<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. ____)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, For Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
MANATRON, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
____________________________________________________
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
-----------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------
<PAGE>
5) Total fee paid:
-----------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
1) Amount previously paid:
-----------------------------------------------------------------
2) Form, Schedule or Registration Statement no.:
-----------------------------------------------------------------
3) Filing Party:
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4) Date Filed:
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<PAGE>
[MANATRON LOGO]
2970 South 9th Street
Kalamazoo, Michigan 49009
September 8, 1997
To Our Shareholders:
You are cordially invited to attend the 1997 Annual Meeting of
Shareholders of Manatron, Inc. The meeting will be held at the Holiday
Inn-West, in Kalamazoo, Michigan, on Thursday October 9, 1997, at
4:00 p.m., local time.
On the following pages, you will find the Notice of Annual Meeting of
Shareholders and the Proxy Statement. The Proxy Statement and enclosed
form of proxy are being furnished to shareholders on or about September 8,
1997. A report on Manatron's activities and its outlook for the future
also will be presented at the meeting.
It is important that your shares be represented and voted at the
annual meeting, regardless of the size of your holdings. Whether or not
you plan to attend the annual meeting, we urge you to SIGN, DATE, AND
RETURN AS SOON AS POSSIBLE the enclosed proxy card. Sending a proxy will
not affect your right to vote in person in the event you attend the
meeting.
Respectfully,
/S/ RANDALL L. PEAT
Randall L. Peat
Chairman of the Board of Directors
YOUR VOTE IS IMPORTANT. EVEN IF YOU PLAN TO ATTEND THE MEETING,
PLEASE SIGN, DATE, AND RETURN THE ENCLOSED PROXY PROMPTLY.
-2-
<PAGE>
[MANATRON LOGO]
2970 South 9th Street
Kalamazoo, Michigan 49009
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To our Shareholders:
The Annual Meeting of Shareholders of Manatron, Inc., will be held at
the Holiday Inn-West, in Kalamazoo, Michigan, on Thursday, October 9, 1997,
at 4:00 p.m., local time, for the following purposes:
1. To elect three directors for three-year terms expiring in 2000.
2. To transact any other business that may properly come before the
meeting.
Only shareholders of record as of the close of business on August 29,
1997, are entitled to notice of and to vote at the annual meeting.
A copy of the Annual Report to Shareholders for the fiscal year ended
April 30, 1997, is enclosed with this Notice. The following Proxy
Statement and enclosed proxy are being furnished to shareholders on or
about September 8, 1997.
BY ORDER OF THE BOARD OF DIRECTORS
/S/ JANE M. RIX
Kalamazoo, Michigan Jane M. Rix
September 8, 1997 Secretary
YOUR VOTE IS IMPORTANT. EVEN IF YOU PLAN TO ATTEND THE MEETING,
PLEASE SIGN, DATE, AND RETURN THE ENCLOSED PROXY PROMPTLY.
-3-
<PAGE>
MANATRON, INC.
2970 SOUTH 9TH STREET
KALAMAZOO, MICHIGAN 49009
ANNUAL MEETING OF SHAREHOLDERS
SEPTEMBER 8, 1997
PROXY STATEMENT
This Proxy Statement and the enclosed proxy are being furnished to
shareholders of common stock of Manatron, Inc. (the "Company") on or about
September 8, 1997, in connection with the solicitation of proxies by the
Board of Directors to be voted at the 1997 Annual Meeting of Shareholders
to be held on Thursday, October 9, 1997, at 4:00 p.m., local time, and at
any adjournment of that meeting. The annual meeting will be held at the
Holiday Inn-West, in Kalamazoo, Michigan.
The purpose of the annual meeting is to consider and vote upon the
election of three directors for three-year terms expiring in 2000. Proxies
in the accompanying form, if properly executed, duly returned to the
Company, and not revoked, will be voted at the annual meeting. If a
shareholder specifies a choice, the shares represented by proxy will be
voted as specified. If no choice is specified, the shares represented by
proxy will be voted for the election of all nominees named in this Proxy
Statement and in accordance with the discretion of the persons named as
proxies on any other matters that may come before the meeting or any
adjournment of the meeting. For purposes of determining the presence or
absence of a quorum for the transaction of business at the meeting, all
shares for which a proxy or vote is received, including abstentions and
shares represented by a broker vote on any matter, will be counted as
present and represented at the meeting.
Any shareholder executing and returning the enclosed form of proxy may
revoke it at any time before it is exercised by delivering a written notice
of revocation to the Secretary of the Company at the address set forth
above or by attending and voting at the annual meeting.
The Company has no knowledge of any matter to be presented for
consideration at the annual meeting other than that stated in the Notice of
Annual Meeting of Shareholders. If any other matter should properly come
before the meeting, the persons named in the proxy will have discretionary
authority to vote in accordance with their judgment.
<PAGE>
ELECTION OF DIRECTORS
The Board of Directors proposes that the following three individuals
be elected as directors for three-year terms expiring at the 2000 annual
meeting:
Douglas A. Peat
Richard J. Holloman
Melvin J. Trumble
This Proxy Statement contains more information about the director
nominees. All nominees presently are directors of the Company whose terms
will expire at the 1997 annual meeting. Unless otherwise directed by a
shareholder's proxy, the persons named as proxies intend to vote for the
nominees identified above. Each of the nominees has consented to being
named in this Proxy Statement and to serve if elected. In the event that
any nominee is unable to serve or is otherwise unavailable for election,
which is not now anticipated, the Board of Directors may or may not select
a substitute nominee. If a substitute nominee is selected, all proxies
will be voted for the election of the substitute nominee designated by the
Board of Directors. If a substitute nominee is not selected, all proxies
will be voted for the election of the remaining nominees. Proxies will not
be voted for a greater number of persons than the number of nominees named
in this Proxy Statement.
A plurality of the shares present in person or represented by proxy
and voting on the election of directors is required to elect directors.
For the purpose of counting votes on this proposal, abstentions, broker
non-votes, and other shares not voted will not be counted as shares voted
on the election, and the number of shares of which a plurality is required
will be reduced by the number of shares not voted.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU
VOTE FOR THE ELECTION OF ALL NOMINEES AS DIRECTORS
VOTING SECURITIES
Holders of record of common stock at the close of business on August
29, 1997, are entitled to notice of and to vote at the Annual Meeting of
Shareholders and at any adjournment of the meeting. As of July 31, 1997,
2,810,019 shares of the Company's common stock, no par value ("Common
Stock"), were issued and outstanding. Shareholders are entitled to one
vote on each matter presented for shareholder action for each share of
Common Stock registered in their names at the close of business on the
record date. Shares cannot be voted unless the shareholder is present at
the annual meeting or represented by proxy.
-2-
<PAGE>
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth information as to each person known to
the Company to have been the beneficial owner of more than 5% of the
Company's outstanding shares of Common Stock as of July 31, 1997:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL
OWNERSHIP OF COMMON STOCK<F1>
-----------------------------
SOLE VOTING
AND PERCENT
NAME AND ADDRESS OF DISPOSITIVE OF
BENEFICIAL OWNER POWER<F2> CLASS<F3>
- ------------------------- ----------------------------- ---------
<S> <C> <C>
Randall L. Peat
47801 - 45th Street
Paw Paw, Michigan 49079 560,787 17.25%
Allen F. Peat
3640 Bal Harbor Blvd., Apt. 513
Punta Gorda, Florida 33950 510,174 15.70%
Richard J. Holloman
816 Wild Turkey Place
Wilmington, North Carolina 28405 208,702 6.42%
Douglas A. Peat
1084 Josiane
Kalamazoo, Michigan 49009 205,252 6.31%
___________________
<FN>
<F1> Based on information provided by each person listed.
<F2> These numbers include shares subject to options that are exercisable
within 60 days after July 31, 1997, granted under the Company's 1986
Incentive Stock Option Plan, 1989 Stock Option Plan, and 1994 and 1995
Long-Term Incentive Plans.
<F3> These percentages represent the number of shares owned by each
beneficial owner as of July 31, 1997, plus the shares allocated to a
person's ESOP account, plus the shares that may be acquired by each
beneficial owner through the exercise of outstanding stock options
within 60 days by each after July 31, 1997, as a percentage of the
-3-
<PAGE>
total of all outstanding shares as of July 31, 1997, plus the total of
all shares that may be acquired through the exercise of outstanding
stock options within 60 days after July 31, 1997.
</FN>
</TABLE>
SECURITIES OWNERSHIP OF MANAGEMENT
The following table sets forth the number of shares of Common Stock
beneficially owned as of July 31, 1997, by each of the Company's directors
and nominees for director, each officer whose salary and bonus equaled
$100,000 or more ("named executive officers"), and all of the Company's
directors and officers as a group:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL
OWNERSHIP OF COMMON STOCK<F1>
-----------------------------
SOLE VOTING
AND
NAME OF DISPOSITIVE PERCENT OF
BENEFICIAL OWNER POWER<F2> CLASS<F3>
- -------------------- ----------------------------- ---------
<S> <C> <C>
Gene Bledsoe<F4> 20,001 <F*>
Richard J. Holloman 208,702 6.42%
Allen F. Peat 510,174 15.70%
Douglas A. Peat 205,252 6.31%
Randall L. Peat<F4> 560,787 17.25%
Jane M. Rix 8,985 <F*>
James W. Sanderbeck 32,193 <F*>
Paul R. Sylvester<F4> 92,332 2.84%
Melvin J. Trumble 23,617 <F*>
Harry C. Vorys 19,265 <F*>
Stephen C. Waterbury 17,222 <F*>
All directors and executive
officers as a group 1,715,465 52.78%
__________________
<FN>
<F*> Less than 1%.
<F1> The number of shares stated is based on information provided by each
person listed and includes shares personally owned of record by the
person and shares which, under applicable regulations, are considered
to be otherwise beneficially owned by the person.
-4-
<PAGE>
<F2> These numbers include shares held directly and shares subject to
options which are exercisable within 60 days after July 31, 1997, that
were awarded under the Company's 1986 Incentive Stock Option Plan,
1989 Stock Option Plan, and 1994 and 1995 Long-Term Incentive Plans.
The number of shares subject to options which are exercisable within
60 days after July 31, 1997, for each listed person is as follows:
Gene Bledsoe 3,050
Richard J. Holloman 22,750
Allen F. Peat 28,863
Douglas A. Peat 22,076
Randall L. Peat 20,000
Jane M. Rix 7,000
James W. Sanderbeck 20,000
Paul R. Sylvester 50,000
Melvin J. Trumble 20,000
Harry C. Vorys 11,041
Stephen C. Waterbury 5,254
All directors and executive 224,034
officers as a group
<F3> These percentages represent the number of shares owned by each
beneficial owner as of July 31, 1997, plus the shares allocated to a
person's ESOP account, plus the shares that may be acquired by each
beneficial owner through the exercise of outstanding stock options
within 60 days by each after July 31, 1997, as a percentage of the
total of all outstanding shares as of July 31, 1997, plus the total of
all shares that may be acquired through the exercise of outstanding
stock options within 60 days after July 31, 1997.
<F4> Messrs. Bledsoe, Randall Peat, and Sylvester are members of the
Administrative Committee of the Manatron, Inc. Salary Deferral and
Employee Stock Ownership Plan (the "Plan"). Mr. Sylvester, President,
Chief Executive Officer, Chief Financial Officer, and director of the
Company, is the trustee of the ESOP portion of the Plan and holds the
shares of Common Stock for the ESOP. The Committee has the power to
direct the trustee as to the voting of the shares held by the ESOP
trust that have not been allocated to individual accounts. Each of
the members of the Committee disclaims beneficial ownership of shares
held by the ESOP (except any shares allocated to the person's
individual account under the ESOP), and the ESOP shares are not
reported as beneficially owned by the members of the Committee as
individuals unless the shares have been allocated to the person's
account under the ESOP. As of July 31, 1997, 42,852 shares have been
allocated to participants and 123,737 shares have not yet been
allocated under the ESOP.
</FN>
</TABLE>
-5-
<PAGE>
BOARD OF DIRECTORS
The Company's Board of Directors consists of 10 directors, three of
whom are standing for reelection. The Board of Directors is divided into
three classes, with each class to be as nearly equal in number as possible.
Each class of directors serves a term of office of three years, with the
term of each class expiring at the annual meeting of shareholders in each
successive year.
Biographical information is presented below for each person who either
is nominated for election as a director at the 1997 annual meeting or is
continuing as an incumbent director. Unless otherwise noted, each director
and nominee for director has had the same principal employment for the last
five years.
NOMINEES FOR ELECTION TO TERMS EXPIRING IN 2000
DOUGLAS A. PEAT (age 35) has been a director since 1991. Mr. Douglas
Peat currently is a Regional Vice President who is responsible primarily
for sales and customer service in the State of Michigan. Mr. Douglas Peat
was appointed Executive Vice President in October 1994 and held that
position until October 1995 and has been employed by the Company in various
other sales and marketing positions since 1985. Mr. Douglas Peat is the
son of Allen Peat, a director of the Company, and is the nephew of Randall
Peat, Chairman of the Board of Directors of the Company.
RICHARD J. HOLLOMAN (age 43) has been a director since 1992.
Mr. Holloman founded Specialized Data Systems, Inc. ("SDS") in 1980 and
served as its President until June 1995. Mr. Holloman became a director of
the Company in March 1992 when the Company acquired SDS. Mr. Holloman is
currently Vice President of Administration and Marketing for Vision
Software, Inc., located in Wilmington, North Carolina, which designs,
develops, and distributes Emergency 911 and public safety software and
related services to local governments nationwide. In addition, Mr.
Holloman is the President and owner of Specialized Appraisal Services, a
small mass appraisal company located in Greenville, North Carolina.
MELVIN J. TRUMBLE (age 57) has been a director since 1995.
Mr. Trumble is Senior Vice President of the Company's Appraisal Division,
formerly Sabre Systems and Services ("Sabre"), which the Company acquired
in November 1994. Prior to the acquisition, Mr. Trumble served as the
General Manager of Sabre's real estate appraisal, mapping, and systems
business.
-6-
<PAGE>
INCUMBENT DIRECTORS WHOSE TERMS EXPIRE IN 1998
GENE BLEDSOE (age 52) has been a director since 1993. Mr. Bledsoe has
been the Managing Partner of the Casal Group Corporation since 1985, a
computer industry marketing services and management consulting firm based
in Dallas, Texas. Mr. Bledsoe also served as the Company's interim
President and Chief Executive Officer from October 1995 through February
1996.
JANE M. RIX (age 49) has been a director and the Company's Secretary
since 1993. Ms. Rix, who has been with the Company since 1977, primarily
is responsible for purchasing in addition to her Corporate Secretary duties.
ALLEN F. PEAT (age 61) has been a director since 1972. Mr. Allen
Peat, a cofounder of the Company, served as the Company's Chairman of the
Board, President, and Chief Executive Officer until he retired in October
1995. Mr. Allen Peat is the brother of Randall Peat, Chairman of the Board
of Directors of the Company, and is the father of Douglas Peat, Regional
Vice President and director of the Company.
HARRY C. VORYS (age 72) has been a director since 1986. Prior to his
retirement in July 1990, Mr. Vorys was an Executive Vice President and
Director of Citizens Trust and Savings Bank of South Haven, Michigan, which
later merged into Shoreline Bank. Mr. Vorys served as a director of
Shoreline Financial Corporation, the holding company of Shoreline Bank,
until May 1997.
INCUMBENT DIRECTORS WHOSE TERMS EXPIRE IN 1999
RANDALL L. PEAT (age 49) has been a director since 1969. Mr. Randall
Peat, a cofounder of the Company, became Chairman of the Board of Directors
in October 1995. Mr. Randall Peat previously held the position of
President of the Company's Judicial Information Systems Division. Mr.
Randall Peat is the brother of Allen Peat, a director of the Company, and
is the uncle of Douglas Peat, Regional Vice President and director of the
Company.
PAUL R. SYLVESTER (age 38) has been a director since 1987.
Mr. Sylvester became President and Chief Executive Officer of the Company
in March 1996, and has served as its Vice President - Finance and Chief
Financial Officer since 1987. Mr. Sylvester also has been the Company's
Treasurer since 1993.
STEPHEN C. WATERBURY (age 47) has been a director since 1991.
Mr. Waterbury is a partner at the law firm of Warner Norcross & Judd LLP
located in Grand Rapids, Michigan.
-7-
<PAGE>
BOARD COMMITTEES AND MEETINGS
The Company's Board of Directors, which is responsible for the overall
management of the business and affairs of the Company, held four meetings
since the last annual meeting of shareholders. Each director attended 75%
or more of the aggregate of the total number of Board of Directors meetings
and the total number of committee meetings of which they were members. The
Board of Directors has five standing committees: the Audit Committee, the
Compensation Committee, the Stock Option Committee, the Nominating
Committee, and the Executive Committee. The members of each committee are
appointed by the Board of Directors.
AUDIT COMMITTEE. The Audit Committee is responsible for (i)
recommending to the Board of Directors the selection of independent
auditors; (ii) reviewing and approving the scope of the yearly audit plan
and proposed budget for audit fees; (iii) reviewing the results of the
annual audit with the independent auditors; (iv) reviewing the Company's
internal controls with the independent auditors; (v) reviewing the
recommendations of independent auditors for accounting or operational
improvements; (vi) reviewing nonaudit services and special engagements to
be performed by the independent auditors; and (vii) reporting to the Board
of Directors on the Audit Committee's activities and findings and making
recommendations to the Board of Directors on these findings. Messrs.
Bledsoe, Vorys (Chairman), and Waterbury are members of the Audit
Committee. The Audit Committee met once since the last annual meeting of
shareholders.
COMPENSATION COMMITTEE. The responsibilities of the Compensation
Committee include (i) recommending the cash and other incentive
compensation, if any, to be paid to the Company's executive officers; and
(ii) reviewing awards under stock-based compensation plans approved by the
Stock Option Committee. The Compensation Committee consists of Messrs.
Vorys (Chairman), Bledsoe, and Waterbury. The Compensation Committee met
two times since the last annual meeting of shareholders.
STOCK OPTION COMMITTEE. The Stock Option Committee is responsible for
(i) the administration and award of stock options and restricted stock
under the Company's stock plans; and (ii) the review of all material
proposed option plan changes. In addition, the Stock Option Committee
determines the key employees to whom options will be granted, the number of
shares covered by each option, the exercise price of each option, and other
matters associated with option awards. Messrs. Vorys, Bledsoe, and
Holloman are members of the Stock Option Committee. The committee met two
times since the last annual meeting of shareholders.
NOMINATING COMMITTEE. The Nominating Committee considers and
evaluates the qualifications of potential candidates for the Board of
-8-
<PAGE>
Directors and recommends appropriate candidates to the full Board of
Directors. The Nominating Committee consists of Messrs. Bledsoe, Vorys,
and Waterbury. The committee met once since the last annual meeting of
shareholders.
A shareholder of record of shares of a class entitled to vote at any
meeting of shareholders called for the election of directors (an "Election
Meeting") may make a nomination at the Election Meeting if, and only if,
that shareholder first has delivered, not less than 120 days prior to the
date of the Election Meeting in the case of an annual meeting, and not
more than seven days following the date of notice of the Election Meeting
in the case of a special meeting, a notice to the Secretary of the
Company setting forth with respect to each proposed nominee: (i) the name,
age, business address, and residence address of the nominee; (ii) the
principal occupation or employment of the nominee; (iii) the number of
shares of capital stock of the Company that are beneficially owned by the
nominee; (iv) a statement that the nominee is willing to be nominated and
to serve; and (v) such other information concerning the nominee as would be
required under the rules of the Securities and Exchange Commission to be
included in a proxy statement soliciting proxies for the election of the
nominee.
EXECUTIVE COMMITTEE. The Executive Committee has the authority to
exercise the powers of the Board of Directors in managing the Company's
business affairs and property during intervals between meetings of the
Board of Directors. The Executive Committee consists of Messrs. Bledsoe,
Randall Peat, and Sylvester. The committee did not meet since the last
annual meeting of shareholders.
COMPENSATION OF DIRECTORS
Nonemployee directors receive a $5,000 annual retainer fee plus
compensation in accordance with the following: $500 for attendance at each
meeting of the Board of Directors and $250 for attendance at each committee
meeting. Directors who are also employees of the Company or its
subsidiaries receive no annual retainer and are not compensated for
attendance at board or committee meetings.
Each nonemployee director who has served a full year of service as a
member of the Board of Directors is granted an option on the date of each
annual meeting of shareholders to purchase 1,000 shares of Common Stock.
The per share exercise price of options granted to directors is 100% of
the fair market value of the Common Stock on the date each option is granted,
except that the per share exercise price of options granted to directors who
own 10% or more of the Company's Common Stock is 110% of the fair market
value. The term of each option may not exceed 10 years.
-9-
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth certain information concerning the
compensation earned during each of the last three fiscal years ended
April 30, 1997, 1996, and 1995, by the Company's Chief Executive Officer
and the named executive officers:
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------- ------------
NUMBER OF
SHARES
NAME AND PRINCIPAL UNDERLYING ALL OTHER
POSITION YEAR SALARY BONUS OPTIONS COMPENSATION<F1>
- ------------------ ---- -------- ------- ------------ ----------------
<S> <C> <C> <C> <C> <C>
Paul R. Sylvester 1997 $120,000 $24,300 70,000 $3,184
President, Chief 1996 99,167 15,000 70,000 9,016
Executive Officer, and 1995 88,015 10,000 22,062 1,978
Chief Financial Officer<F2>
Melvin J. Trumble 1997 105,000 29,000<F3> 30,000 2,351
Senior Vice President 1996 105,000 -- 30,000 2,335
of Appraisal Operations 1995 54,350<F4> -- 30,000 454
Randall L. Peat 1997 97,000 19,000 30,000 2,713
Chairman of the 1996 97,000 -- 30,000 14,976
Board 1995 97,000 -- 11,025 14,929
James W. Sanderbeck 1997 95,200 19,000 30,000 2,122
Chief Operating 1996 95,200 -- 30,000 2,164
Officer 1995 95,200 -- 21,000 2,164
_______________________
<FN>
<F1> All other compensation for the year ended April 30, 1997, includes:
(i) Company matching contributions under the Company's 401(k) plan of
$1,558 for Mr. Sylvester, $1,341 for Mr. Trumble, $1,213 for Mr. Peat,
and $1,206 for Mr. Sanderbeck; (ii) amounts paid by the Company for
life insurance of $472 for Mr. Sylvester and $1,500 for Mr. Peat; and
(iii) amounts paid by the Company for accrued but unused sick time of
$1,154 for Mr. Sylvester, $1,010 for Mr. Trumble, and $916 for Mr.
Sanderbeck.
-10-
<PAGE>
<F2> The information listed for Mr. Sylvester for fiscal year 1996 covers
compensation paid to him by the Company for service as Chief Financial
Officer from May 1, 1995, to February 29, 1996, and amounts for
service as President, Chief Executive Officer, and Chief Financial
Officer from March 1, 1996, to April 30, 1996.
<F3> This amount includes $19,000 paid to Mr. Trumble under the Company's
1997 Executive Incentive Plan and $10,000 paid to Mr. Trumble as a
one-time bonus related to certain sales activities.
<F4> The Company acquired Sabre in November 1994. The salary listed for
Mr. Trumble for fiscal year 1995 covers compensation paid to Mr.
Trumble by the Company for service from November 11, 1994, to April
30, 1995.
</FN>
</TABLE>
The following table sets forth the total number of securities
underlying unexercised options as of April 30, 1997. No stock options were
granted to the Chief Executive Officer or the named executive officers
during the 1997 fiscal year, and neither the Chief Executive Officer nor
any named executive officer exercised any stock options during the same
period.
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING
UNEXERCISED
OPTIONS AT
FISCAL YEAR-END
----------------------------
NAME EXERCISABLE UNEXERCISABLE
-------------------- ----------- -------------
<S> <C> <C> <C>
Paul R. Sylvester 50,000 20,000
Melvin J. Trumble 20,000 10,000
Randall L. Peat 20,000 10,000
James W. Sanderbeck 20,000 10,000
</TABLE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's executive compensation program is administered by the
Compensation Committee of the Board of Directors (the "Committee"). The
-11-
<PAGE>
Committee develops compensation policies for the Company and evaluates
annual salaries and incentive compensation plans for the executive
officers. The Committee also reviews awards under certain stock-based
compensation plans as approved by the Stock Option Committee. The
Committee submits its recommendations on such matters to the full Board of
Directors for ratification. The Committee consists of three directors,
none of whom is a current or former employee of the Company.
COMPENSATION PHILOSOPHY
The Committee's executive compensation philosophy is to provide
competitive levels of compensation as well as incentives to achieve
superior financial performance. The Committee's policies are designed to
achieve four primary objectives: (i) align management's compensation with
the Company's achievement of annual and long-term performance goals; (ii)
reward above-average performance by the Company; (iii) recognize individual
initiative and achievement; and (iv) assist the Company in attracting and
retaining quality executive officers. The Committee believes that a
substantial portion of the annual compensation of each officer must relate
to, and be contingent upon, the performance of the Company.
The Company's basic compensation policies are designed to enhance
shareholder value by rewarding executive officers for profitable growth of
the Company and increases in the value of its Common Stock. The Company's
executive compensation policies also seek to align the interests of
executive officers and other key employees with the interests of
shareholders through stock ownership. The Committee believes that it is in
the Company's best interest to generate rewards for senior executives and
key employees, which may result in above-average performance measured in
terms of profit growth and total shareholder return.
Executive officer compensation is comprised of three primary
components: base salary and benefits, annual performance bonus, and
participation in stock option plans. Each component of compensation is
designed to accomplish one or more of the compensation objectives.
Benefits offered to executive officers include participation in the
Manatron, Inc. Salary Deferral and Employee Stock Ownership Plan, which
covers substantially all employees, the Employee Stock Purchase Plan, and
the Company's various health, life, and disability insurance benefit plans.
Congress has amended the Internal Revenue Code of 1986, to add
Section 162(m) which provides that publicly held corporations may not
deduct compensation paid to certain executive officers in excess of $1
million annually, with certain exemptions. The Company has examined its
executive compensation policies in light of Section 162(m) and the
regulations adopted by the Internal Revenue Service to implement this
section. It is not expected that any portion of the Company's deduction
for employee remuneration will be disallowed in fiscal year 1998 or in
future years by reason of awards granted in fiscal year 1998.
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BASE SALARY
The Company seeks to attract and retain well-qualified executives by
providing base salaries and benefit packages at levels that are considered
to be competitive. In setting the base salaries of the Company's executive
officers, the Committee considers the skill and experience required by an
individual's position, job performance, accountability, and tenure.
Although the Committee refers to base salaries at other comparable
companies to help establish guidelines, the Company's current operating
performance is considered most important in determining the base salaries
of management.
The Committee believes current base salaries for executive officers of
the Company have not kept pace with and are below average for executives in
similar positions. It is the Committee's intention to increase base
salaries of executive officers to more competitive levels as profits
improve. Nonetheless, incentive compensation based upon criteria designed
to reward executives for performance which enhances shareholder value will
continue to represent a substantial percentage of potential executive
compensation.
In general, the Company adjusts executive officer salaries on an
annual basis. The annual adjustments are determined by considering the
Company's performance, each officer's performance, any increased
responsibilities of the officer, and current economic conditions. The base
salaries paid to the Company's executive officers during fiscal 1997
remained at the same levels as fiscal 1996.
ANNUAL BONUS PLAN
Annual bonuses under the Company's short-term executive incentive
compensation plan are intended to reward executives for achieving specific
goals, motivate executives to work more effectively, and focus executives'
attention on specific areas of major importance.
Under the 1997 Executive Incentive Plan (the "1997 Plan"), bonuses
were based on the Company's financial performance which was measured by the
following two variables: (i) after-tax earnings; and (ii) net free annual
cash flow. In fiscal 1997, the Company did not pay to participants any
award related to the after-tax earnings component. If an award had been
made based on the after-tax earnings component, the award would have
distributed to participants pro-rata based on each participant's base
salary and would have been limited to 25% of a participant's salary. Under
the 1997 Plan, the net free annual cash flow component of an incentive
award was determined as follows: (i) 80% of the net free annual cash flow
component was distributed to participants pro-rata based on each
participant's base salary; and (ii) 20% of the net free annual cash flow
component was distributed to participants based on performance objectives,
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criteria, and/or ratings for individual participants as established in the
sole discretion of the Chief Executive Officer. The performance
objectives, criteria, and/or ratings for the Chief Executive Officer were
determined by the Committee. Awards paid to participants under the net free
annual cash flow component in fiscal 1997 were slightly below the maximum
limit (25% of a participant's base salary).
The 1998 Executive Incentive Plan (the "1998 Plan") continues to
consider the Company's after-tax earnings, which can result in awards up
to 25% of a participant's base salary, depending upon the amount of
earnings that are reported. Instead of focusing on the Company's net free
annual cash flow, the 1998 Plan considers the following five variables:
(i) reduction in the Company's line of credit balance; (ii) reduction in the
Company's past-due account receivables; (iii) achievement of the Company's
sales forecasts; (iv) improvement in the level of the Company's average
overall customer satisfaction rating; and (v) improvement in the Company's
employee turnover percent. Awards based on the preceding five variables
cannot exceed 25% of a participant's base salary and are conditioned on
achieving "threshold" goals. The amount of a participant's award based on
the five variables, if any, will be paid as follows: (i) 65% of the total
amount earned will be paid to participants pro rata based on each
participant's base salary; and (ii) the remaining 35% of the total amount
earned may be paid to participants based on performance objectives,
criteria, and/or ratings for individual participants as determined by the
Chief Executive Officer and the Committee. Total bonuses paid under the 1998
Plan to any participant are limited to 50% of that participant's base salary.
STOCK OPTIONS
The Stock Option Committee of the Board of Directors periodically
grants stock options to executive officers of the Company. These stock
options provide the recipient the right to acquire shares of the Company's
Common Stock at fair market value on the date of grant. The options
generally become exercisable immediately after the date of grant and expire
10 years following the date of grant. The number of shares covered
by each grant is designed to provide the executive officers a substantial
incentive to operate the Company from the perspective of an owner, thereby
closely aligning their interests to those of the Company's shareholders.
Although the Committee believes that stock ownership by executive
officers and other key employees is beneficial, the Company currently has
no target ownership level for Common Stock holdings by officers. The Stock
Option Committee generally does not take into account in its decisions the
amount and value of options currently held by an officer. In fiscal 1997,
the Stock Option Committee did not award any incentive stock options to any
employees of the Company.
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CHIEF EXECUTIVE OFFICER COMPENSATION
The Chief Executive Officer's compensation is based upon the policies
and objectives discussed above. The Committee considers current operating
performance to be a key determinant in establishing the base salary of the
Chief Executive Officer and also considers the Chief Executive Officer's
performance, skill and experience, accountability, length of service, and
current economic conditions. The Committee believes that incentive
compensation, designed to reward performance, should represent a
significant percentage of the Chief Executive Officer's potential
compensation.
On October 10, 1996, the Company executed an employment agreement with
Mr. Sylvester which provides for his continued service to the Company as
President and Chief Executive Officer until termination of the employment
agreement. The employment agreement also is described on page 16 of this
Proxy Statement under the heading "Employment Agreements, Termination of
Employment and Change in Control Arrangements."
Under the employment agreement, Mr. Sylvester (i) will receive an
annual base salary of at least $120,000; (ii) is entitled to participate in
the Company's executive incentive bonus plan; and (iii) is entitled to
receive fringe benefits available to all employees. Mr. Sylvester received
an annual bonus of $24,300 for fiscal year 1997.
All recommendations of the Committee attributable to compensation in
the 1997 fiscal year were unanimous and were approved and adopted by the
Board of Directors without modification.
The Committee welcomes written comment from the Company's shareholders
concerning its compensation programs. Comments should be marked "personal
and confidential" and addressed to the Compensation Committee of the Board
of Directors, Manatron, Inc., 2970 South 9th Street, Kalamazoo, Michigan
49009.
Respectfully submitted,
Gene Bledsoe
Harry C. Vorys
Stephen C. Waterbury
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<PAGE>
EMPLOYMENT AGREEMENTS, TERMINATION OF EMPLOYMENT AND
CHANGE IN CONTROL ARRANGEMENTS
ALLEN PEAT'S AGREEMENT. Effective October 17, 1995, the Company and
Mr. Allen Peat entered into an agreement setting forth the terms pursuant
to which Mr. Allen Peat retired as Chairman, President, and Chief Executive
Officer (the "Peat Agreement"). The Peat Agreement provides for severance
compensation, deferred compensation, and other payments totaling
approximately $1.3 million to be paid through December 1999. In fiscal
1997, under the Peat Agreement the Company paid to Mr. Allen Peat
approximately $245,000. Mr. Allen Peat retains all rights of a retired
employee under the Company's existing 401(k) plan, employee stock plan, and
other qualified benefit plans, if any.
The Peat Agreement contains standstill provisions restricting
Mr. Allen Peat's ability to (i) acquire the Company's Common Stock;
(ii) acquire control of the Company; (iii) solicit proxies for particular
purposes; (iv) subject his shares to a voting trust or similar agreement;
and (v) participate in or encourage a group which seeks to acquire, hold,
or dispose of the Company's Common Stock. Notwithstanding the above
standstill provisions, Mr. Allen Peat is free to vote his existing shares
as he determines and to dispose of any of the existing shares. Any
transferee of Mr. Allen Peat's shares shall take such shares free of the
restriction imposed by the Peat Agreement.
EMPLOYMENT AGREEMENTS OF PAUL SYLVESTER, MELVIN TRUMBLE, AND JAMES
SANDERBECK. On October 10, 1996, the Company entered into an employment
agreement with each of Messrs. Sylvester, Trumble, and Sanderbeck (the
"Employment Agreements"). The Employment Agreements provide for employment
for each listed individual until terminated as provided in the Employment
Agreements. Under the Employment Agreements, each individual will be paid
a minimum salary, ($120,000 for Mr. Sylvester, $105,000 for Mr. Trumble,
and $95,200 for Mr. Sanderbeck). Under the Employment Agreements,
Messrs. Sylvester, Trumble, and Sanderbeck also are entitled to receive
(i) paid vacation in accordance with the Company's vacation policies;
(ii) standard benefits offered to all employees; and (iii) reimbursement of
reasonable expenses in connection with the performance of job duties. In
addition, Messrs. Sylvester, Trumble, and Sanderbeck may be entitled to a
Company automobile or a car allowance for business purposes and each
participates in the 1998 Plan.
If the employment of Messrs. Sylvester, Trumble, or Sanderbeck is
terminated other than for Cause or if they resign from employment With
Cause (each as defined in the Employment Agreements), the Employment
Agreements require the Company to pay to the terminated employee six
months' severance pay of an amount equal to the employee's base salary and
any and all benefits in effect at the time of termination. Under
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<PAGE>
Mr. Sylvester's Employment Agreement, if Mr. Sylvester receives the
severance pay described above, the outstanding loans made to Mr. Sylvester
by the Company for the purpose of acquiring shares of the Company's Common
Stock will be canceled in exchange for the Common Stock purchased by Mr.
Sylvester.
RANDALL PEAT'S EMPLOYMENT AGREEMENT. On July 17, 1986, the Company
entered into an employment agreement, which provides for, among other
things, a monthly salary (approximately $8,083 a month), annual bonus, and
other fringe benefits, as determined from time to time by the Board of
Directors. For any given year, it is intended that Mr. Randall Peat's
monthly salary and fringe benefits not be less than those received in the
prior year. Mr. Randall Peat's annual bonus is determined in accordance
with the 1998 Plan. The term of Mr. Randall Peat's employment agreement is
a rolling five-year term, which is extended an additional year in December
of each year unless the Board of Directors determines otherwise.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee is composed of Messrs. Bledsoe,
Vorys, and Waterbury. Mr. Waterbury is a partner in the law firm of Warner
Norcross & Judd LLP, and Mr. Bledsoe is the Managing Partner of the Casal
Group, a computer industry marketing services and management consulting
firm. The services of these firms were utilized by the Company in fiscal
year 1997 and the Company intends to continue to use these firms in fiscal
year 1998.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company is leasing its office in Greenville, North Carolina
under a five-year agreement expiring on July 31, 1999, consisting of
approximately 4,700 square feet, from HBH Partnership, of which Mr.
Holloman, former President of SDS and a director of the Company, is a one-
third owner, for approximately $4,300 per month. HBH Partnership is
responsible for taxes, maintenance, and insurance on the leased property.
The term of this lease was not negotiated at arm's length and may be deemed
to involve a conflict of interest. However, in the opinion of management,
the terms are at least as favorable to the Company as the terms which would
be available to the Company in an arm's-length transaction.
On June 29, 1995, the Company's ESOP purchased 142,858 shares of
Common Stock from Mr. Allen Peat, former Chairman of the Board, President,
and Chief Executive Officer, for $3.50 per share, which approximated market
value on that date. The ESOP borrowed $500,000 from a bank to finance the
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<PAGE>
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,
$325,000 remained outstanding under the loan agreement.
The Company has made two loans to Mr. Sylvester, President, Chief
Executive Officer, and Chief Financial Officer, totaling $111,250, and two
loans to Mr. Douglas Peat, Regional Vice President, totaling $111,250. The
proceeds of the loans for each individual were used to purchase shares of
Company Common Stock. Messrs. Sylvester and Douglas Peat are obligated to
repay the full amount of the first loan of $50,000 without interest on
March 1, 1998, unless the loan becomes due earlier. Messrs. Sylvester and
Douglas Peat are obligated to repay the full amount of their respective
loans of $61,250 without interest on September 1, 1999, unless the loans
become due earlier. Each of the loans becomes due before their respective
repayment dates if Messrs. Sylvester or Douglas Peat sell the Common Stock
purchased with the proceeds of the respective loan.
During fiscal year 1997, the Company retained the law firm of Warner
Norcross & Judd LLP to perform certain legal services for the Company.
Stephen C. Waterbury, a director of the Company, is a partner in Warner
Norcross & Judd LLP. The Company plans to continue to retain Warner
Norcross & Judd LLP in the future for certain legal matters.
STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return
on the Company's Common Stock to the Standard & Poor's 500 Stock Index and
an industry index comprised of the common stock of nine companies in the
computer software industry (the "Peer Group"), assuming an investment of
$100 over a five-year period ended April 30, 1997, using 1992 as a base
period. The Standard & Poor's 500 Stock Index is a broad equity market
index published by Standard & Poor's. The Peer Group was selected by the
Company and includes the companies listed in the footnote to the graph
below. Cumulative total return is measured by dividing (i) the sum of (a)
the cumulative amount of dividends for the measurement period, assuming
dividend reinvestment, and (b) the difference between the share price at
the end and the beginning of the measurement period; by (ii) the share
price at the beginning of the measurement period.
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<PAGE>
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL SHAREHOLDER RETURN
[GRAPH]
________________________
<F*> The Peer Group includes Barrister Information Systems Corp.; Bolt,
Beranek & Newman, Inc.; Business Records Corporation; Cerner Corp.;
Computrac, Inc.; Microlog Corp.; Symix Systems I; Alpha Technologies, Inc.;
and Systems & Computer Technology Corp.
The dollar values for total shareholder return plotted in the graph
above are shown in the table below:
<TABLE>
<CAPTION>
1992 1993 1994 1995 1996 1997
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Manatron $100.00 $ 74.51 $124.50 $ 97.10 $ 48.55 $ 52.29
S & P 500 100.00 109.24 115.05 135.14 175.97 219.99
Peer Group 100.00 140.10 237.10 323.47 331.25 282.56
</TABLE>
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SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's directors and officers to file reports of ownership
and changes in ownership of shares of Common Stock with the Securities and
Exchange Commission. Directors and officers are required by Securities and
Exchange Commission regulations to furnish the Company with copies of all
Section 16(a) reports they file. Based on its review of the copies of such
reports received by it, or written representations from certain reporting
persons that no reports on Forms 5 were required for those persons for the
1997 fiscal year, the Company believes that its directors and officers
complied with all applicable reporting and filing requirements during the
Company's last fiscal year.
SELECTION OF AUDITORS
The Company selected Arthur Andersen LLP, independent auditors, as its
principal auditors for fiscal year 1997. Representatives of Arthur
Andersen LLP are expected to be present at the 1997 Annual Meeting of
Shareholders, will be provided with the opportunity to make a statement if
they desire to do so, and are expected to be available to respond to
appropriate questions.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the next annual
meeting of shareholders must be received by the Company no later than May
11, 1998, to be considered for inclusion in the proxy statement and form of
proxy relating to that meeting. Shareholder proposals should be made in
accordance with Rule 14a-8 issued under the Securities Exchange Act of
1934, as amended, and should be addressed to Secretary of Manatron, Inc.,
2970 South 9th Street, Kalamazoo, Michigan 49009.
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<PAGE>
SOLICITATION OF PROXIES
The Company will bear all costs of the preparation and solicitation of
proxies, including the charges and expenses of brokerage firms, banks,
trustees, or other nominees for forwarding proxy materials to beneficial
owners. Solicitation of proxies will be made initially by mail. In
addition, directors, officers, and employees of the Company and its
subsidiaries may solicit proxies personally or by telephone or facsimile
without additional compensation. Proxies may be solicited by nominees and
other fiduciaries who may mail materials or otherwise communicate with
beneficial owners of shares held by them. The Company has retained
Corporate Investor Communications, Inc. at an estimated cost of $2,500,
plus expenses and disbursements, to assist in the solicitation of proxies.
By Order of the Board of Directors
/S/ JANE M. RIX
Kalamazoo, Michigan Jane M. Rix
September 8, 1997 Secretary
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<PAGE>
[FRONT]
PROXY PROXY
MANATRON, INC.
2970 SOUTH 9TH STREET
KALAMAZOO, MICHIGAN 49009
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder hereby appoints GENE BLEDSOE, RANDALL L.
PEAT, and PAUL R. SYLVESTER, and each of them, each with full power of
substitution, proxies to represent the shareholder listed on the reverse
side of this Proxy and to vote all shares of Common Stock of Manatron, Inc.
that the shareholder would be entitled to vote on all matters which come
before the Annual Meeting of Shareholders to be held at the Holiday Inn-
West, in Kalamazoo, Michigan, on Thursday, October 9, 1997, at 4:00 p.m.,
and any adjournment of that meeting.
IF THIS PROXY IS PROPERLY EXECUTED, THE SHARES REPRESENTED BY THIS
PROXY WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THE SHARES
REPRESENTED BY THIS PROXY WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES
NAMED ON THIS PROXY AS DIRECTORS. THE SHARES REPRESENTED BY THIS PROXY
WILL BE VOTED IN THE DISCRETION OF THE PROXIES ON ANY OTHER MATTERS THAT
MAY COME BEFORE THE MEETING.
PLEASE SIGN, DATE, AND RETURN THIS
PROXY PROMPTLY USING THE ENCLOSED ENVELOPE.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
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<PAGE>
[BACK]
MANATRON, INC.
PLEASE MARK YOUR VOTE IN THE FOLLOWING MANNER USING DARK INK ONLY. [X]
ELECTION OF DIRECTORS
Nominees: Douglas A. Peat, Richard J. For All
Holloman, and Melvin J. Trumble For Withheld Except
(INSTRUCTION: TO WITHHOLD AUTHORITY
TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE THROUGH THAT NOMINEE'S NAME
IN THE LIST ABOVE.) [ ] [ ] [ ]
Your Board of Directors Recommends that
You Vote FOR ALL NOMINEES
Dated: _________________, 1997
______________________________
______________________________
Signature of Shareholder(s)
IMPORTANT -- Please sign
exactly as your name(s)
appears on this Proxy. When
signing on behalf of a
corporation, partnership,
estate, or trust, indicate
title or capacity of person
signing. IF SHARES ARE HELD
JOINTLY, EACH HOLDER SHOULD
SIGN.
A-2
