectly in competition with the
business of Employer, or its successors and assigns, as it is now, or
as it may during Employee's employment be, conducted east of the
Mississippi River ("Competing Entity"); this provision shall not,
however, restrict the right of Employee to own less than one percent
(1%) of the issued and outstanding shares of capital stock in any
company listed on a national or regional stock exchange, or whose
stock is quoted on a NASDAQ market, regardless of the nature of the
business.
(b) Be or become a shareholder, partner or other investor, or an
officer, employee, consultant, adviser or director or an agent
(whether independent or otherwise) for any Competing Entity; this
provision shall not, however, restrict the right of Employee to own
less than one percent (1%) of the issued and outstanding shares of
capital stock in any company listed on a national or regional stock
exchange, or whose stock is quoted on a NASDAQ market, regardless of
the nature of the business.
(c) Solicit either for herself or on behalf of any Competing
Entity, any "active customer of Employer" where an "active customer of
Employer" is a person or entity who or which is or has been a customer
of Employer during the term of Employee's employment or during the two
(2) years preceding Employee's termination of employment.
(d) Employee acknowledges that Employer has previously conducted
its business east of the Mississippi, and that the restrictive
covenant assumed by Employee pursuant to this section is essential to
the business of Employer and its goodwill. To the extent any part of
this covenant may be held unenforceable as set forth herein, the
restrictions set forth herein shall be severable so as to confine
their application to the geographical and time restrictions as a court
deems to be reasonable.
(e) The provisions set forth in this Section 7 shall be in
effect while Employee is employed by Employer and for the period of
time during which Employee receives Severance Pay. In the event
Employee breaches any of the terms, conditions or provisions under
this Section, the remedy available to Employer shall be the right of
Employer to receive actual damages along with the forfeiture of
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<PAGE>
Severance Pay (paid or unpaid) if such breach occurs prior to any
employment termination. If such breach occurs subsequent to any
employment termination, the sole remedy of Employer for the breach
shall be the forfeiture of the right of Employee to receive any unpaid
Severance Pay.
8. COVENANT NOT TO SOLICIT EMPLOYEES. During the period after
termination during which Employee receives any Severance Pay, Employee
shall not, directly or indirectly, induce or attempt to influence any
employee of Employer to terminate employment, except in her capacity as an
officer of Employer in the ordinary course of business or as approved by
the Board of Directors of Employer. The sole remedy of Employer for breach
of the covenant set forth in this Section 8 shall be the forfeiture of the
right of Employee to receive any unpaid Severance Pay.
9. COVENANT NOT TO DISCLOSE CONFIDENTIAL INFORMATION. Employee
agrees that all information regarding manufacturing technique, process,
formula, development or experimental work, work in process, business, trade
secret or any other secret or confidential matter relating to the products,
sales or business at Employer, including, but not limited to, customer
lists, sales records, financial statements, payroll records, ledgers,
corporate records, account numbers, contact lists and other information of
any nature whatsoever pertaining to the business of Employer are of a
proprietary and confidential nature and that none of such information shall
be disclosed, published or made use of for any purpose by Employee without
the prior written consent of Employer.
10. COVENANT NOT TO USE TRADE NAME. Employee agrees that she shall
not, directly or indirectly, be or become an investor, partner,
shareholder, officer, employee, director, consultant, adviser or agent of,
or have any other affiliation with or economic interest in, any
corporation, partnership, proprietorship or other business entity that has
"Manatron," "ATEK," "Specialized Data Systems" or "Sabre" as any part of
its name or trade name except for Employer or any companies or businesses
affiliated with Employer; this provision shall not, however, restrict the
right of Employee to own less than one percent (1%) of the issued and
outstanding shares of capital stock in any company listed on a national or
regional stock exchange, or whose stock is quoted on a NASDAQ market,
regardless of the nature of the business.
11. SPECIFIC PERFORMANCE AVAILABLE. The provisions set forth in
Sections 9 and 10 shall be in effect while Employee is employed by Employer
and also following termination of employment. Employee recognizes and
acknowledges that in the event of any default in, or breach of any of, the
terms, conditions and provisions of Sections 9 or 10, Employer's remedies
at law shall be inadequate. Accordingly, Employee agrees that in such
event, Employer shall be entitled to the remedies of specific performance
and injunctive relief in addition to actual damages and any and all other
-5-
<PAGE>
remedies and rights at law or in equity, and such rights and remedies shall
be cumulative.
12. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the parties as to Employee's employment. All prior
discussions, compensation understandings, negotiations and agreements
notwithstanding, this Agreement constitutes the parties' sole source of
rights and duties with respect to Employee's employment. This Agreement
may not be changed orally, but only by agreement in writing expressly
identifying itself as an amendment to this Agreement and signed by Employee
and Employer.
13. AGREEMENT BINDING ON SUCCESSORS. This Agreement shall be binding
upon Employer and its successors and assigns. The rights and duties of
Employee are personal to her and shall not be subject to transfer,
delegation or assignment.
14. AMENDMENT AND WAIVER. This Agreement has been authorized by
Employer's Board of Directors. No employee or officer of Employer has
authority to offer employment other than employment terminable at will, or
to limit Employer's ability to terminate employment at will in any way;
employment on any other terms may only be authorized by a written
resolution of the Board of Directors. No waiver by either party at any
time of any breach by the other party or compliance with any condition or
provision of this Agreement to be performed by the other party shall be
deemed a waiver of similar or dissimilar provisions or condition at the
time or any time prior or subsequent time.
15. SEVERABILITY. Any provision or term of this Agreement that shall
be found to be contrary to law or otherwise unenforceable, in whole or in
part, shall not affect the remaining terms of this Agreement, which shall
be continued as if the unenforceable provision were absent from this
Agreement. It is the desire and intent of the parties to this Agreement
that the provisions of this Agreement be enforced to the fullest extent
permissible under the laws and public policies applied in each jurisdiction
in which enforcement is sought.
16. GOVERNING LAW. This Agreement shall be governed, construed and
enforced in accordance with the laws of the State of Michigan.
17. ARBITRATION. Any dispute or controversy under this Agreement
shall be settled exclusively by arbitration in Kalamazoo, Michigan, in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitration award in any court
having jurisdiction. Employer will reimburse Employee for all reasonable
attorneys' fees incurred by Employee as a result of any arbitration with
regard to any issue under this Agreement (or any judicial proceeding to
compel or to enforce such arbitration): (a) which is initiated by Employee
if Employer is found in such proceeding to have violated this Agreement
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<PAGE>
substantially as alleged by Employee; or (b) which is initialed by
Employer, unless Employee is found in such proceeding to have violated this
Agreement substantially as alleged by Employer.
18. NOTICE. All notices, request, demands, consents, waivers,
instructions, approvals and the communications hereunder shall be in
writing and shall be deemed to have been given if personally delivered to
or mailed as follows:
If to Employer:
Manatron, Inc.
2970 South 9th Street
Kalamazoo, Michigan 49009
Attention: President
If to Employee:
Jane M. Rix
2459 Fairgrove Avenue
Kalamazoo, Michigan 49009
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first written above.
/S/ JANE M. RIX
Jane M. Rix
"Employee"
MANATRON, INC.
By /S/ RANDALL L. PEAT
Randall L. Peat
Its Chairman of the Board
By /S/ PAUL R. SYLVESTER
Paul R. Sylvester
Its President and Chief Executive Officer
-7-
<PAGE>
EXHIBIT 10.17
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("AGREEMENT") dated as of October 10,
1996, between JAMES W. SANDERBECK ("EMPLOYEE"), and MANATRON, INC., a
Michigan corporation, maintaining its principal executive offices at 2970
South 9th Street, Kalamazoo, Michigan 49009 ("EMPLOYER").
Accordingly, the parties agree as follows:
1. EMPLOYMENT. Employer hereby employs Employee, and Employee
hereby accepts this employment, on the terms and subject to the conditions
set forth herein.
2. POSITION. Employee agrees to serve Employer in the position and
with the job description as described on Exhibit A, or to serve Employer
and its subsidiaries in such other executive or operational positions
commensurate with Employee's experience and expertise as may be determined
by Employer. Employee shall devote his full business time, energies, best
efforts, skill and attention to the duties arising out of or incident to
his position and responsibilities pursuant to this Agreement, during the
term of employment, and shall not engage in other employment or business
opportunity, unless the employment or business opportunity is disclosed to
and approved by the Chief Executive Officer in advance of the employment or
business opportunity.
3. DURATION. Employment under this Agreement shall commence on the
date set forth above and shall continue until terminated as provided in
this Agreement.
4. COMPENSATION. In consideration for his services, Employee shall
receive the following compensation:
(a) SALARY. Employee shall be paid by Employer (or, if
applicable, by an affiliate of Employer) a minimum annual salary of
$95,220 per year while this Agreement is in effect (the "BASE
SALARY"). The Base Salary shall be reviewed annually and adjusted as
the President of Employer in his discretion deems appropriate and
which shall be commensurate with Employee's position. If the
President of Employer decides to reduce Employee's Base Salary,
Employer shall provide Employee three (3) months' written notice
before the reduction shall go into effect.
(b) VACATION. Employee shall receive paid vacation in
accordance with Employer's vacation and hiring policies as in effect
from time to time.
<PAGE>
(c) AUTOMOBILE EXPENSES. If Employee is provided with an
automobile or a car allowance for business purposes, it shall be
provided in accordance with Employer's standard automobile use
policies and practices.
(d) BONUS. Employee will be eligible to participate in
Employer's executive incentive bonus plan as in effect from time to
time. A copy of Employer's current executive incentive bonus plan
(Manatron, Inc. Executive Incentive Plan for Fiscal 1997) has been or
will be separately provided to Employee. Employee acknowledges that
the terms of the bonus plan are subject to revision at Employer's
discretion. If Employee is terminated for any reason described in
Section 5, Employee shall be entitled to receive his pro rata share of
an Award (as defined in the plan in effect on the date of termination)
for the portion of the fiscal year in which Employee participated in
the plan.
(e) BENEFITS. Employee shall receive standard benefits offered
to all employees as determined from time to time by the Board of
Directors of Employer.
(f) REIMBURSEMENT OF EXPENSES. Employer shall reimburse
Employee for all reasonable proper travel and out-of-pocket expenses
incurred by him in connection with the performance of his duties under
this Agreement in accordance with Employer's policies for
reimbursement.
5. TERMINATION OF EMPLOYMENT. This Agreement and Employee's
employment pursuant to this Agreement may be terminated prior to the
expiration of the stated term of this Agreement as follows:
(a) TERMINATION BY EMPLOYEE. Employee is free to resign from
employment at any time with or without cause, by providing thirty (30)
days' prior written notification to Employer. For purposes of this
Agreement, "With Cause" shall mean:
(i) Without Employee's express written consent, the
assignment to Employee of any duties inconsistent with Employee's
present position or positions, duties, responsibilities and
status with Employer or a subsidiary, except in connection with
Employee's termination as provided below in Sections 5(c), (d) or
(e) or by Employee other than "With Cause";
(ii) A reduction in Employee's Base Salary as in effect on
the date of this Agreement or as the same may be increased from
time to time, by more than fifteen percent (15%); or
(iii) Without Employee's express written consent, a
relocation of Employee to a location outside of Employee's
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<PAGE>
current employment location, except for required travel on
business of Employer to an extent substantially consistent with
Employee's present business travel obligations.
(b) TERMINATION BY EMPLOYER. Employer may terminate Employee's
employment at any time, with or without cause and with or without
prior review, notice or warning by providing thirty (30) days' prior
written notification to Employee.
(c) DEATH. Employee's employment under this Agreement shall
terminate in the event of Employee's death. Obligations of Employer
hereunder shall terminate as of the date of Employee's termination for
death.
(d) DISABILITY. Employer may terminate this Agreement for
"Disability" if, as a result of Employee's incapacity due to physical
or mental illness, he shall have been absent from his duties with
Employer on a full-time basis for six (6) consecutive months, and if
he shall not have returned to the full time performance of his duties
within thirty (30) days after written notice after such six (6) month
period.
(e) FOR CAUSE. Employee's employment under this Agreement may
be terminated by Employer for "Cause" at any time. For purposes of
this Agreement, termination shall be considered to be for "Cause" if
based upon (i) Employee's conviction of a crime involving moral
turpitude or embezzlement; (ii) Employee's willful activities in
competition with Employer or in aid of its competitors; (iii) the
willful and continued failure to substantially perform Employee's
duties with Employer under this Agreement (other than any other such
failure resulting from Disability), after a written demand for
substantial performance is delivered to Employee that specifically
identifies the manner in which Employer believes Employee has
willfully failed to substantially perform his duties, and after
Employee has failed to resume substantial performance of his duties on
a continuous basis within fourteen (14) calendar days of receiving
such demand; or (iv) Employee willfully engaging in conduct which is
demonstrably and materially injurious to Employer, monetarily or
otherwise. For purposes of (ii), (iii) and (iv) above, no act, or
failure to act, on Employee's part shall be deemed "willful" unless
done, or omitted to be done, by the Employee not in good faith and
without reasonable belief that the action or omission was in the best
interest of Employer.
6. SEVERANCE PAY. If Employer terminates Employee under Section
5(b) without cause or if Employee resigns from employment "With Cause" (as
defined in Section 5(a)), above, prior to the expiration of this Agreement,
Employer or its successor in interest shall pay Employee six (6) months'
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<PAGE>
severance pay of an amount equal to Employee's Base Salary and any and all
benefits in effect at the time of termination ("SEVERANCE PAY"). Employee
agrees that Employee's right to receive Severance Pay is conditioned on the
prior execution by Employee of a binding general release (in such form as
Employer may determine) of any and all claims against Employer and all co-
owned entities, and their officers, directors, employees, agents and
owners.
7. COVENANTS OF EMPLOYEE. While employed by Employer and during the
period after termination during which Employee receives any Severance Pay,
Employee shall not:
(a) Engage, and shall have no investment, involvement or other
connection whatsoever, direct or indirect, with any corporation,
partnership, proprietorship, individual or other business entity that
is engaged, in whole or in part, in any line of business that is the
same as, similar to or directly or indirectly in competition with the
business of Employer, or its successors and assigns, as it is now, or
as it may during Employee's employment be, conducted east of the
Mississippi River ("Competing Entity"); this provision shall not,
however, restrict the right of Employee to own less than one percent
(1%) of the issued and outstanding shares of capital stock in any
company listed on a national or regional stock exchange, or whose
stock is quoted on a NASDAQ market, regardless of the nature of the
business.
(b) Be or become a shareholder, partner or other investor, or an
officer, employee, consultant, adviser or director or an agent
(whether independent or otherwise) for any Competing Entity; this
provision shall not, however, restrict the right of Employee to own
less than one percent (1%) of the issued and outstanding shares of
capital stock in any company listed on a national or regional stock
exchange, or whose stock is quoted on a NASDAQ market, regardless of
the nature of the business.
(c) Solicit either for himself or on behalf of any Competing
Entity, any "active customer of Employer" where an "active customer of
Employer" is a person or entity who or which is or has been a customer
of Employer during the term of Employee's employment or during the two
(2) years preceding Employee's termination of employment.
(d) Employee acknowledges that Employer has previously conducted
its business east of the Mississippi, and that the restrictive
covenant assumed by Employee pursuant to this section is essential to
the business of Employer and its goodwill. To the extent any part of
this covenant may be held unenforceable as set forth herein, the
restrictions set forth herein shall be severable so as to confine
their application to the geographical and time restrictions as a court
deems to be reasonable.
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<PAGE>
(e) The provisions set forth in this Section 7 shall be in
effect while Employee is employed by Employer and for the period of
time during which Employee receives Severance Pay. In the event
Employee breaches any of the terms, conditions or provisions under
this Section, the remedy available to Employer shall be the right of
Employer to receive actual damages along with the forfeiture of
Severance Pay (paid or unpaid) if such breach occurs prior to any
employment termination. If such breach occurs subsequent to any
employment termination, the sole remedy of Employer for the breach
shall be the forfeiture of the right of Employee to receive any unpaid
Severance Pay.
8. COVENANT NOT TO SOLICIT EMPLOYEES. During the period after
termination during which Employee receives any Severance Pay, Employee
shall not, directly or indirectly, induce or attempt to influence any
employee of Employer to terminate employment, except in his capacity as an
officer of Employer in the ordinary course of business or as approved by
the Board of Directors of Employer. The sole remedy of Employer for breach
of the covenant set forth in this Section 8 shall be the forfeiture of the
right of Employee to receive any unpaid Severance Pay.
9. COVENANT NOT TO DISCLOSE CONFIDENTIAL INFORMATION. Employee
agrees that all information regarding manufacturing technique, process,
formula, development or experimental work, work in process, business, trade
secret or any other secret or confidential matter relating to the products,
sales or business at Employer, including, but not limited to, customer
lists, sales records, financial statements, payroll records, ledgers,
corporate records, account numbers, contact lists and other information of
any nature whatsoever pertaining to the business of Employer are of a
proprietary and confidential nature and that none of such information shall
be disclosed, published or made use of for any purpose by Employee without
the prior written consent of Employer.
10. COVENANT NOT TO USE TRADE NAME. Employee agrees that he shall
not, directly or indirectly, be or become an investor, partner,
shareholder, officer, employee, director, consultant, adviser or agent of,
or have any other affiliation with or economic interest in, any
corporation, partnership, proprietorship or other business entity that has
"Manatron," "ATEK," "Specialized Data Systems" or "Sabre" as any part of
its name or trade name except for Employer or any companies or businesses
affiliated with Employer; this provision shall not, however, restrict the
right of Employee to own less than one percent (1%) of the issued and
outstanding shares of capital stock in any company listed on a national or
regional stock exchange, or whose stock is quoted on a NASDAQ market,
regardless of the nature of the business.
11. SPECIFIC PERFORMANCE AVAILABLE. The provisions set forth in
Sections 9 and 10 shall be in effect while Employee is employed by Employer
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<PAGE>
and also following termination of employment. Employee recognizes and
acknowledges that in the event of any default in, or breach of any of, the
terms, conditions and provisions of Sections 9 or 10, Employer's remedies
at law shall be inadequate. Accordingly, Employee agrees that in such
event, Employer shall be entitled to the remedies of specific performance
and injunctive relief in addition to actual damages and any and all other
remedies and rights at law or in equity, and such rights and remedies shall
be cumulative.
12. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the parties as to Employee's employment. All prior
discussions, compensation understandings, negotiations and agreements
notwithstanding, this Agreement constitutes the parties' sole source of
rights and duties with respect to Employee's employment. This Agreement
may not be changed orally, but only by agreement in writing expressly
identifying itself as an amendment to this Agreement and signed by Employee
and Employer.
13. AGREEMENT BINDING ON SUCCESSORS. This Agreement shall be binding
upon Employer and its successors and assigns. The rights and duties of
Employee are personal to him and shall not be subject to transfer,
delegation or assignment.
14. AMENDMENT AND WAIVER. This Agreement has been authorized by
Employer's Board of Directors. No employee or officer of Employer has
authority to offer employment other than employment terminable at will, or
to limit Employer's ability to terminate employment at will in any way;
employment on any other terms may only be authorized by a written
resolution of the Board of Directors. No waiver by either party at any
time of any breach by the other party or compliance with any condition or
provision of this Agreement to be performed by the other party shall be
deemed a waiver of similar or dissimilar provisions or condition at the
time or any time prior or subsequent time.
15. SEVERABILITY. Any provision or term of this Agreement that shall
be found to be contrary to law or otherwise unenforceable, in whole or in
part, shall not affect the remaining terms of this Agreement, which shall
be continued as if the unenforceable provision were absent from this
Agreement. It is the desire and intent of the parties to this Agreement
that the provisions of this Agreement be enforced to the fullest extent
permissible under the laws and public policies applied in each jurisdiction
in which enforcement is sought.
16. GOVERNING LAW. This Agreement shall be governed, construed and
enforced in accordance with the laws of the State of Michigan.
17. ARBITRATION. Any dispute or controversy under this Agreement
shall be settled exclusively by arbitration in Kalamazoo, Michigan, in
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<PAGE>
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitration award in any court
having jurisdiction. Employer will reimburse Employee for all reasonable
attorneys' fees incurred by Employee as a result of any arbitration with
regard to any issue under this Agreement (or any judicial proceeding to
compel or to enforce such arbitration): (a) which is initiated by Employee
if Employer is found in such proceeding to have violated this Agreement
substantially as alleged by Employee; or (b) which is initialed by
Employer, unless Employee is found in such proceeding to have violated this
Agreement substantially as alleged by Employer.
18. NOTICE. All notices, request, demands, consents, waivers,
instructions, approvals and the communications hereunder shall be in
writing and shall be deemed to have been given if personally delivered to
or mailed as follows:
If to Employer:
Manatron, Inc.
2970 South 9th Street
Kalamazoo, Michigan 49009
Attention: President
If to Employee:
James W. Sanderbeck
2970 South 9th Street
Kalamazoo, Michigan 49009
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first written above.
/S/ JAMES W. SANDERBECK
James W. Sanderbeck
"Employee"
MANATRON, INC.
By /S/ RANDALL L. PEAT
Randall L. Peat
Its Chairman of the Board
By /S/ PAUL R. SYLVESTER
Paul R. Sylvester
Its President and Chief Executive Officer
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<PAGE>
EXHIBIT 10.18
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("AGREEMENT") dated as of October 10,
1996, between PAUL R. SYLVESTER ("EMPLOYEE"), and MANATRON, INC., a
Michigan corporation, maintaining its principal executive offices at 2970
South 9th Street, Kalamazoo, Michigan 49009 ("EMPLOYER").
Accordingly, the parties agree as follows:
1. EMPLOYMENT. Employer hereby employs Employee, and Employee
hereby accepts this employment, on the terms and subject to the conditions
set forth herein.
2. POSITION. Employee agrees to serve Employer in the position and
with the job description as described on Exhibit A, or to serve Employer
and its subsidiaries in such other executive or operational positions
commensurate with Employee's experience and expertise as may be determined
by Employer. Employee shall devote his full business time, energies, best
efforts, skill and attention to the duties arising out of or incident to
his position and responsibilities pursuant to this Agreement, during the
term of employment, and shall not engage in other employment or business
opportunity, unless the employment or business opportunity is disclosed to
and approved by the Compensation Committee of the Board of Directors in
advance of the employment or business opportunity.
3. DURATION. Employment under this Agreement shall commence on the
date set forth above and shall continue until terminated as provided in
this Agreement.
4. COMPENSATION. In consideration for his services, Employee shall
receive the following compensation:
(a) SALARY. Employee shall be paid by Employer (or, if
applicable, by an affiliate of Employer) a minimum annual salary of
$120,000 per year while this Agreement is in effect (the "BASE
SALARY"). The Base Salary shall be reviewed annually and adjusted as
the Board of Directors of Employer in its discretion deems appropriate
and which shall be commensurate with Employee's position. If the
Board of Directors of Employer decides to reduce Employee's Base
Salary, Employer shall provide Employee three (3) months' written
notice before the reduction shall go into effect.
(b) VACATION. Employee shall receive paid vacation in
accordance with Employer's vacation and hiring policies as in effect
from time to time.
<PAGE>
(c) AUTOMOBILE EXPENSES. If Employee is provided with an
automobile or a car allowance for business purposes, it shall be
provided in accordance with Employer's standard automobile use
policies and practices.
(d) BONUS. Employee will be eligible to participate in the
Employer's executive incentive bonus plan as in effect from time to
time. A copy of Employer's current executive incentive bonus plan
(Manatron, Inc. Executive Incentive Plan for Fiscal 1997) has been or
will be separately provided to Employee. Employee acknowledges that
the terms of the bonus plan are subject to revision at Employer's
discretion. If Employee is terminated for any reason described in
Section 5, Employee shall be entitled to receive his pro rata share of
an Award (as defined in the plan in effect on the date of termination)
for the portion of the fiscal year in which Employee participated in
the plan.
(e) BENEFITS. Employee shall receive standard benefits offered
to all employees as determined from time to time by the Board of
Directors of Employer.
(f) REIMBURSEMENT OF EXPENSES. Employer shall reimburse
Employee for all reasonable proper travel and out-of-pocket expenses
incurred by him in connection with the performance of his duties under
this Agreement in accordance with Employer's policies for
reimbursement.
5. TERMINATION OF EMPLOYMENT. This Agreement and Employee's
employment pursuant to this Agreement may be terminated prior to the
expiration of the stated term of this Agreement as follows:
(a) TERMINATION BY EMPLOYEE. Employee is free to resign from
employment at any time with or without cause, by providing thirty (30)
days' prior written notification to Employer. For purposes of this
Agreement, "With Cause" shall mean:
(i) Without Employee's express written consent, the
assignment to Employee of any duties inconsistent with Employee's
present position or positions, duties, responsibilities and
status with Employer or a subsidiary, except in connection with
Employee's termination as provided below in Sections 5(c), (d) or
(e) or by Employee other than "With Cause";
(ii) A reduction in Employee's Base Salary as in effect on
the date of this Agreement or as the same may be increased from
time to time, by more than fifteen percent (15%); or
(iii) Without Employee's express written consent, a
relocation of Employee to a location outside of Employee's
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<PAGE>
current employment location, except for required travel on
business of Employer to an extent substantially consistent with
Employee's present business travel obligations.
(b) TERMINATION BY EMPLOYER. Employer may terminate Employee's
employment at any time, with or without cause and with or without
prior review, notice or warning by providing thirty (30) days' prior
written notification to Employee.
(c) DEATH. Employee's employment under this Agreement shall
terminate in the event of Employee's death. Obligations of Employer
hereunder shall terminate as of the date of Employee's termination for
death.
(d) DISABILITY. Employer may terminate this Agreement for
"Disability" if, as a result of Employee's incapacity due to physical
or mental illness, he shall have been absent from his duties with
Employer on a full-time basis for six (6) consecutive months, and if
he shall not have returned to the full time performance of his duties
within thirty (30) days after written notice after such six (6) month
period.
(e) FOR CAUSE. Employee's employment under this Agreement may
be terminated by Employer for "Cause" at any time. For purposes of
this Agreement, termination shall be considered to be for "Cause" if
based upon (i) Employee's conviction of a crime involving moral
turpitude or embezzlement; (ii) Employee's willful activities in
competition with Employer or in aid of its competitors; (iii) the
willful and continued failure to substantially perform Employee's
duties with Employer under this Agreement (other than any other such
failure resulting from Disability), after a written demand for
substantial performance is delivered to Employee that specifically
identifies the manner in which Employer believes Employee has
willfully failed to substantially perform his duties, and after
Employee has failed to resume substantial performance of his duties on
a continuous basis within fourteen (14) calendar days of receiving
such demand; or (iv) Employee willfully engaging in conduct which is
demonstrably and materially injurious to Employer, monetarily or
otherwise. For purposes of (ii), (iii) and (iv) above, no act, or
failure to act, on Employee's part shall be deemed "willful" unless
done, or omitted to be done, by the Employee not in good faith and
without reasonable belief that the action or omission was in the best
interest of Employer.
6. SEVERANCE PAY.
(a) If Employer terminates Employee under Section 5(b) without
cause or if Employee resigns from employment "With Cause" (as defined
in Section 5(a)), above, prior to the expiration of this Agreement,
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<PAGE>
Employer or its successor in interest shall pay Employee six (6)
months' severance pay of an amount equal to Employee's Base Salary and
any and all benefits in effect at the time of termination ("SEVERANCE
PAY"). Employee agrees that Employee's right to receive Severance Pay
is conditioned on the prior execution by Employee of a binding general
release (in such form as Employer may determine) of any and all claims
against Employer and all co-owned entities, and their officers,
directors, employees, agents and owners.
(b) If Employee is entitled to Severance Pay pursuant to this
Section 6, the presently outstanding loans made to Employee by
Employer for the purpose of acquiring common stock of Employer will be
canceled in exchange for the common stock purchased by Employee with
the proceeds of the loan. If the cancellation and exchange results in
compensation income to Employee, Employee shall notify Employer and
Employer shall reimburse Employee an amount equal to the tax effects
of any amounts recognized as compensation income.
7. NON-COMPETITION COVENANTS OF EMPLOYEE. While employed by Employer
and during the period after termination during which Employee receives any
Severance Pay, Employee shall not:
(a) Engage, and shall have no investment, involvement or other
connection whatsoever, direct or indirect, with any corporation,
partnership, proprietorship, individual or other business entity that
is engaged, in whole or in part, in any line of business that is the
same as, similar to or directly or indirectly in competition with the
business of Employer, or its successors and assigns, as it is now, or
as it may during Employee's employment be, conducted east of the
Mississippi River ("Competing Entity"); this provision shall not,
however, restrict the right of Employee to own less than one percent
(1%) of the issued and outstanding shares of capital stock in any
company listed on a national or regional stock exchange, or whose
stock is quoted on a NASDAQ market, regardless of the nature of the
business.
(b) Be or become a shareholder, partner or other investor, or an
officer, employee, consultant, adviser or director or an agent
(whether independent or otherwise) for any Competing Entity; this
provision shall not, however, restrict the right of Employee to own
less than one percent (1%) of the issued and outstanding shares of
capital stock in any company listed on a national or regional stock
exchange, or whose stock is quoted on a NASDAQ market, regardless of
the nature of the business.
(c) Solicit either for himself or on behalf of any Competing
Entity, any "active customer of Employer" where an "active customer of
Employer" is a person or entity who or which is or has been a customer
-4-
<PAGE>
of Employer during the term of Employee's employment or during the two
(2) years preceding Employee's termination of employment.
(d) Employee acknowledges that Employer has previously conducted
its business east of the Mississippi, and that the restrictive
covenant assumed by Employee pursuant to this section is essential to
the business of Employer and its goodwill. To the extent any part of
this covenant may be held unenforceable as set forth herein, the
restrictions set forth herein shall be severable so as to confine
their application to the geographical and time restrictions as a court
deems to be reasonable.
(e) The provisions set forth in this Section 7 shall be in
effect while Employee is employed by Employer and for the period of
time during which Employee receives Severance Pay. In the event
Employee breaches any of the terms, conditions or provisions under
this Section, the remedy available to Employer shall be the right of
Employer to receive actual damages along with the forfeiture of
Severance Pay (paid or unpaid) if such breach occurs prior to any
employment termination. If such breach occurs subsequent to any
employment termination, the sole remedy of Employer for the breach
shall be the forfeiture of the right of Employee to receive any unpaid
Severance Pay.
8. COVENANT NOT TO SOLICIT EMPLOYEES. During the period after
termination during which Employee receives any Severance Pay, Employee
shall not, directly or indirectly, induce or attempt to influence any
employee of Employer to terminate employment, except in his capacity as an
officer of Employer in the ordinary course of business or as approved by
the Board of Directors of Employer. The sole remedy of Employer for breach
of the covenant set forth in this Section 8 shall be the forfeiture of the
right of Employee to receive any unpaid Severance Pay.
9. COVENANT NOT TO DISCLOSE CONFIDENTIAL INFORMATION. Employee
agrees that all information regarding manufacturing technique, process,
formula, development or experimental work, work in process, business, trade
secret or any other secret or confidential matter relating to the products,
sales or business at Employer, including, but not limited to, customer
lists, sales records, financial statements, payroll records, ledgers,
corporate records, account numbers, contact lists and other information of
any nature whatsoever pertaining to the business of Employer are of a
proprietary and confidential nature and that none of such information shall
be disclosed, published or made use of for any purpose by Employee without
the prior written consent of Employer.
10. COVENANT NOT TO USE TRADE NAME. Employee agrees that he shall
not, directly or indirectly, be or become an investor, partner,
shareholder, officer, employee, director, consultant, adviser or agent of,
or have any other affiliation with or economic interest in, any
-5-
<PAGE>
corporation, partnership, proprietorship or other business entity that has
"Manatron," "ATEK," "Specialized Data Systems" or "Sabre" as any part of
its name or trade name except for Employer or any companies or businesses
affiliated with Employer; this provision shall not, however, restrict the
right of Employee to own less than one percent (1%) of the issued and
outstanding shares of capital stock in any company listed on a national or
regional stock exchange, or whose stock is quoted on a NASDAQ market,
regardless of the nature of the business.
11. SPECIFIC PERFORMANCE AVAILABLE. The provisions set forth in
Sections 9 and 10 shall be in effect while Employee is employed by Employer
and also following termination of employment. Employee recognizes and
acknowledges that in the event of any default in, or breach of any of, the
terms, conditions and provisions of Sections 9 or 10, Employer's remedies
at law shall be inadequate. Accordingly, Employee agrees that in such
event, Employer shall be entitled to the remedies of specific performance
and injunctive relief in addition to actual damages and any and all other
remedies and rights at law or in equity, and such rights and remedies shall
be cumulative.
12. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the parties as to Employee's employment. All prior
discussions, compensation understandings, negotiations and agreements
notwithstanding, this Agreement constitutes the parties' sole source of
rights and duties with respect to Employee's employment. This Agreement
may not be changed orally, but only by agreement in writing expressly
identifying itself as an amendment to this Agreement and signed by Employee
and Employer.
13. AGREEMENT BINDING ON SUCCESSORS. This Agreement shall be binding
upon Employer and its successors and assigns. The rights and duties of
Employee are personal to him and shall not be subject to transfer,
delegation or assignment.
14. AMENDMENT AND WAIVER. This Agreement has been authorized by
Employer's Board of Directors. No employee or officer of Employer has
authority to offer employment other than employment terminable at will, or
to limit Employer's ability to terminate employment at will in any way;
employment on any other terms may only be authorized by a written
resolution of the Board of Directors. No waiver by either party at any
time of any breach by the other party or compliance with any condition or
provision of this Agreement to be performed by the other party shall be
deemed a waiver of similar or dissimilar provisions or condition at the
time or any time prior or subsequent time.
15. SEVERABILITY. Any provision or term of this Agreement that shall
be found to be contrary to law or otherwise unenforceable, in whole or in
part, shall not affect the remaining terms of this Agreement, which shall
be continued as if the unenforceable provision were absent from this
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<PAGE>
Agreement. It is the desire and intent of the parties to this Agreement
that the provisions of this Agreement be enforced to the fullest extent
permissible under the laws and public policies applied in each jurisdiction
in which enforcement is sought.
16. GOVERNING LAW. This Agreement shall be governed, construed and
enforced in accordance with the laws of the State of Michigan.
17. ARBITRATION. Any dispute or controversy under this Agreement
shall be settled exclusively by arbitration in Kalamazoo, Michigan, in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitration award in any court
having jurisdiction. Employer will reimburse Employee for all reasonable
attorneys' fees incurred by Employee as a result of any arbitration with
regard to any issue under this Agreement (or any judicial proceeding to
compel or to enforce such arbitration): (a) which is initiated by Employee
if Employer is found in such proceeding to have violated this Agreement
substantially as alleged by Employee; or (b) which is initialed by
Employer, unless Employee is found in such proceeding to have violated this
Agreement substantially as alleged by Employer.
18. NOTICE. All notices, request, demands, consents, waivers,
instructions, approvals and the communications hereunder shall be in
writing and shall be deemed to have been given if personally delivered to
or mailed as follows:
If to Employer:
Manatron, Inc.
2970 South 9th Street
Kalamazoo, Michigan 49009
Attention: President
If to Employee:
Paul R. Sylvester
9307 East Arrowhead
Scotts, Michigan 49088
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first written above.
/S/ PAUL R. SYLVESTER
Paul R. Sylvester
"Employee"
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<PAGE>
MANATRON, INC.
By /S/ RANDALL PEAT
Randall . Peat
Its Chairman of the Board
-8-
<PAGE>
EXHIBIT 10.19
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("AGREEMENT") dated as of October 10,
1996, between LARRY L. TERHUNE ("EMPLOYEE"), and MANATRON, INC., a Michigan
corporation, maintaining its principal executive offices at 2970 South 9th
Street, Kalamazoo, Michigan 49009 ("EMPLOYER").
Accordingly, the parties agree as follows:
1. EMPLOYMENT. Employer hereby employs Employee, and Employee
hereby accepts this employment, on the terms and subject to the conditions
set forth herein.
2. POSITION. Employee agrees to serve Employer in the position and
with the job description as described on Exhibit A, or to serve Employer
and its subsidiaries in such other executive or operational positions
commensurate with Employee's experience and expertise as may be determined
by Employer. Employee shall devote his full business time, energies, best
efforts, skill and attention to the duties arising out of or incident to
his position and responsibilities pursuant to this Agreement, during the
term of employment, and shall not engage in other employment or business
opportunity, unless the employment or business opportunity is disclosed to
and approved by the Chief Executive Officer in advance of the employment or
business opportunity.
3. DURATION. Employment under this Agreement shall commence on the
date set forth above and shall continue until terminated as provided in
this Agreement.
4. COMPENSATION. In consideration for his services, Employee shall
receive the following compensation:
(a) SALARY. Employee shall be paid by Employer (or, if
applicable, by an affiliate of Employer) a minimum annual salary of
$70,000 per year while this Agreement is in effect (the "BASE
SALARY"). The Base Salary shall be reviewed annually and adjusted as
the President of Employer in his discretion deems appropriate and
which shall be commensurate with Employee's position. If the
President of Employer decides to reduce Employee's Base Salary,
Employer shall provide Employee three (3) months' written notice
before the reduction shall go into effect.
(b) VACATION. Employee shall receive paid vacation in
accordance with Employer's vacation and hiring policies as in effect
from time to time.
<PAGE>
(c) AUTOMOBILE EXPENSES. If Employee is provided with an
automobile or a car allowance for business purposes, it shall be
provided in accordance with Employer's standard automobile use
policies and practices.
(d) BONUS. Employee will be eligible to participate in the
Company's Southeastern Regional Bonus Plan as in effect from time to
time and may be eligible to participate in other bonus or incentive
programs at the discretion of Employer. A copy of the current plans
which Employee is eligible to participate in are attached to this
Agreement. Employee acknowledges that the terms of the bonus plan and
his right to participate in bonus plans are subject to the discretion
of Employer.
(e) BENEFITS. Employee shall receive standard benefits offered
to all employees as determined from time to time by the Board of
Directors of Employer.
(f) REIMBURSEMENT OF EXPENSES. Employer shall reimburse
Employee for all reasonable proper travel and out-of-pocket expenses
incurred by him in connection with the performance of his duties under
this Agreement in accordance with Employer's policies for
reimbursement.
5. TERMINATION OF EMPLOYMENT. This Agreement and Employee's
employment pursuant to this Agreement may be terminated prior to the
expiration of the stated term of this Agreement as follows:
(a) TERMINATION BY EMPLOYEE. Employee is free to resign from
employment at any time with or without cause, by providing thirty (30)
days' prior written notification to Employer. For purposes of this
Agreement, "With Cause" shall mean:
(i) Without Employee's express written consent, the
assignment to Employee of any duties inconsistent with Employee's
present position or positions, duties, responsibilities and
status with Employer or a subsidiary, except in connection with
Employee's termination as provided below in Sections 5(c), (d) or
(e) or by Employee other than "With Cause";
(ii) A reduction in Employee's Base Salary as in effect on
the date of this Agreement or as the same may be increased from
time to time, by more than fifteen percent (15%); or
(iii) Without Employee's express written consent, a
relocation of Employee to a location outside of Employee's
current employment location, except for required travel on
business of Employer to an extent substantially consistent with
Employee's present business travel obligations.
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<PAGE>
(b) TERMINATION BY EMPLOYER. Employer may terminate Employee's
employment at any time, with or without cause and with or without
prior review, notice or warning by providing thirty (30) days' prior
written notification to Employee.
(c) DEATH. Employee's employment under this Agreement shall
terminate in the event of Employee's death. Obligations of Employer
hereunder shall terminate as of the date of Employee's termination for
death.
(d) DISABILITY. Employer may terminate this Agreement for
"Disability" if, as a result of Employee's incapacity due to physical
or mental illness, he shall have been absent from his duties with
Employer on a full-time basis for six (6) consecutive months, and if
he shall not have returned to the full time performance of his duties
within thirty (30) days after written notice after such six (6) month
period.
(e) FOR CAUSE. Employee's employment under this Agreement may
be terminated by Employer for "Cause" at any time. For purposes of
this Agreement, termination shall be considered to be for "Cause" if
based upon (i) Employee's conviction of a crime involving moral
turpitude or embezzlement; (ii) Employee's willful activities in
competition with Employer or in aid of its competitors; (iii) the
willful and continued failure to substantially perform Employee's
duties with Employer under this Agreement (other than any other such
failure resulting from Disability), after a written demand for
substantial performance is delivered to Employee that specifically
identifies the manner in which Employer believes Employee has
willfully failed to substantially perform his duties, and after
Employee has failed to resume substantial performance of his duties on
a continuous basis within fourteen (14) calendar days of receiving
such demand; or (iv) Employee willfully engaging in conduct which is
demonstrably and materially injurious to Employer, monetarily or
otherwise. For purposes of (ii), (iii) and (iv) above, no act, or
failure to act, on Employee's part shall be deemed "willful" unless
done, or omitted to be done, by the Employee not in good faith and
without reasonable belief that the action or omission was in the best
interest of Employer.
6. SEVERANCE PAY. If Employer terminates Employee under Section 5(b)
without cause or if Employee resigns from employment "With Cause" (as
defined in Section 5(a)), above, prior to the expiration of this Agreement,
Employer or its successor in interest shall pay Employee six (6) months'
severance pay of an amount equal to Employee's Base Salary and any and all
benefits in effect at the time of termination ("SEVERANCE PAY"). Employee
agrees that Employee's right to receive Severance Pay is conditioned on the
prior execution by Employee of a binding general release (in such form as
Employer may determine) of any and all claims against Employer and all co-
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owned entities, and their officers, directors, employees, agents and
owners.
7. NON-COMPETITION COVENANTS OF EMPLOYEE. While employed by
Employer and during the period after termination during which Employee
receives any Severance Pay, Employee shall not:
(a) Engage, and shall have no investment, involvement or other
connection whatsoever, direct or indirect, with any corporation,
partnership, proprietorship, individual or other business entity that
is engaged, in whole or in part, in any line of business that is the
same as, similar to or directly or indirectly in competition with the
business of Employer, or its successors and assigns, as it is now, or
as it may during Employee's employment be, conducted east of the
Mississippi River ("Competing Entity"); this provision shall not,
however, restrict the right of Employee to own less than one percent
(1%) of the issued and outstanding shares of capital stock in any
company listed on a national or regional stock exchange, or whose
stock is quoted on a NASDAQ market, regardless of the nature of the
business.
(b) Be or become a shareholder, partner or other investor, or an
officer, employee, consultant, adviser or director or an agent
(whether independent or otherwise) for any Competing Entity; this
provision shall not, however, restrict the right of Employee to own
less than one percent (1%) of the issued and outstanding shares of
capital stock in any company listed on a national or regional stock
exchange, or whose stock is quoted on a NASDAQ market, regardless of
the nature of the business.
(c) Solicit either for himself or on behalf of any Competing
Entity, any "active customer of Employer" where an "active customer of
Employer" is a person or entity who or which is or has been a customer
of Employer during the term of Employee's employment or during the two
(2) years preceding Employee's termination of employment.
(d) Employee acknowledges that Employer has previously conducted
its business east of the Mississippi, and that the restrictive
covenant assumed by Employee pursuant to this section is essential to
the business of Employer and its goodwill. To the extent any part of
this covenant may be held unenforceable as set forth herein, the
restrictions set forth herein shall be severable so as to confine
their application to the geographical and time restrictions as a court
deems to be reasonable.
(e) The provisions set forth in this Section 7 shall be in
effect while Employee is employed by Employer and for the period of
time during which Employee receives Severance Pay. In the event
Employee breaches any of the terms, conditions or provisions under
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this Section, the remedy available to Employer shall be the right of
Employer to receive actual damages along with the forfeiture of
Severance Pay (paid or unpaid) if such breach occurs prior to any
employment termination. If such breach occurs subsequent to any
employment termination, the sole remedy of Employer for the breach
shall be the forfeiture of the right of Employee to receive any unpaid
Severance Pay.
8. COVENANT NOT TO SOLICIT EMPLOYEES. During the period after
termination during which Employee receives any Severance Pay, Employee
shall not, directly or indirectly, induce or attempt to influence any
employee of Employer to terminate employment, except in his capacity as an
officer of Employer in the ordinary course of business or as approved by
the Board of Directors of Employer. The sole remedy of Employer for breach
of the covenant set forth in this Section 8 shall be the forfeiture of the
right of Employee to receive any unpaid Severance Pay.
9. COVENANT NOT TO DISCLOSE CONFIDENTIAL INFORMATION. Employee
agrees that all information regarding manufacturing technique, process,
formula, development or experimental work, work in process, business, trade
secret or any other secret or confidential matter relating to the products,
sales or business at Employer, including, but not limited to, customer
lists, sales records, financial statements, payroll records, ledgers,
corporate records, account numbers, contact lists and other information of
any nature whatsoever pertaining to the business of Employer are of a
proprietary and confidential nature and that none of such information shall
be disclosed, published or made use of for any purpose by Employee without
the prior written consent of Employer.
10. COVENANT NOT TO USE TRADE NAME. Employee agrees that he shall
not, directly or indirectly, be or become an investor, partner,
shareholder, officer, employee, director, consultant, adviser or agent of,
or have any other affiliation with or economic interest in, any
corporation, partnership, proprietorship or other business entity that has
"Manatron," "ATEK," "Specialized Data Systems" or "Sabre" as any part of
its name or trade name except for Employer or any companies or businesses
affiliated with Employer; this provision shall not, however, restrict the
right of Employee to own less than one percent (1%) of the issued and
outstanding shares of capital stock in any company listed on a national or
regional stock exchange, or whose stock is quoted on a NASDAQ market,
regardless of the nature of the business.
11. SPECIFIC PERFORMANCE AVAILABLE. The provisions set forth in
Sections 9 and 10 shall be in effect while Employee is employed by Employer
and also following termination of employment. Employee recognizes and
acknowledges that in the event of any default in, or breach of any of, the
terms, conditions and provisions of Sections 9 or 10, Employer's remedies
at law shall be inadequate. Accordingly, Employee agrees that in such
event, Employer shall be entitled to the remedies of specific performance
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<PAGE>
and injunctive relief in addition to actual damages and any and all other
remedies and rights at law or in equity, and such rights and remedies shall
be cumulative.
12. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the parties as to Employee's employment. All prior
discussions, compensation understandings, negotiations and agreements
notwithstanding, this Agreement constitutes the parties' sole source of
rights and duties with respect to Employee's employment. This Agreement
may not be changed orally, but only by agreement in writing expressly
identifying itself as an amendment to this Agreement and signed by Employee
and Employer.
13. AGREEMENT BINDING ON SUCCESSORS. This Agreement shall be binding
upon Employer and its successors and assigns. The rights and duties of
Employee are personal to him and shall not be subject to transfer,
delegation or assignment.
14. AMENDMENT AND WAIVER. This Agreement has been authorized by
Employer's Board of Directors. No employee or officer of Employer has
authority to offer employment other than employment terminable at will, or
to limit Employer's ability to terminate employment at will in any way;
employment on any other terms may only be authorized by a written
resolution of the Board of Directors. No waiver by either party at any
time of any breach by the other party or compliance with any condition or
provision of this Agreement to be performed by the other party shall be
deemed a waiver of similar or dissimilar provisions or condition at the
time or any time prior or subsequent time.
15. SEVERABILITY. Any provision or term of this Agreement that shall
be found to be contrary to law or otherwise unenforceable, in whole or in
part, shall not affect the remaining terms of this Agreement, which shall
be continued as if the unenforceable provision were absent from this
Agreement. It is the desire and intent of the parties to this Agreement
that the provisions of this Agreement be enforced to the fullest extent
permissible under the laws and public policies applied in each jurisdiction
in which enforcement is sought.
16. GOVERNING LAW. This Agreement shall be governed, construed and
enforced in accordance with the laws of the State of Michigan.
17. ARBITRATION. Any dispute or controversy under this Agreement
shall be settled exclusively by arbitration in Kalamazoo, Michigan, in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitration award in any court
having jurisdiction. Employer will reimburse Employee for all reasonable
attorneys' fees incurred by Employee as a result of any arbitration with
regard to any issue under this Agreement (or any judicial proceeding to
compel or to enforce such arbitration): (a) which is initiated by Employee
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<PAGE>
if Employer is found in such proceeding to have violated this Agreement
substantially as alleged by Employee; or (b) which is initialed by
Employer, unless Employee is found in such proceeding to have violated this
Agreement substantially as alleged by Employer.
18. NOTICE. All notices, request, demands, consents, waivers,
instructions, approvals and the communications hereunder shall be in
writing and shall be deemed to have been given if personally delivered to
or mailed as follows:
If to Employer:
Manatron, Inc.
2970 South 9th Street
Kalamazoo, Michigan 49009
Attention: President
If to Employee:
Larry L. Terhune
213 Sumrell Street
Greenville, North Carolina 27858
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first written above.
/S/ LARRY L. TERHUNE
Larry L. Terhune
"Employee"
MANATRON, INC.
By /S/ RANDALL L. PEAT
Randall L. Peat
Its Chairman of the Board
By /S/ PAUL R. SYLVESTER
Paul R. Sylvester
Its President and Chief Executive Officer
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<PAGE>
EXHIBIT 10.20
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("AGREEMENT") dated as of October 10,
1996, between MELVIN J. TRUMBLE ("EMPLOYEE"), and MANATRON, INC., a
Michigan corporation, maintaining its principal executive offices at 2970
South 9th Street, Kalamazoo, Michigan 49009 ("EMPLOYER").
Accordingly, the parties agree as follows:
1. EMPLOYMENT. Employer hereby employs Employee, and Employee
hereby accepts this employment, on the terms and subject to the conditions
set forth herein.
2. POSITION. Employee agrees to serve Employer in the position and
with the job description as described on Exhibit A, or to serve Employer
and its subsidiaries in such other executive or operational positions
commensurate with Employee's experience and expertise as may be determined
by Employer. Employee shall devote his full business time, energies, best
efforts, skill and attention to the duties arising out of or incident to
his position and responsibilities pursuant to this Agreement, during the
term of employment, and shall not engage in other employment or business
opportunity, unless the employment or business opportunity is disclosed to
and approved by the Chief Executive Officer in advance of the employment or
business opportunity.
3. DURATION. Employment under this Agreement shall commence on the
date set forth above and shall continue until terminated as provided in
this Agreement.
4. COMPENSATION. In consideration for his services, Employee shall
receive the following compensation:
(a) SALARY. Employee shall be paid by Employer (or, if
applicable, by an affiliate of Employer) a minimum annual salary of
$105,000 per year while this Agreement is in effect (the "BASE
SALARY"). The Base Salary shall be reviewed annually and adjusted as
the President of Employer in his discretion deems appropriate and
which shall be commensurate with Employee's position. If the
President of Employer decides to reduce Employee's Base Salary,
Employer shall provide Employee three (3) months' written notice
before the reduction shall go into effect.
(b) VACATION. Employee shall receive paid vacation in
accordance with Employer's vacation and hiring policies as in effect
from time to time.
<PAGE>
(c) AUTOMOBILE EXPENSES. If Employee is provided with an
automobile or a car allowance for business purposes, it shall be
provided in accordance with Employer's standard automobile use
policies and practices.
(d) BONUS. Employee will be eligible to participate in
Employer's executive incentive bonus plan as in effect from time to
time. A copy of Employer's current executive incentive bonus plan
(Manatron, Inc. Executive Incentive Plan for Fiscal 1997) has been or
will be separately provided to Employee. Employee acknowledges that
the terms of the bonus plan are subject to revision at Employer's
discretion. If Employee is terminated for any reason described in
Section 5, Employee shall be entitled to receive his pro rata share of
an Award (as defined in the plan in effect on the date of termination)
for the portion of the fiscal year in which Employee participated in
the plan.
(e) BENEFITS. Employee shall receive standard benefits offered
to all employees as determined from time to time by the Board of
Directors of Employer.
(f) REIMBURSEMENT OF EXPENSES. Employer shall reimburse
Employee for all reasonable proper travel and out-of-pocket expenses
incurred by him in connection with the performance of his duties under
this Agreement in accordance with Employer's policies for
reimbursement.
5. TERMINATION OF EMPLOYMENT. This Agreement and Employee's
employment pursuant to this Agreement may be terminated prior to the
expiration of the stated term of this Agreement as follows:
(a) TERMINATION BY EMPLOYEE. Employee is free to resign from
employment at any time with or without cause, by providing thirty (30)
days' prior written notification to Employer. For purposes of this
Agreement, "With Cause" shall mean:
(i) Without Employee's express written consent, the
assignment to Employee of any duties inconsistent with Employee's
present position or positions, duties, responsibilities and
status with Employer or a subsidiary, except in connection with
Employee's termination as provided below in Sections 5(c), (d) or
(e), or by Employee other than "With Cause";
(ii) A reduction in Employee's Base Salary as in effect on
the date of this Agreement or as the same may be increased from
time to time, by more than fifteen percent (15%); or
(iii) Without Employee's express written consent, a
relocation of Employee to a location outside of Employee's
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<PAGE>
current employment location, except for required travel on
business of Employer to an extent substantially consistent with
Employee's present business travel obligations.
(b) TERMINATION BY EMPLOYER. Employer may terminate Employee's
employment at any time, with or without cause and with or without
prior review, notice or warning by providing thirty (30) days' prior
written notification to Employee.
(c) DEATH. Employee's employment under this Agreement shall
terminate in the event of Employee's death. Obligations of Employer
hereunder shall terminate as of the date of Employee's termination for
death.
(d) DISABILITY. Employer may terminate this Agreement for
"Disability" if, as a result of Employee's incapacity due to physical
or mental illness, he shall have been absent from his duties with
Employer on a full-time basis for six (6) consecutive months, and if
he shall not have returned to the full time performance of his duties
within thirty (30) days after written notice after such six (6) month
period.
(e) FOR CAUSE. Employee's employment under this Agreement may
be terminated by Employer for "Cause" at any time. For purposes of
this Agreement, termination shall be considered to be for "Cause" if
based upon (i) Employee's conviction of a crime involving moral
turpitude or embezzlement; (ii) Employee's willful activities in
competition with Employer or in aid of its competitors; (iii) the
willful and continued failure to substantially perform Employee's
duties with Employer under this Agreement (other than any other such
failure resulting from Disability), after a written demand for
substantial performance is delivered to Employee that specifically
identifies the manner in which Employer believes Employee has
willfully failed to substantially perform his duties, and after
Employee has failed to resume substantial performance of his duties on
a continuous basis within fourteen (14) calendar days of receiving
such demand; or (iv) Employee willfully engaging in conduct which is
demonstrably and materially injurious to Employer, monetarily or
otherwise. For purposes of (ii), (iii) and (iv) above, no act, or
failure to act, on Employee's part shall be deemed "willful" unless
done, or omitted to be done, by the Employee not in good faith and
without reasonable belief that the action or omission was in the best
interest of Employer.
6. SEVERANCE PAY. If Employer terminates Employee under Section 5(b)
without cause or if Employee resigns from employment "With Cause" (as
defined in Section 5(a)), above, prior to the expiration of this Agreement,
Employer or its successor in interest shall pay Employee six (6) months'
severance pay of an amount equal to Employee's Base Salary and any and all
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benefits in effect at the time of termination ("SEVERANCE PAY"). Employee
agrees that Employee's right to receive Severance Pay is conditioned on the
prior execution by Employee of a binding general release (in such form as
Employer may determine) of any and all claims against Employer and all co-
owned entities, and their officers, directors, employees, agents and
owners.
7. NON-COMPETITION COVENANTS OF EMPLOYEE. While employed by Employer
and during the period after termination during which Employee receives any
Severance Pay, Employee shall not:
(a) Engage, and shall have no investment, involvement or other
connection whatsoever, direct or indirect, with any corporation,
partnership, proprietorship, individual or other business entity that
is engaged, in whole or in part, in any line of business that is the
same as, similar to or directly or indirectly in competition with the
business of Employer, or its successors and assigns, as it is now, or
as it may during Employee's employment be, conducted east of the
Mississippi River ("Competing Entity"); this provision shall not,
however, restrict the right of Employee to own less than one percent
(1%) of the issued and outstanding shares of capital stock in any
company listed on a national or regional stock exchange, or whose
stock is quoted on a NASDAQ market, regardless of the nature of the
business.
(b) Be or become a shareholder, partner or other investor, or an
officer, employee, consultant, adviser or director or an agent
(whether independent or otherwise) for any Competing Entity; this
provision shall not, however, restrict the right of Employee to own
less than one percent (1%) of the issued and outstanding shares of
capital stock in any company listed on a national or regional stock
exchange, or whose stock is quoted on a NASDAQ market, regardless of
the nature of the business.
(c) Solicit either for himself or on behalf of any Competing
Entity, any "active customer of Employer" where an "active customer of
Employer" is a person or entity who or which is or has been a customer
of Employer during the term of Employee's employment or during the two
(2) years preceding Employee's termination of employment.
(d) Employee acknowledges that Employer has previously conducted
its business east of the Mississippi, and that the restrictive
covenant assumed by Employee pursuant to this section is essential to
the business of Employer and its goodwill. To the extent any part of
this covenant may be held unenforceable as set forth herein, the
restrictions set forth herein shall be severable so as to confine
their application to the geographical and time restrictions as a court
deems to be reasonable.
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<PAGE>
(e) The provisions set forth in this Section 7 shall be in
effect while Employee is employed by Employer and for the period of
time during which Employee receives Severance Pay. In the event
Employee breaches any of the terms, conditions or provisions under
this Section, the remedy available to Employer shall be the right of
Employer to receive actual damages along with the forfeiture of
Severance Pay (paid or unpaid) if such breach occurs prior to any
employment termination. If such breach occurs subsequent to any
employment termination, the sole remedy of Employer for the breach
shall be the forfeiture of the right of Employee to receive any unpaid
Severance Pay.
8. COVENANT NOT TO SOLICIT EMPLOYEES. During the period after
termination during which Employee receives any Severance Pay, Employee
shall not, directly or indirectly, induce or attempt to influence any
employee of Employer to terminate employment, except in his capacity as an
officer of Employer in the ordinary course of business or as approved by
the Board of Directors of Employer. The sole remedy of Employer for breach
of the covenant set forth in this Section 8 shall be the forfeiture of the
right of Employee to receive any unpaid Severance Pay.
9. COVENANT NOT TO DISCLOSE CONFIDENTIAL INFORMATION. Employee
agrees that all information regarding manufacturing technique, process,
formula, development or experimental work, work in process, business, trade
secret or any other secret or confidential matter relating to the products,
sales or business at Employer, including, but not limited to, customer
lists, sales records, financial statements, payroll records, ledgers,
corporate records, account numbers, contact lists and other information of
any nature whatsoever pertaining to the business of Employer are of a
proprietary and confidential nature and that none of such information shall
be disclosed, published or made use of for any purpose by Employee without
the prior written consent of Employer.
10. COVENANT NOT TO USE TRADE NAME. Employee agrees that he shall
not, directly or indirectly, be or become an investor, partner,
shareholder, officer, employee, director, consultant, adviser or agent of,
or have any other affiliation with or economic interest in, any
corporation, partnership, proprietorship or other business entity that has
"Manatron," "ATEK," "Specialized Data Systems" or "Sabre" as any part of
its name or trade name except for Employer or any companies or businesses
affiliated with Employer; this provision shall not, however, restrict the
right of Employee to own less than one percent (1%) of the issued and
outstanding shares of capital stock in any company listed on a national or
regional stock exchange, or whose stock is quoted on a NASDAQ market,
regardless of the nature of the business.
11. SPECIFIC PERFORMANCE AVAILABLE. The provisions set forth in
Sections 9 and 10 shall be in effect while Employee is employed by Employer
and also following termination of employment. Employee recognizes and
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<PAGE>
acknowledges that in the event of any default in, or breach of any of, the
terms, conditions and provisions of Sections 9 or 10, Employer's remedies
at law shall be inadequate. Accordingly, Employee agrees that in such
event, Employer shall be entitled to the remedies of specific performance
and injunctive relief in addition to actual damages and any and all other
remedies and rights at law or in equity, and such rights and remedies shall
be cumulative.
12. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the parties as to Employee's employment. All prior
discussions, compensation understandings, negotiations and agreements
notwithstanding, this Agreement constitutes the parties' sole source of
rights and duties with respect to Employee's employment. This Agreement
may not be changed orally, but only by agreement in writing expressly
identifying itself as an amendment to this Agreement and signed by Employee
and Employer.
13. AGREEMENT BINDING ON SUCCESSORS. This Agreement shall be binding
upon Employer and its successors and assigns. The rights and duties of
Employee are personal to him and shall not be subject to transfer,
delegation or assignment.
14. AMENDMENT AND WAIVER. This Agreement has been authorized by
Employer's Board of Directors. No employee or officer of Employer has
authority to offer employment other than employment terminable at will, or
to limit Employer's ability to terminate employment at will in any way;
employment on any other terms may only be authorized by a written
resolution of the Board of Directors. No waiver by either party at any
time of any breach by the other party or compliance with any condition or
provision of this Agreement to be performed by the other party shall be
deemed a waiver of similar or dissimilar provisions or condition at the
time or any time prior or subsequent time.
15. SEVERABILITY. Any provision or term of this Agreement that shall
be found to be contrary to law or otherwise unenforceable, in whole or in
part, shall not affect the remaining terms of this Agreement, which shall
be continued as if the unenforceable provision were absent from this
Agreement. It is the desire and intent of the parties to this Agreement
that the provisions of this Agreement be enforced to the fullest extent
permissible under the laws and public policies applied in each jurisdiction
in which enforcement is sought.
16. GOVERNING LAW. This Agreement shall be governed, construed and
enforced in accordance with the laws of the State of Michigan.
17. ARBITRATION. Any dispute or controversy under this Agreement
shall be settled exclusively by arbitration in Kalamazoo, Michigan, in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitration award in any court
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<PAGE>
having jurisdiction. Employer will reimburse Employee for all reasonable
attorneys' fees incurred by Employee as a result of any arbitration with
regard to any issue under this Agreement (or any judicial proceeding to
compel or to enforce such arbitration): (a) which is initiated by Employee
if Employer is found in such proceeding to have violated this Agreement
substantially as alleged by Employee; or (b) which is initialed by
Employer, unless Employee is found in such proceeding to have violated this
Agreement substantially as alleged by Employer.
18. NOTICE. All notices, request, demands, consents, waivers,
instructions, approvals and the communications hereunder shall be in
writing and shall be deemed to have been given if personally delivered to
or mailed as follows:
If to Employer:
Manatron, Inc.
2970 South 9th Street
Kalamazoo, Michigan 49009
Attention: President
If to Employee:
Melvin J. Trumble
3962 Applewood Lane
Kettering, Ohio 45429
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first written above.
/S/ MELVIN J. TRUMBLE
Melvin J. Trumble
"Employee"
MANATRON, INC.
By /S/ RANDALL L. PEAT
Randall L. Peat
Its Chairman of the Board
By /S/ PAUL R. SYLVESTER
Paul R. Sylvester
Its President and Chief Executive Officer
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<PAGE>
EXHIBIT 10.21
MANATRON, INC.
EXECUTIVE INCENTIVE PLAN FOR FISCAL 1997
ARTICLE I
DECLARATION
SECTION 1. ESTABLISHMENT OF PLAN. The Manatron, Inc. Executive
Incentive Plan (the "Plan") is established by Manatron, Inc.
(the "Company") for fiscal year 1997, and may be continued,
intact or as amended, from year to year, at the Company's
option. The Plan is an annual incentive, performance, and
bonus compensation program for eligible employees of the
Company.
SECTION 2. OBJECTIVES. The objectives of the Plan are to:
(a) Reward the outstanding performance of certain Executive
Employees who contribute significantly to the
achievement of the Company's annual objectives; and
(b) Facilitate the attraction and retention of superior
personnel required for continued innovation, growth,
and profitability.
SECTION 3. EFFECTIVE DATES. The effective date of the Plan is May 1,
1996. Each provision of the Plan applies until the
effective date of an amendment of that provision.
ARTICLE II
DEFINITIONS
The following terms shall have the definition stated, unless the
context requires a different meaning:
SECTION 1. AFTER-TAX EARNINGS. "After-Tax Earnings" shall mean the
Company's after-tax corporate net income for the subject
fiscal year as shown in the Company's annual audited
financial statements for that fiscal year after all expenses
and taxes, adjusted to remove amounts expended for payments
made pursuant to this Plan and any other annual or long-term
incentive compensation or bonus plans.
<PAGE>
SECTION 2. AWARD. "Award" means a contingent right to receive cash
following the end of an Award Year.
SECTION 3. AWARD YEAR. "Award Year" means each fiscal year of the
Company.
SECTION 4. COMMITTEE. "Committee" means the Compensation Committee of
the Board of Directors of the Company which administers the
Plan.
SECTION 5. EXECUTIVE EMPLOYEE. "Executive Employee" means a full-time
senior employee of the Company or one of the Company's
subsidiaries determined by the Committee to have the
potential of a direct and significant impact on the
performance of the Company or to make a substantial
contribution to the success of the Company.
SECTION 6. NET FREE ANNUAL CASH FLOW. "Net Free Annual Cash Flow"
means the Company's after-tax earnings plus non-cash
expenses such as depreciation and amortization.
SECTION 7. PARTICIPANT. "Participant" means an Executive Employee
determined by the Committee to be eligible for an Award for
the Award Year.
SECTION 8. PLAN. "Plan" means the Manatron, Inc. Executive Incentive
Plan for Fiscal 1997.
ARTICLE III
PARTICIPATION
SECTION 1. DESIGNATION BY COMMITTEE. An Executive Employee shall be a
Participant in the Plan for an Award Year when designated as
a Participant for that Award Year by the Committee.
Executive Employees selected by the Committee for
participation for the Award Year shall be notified in
writing and provided with a copy of this Plan or with a
written summary and explanation of the Plan.
SECTION 2. PARTICIPATION LIMITED TO ONE YEAR. Designation as a
Participant in the Plan for an Award Year is limited to that
Award Year. Each Participant must be designated as a
Participant by the Committee for each Award Year to be
eligible to participate in the Plan for that Award Year.
-2-
<PAGE>
ARTICLE IV
ADMINISTRATION
SECTION 1. AUTHORITY OF COMMITTEE. The Plan will be administered by
the Committee and (except with respect to his own Award) the
Chief Executive Officer of the Company. If deemed by the
Committee to be necessary, the Committee will adopt rules,
policies, and forms for the administration, interpretation,
and implementation of the Plan.
SECTION 2. DETERMINATION OF AWARD AMOUNTS. As described below, a
portion of Net Free Annual Cash Flow component of the Award
for each Participant (other than the Chief Executive
Officer, which shall be determined by the Committee) shall
be determined by the Chief Executive Officer in his sole
discretion. All decisions, determinations, and
interpretations of the Chief Executive Officer and the
Committee will be final and binding on all Participants. No
member of the Committee shall be eligible to receive Awards
pursuant to the Plan.
SECTION 3. LIMITATION ON LIABILITY. Neither the Chief Executive
Officer, any member of the Committee, nor any member of the
Board of Directors shall be liable for any act or omission
in connection with the performance of his or her duties or
the exercise of his or her discretion related to any act or
omission concerning the operation and administration of the
Plan.
ARTICLE V
AWARDS
SECTION 1. DETERMINATION OF PARTICIPANT'S AWARD POTENTIAL. Unless
modified by the Committee or the Chief Executive Officer,
each Participant's award potential, as determined by the
Committee for each Award Year, shall consist of the
following:
(a) PERSONAL RANGE. The Participant's maximum
potential Award pursuant to this Plan shall be fifty percent
(50%) of the base salary paid to the Participant during the
Award Year.
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<PAGE>
(b) COMPANY PERFORMANCE. The range of financial
performance by the Company which will be considered in
determining Awards and the target financial performance
objective shall be established for the Award Year.
Financial performance shall be measured by two variables, as
follows:
(i) AFTER-TAX EARNINGS. Fifty percent (50%) of
the maximum potential Award for any Participant shall
be based upon the Company's after-tax corporate
earnings for the Award Year. The After-Tax Earnings
component of an Award for an Award Year will be
distributed to Participants pro-rata based on each
Participant's base salary for the Award Year. No Award
will consist of an amount based on the Company's After-
Tax Earnings unless the Company's After-Tax Earnings
for the Award Year are at a minimum threshold of One
Hundred Thousand Dollars ($100,000) for the year, and
Twenty-Five percent (25%) of the Company's After-Tax
Earnings for the Award Year in excess of the minimum
threshold shall be available for award to Participants
pursuant to the Plan.
(ii) NET FREE ANNUAL CASH FLOW. The remaining
fifty percent (50%) of the maximum potential Award for
any Participant shall be based upon the Company's Net
Free Annual Cash Flow. Fifteen percent (15%) of the
Company's Net Free Annual Cash Flow in excess of One
Million Dollars ($1,000,000) per year shall be
available for award to Participants pursuant to the
Plan.
The amount of a Participant's Award based on the
Company's Net Free Annual Cash Flow will be determined
as follows: (1) eighty percent (80%) of the Net Free
Annual Cash Flow component will be distributed to a
Participant pro-rata based on each Participant's base
salary for the Award Year; and (2) the remaining twenty
percent (20%) of the Net Free Annual Cash Flow
component can be distributed to a Participant based on
performance objectives, criteria, and/or ratings for
individual Participants as established in the sole
discretion of the Chief Executive Officer.
Under no circumstance shall the pro rata salary
component of the Net Free Annual Cash flow component of
an Award for an Award Year exceed Twenty percent (20%)
of a Participant's annual base salary, or the
-4-
<PAGE>
performance objective discretionary portion exceed Five
percent (5%), and under no circumstances shall the Net
Free Annual Cash Flow total component of an Award for
an Award Year exceed twenty-five percent (25%) of a
Participant's annual base salary.
ARTICLE VI
INDIVIDUAL ASSESSMENT AND ADJUSTMENT
SECTION 1. PARTICIPANT'S AWARD. The basis for Awards for any Award
Year will be achievement of financial performance thresholds
and performance objectives and criteria as determined in the
sole discretion of the Chief Executive Officer. If the
financial thresholds are met for the Award Year, the Chief
Executive Officer will calculate and determine the amount of
the Award for each Participant based upon the extent to
which the Company's financial performance and individual
performance objectives and criteria (as determined by the
Chief Executive Officer) were achieved for the Award Year.
SECTION 2. PARTIAL AWARD. In the event an Executive Employee
participates in the Plan for only part of an Award Year, the
Award may be adjusted pro-rata based on the amount of time
for which the Executive Employee was a Participant in the
Plan.
ARTICLE VII
PAYMENT OF AWARDS
Subject to Article VIII, each Award, as finally determined for
the Award Year, shall be paid to the Participant in cash as soon as
administratively feasible following final determination and approval.
ARTICLE VIII
TERMINATION OF EMPLOYMENT
SECTION 1. RETIREMENT, DEATH, DISABILITY, OR OTHER TERMINATION. In
the event of a Participant's death, disability, normal
retirement, or termination of employment (unless Section 2
of this Article applies) during an Award Year, payment of
the Award earned for that year will be pro-rated. In the
event of death, payment shall be made to the Participant's
-5-
<PAGE>
designated beneficiary, or if there is no designated
beneficiary, payment shall be made to the Participant's
estate.
SECTION 2. FORFEITURE. In the event that a Participant is terminated
for "cause," the Participant's entitlement to any Award,
including any Award for a prior Award Year that has not been
paid, shall be forfeited and the Award shall be canceled.
For purposes of this Plan, termination shall be considered
to be for "cause" if based upon (i) Participant's conviction
of a crime involving moral turpitude or embezzlement; (ii)
Participant's willful activities in competition with
Employer or in aid of its competitors; (iii) the willful and
continued failure to substantially perform Participant's
duties with Employer under this Agreement (other than any
other such failure resulting from Disability), after a
written demand for substantial performance is delivered to
Participant that specifically identifies the manner in which
Employer believes Participant has willfully failed to
substantially perform his duties, and after Participant has
failed to resume substantial performance of his duties on a
continuous basis within fourteen (14) calendar days of
receiving such demand; or (iv) Participant willfully
engaging in conduct which is demonstrably and materially
injurious to Employer, monetarily or otherwise. For
purposes of (ii), (iii) and (iv) above, no act, or failure
to act, on Participant's part shall be deemed "willful"
unless done, or omitted to be done, by the Participant not
in good faith and without reasonable belief that the action
or omission was in the best interest of Employer.
ARTICLE IX
GENERAL PROVISIONS
SECTION 1. NO RIGHT TO PARTICIPATE. Nothing in this Plan will be
deemed to give a Participant or a Participant's legal
representative or any other person or entity claiming under
or through a Participant a contract or right to participate
in the benefits of the Plan. The selection of an individual
as an Executive Employee and as a Participant, as well as
determination of the amount of any Award or any other
determination relating to the Plan, shall be final and
binding on all parties to this Plan.
SECTION 2. NO EMPLOYMENT RIGHT. Participation in this Plan shall not
be construed as constituting a commitment, guarantee,
-6-
<PAGE>
agreement, or understanding of any kind that the Company
will continue to employ any Executive Employee or
Participant, and this Plan shall not be construed as any
type of employment contract or obligation between the
Company and an Executive Employee or Participant.
SECTION 3. NONTRANSFERABILITY. Neither a Participant nor any
beneficiary of the Participant shall have any right to
assign, transfer, attach, or hypothecate any Award,
potential Award, or right to future payment of any Award or
other benefit under this Plan. Payment of any amount due or
to become due under this Plan shall not be subject to the
claims of creditors of the Participant or to execution by
attachment or garnishment or by any other legal or equitable
proceeding.
SECTION 4. WITHHOLDING. The Company shall have the right to deduct
from any payment made under this Plan all amounts required
by federal, state, or local tax laws to be withheld and
shall apply to any payment made under this Plan all
applicable payroll taxes and assessments.
SECTION 5. CHANGE IN CAPITALIZATION. In the event of a reorganization,
merger, consolidation, or other transaction in which the
Company is not the surviving corporation, or upon the sale
of substantially all of the property and assets of the
Company or upon the dissolution or liquidation of the
Company, this Plan will terminate on the effective date of
such transaction. Participants shall be entitled to prompt
payment of pro-rated Awards for the Award Year during which
the event occurs unless this Plan continues in whole or in
part or a successor plan is substituted.
IN WITNESS WHEREOF, this instrument is executed as an act of the
Company effective as of May 1, 1996.
MANATRON, INC.
By _____________________________________
Paul R. Sylvester
President, Chief Executive Officer,
and Chief Financial Officer
By _____________________________________
Gene Bledsoe, Member, Compensation
Committee
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<PAGE>
By _____________________________________
Harry C. Vorys, Member,
Compensation Committee
By _____________________________________
Stephen C. Waterbury, Member
Compensation Committee
-8-
<PAGE>
EXHIBIT 10.22
MANATRON, INC.
EXECUTIVE INCENTIVE PLAN FOR FISCAL 1998
ARTICLE I
DECLARATION
SECTION 1. ESTABLISHMENT OF PLAN. The Manatron, Inc. Executive
Incentive Plan for Fiscal 1998 (the "PLAN") is established
by Manatron, Inc. (the "COMPANY") for fiscal year 1998, and
may be continued, intact or as amended, from year to year,
at the Company's option. The Plan is an annual incentive,
performance, and bonus compensation program for eligible
employees of the Company.
SECTION 2. OBJECTIVES. The objectives of the Plan are to:
(a) Reward the outstanding performance of certain Executive
Employees who contribute significantly to the
achievement of the Company's annual objectives; and
(b) Facilitate the attraction and retention of superior
personnel required for continued innovation, growth,
and profitability.
SECTION 3. EFFECTIVE DATES. The effective date of the Plan is May 1,
1997. Each provision of the Plan applies until the
effective date of an amendment of that provision.
ARTICLE II
DEFINITIONS
The following terms shall have the definition stated, unless the
context requires a different meaning:
SECTION 1. AFTER-TAX EARNINGS. "After-Tax Earnings" shall mean the
Company's after-tax corporate net income for the subject
fiscal year as shown in the Company's annual audited
financial statements for that fiscal year after all expenses
and taxes, adjusted to remove amounts expended for payments
made pursuant to this Plan.
<PAGE>
SECTION 2. AWARD. "Award" means a contingent right to receive cash
following the end of an Award Year.
SECTION 3. AWARD YEAR. "Award Year" means each fiscal year of the
Company.
SECTION 4. COMMITTEE. "Committee" means the Compensation Committee of
the Board of Directors of the Company which administers the
Plan.
SECTION 5. EXECUTIVE EMPLOYEE. "Executive Employee" means a full-time
senior employee of the Company or one of the Company's
subsidiaries determined by the Committee to have the
potential of a direct and significant impact on the
performance of the Company or to make a substantial
contribution to the success of the Company.
SECTION 6. PARTICIPANT. "Participant" means an Executive Employee
determined by the Committee to be eligible for an Award for
the Award Year.
SECTION 7. PLAN. "Plan" means the Manatron, Inc. Executive Incentive
Plan for Fiscal 1998.
ARTICLE III
PARTICIPATION
SECTION 1. DESIGNATION BY COMMITTEE. An Executive Employee shall be a
Participant in the Plan for an Award Year when designated as
a Participant for that Award Year by the Committee.
Executive Employees selected by the Committee for
participation for the Award Year shall be notified in
writing and provided with a copy of this Plan or with a
written summary and explanation of the Plan.
SECTION 2. PARTICIPATION LIMITED TO ONE YEAR. Designation as a
Participant in the Plan for an Award Year is limited to that
Award Year. Each Participant must be designated as a
Participant by the Committee for each Award Year to be
eligible to participate in the Plan for that Award Year.
-2-
<PAGE>
ARTICLE IV
ADMINISTRATION
SECTION 1. AUTHORITY OF COMMITTEE. The Plan will be administered by
the Committee and (except with respect to his own Award) the
Chief Executive Officer of the Company. If deemed by the
Committee to be necessary, the Committee will adopt rules,
policies, and forms for the administration, interpretation,
and implementation of the Plan.
SECTION 2. DETERMINATION OF AWARD AMOUNTS. The components of any
Award, as listed in Article V, shall be determined by the
Chief Executive Officer and the Committee. All decisions,
determinations, and interpretations of the Chief Executive
Officer and the Committee will be final and binding on all
Participants. No member of the Committee shall be eligible
to receive Awards pursuant to the Plan.
SECTION 3. LIMITATION ON LIABILITY. Neither the Chief Executive
Officer, any member of the Committee, nor any member of the
Board of Directors shall be liable for any act or omission
in connection with the performance of such person's duties
or the exercise of such person's discretion related to any
act or omission concerning the operation and administration
of the Plan.
ARTICLE V
AWARDS
SECTION 1. DETERMINATION OF PARTICIPANT'S AWARD POTENTIAL. Unless
modified by the Committee or the Chief Executive Officer,
each Participant's award potential shall consist of the
following:
(a) PERSONAL RANGE. The Participant's maximum
potential Award pursuant to this Plan for an Award Year
shall be fifty percent (50%) of the base salary paid to the
Participant during the Award Year.
(b) COMPANY PERFORMANCE. The target financial
performance and other objectives of the Company that will be
considered in determining Awards are as follows for Fiscal
1998:
-3-
<PAGE>
(i) AFTER-TAX EARNINGS. Fifty percent (50%) of
the maximum potential Award for any Participant shall
be based upon the Company's After-Tax Earnings for the
Award Year. The After-Tax Earnings component of an
Award for an Award Year will be distributed to
Participants pro-rata based on each Participant's base
salary for the Award Year. No Award will consist of an
amount based on the Company's After-Tax Earnings unless
the After-Tax Earnings for the Award Year are at a
minimum threshold of One Hundred Thousand Dollars
($100,000) for the Award Year. Twenty-five percent
(25%) of the Company's After-Tax Earnings for the Award
Year in excess of the minimum threshold shall be
available for Awards to Participants pursuant to the
Plan.
(ii) OTHER OBJECTIVES. The remaining fifty
percent (50%) of the maximum potential Award for any
Participant shall be based upon the following five
variables (the "VARIABLES"):
(a) LINE OF CREDIT BALANCE. As of April 30,
1997, the Company's line of credit balance was
Eight Hundred Eighty-Five Thousand Dollars
($885,000), and the amount of its invested cash
was Two Hundred Thousand Dollars ($200,000). Two
and one-half percent (2 1/2%) of any reduction in
the line of credit and any increase in the
invested cash as of April 30, 1998, shall be
available for Awards to Participants pursuant to
the Plan. In the event that the Board of
Directors elects to borrow money or use the
Company's cash to purchase a building, acquire
another company, purchase the Company's common
stock, or to fund any other significant
nonbudgeted item, such amounts will be excluded
when calculating any decrease or increase in the
above amounts. In no event will the amount
available for Awards to Participants under this
subsection exceed Fifty Thousand Dollars
($50,000).
(b) RECEIVABLES. As of April 30, 1997, the
Company's receivables that have been past due for
more than 90 days are as follows:
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<PAGE>
<TABLE>
<CAPTION>
OVER 90 OVER 120
DAYS DAYS TOTAL
------- -------- -----
<S> <C> <C> <C> <C>
Manatron, Inc. $ 13,146 $ 656,940 $ 670,086
Specialized Data Systems, Inc. 23,945 628,005 651,950
Atek Information Services, Inc. 45,187 187,205 232,392
Sabre Systems and Services 18,739 496,559 515,298
Consolidated $101,017 $1,968,709 $2,069,726
======== ========== ==========
</TABLE>
Five percent (5%) of any reduction in the Two Million
Sixty-Nine Thousand, Seven Hundred Twenty-Six Dollars
($2,069,726) consolidated total, excluding write-offs,
as of April 30, 1998, shall be available for Awards to
Participants pursuant to the Plan. In no event will
the amount available for Awards to Participants under
this subsection exceed Fifty Thousand Dollars
($50,000).
(c) SALES FORECAST. The Company's sales forecast
for its fiscal year ended April 30, 1998, is Twenty-Six
Million Three Hundred Twenty-Five Thousand Dollars
($26,325,000). In the event at least eighty-five
percent (85%) of this amount is achieved, then a total
of Five Thousand Dollars ($5,000) shall be available
for Awards to Participants pursuant to the Plan. In
the event at least ninety percent (90%) of this amount
is achieved, then a total of Ten Thousand Dollars
($10,000) shall be available for Awards to Participants
pursuant to the Plan. In the event at least ninety-
five percent (95%) of this amount is achieved, then a
total of Fifteen Thousand Dollars ($15,000) shall be
available for Awards to Participants pursuant to the
Plan. In the event at least one hundred percent (100%)
of this amount is achieved, then a total of Twenty
Thousand Dollars ($20,000) shall be available for
Awards to Participants pursuant to the Plan. In the
event more than one hundred percent (100%) of this
amount is achieved, then an additional Two Thousand
Dollars ($2,000) for each percentage point in excess of
one hundred percent (100%) shall be available for
awards to Participants pursuant to the Plan. In no
event will the amount available for awards to
-5-
<PAGE>
Participants under this subsection exceed Fifty
Thousand Dollars ($50,000).
(d) CUSTOMER SATISFACTION. The Company's average
overall customer satisfaction rating by region based on
the surveys that were distributed by the Company to its
customers during the fiscal year ended April 30, 1997,
was 7.32, which is calculated as follows:
<TABLE>
<CAPTION>
REGION RATING
------ ------
<S> <C> <C>
Alabama 6.05
Illinois/Missouri 7.47
Indiana 7.12
Michigan 8.17
Ohio 7.88
Southeast 7.20
Average 7.32
</TABLE>
In the event that the average overall rating customer
satisfaction based on the surveys that are distributed
by the Company to its customers during the fiscal year
ended April 30, 1998, is at least 7.5, then a total of
Five Thousand Dollars ($5,000) shall be available for
Awards to Participants pursuant to the Plan. In the
event that the overall customer satisfaction rating is
at least 8.0, then a total of Fifteen Thousand Dollars
($15,000) shall be available for Awards to Participants
pursuant to the Plan. In the event that the overall
customer satisfaction rating is at least 8.5, then a
total of Twenty-Five Thousand Dollars ($25,000) shall
be available for Awards to Participants pursuant to the
Plan. In the event that the overall customer
satisfaction rating is at least 9.0, then a total of
Forty Thousand Dollars ($40,000) shall be available for
Awards to Participants pursuant to the Plan.
(e) EMPLOYEE TURNOVER. The Company's employee
turnover percent, exclusive of appraisal personnel, for
the year ended April 30, 1997, was approximately
fifteen percent (15%). In the event that the employee
turnover percent, exclusive of appraisal personnel, for
the year ended April 30, 1998, is less than fifteen
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<PAGE>
percent (15%), then a total of Five Thousand Dollars
($5,000) shall be available for Awards to Participants
pursuant to the Plan. In the event that the employee
turnover percent, exclusive of appraisal personnel, for
the year ended April 30, 1998, is less than ten percent
(10%), then a total of Fifteen Thousand Dollars
($15,000) shall be available for Awards to Participants
pursuant to the Plan. In the event that the employee
turnover percent, exclusive of appraisal personnel, for
the year ended April 30, 1998, is less than five
percent (5%), then a total of Thirty Thousand Dollars
($30,000) shall be available for Awards to Participants
pursuant to the Plan.
The amount of a Participant's Award based on the
Variables listed above will be determined as follows:
(1) sixty-five percent (65%) of the total amount of the
Variables will be distributed to a Participant pro-rata
based on each Participant's base salary for the Award
Year; and (2) the remaining thirty-five percent (35%)
of the total amount of the Variables may be distributed
to a Participant based on performance objectives,
criteria, and/or ratings for individual Participants as
determined pursuant to Section 2 of Article IV
("Discretionary Portion").
Under no circumstances shall the amount of an
Award based upon the Variables for any Award Year
exceed twenty-five percent (25%) of a Participant's
annual base salary.
ARTICLE VI
INDIVIDUAL ASSESSMENT AND ADJUSTMENT
SECTION 1. PARTICIPANT'S AWARD. The basis for Awards for any Award
Year will be achievement of financial performance targets
and other objectives as set forth in this Plan and, with
respect to the Discretionary Portion, as determined in the
sole discretion of the Chief Executive Officer and
Committee. If the financial targets and other objectives
are met for the Award Year, the Chief Executive Officer will
calculate and determine the amount of the Award for each
Participant based upon the extent to which the Company's
financial performance targets and other objectives (as
determined by the Chief Executive Officer) were achieved for
the Award Year.
-7-
<PAGE>
SECTION 2. PARTIAL AWARD. In the event an Executive Employee
participates in the Plan for only part of an Award Year, the
Award may be adjusted pro-rata based on the amount of time
for which the Executive Employee was a Participant in the
Plan.
ARTICLE VII
PAYMENT OF AWARDS
Subject to Article VIII, each Award, as finally determined for
the Award Year, shall be paid to the Participant in cash as soon as
administratively feasible following final determination and approval.
ARTICLE VIII
TERMINATION OF EMPLOYMENT
SECTION 1. RETIREMENT, DEATH, DISABILITY, OR OTHER TERMINATION. In
the event of a Participant's death, disability, normal
retirement, or termination of employment (unless Section 2
of this Article applies) during an Award Year, payment of
the Award earned for that year will be pro-rated. In the
event of death, payment shall be made to the Participant's
designated beneficiary, or if there is no designated
beneficiary, payment shall be made to the Participant's
estate.
SECTION 2. FORFEITURE. In the event that a Participant is terminated
for "cause," the Participant's entitlement to any Award,
including any Award for a prior Award Year that has not been
paid, shall be forfeited and the Award shall be canceled.
For purposes of this Plan, termination shall be considered
to be for "cause" if based upon (a) Participant's conviction
of a crime involving moral turpitude or embezzlement; (b)
Participant's willful activities in competition with the
Company or in aid of its competitors; (c) Participant's
willful and continued failure to substantially perform
Participant's duties with the Company under this Plan (other
than any such failure resulting from disability), under any
employment agreement with the Company, or otherwise, after a
written demand for substantial performance is delivered to
Participant that specifically identifies the manner in which
the Company believes Participant has willfully failed to
substantially perform his or her duties, and after
Participant has failed to resume substantial performance of
-8-
<PAGE>
his or her duties on a continuous basis within 14 calendar
days of receiving such demand; or (d) Participant willfully
engaging in conduct that is demonstrably and materially
injurious to the Company, monetarily or otherwise. For
purposes of (b), (c) and (d) above, no act, or failure to
act, on Participant's part shall be deemed "willful" unless
done, or omitted to be done, by the Participant not in good
faith and without reasonable belief that the action or
omission was in the best interest of the Company.
ARTICLE IX
GENERAL PROVISIONS
SECTION 1. NO RIGHT TO PARTICIPATE. Nothing in this Plan will be
deemed to give a Participant or a Participant's legal
representative or any other person or entity claiming under
or through a Participant a contract or right to participate
in the benefits of the Plan. The selection of an individual
as an Executive Employee and as a Participant, as well as
determination of the amount of any Award or any other
determination relating to the Plan, shall be final and
binding on all parties to this Plan.
SECTION 2. NO EMPLOYMENT RIGHT. Participation in this Plan shall not
be construed as constituting a commitment, guarantee,
agreement, or understanding of any kind that the Company
will continue to employ any Executive Employee or
Participant, and this Plan shall not be construed as any
type of employment contract or obligation between the
Company and an Executive Employee or Participant.
SECTION 3. NONTRANSFERABILITY. Neither a Participant nor any
beneficiary of the Participant shall have any right to
assign, transfer, attach, or hypothecate any Award,
potential Award, or right to future payment of any Award or
other benefit under this Plan. Payment of any amount due or
to become due under this Plan shall not be subject to the
claims of creditors of the Participant or to execution by
attachment or garnishment or by any other legal or equitable
proceeding.
SECTION 4. WITHHOLDING. The Company shall have the right to deduct
from any payment made under this Plan all amounts required
by federal, state, or local tax laws to be withheld and
shall apply to any payment made under this Plan all
applicable payroll taxes and assessments.
-9-
<PAGE>
SECTION 5. CHANGE IN CAPITALIZATION. In the event of a reorganization,
merger, consolidation, or other transaction in which the
Company is not the surviving corporation, or upon the sale
of substantially all of the property and assets of the
Company or upon the dissolution or liquidation of the
Company, this Plan will terminate on the effective date of
such transaction. Participants shall be entitled to prompt
payment of pro-rated Awards for the Award Year during which
the event occurs unless this Plan continues in whole or in
part or a successor plan is substituted.
IN WITNESS WHEREOF, this instrument is executed as an act of the
Company effective as of May 1, 1997.
MANATRON, INC.
By __________________________________ By ________________________________
Paul R. Sylvester Gene Bledsoe, Member, Compensa-
President, Chief Executive Officer, tion Committee
and Chief Financial Officer
By __________________________________ By ________________________________
Harry C. Vorys, Member, Stephen C. Waterbury, Member
Compensation Committee Compensation Committee
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<PAGE>
EXHIBIT 23
ARTHUR ANDERSEN LLP
INDEPENDENT AUDITORS' CONSENT
Board of Directors
Manatron, Inc.
Kalamazoo, Michigan
As independent public accountants, we hereby consent to the incorporation
by reference of our report included in this Form 10-K for the fiscal year
ended April 30, 1997, into the Company's previously filed Registration
Statement Numbers 33-15777, 33-33966, 33-90490, and 333-7519.
/s/ Arthur Andersen LLP
Grand Rapids, Michigan,
July 29, 1997.
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or officer,
or both, as the case may be, of Manatron, Inc. does hereby appoint Paul R.
Sylvester his or her attorney to execute in his or her name, place and
stead an Annual Report of Manatron, Inc. on Form 10-K for its fiscal year
ended April 30, 1997, and any and all amendments thereto, and to file it
with the Securities and Exchange Commission.
DATE SIGNATURE
7/11 , 1997 /S/ MELVIN J. TRUMBLE
Melvin J. Trumble
<PAGE>
POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or officer,
or both, as the case may be, of Manatron, Inc. does hereby appoint Paul R.
Sylvester his or her attorney to execute in his or her name, place and
stead an Annual Report of Manatron, Inc. on Form 10-K for its fiscal year
ended April 30, 1997, and any and all amendments thereto, and to file it
with the Securities and Exchange Commission.
DATE SIGNATURE
JULY 17 , 1997 /S/ RICHARD J. HOLLOMAN
Richard J. Holloman
<PAGE>
POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or officer,
or both, as the case may be, of Manatron, Inc. does hereby appoint Paul R.
Sylvester his or her attorney to execute in his or her name, place and
stead an Annual Report of Manatron, Inc. on Form 10-K for its fiscal year
ended April 30, 1997, and any and all amendments thereto, and to file it
with the Securities and Exchange Commission.
DATE SIGNATURE
JULY 18 , 1997 /S/ HARRY C. VORYS
Harry C. Vorys
<PAGE>
POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or officer,
or both, as the case may be, of Manatron, Inc. does hereby appoint Paul R.
Sylvester his or her attorney to execute in his or her name, place and
stead an Annual Report of Manatron, Inc. on Form 10-K for its fiscal year
ended April 30, 1997, and any and all amendments thereto, and to file it
with the Securities and Exchange Commission.
DATE SIGNATURE
7-22 , 1997 /S/ RANDALL L. PEAT
Randall L. Peat
<PAGE>
POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or officer,
or both, as the case may be, of Manatron, Inc. does hereby appoint Paul R.
Sylvester his or her attorney to execute in his or her name, place and
stead an Annual Report of Manatron, Inc. on Form 10-K for its fiscal year
ended April 30, 1997, and any and all amendments thereto, and to file it
with the Securities and Exchange Commission.
DATE SIGNATURE
7/14 , 1997 /S/ GENE BLEDSOE
Gene Bledose
<PAGE>
POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or officer,
or both, as the case may be, of Manatron, Inc. does hereby appoint Paul R.
Sylvester his or her attorney to execute in his or her name, place and
stead an Annual Report of Manatron, Inc. on Form 10-K for its fiscal year
ended April 30, 1997, and any and all amendments thereto, and to file it
with the Securities and Exchange Commission.
DATE SIGNATURE
7/12 , 1997 /S/ STEPHEN C. WATERBURY
Stephen C. Waterbury
<PAGE>
POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or officer,
or both, as the case may be, of Manatron, Inc. does hereby appoint Paul R.
Sylvester his or her attorney to execute in his or her name, place and
stead an Annual Report of Manatron, Inc. on Form 10-K for its fiscal year
ended April 30, 1997, and any and all amendments thereto, and to file it
with the Securities and Exchange Commission.
DATE SIGNATURE
JULY 21 , 1997 /S/ JANE M. RIX
Jane M. Rix
<PAGE>
POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or officer,
or both, as the case may be, of Manatron, Inc. does hereby appoint Paul R.
Sylvester his or her attorney to execute in his or her name, place and
stead an Annual Report of Manatron, Inc. on Form 10-K for its fiscal year
ended April 30, 1997, and any and all amendments thereto, and to file it
with the Securities and Exchange Commission.
DATE SIGNATURE
7/10 , 1997 /S/ DOUGLAS A. PEAT
Douglas A. Peat
<PAGE>
POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or officer,
or both, as the case may be, of Manatron, Inc. does hereby appoint Paul R.
Sylvester his or her attorney to execute in his or her name, place and
stead an Annual Report of Manatron, Inc. on Form 10-K for its fiscal year
ended April 30, 1997, and any and all amendments thereto, and to file it
with the Securities and Exchange Commission.
DATE SIGNATURE
7/17 , 1997 /S/ ALLEN F. PEAT
Allen F. Peat
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE FISCAL YEAR 1997 FORM 10-K FOR MANATRON, INC. AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> APR-30-1997
<PERIOD-START> MAY-01-1996
<PERIOD-END> APR-30-1997
<CASH> 457,691
<SECURITIES> 0
<RECEIVABLES> 5,692,325
<ALLOWANCES> (775,000)
<INVENTORY> 275,142
<CURRENT-ASSETS> 10,074,327
<PP&E> 5,484,637
<DEPRECIATION> (4,021,060)
<TOTAL-ASSETS> 14,854,268
<CURRENT-LIABILITIES> 8,499,467
<BONDS> 0
<COMMON> 5,418,203
0
0
<OTHER-SE> (592,536)
<TOTAL-LIABILITY-AND-EQUITY> 14,854,268
<SALES> 22,016,988
<TOTAL-REVENUES> 22,016,988
<CGS> 13,380,353
<TOTAL-COSTS> 13,380,353
<OTHER-EXPENSES> 8,551,241
<LOSS-PROVISION> 245,394
<INTEREST-EXPENSE> 305,632
<INCOME-PRETAX> (406,659)
<INCOME-TAX> 0
<INCOME-CONTINUING> (406,659)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (406,659)
<EPS-PRIMARY> (.14)
<EPS-DILUTED> (.14)
</TABLE>
