<PAGE>
=============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One):
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
For the transition period from ________ to _________
Commission file number: 0-15264
A. Full title of the plan and the address of the plan,
if different from that of the issuer named below: Manatron,
Inc. Employee Stock Ownership and Salary Deferral Plan
B. Name of issuer of the securities held pursuant to
the plan and the address of its principal executive office:
Manatron, Inc., 2970 South 9th Street, Kalamazoo, Michigan
49009
=============================================================================
<PAGE>
MANATRON, INC.
EMPLOYEE STOCK OWNERSHIP AND SALARY DEFERRAL PLAN
FINANCIAL STATEMENTS AND SCHEDULES
AS OF DECEMBER 31, 1996 AND 1995
TOGETHER WITH AUDITORS' REPORT
<PAGE>
ARTHUR ANDERSEN LLP
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Administrative Committee of the
Manatron, Inc. Employee Stock Ownership
and Salary Deferral Plan:
We have audited the accompanying statements of net assets
available for plan benefits of the Manatron, Inc. Employee
Stock Ownership and Salary Deferral Plan as of December 31,
1996 and 1995, and the related statements of changes in net assets
available for plan benefits for the years then ended. These
financial statements and the supplemental schedules referred
to below are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial
statements and supplemental schedules 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 net assets
available for plan benefits as of December 31, 1996 and 1995, and the
changes in net assets available for plan benefits for the
years then ended, in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion
on the basic financial statements taken as a whole. The
supplemental schedules of assets held for investment purposes
and reportable transactions are presented for the purpose of
additional analysis and are not a required part of the basic
financial statements but are supplementary information
required by the Department of Labor's Rules and Regulations
for Reporting and Disclosure under the Employee Retirement
Income Security Act of 1974. The supplemental schedules have
been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, are
<PAGE>
fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/ Arthur Andersen LLP
Grand Rapids, Michigan
May 7, 1997
<PAGE>
MANATRON, INC.
EMPLOYEE STOCK OWNERSHIP AND SALARY DEFERRAL PLAN
<TABLE>
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF DECEMBER 31, 1996 AND 1995
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
ASSETS:
Participant directed investments (Note 1):
Manatron, Inc. Common Stock Fund $ 85,203 $ 45,255
Guaranteed Investment Contract Fund 272,869 235,828
Munder Intermediate Bond Fund 13,564 13,494
Fidelity Magellan Fund 553,425 388,478
Fidelity Puritan Fund 451,333 349,846
Fidelity Worldwide Fund 351,134 246,795
Munder Small Company Growth Fund 267,200 142,318
Munder Balanced Fund 81,896 58,473
Munder Index 500 Fund 412,564 271,512
Participant loans receivable 8,000 -
---------- ----------
Total participant directed investments 2,497,188 1,751,999
---------- ----------
Employee Stock Ownership Plan investments:
Unallocated Shares of Manatron, Inc. common stock 150,009 257,148
Shares of Manatron, Inc. common stock
allocated to participants 64,278 28,568
---------- ----------
Total Employee Stock Ownership Plan investments 214,287 285,716
---------- ----------
Total plan assets 2,711,475 2,037,715
---------- ----------
LIABILITIES:
Loan payable to bank 350,000 450,000
---------- ----------
Total liabilities 350,000 450,000
---------- ----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $2,361,475 $1,587,715
========== ==========
</TABLE>
The accompanying notes to financial statements are
an integral part of this statement.
-1-
<PAGE>
MANATRON, INC.
EMPLOYEE STOCK OWNERSHIP AND SALARY DEFERRAL PLAN
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1996
<CAPTION>
PARTICIPANT DIRECTED
----------------------------------------------------------------------------------------
GUARANTEED
MANATRON INVESTMENT MUNDER FIDELITY FIDELITY FIDELITY MUNDER
STOCK CONTRACT INTERMEDIATE MAGELLAN PURITAN WORLDWIDE SMALL COMPANY
FUND FUND BOND FUND FUND FUND FUND GROWTH FUND
-------- ---------- ------------ ---------- -------- --------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income (loss):
Net appreciation (depreciation) in
fair value of investments $ (27,888) $ - $ (381) $ (16,282) $ 7,712 $ 38,628 $ 25,824
Interest and dividends - 13,560 770 71,322 50,584 11,900 34,090
Other receipts 28,611 - - - - - -
--------- -------- -------- ---------- --------- ---------- ---------
Total investment income (loss) 723 13,560 389 55,040 58,296 50,528 59,914
--------- -------- -------- ---------- --------- ---------- ---------
Contributions:
Employee 20,245 45,556 3,842 126,742 73,360 63,972 48,899
Employer 4,113 7,866 628 18,193 11,517 9,850 6,597
Rollovers into Plan - 1,239 - - - - 620
Comerica reimbursement of
investment loss 905 1,777 115 5,879 6,096 3,864 1,351
--------- -------- -------- ---------- --------- ---------- ---------
Total contributions 25,263 56,438 4,585 150,814 90,973 77,686 57,467
--------- -------- -------- ---------- --------- ---------- ---------
Total additions 25,986 69,998 4,974 205,854 149,269 128,214 117,381
--------- -------- -------- ---------- --------- ---------- ---------
DEDUCTIONS FROM NET ASSETS
ATTRIBUTED TO:
Benefit payments (1,176) (17,830) (3,580) (20,723) (42,642) (16,719) (13,584)
Interest expense - - - - - - -
--------- -------- -------- ---------- --------- ---------- ---------
Total deductions (1,176) (17,830) (3,580) (20,723) (42,642) (16,719) (13,584)
--------- -------- -------- ---------- --------- ---------- ---------
INTERFUND TRANSFERS 15,138 (15,127) (1,324) (20,184) (5,140) (7,156) (21,085)
ALLOCATION OF 28,568 ESOP SHARES - - - - - - -
--------- -------- -------- ---------- --------- ---------- ---------
Net increase (decrease) 39,948 37,041 70 164,947 101,487 104,339 124,882
--------- -------- -------- ---------- --------- ---------- ---------
-2-
<PAGE>
NET ASSETS AVAILABLE FOR PLAN
BENEFITS,
Beginning of year 45,255 235,828 13,494 388,478 349,846 246,795 142,318
--------- -------- -------- ---------- --------- ---------- ---------
End of year $ 85,203 $272,869 $ 13,564 $ 553,425 $ 451,333 $ 351,134 $ 267,200
========= ======== ======== ========== ========= ========== =========
</TABLE>
The accompanying notes to financial statements are
an integral part of this statement.
-3-
<PAGE>
MANATRON, INC.
EMPLOYEE STOCK OWNERSHIP AND SALARY DEFERRAL PLAN
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1996
(CONTINUED)
<CAPTION>
PARTICIPANT DIRECTED ESOP INVESTMENTS
---------------------------------- -------------------------
MUNDER MUNDER PARTICIPANT
BALANCED INDEX 500 LOANS
FUND FUND RECEIVABLE ALLOCATED UNALLOCATED TOTAL
-------- --------- ----------- --------- ----------- -----
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income (loss):
Net appreciation (depreciation) in fair value
of investments $ 2,284 $ 57,962 $ - $ (21,426) $ (50,003) $ 16,430
Interest and dividends 5,766 13,426 - - - 201,418
Other receipts - - - - - 28,611
-------- --------- -------- ---------- --------- ----------
Total investment income (loss) 8,050 71,388 - (21,426) (50,003) 246,459
-------- --------- -------- ---------- --------- ----------
Contributions:
Employee 20,982 86,999 - - - 490,597
Employer 3,817 12,502 - - 134,657 209,740
Rollovers into Plan 620 620 - - - 3,099
Comerica reimbursement of investment loss 667 3,411 - - - 24,065
-------- --------- -------- ---------- --------- ----------
Total contributions 26,086 103,532 - - 134,657 727,501
-------- --------- -------- ---------- --------- ----------
Total additions 34,136 174,920 - (21,426) 84,654 973,960
-------- --------- -------- ---------- --------- ----------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefit payments (4,863) (44,426) - - - (165,543)
Interest expense - - - - (34,657) (34,657)
-------- --------- -------- ---------- --------- ----------
Total deductions (4,863) (44,426) - - (34,657) (200,200)
-------- --------- -------- ---------- --------- ----------
INTERFUND TRANSFERS (5,850) 10,558 8,000 - - -
ALLOCATION OF 28,568 SHARES - - - 57,136 (57,136) -
-------- --------- -------- ---------- --------- ----------
Net increase (decrease) 23,423 141,052 8,000 35,710 (7,139) 773,760
-------- --------- -------- ---------- --------- ----------
-4-
<PAGE>
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
Beginning of year 58,473 271,512 - 28,568 (192,852) 1,587,715
-------- --------- -------- ---------- --------- ----------
End of year $ 81,896 $ 412,564 $ 8,000 $ 64,278 $(199,991) $2,361,475
======== ========= ======== ========== ========= ==========
</TABLE>
The accompanying notes to financial statements are
an integral part of this statement.
-5-
<PAGE>
MANATRON, INC.
EMPLOYEE STOCK OWNERSHIP AND SALARY DEFERRAL PLAN
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1995
<CAPTION>
PARTICIPANT DIRECTED INVESTMENTS
-------------------------------------------------------------------------------------------
COMERICA, INC.
-------------------------------------------------------------------------------------------
MANATRON INVESTMENT MUNDER FIDELITY FIDELITY FIDELITY MUNDER MUNDER MUNDER
STOCK CONTRACT INTERMEDIATE MAGELLAN PURITAN WORLDWIDE SMALL COMPANY BALANCED INDEX 500
FUND FUND BOND FUND FUND FUND FUND GROWTH FUND FUND FUND
-------- ---------- ----------- -------- ------- --------- ------------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Investment income (loss):
Net appreciation (depreciation)
in fair value of investments $(29,658) $ - $ 312 $ 20,531 $ 29,152 $ 5,417 $ 15,830 $ 5,282 $ 23,802
Interest and dividends 375 8,544 494 21,238 17,174 2,702 15,781 894 15,760
-------- -------- ------- -------- --------- -------- --------- ------- --------
Total investment income (loss) (29,283) 8,544 806 41,769 46,326 8,119 31,611 6,176 39,562
-------- -------- ------- -------- --------- -------- --------- ------- --------
Contributions:
Employee 26,462 62,819 4,839 114,645 104,399 81,713 52,608 19,912 79,556
Employer 4,498 10,831 789 17,004 16,839 13,358 7,572 3,954 12,316
Rollovers into Plan 4,210 31,056 3,964 31,738 31,427 19,851 25,126 7,123 29,715
-------- -------- ------- -------- --------- -------- --------- ------- --------
Total contributions 35,170 104,706 9,592 163,387 152,665 114,922 85,306 30,989 121,587
-------- -------- ------- -------- --------- -------- --------- ------- --------
Total additions 5,887 113,250 10,398 205,156 198,991 123,041 116,917 37,165 161,149
-------- -------- ------- -------- --------- -------- --------- ------- --------
DEDUCTIONS FROM NET ASSETS
ATTRIBUTED TO:
Benefit payments (12,461) (63,936) (557) (22,266) (102,457) (10,946) (3,886) (515) (21,714)
Interest expense - - - - - - - - -
-------- -------- ------- -------- --------- -------- --------- ------- --------
Total deductions (12,461) (63,936) (557) (22,266) (102,457) (10,946) (3,886) (515) (21,714)
-------- -------- ------- -------- --------- -------- --------- ------- --------
FUNDS RECEIVED FROM ATEK MERGER - - - - - - 225,958 - -
-6-
<PAGE>
INTERFUND TRANSFERS 51,829 186,514 3,653 205,588 253,312 134,700 (989,496) 21,823 132,077
TRANSFER BETWEEN TRUSTEES - - - - - - 792,825 - -
ALLOCATION OF 14,284 ESOP SHARES - - - - - - - - -
-------- -------- ------- -------- --------- -------- --------- ------- --------
Net increase (decrease) 45,255 235,828 13,494 388,478 349,846 246,795 142,318 58,473 271,512
-------- -------- ------- -------- --------- -------- --------- ------- --------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS,
Beginning of year - - - - - - - - -
-------- -------- ------- -------- --------- -------- --------- ------- --------
End of year $ 45,255 $235,828 $13,494 $388,478 $ 349,846 $246,795 $ 142,318 $58,473 $271,512
======== ======== ======= ========= ========= ======== ========= ======= ========
</TABLE>
The accompanying notes to financial statements are
an integral part of this statement.
-7-
<PAGE>
MANATRON, INC.
EMPLOYEE STOCK OWNERSHIP AND SALARY DEFERRAL PLAN
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1995
(CONTINUED)
<CAPTION>
PARTICIPANT DIRECTED INVESTMENTS
-------------------------------------------------------------------------------------------
PRINCIPAL MUTUAL LIFE INSURANCE COMPANY
-------------------------------------------------------------------------------------------
SMALL INVESTMENT U.S. MONEY REAL BOND AND INTERNATIONAL STOCK VALUE
COMPANY CONTRACT STOCK MARKET ESTATE MORTGAGE STOCK INDEX STOCK
GROWTH FUND FUND FUND FUND FUND FUND FUND FUND FUND
----------- --------- ------- ------ ------ -------- ------------- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Investment income (loss):
Net appreciation (depreciation)
in fair value of investments $ - $ - $ - $ - $ - $ - $ - $ - $ -
Interest and dividends - - - - - - - - -
-------- --------- --------- -------- ------- -------- ------- -------- ------
Total investment income (loss) - - - - - - - - -
-------- --------- --------- -------- ------- -------- ------- -------- ------
Contributions:
Employee - - - - - - - - -
Employer - - - - - - - - -
Rollovers into Plan - - - - - - - - -
-------- --------- --------- -------- ------- -------- ------- -------- ------
Total contributions - - - - - - - - -
-------- --------- --------- -------- ------- -------- ------- -------- ------
Total additions - - - - - - - - -
-------- --------- --------- -------- ------- -------- ------- -------- ------
DEDUCTIONS FROM NET ASSETS
ATTRIBUTED TO:
Benefit payments - - - - - - - - -
Interest expense - - - - - - - - -
-------- --------- --------- -------- ------- -------- ------- -------- ------
Total deductions - - - - - - - - -
-------- --------- --------- -------- ------- -------- ------- -------- ------
FUNDS RECEIVED FROM ATEK MERGER - - - - - - - - -
INTERFUND TRANSFERS - - - - - - - - -
TRANSFER BETWEEN TRUSTEES (11,616) (399,247) (170,061) (41,768) (4,754) (65,308) (88,553) (11,362) (156)
ALLOCATION OF 14,284 ESOP SHARES - - - - - - - - -
-------- --------- --------- -------- ------- -------- ------- -------- ------
-8-
<PAGE>
Net increase (decrease) (11,616) (399,247) (170,061) (41,768) (4,754) (65,308) (88,553) (11,362) (156)
-------- --------- --------- -------- ------- -------- ------- -------- ------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS,
Beginning of year 11,616 399,247 170,061 41,768 4,754 65,308 88,553 11,362 156
-------- --------- --------- -------- ------- -------- ------- -------- ------
End of year $ - $ - $ - $ - $ - $ - $ - $ - $ -
======== ========= ========= ======== ======= ======== ======= ======== ======
</TABLE>
The accompanying notes to financial statements are
an integral part of this statement.
-9-
<PAGE>
MANATRON, INC.
EMPLOYEE STOCK OWNERSHIP AND SALARY DEFERRAL PLAN
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1995
(CONTINUED)
<CAPTION>
EMPLOYEE STOCK OWNERSHIP
PLAN INVESTMENTS
-------------------------
ALLOCATED UNALLOCATED TOTAL
--------- ----------- -----
<S> <C> <C> <C>
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Investment income (loss): $ (21,432) $ (192,852) $ (143,616)
Net appreciation (depreciation) in
fair value of investments - - 82,962
----------- ----------- --------------
Interest and dividends
Total investment income (loss) (21,432) (192,852) (60,654)
----------- ----------- --------------
Contributions:
Employee - - 546,953
Employer - 71,927 159,088
Rollovers into Plan - - 184,210
----------- ----------- --------------
Total contributions - 71,927 890,251
----------- ----------- --------------
Total additions (21,432) (120,925) 829,597
----------- ----------- --------------
DEDUCTIONS FROM NET ASSETS
ATTRIBUTED TO:
Benefit payments - - (238,738)
Interest expense - (21,927) (21,927)
----------- ----------- --------------
Total deductions - (21,927) (260,665)
----------- ----------- --------------
FUNDS RECEIVED FROM ATEK MERGER - - 225,958
INTERFUND TRANSFERS - - -
TRANSFER BETWEEN TRUSTEES - - -
ALLOCATION OF 14,284 ESOP SHARES 50,000 (50,000) -
----------- ----------- --------------
Net increase (decrease) 28,568 (192,852) 794,890
----------- ----------- --------------
-10-
<PAGE>
NET ASSETS AVAILABLE FOR PLAN
BENEFITS,
Beginning of year - - 792,825
----------- ----------- --------------
End of year $ 28,568 $ (192,852) $ 1,587,715
=========== ============ ==============
</TABLE>
-11-
<PAGE>
MANATRON, INC.
EMPLOYEE STOCK OWNERSHIP AND SALARY DEFERRAL PLAN
NOTES TO FINANCIAL STATEMENTS
(1) DESCRIPTION OF PLAN
The following description of the Manatron, Inc. Employee Stock
Ownership and Salary Deferral Plan (the "Plan") provides only
general information. Participants should refer to the Plan
agreement, as amended, for a more complete description of the
Plan's provisions.
GENERAL
The Plan was established in 1988 by Manatron, Inc. (the
"Company" or "Sponsor") as the Manatron, Inc. Salary Deferral
Plan. In 1995, the Company amended the Plan to include a
leveraged employee stock ownership plan ("ESOP") feature, and
renamed the Plan the Manatron, Inc. Employee Stock Ownership and
Salary Deferral Plan. The Plan is designed to comply with
specific sections and regulations of the Internal Revenue Code of
1986, as amended (the "Code"), and is therefore subject to the
provisions of the Employee Retirement Income Security Act of
1974, as amended ("ERISA").
In connection with the amendment, the Plan purchased 142,858
shares of the Company's common stock for $500,000 from Allen
F. Peat, former Chairman and Chief Executive Officer of the Company;
using the proceeds of a bank borrowing (see Notes 3 and 5). The
stock is held by the Plan in a trust established under the Plan.
The bank borrowing is to be repaid quarterly over a period of
five years by fully deductible Company contributions to the trust
fund. As the Plan makes each payment of principal, an
appropriate percentage of stock will be allocated to eligible
employees' accounts in accordance with applicable regulations
under the Code.
Effective January 1, 1995, the Company also merged the previously
existing ATEK Information Services, Inc. Retirement Savings Plan
into the Plan. As a result of the merger, the investment assets
of the ATEK plan were liquidated and transferred to the Plan's
trustee, Comerica, Inc. (the "Trustee"), for reinvestment by the Plan.
Additionally, on the date of the merger, each participant in the ATEK
plan became fully vested in their matching contribution account.
-12-
<PAGE>
MANATRON, INC.
EMPLOYEE STOCK OWNERSHIP AND SALARY DEFERRAL PLAN
NOTES TO FINANCIAL STATEMENTS
(Continued)
(1) DESCRIPTION OF PLAN, continued
Overall responsibility for administering the Plan rests with the
Plan Administrative Committee (the "Committee"), which is
appointed by the Board of Directors of the Company. The Plan's
Trustee, is responsible for the management and control of the
Plan's assets and has discretionary responsibility for the
investment and management of such assets.
ELIGIBILITY
The Plan is a defined contribution plan covering substantially
all employees of the Company, ATEK Information Systems, Inc.,
and Specialized Data Systems, Inc. (together the "Employers").
Generally, an employee may become a participant in the Plan on
the entry date following completion of one year of eligible
service and having attained age 21, as described in the Plan.
CONTRIBUTIONS AND VESTING
The Plan provides for three different types of contributions:
ESOP CONTRIBUTION - As previously described, each plan year,
the Company will contribute the required loan payments to
the ESOP trust. At the time of each payment, 7,142 shares
of Company common stock held by the ESOP trust will
be committed for release to plan participants. Released
shares will be allocated to individual participant accounts
based on the percentage of the individual participant's
compensation to all eligible participants' compensation for
the plan year. Participants must be employed on the last
day of the plan year to be eligible for Company
contributions.
PROFIT-SHARING CONTRIBUTION - Each year the Company will
decide whether to make a profit-sharing contribution to the
Plan and the amount to be contributed. Participants must be
employed on the last day of the plan year to be eligible for
the Company contribution. The amount credited to a
participant's profit-sharing account will be determined in
the same manner as the ESOP contributions.
-13-
<PAGE>
MANATRON, INC.
EMPLOYEE STOCK OWNERSHIP AND SALARY DEFERRAL PLAN
NOTES TO FINANCIAL STATEMENTS
(Continued)
(1) DESCRIPTION OF PLAN, continued
ELECTIVE SALARY DEFERRAL CONTRIBUTIONS - Employees who
participate in the Plan can elect to make voluntary pre-tax
contributions in an amount between 1% and 15% of their
annual compensation. Annual participant contributions are
limited to the maximum amount permitted by the Code. The
Company matching contribution (currently 25 cents for each
dollar contributed by a participant up to 5% of eligible pay)
is set forth in the Plan document and may be changed by resolution
of the Company. The Company matching contributions during 1996
and 1995 were approximately $75,000 and $82,000, respectively.
VESTING - Participants are 100% vested in rollovers, direct
transfers, elective salary deferral contribution, matching
contributions and non-elective contribution accounts.
Vesting for ESOP and profit-sharing contribution accounts is
determined by the years of vesting service. One year of
vesting service is 1,000 hours or more of service in the
plan year. Participants become 20% vested after three
years of vesting service and continue to vest 20% a year
until they are 100% vested.
INVESTMENT OPTIONS
Participants may direct their elective salary deferral, company
matching and profit sharing contributions, in 5% increments, in
any of the following investment options:
MANATRON INC. COMMON STOCK FUND - This fund invests in
common stock of the Company, which currently trades on The
Nasdaq Stock Market.
GUARANTEED INVESTMENT CONTRACT FUND - An investment fund
that seeks to safeguard principal and offer a return that
will exceed the returns of money market funds.
MUNDER INTERMEDIATE BOND FUND - A broadly diversified
portfolio of high quality fixed income securities with a
weighted average maturity of three to six years.
-14-
<PAGE>
MANATRON, INC.
EMPLOYEE STOCK OWNERSHIP AND SALARY DEFERRAL PLAN
NOTES TO FINANCIAL STATEMENTS
(Continued)
(1) DESCRIPTION OF PLAN, continued
FIDELITY MAGELLAN FUND - A common stock fund which
emphasizes growth potential. The fund may hold both foreign
and domestic stocks as well as debt securities.
FIDELITY PURITAN FUND - A balanced fund which invests in
both equity and fixed income investments. The fund may
invest in foreign holdings and the fixed income portion may
be of any quality or maturity.
FIDELITY WORLDWIDE FUND - An equity fund which invests
globally - both U.S. and non-U.S. stocks. A portion of the
fund will always be invested in the U.S. market.
MUNDER SMALL COMPANY GROWTH FUND - The fund invests in
equity securities which are issued by companies smaller than
those found on the major indices, such as the S&P 500.
MUNDER BALANCED FUND - A balanced portfolio utilizing the
three major asset groups: equity securities, fixed income
securities and cash equivalents.
MUNDER INDEX 500 FUND - A fund which provides price
performance and income that is comparable to the performance
of the S&P 500.
MUNDER CASH INVESTMENT FUND - A money market portfolio
invested in high quality money market securities with an
average maturity of less than 90 days.
PARTICIPANT LOANS
Participants of the Plan may borrow from their accounts a minimum
of $1,000, up to a maximum equal to the lesser of $50,000 or 50%
of their account balance. Loan transactions are treated as a
transfer to (from) the related investment fund from (to) the
Participant Loan Fund. Loan terms of the promissory notes range
from one to five years or a reasonable period for the purchase of a
primary residence. The promissory notes are secured by the
balance in the participant's account and bear interest at a
reasonable rate established at the time of the loan by the Plan
-15-
<PAGE>
MANATRON, INC.
EMPLOYEE STOCK OWNERSHIP AND SALARY DEFERRAL PLAN
NOTES TO FINANCIAL STATEMENTS
(Continued)
(1) DESCRIPTION OF PLAN, continued
administrator. Principal and interest payments will be made
ratably through payroll deductions. Currently there is one loan
outstanding with a face value of $8,000.
NET INVESTMENT INCOME
Investment income is allocated to participants based on the ratio
of a participant's balance in each investment fund to total
participant balances in the corresponding investment fund.
FORFEITURES
After an employee terminates employment, any non-vested amounts in the
participant's account will be forfeited. Forfeited amounts are
allocated to all remaining participants in the same manner as
investment income.
DISTRIBUTIONS TO PARTICIPANTS
Distributions to participants generally occur upon a
participant's retirement or termination of employment. However,
participants may defer distribution of their benefits until
reaching age 70 1/2. Vested balances of retired or terminated
participants will be distributed in a lump sum payment, annuity,
installments or transfer.
ADMINISTRATIVE EXPENSE
The Plan is administered by the Company. Although not obligated
to do so, the Company paid administrative expenses and trustee
fees on behalf of the Plan totaling approximately $10,000 and
$16,000 in 1996 and 1995, respectively.
PLAN TERMINATION
Although it has no current intent to do so, the Company reserves
the right to terminate the Plan and trust, or to cease or suspend
further contributions, at any time, subject to plan provisions
and applicable provision of ERISA. Upon termination of the Plan,
all participant's accounts become fully vested and non-forfeitable.
-16-
<PAGE>
MANATRON, INC.
EMPLOYEE STOCK OWNERSHIP AND SALARY DEFERRAL PLAN
NOTES TO FINANCIAL STATEMENTS
(Continued)
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The accompanying financial statements are presented on the
accrual basis of accounting.
INVESTMENTS
The quoted market price, as reported by the Trustee was used to
approximate the current value for all investments other than the
guaranteed investment contract value. The Guaranteed Investment
Contract Fund is fully benefit responsive, as described in AICPA
Statement of Position No. 94-4, "Reporting of Investments Contracts
Held by Health and Welfare Benefit Plans and Defined Contribution
Pension Plans" (SOP 94-4) and therefore, reported at contract values
as reported by the trustee. The market value of this fund does not
differ materially from the stated contract value. Net appreciation
(depreciation) in fair value of investments included in the
Statement of Changes in Net Assets Available for Plan Benefits is
comprised of unrealized gains or losses resulting from changes in
market prices and realized gains and losses on sales of
investments.
CHANGE IN TRUSTEE
Effective January 1, 1995, the Plan changed trustees from
Principal Mutual Life Insurance Company to Comerica, Inc.
Accordingly, plan investments previously held by Principal Mutual
Life Insurance Company were liquidated and the resultant funds
transferred to Comerica, Inc. In 1996, the Trustee reimbursed
the Plan for funds held and not invested for a period of time.
Amounts are shown in the financial statements as reimbursement for
investment loss.
USE OF ESTIMATES
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported
in the financial statements and accompanying notes. Actual
results could differ from those estimates.
-17-
<PAGE>
MANATRON, INC.
EMPLOYEE STOCK OWNERSHIP AND SALARY DEFERRAL PLAN
NOTES TO FINANCIAL STATEMENTS
(Continued)
(3) LOAN PAYABLE
In connection with the stock purchase described in Note 2, the
Plan entered into a $500,000 term loan agreement with the Trustee.
The borrowing is collateralized by the unallocated shares of ESOP
stock and is guaranteed by the Company. The lender has no rights
against shares once they are allocated under the ESOP. The loan
agreement provides for quarterly principal payments of $25,000 over
the next five years. The loan bears interest at the prime rate of
the lender, which at December 31, 1996 was 8.25%. A summary of future
debt maturities is as follows:
YEAR AMOUNT
1997 $ 100,000
1998 100,000
1999 100,000
2000 50,000
(4) TAX STATUS
On February 7, 1996, the Plan received a favorable determination
letter from the Internal Revenue Service stating that the Plan,
as amended, is in compliance with Section 401(a) of the Code and,
therefore, the Plan and underlying trust continue to be tax exempt.
(5) RELATED PARTY TRANSACTIONS
As described in Note 1, in connection with the establishment of
the ESOP, the Plan purchased 142,858 shares from Allen F. Peat, the
Company's former Chairman and Chief Executive Officer, for
$500,000. The Plan's management and Allen F. Peat intended this
transaction to be conducted at the current market value of the
Company's stock on the date of purchase. The actual market value
on the date the transaction occurred was $3.25 per share based on
the "average" trade price. Because the Company's stock is very
thinly traded, and the average trade price on that date
represented less than 1,000 traded shares, management believes
the transaction approximated fair market value.
-18-
<PAGE>
MANATRON, INC. SCHEDULE I
EMPLOYEE STOCK OWNERSHIP AND SALARY DEFERRAL PLAN
EIN: 38-1983228
PLAN NUMBER: 002
<TABLE>
ITEM 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1996
<CAPTION>
DESCRIPTION OF FAIR
IDENTITY OF PARTY INVOLVED INVESTMENT COST VALUE
- -------------------------- -------------- ---- -----
<S> <C> <C> <C>
Participant Directed
Investments:
<F*>Manatron, Inc. Manatron, Inc. Common
Stock Fund (56,802 shares) $ 129,475 $ 85,203
<F*>Comerica, Inc. Guaranteed Investment
Contract Fund (272,869 units) 268,848 272,869
Munder Intermediate
Bond Fund (1,446 shares) 13,398 13,564
Fidelity Magellan
Fund (6,862 shares) 542,601 553,425
Fidelity Puritan
Fund (26,179 shares) 423,081 451,333
Fidelity Worldwide
Fund (22,816 shares) 306,771 351,134
Munder Small Company
Growth Fund (13,414 shares) 227,103 267,200
Munder Balanced Fund
(6,757 shares) 74,088 81,896
Munder Index 500 Fund
(23,467 shares) $ 336,555 $ 412,564
----------- ----------
<FN>
<F*> Indicates a party-in-interest.
</FN>
</TABLE>
-19-
<PAGE>
MANATRON, INC. SCHEDULE I
EMPLOYEE STOCK OWNERSHIP AND SALARY DEFERRAL PLAN
EIN: 38-1983228
PLAN NUMBER: 002
<TABLE>
ITEM 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1996
(Continued)
<CAPTION>
DESCRIPTION OF FAIR
IDENTITY OF PARTY INVOLVED INVESTMENT COST VALUE
- -------------------------- -------------- ---- -----
<S> <C> <C> <C>
Participant Loan
Balances:
<F*>Comerica, Inc. Participant Loans
Receivable
(1 loan outstanding) 8,000 8,000
----------- ----------
Total Participant
Directed Investments 2,329,920 2,497,188
----------- ----------
Employee Stock Ownership
Plan Investments:
<F*>Comerica, Inc. Manatron, Inc. Common
Stock (142,858 shares) 500,000 214,287
----------- ----------
Total plan investments $ 2,829,920 $2,711,475
=========== ==========
<FN>
<F*> Indicates a party-in-interest.
</FN>
</TABLE>
-20-
<PAGE>
SCHEDULE II
MANATRON, INC.
EMPLOYEE STOCK OWNERSHIP AND SALARY DEFERRAL PLAN
EIN: 38-1983228
PLAN NUMBER: 002
<TABLE>
ITEM 27D - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
<CAPTION>
PURCHASES SALES
------------------------ ---------------------------------------------------------
NET
IDENTITY OF ISSUER AND NUMBER OF PURCHASE NUMBER OF GAIN
DESCRIPTION OF INVESTMENT TRANSACTIONS PRICE TRANSACTIONS PROCEEDS COST OF ASSET (LOSS)
------------------------- ------------ --------- ------------ -------- ------------- ----
<S> <C> <C> <C> <C> <C> <C>
Participant Directed Investments:
<F*>Comerica, Inc.
Guaranteed Investment Contract Fund 29 $ 74,811 13 $ 35,223 $ 35,223 $ -
Fidelity Magellan Fund 23 238,984 14 57,204 59,553 (2,349)
Fidelity Puritan Fund 24 148,175 13 53,859 52,824 1,035
Fidelity Worldwide Fund 18 93,368 10 27,549 25,668 1,881
Munder Small Company Growth Fund 22 104,499 17 19,378 18,079 1,299
Munder Index 500 Fund 27 140,038 17 57,319 51,546 5,773
Munder Cash Investment Fund 49 316,318 47 335,324 335,324 -
<FN>
<F*> Indicates a party-in-interest.
</FN>
</TABLE>
-21-
<PAGE>
Exhibits:
23 Consent of Arthur Andersen LLP dated June 27, 1997.
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees (or other persons who administer the employee
benefit plan) have duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
Dated: June 27, 1997 MANATRON, INC. EMPLOYEE STOCK
OWNERSHIP AND SALARY DEFERRAL PLAN
By: /s/Paul R. Sylvester
Paul R. Sylvester
President, Chief Financial Officer
Chief Financial Officer and Member of
the Administrative Committee of the
Manatron, Inc. Salary Deferral and
Employee Stock Option Plan
-22-
<PAGE>
EXHIBIT INDEX
EXHIBIT DOCUMENT
23 Consent of Arthur Andersen LLP dated June 27, 1997
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accoutants, we hereby consent to the
incorporation by reference of our report dated May 7, 1997, appearing
in this Annual Report on Form 11-K in the Form S-8 Registration
Statement (No. 333-07519) for the Manatron, Inc. Employee Stock
Ownership and Salary Deferral Plan.
/S/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Grand Rapids, Michigan
June 27, 1997
