EXHIBIT 10.4
MANATRON, INC.
1995 LONG-TERM INCENTIVE PLAN
SECTION 1
Establishment of Plan ;
Purpose of Plan
1.1
Establishment of Plan . The
Company hereby establishes the 1995 LONG-TERM INCENTIVE PLAN (the
"Plan") for its directors, corporate and Subsidiary officers and
other key employees. The Plan permits the grant or award of
Options, Restricted Stock, and Tax Benefit Rights.
1.2
Purpose of Plan . The purpose of
the Plan is to provide directors, officers and key management
employees of the Company and its Subsidiaries with an increased
incentive to make significant and extraordinary contributions to
the long-term performance and growth of the Company and its
Subsidiaries, to join the interests of directors, officers and key
employees with the interests of the Company's shareholders through
the opportunity for increased stock ownership, and to attract and
retain directors, officers and key employees of exceptional
ability. The Plan is further intended to provide flexibility to the
Company in structuring long-term incentive compensation to best
promote the foregoing objectives.
SECTION 2
Definitions
The following words have the
following meanings unless a different meaning is plainly required
by the context:
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2.1
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"Act" means the Securities Exchange Act of 1934, as amended.
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2.2
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"Board" means the Board of Directors of the Company.
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2.3
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"Code" means the Internal Revenue Code of 1986, as amended.
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2.4
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"Committee" means the Stock Option Plan Committee of the Board
or such other committee as the Board shall designate to administer
the Plan. The Committee shall consist of at least two members of
the Board appointed by the Board all of whom shall be
"disinterested persons" as defined in Rule 16b-3 under the Act and
"outside directors" as defined in the rules promulgated pursuant to
Section 162(m) of the Code.
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2.5
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"Common Stock" means the common stock, no par value, of the
Company.
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2.6
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"Company" means Manatron, Inc., a Michigan corporation.
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2.7
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"Competition" means participation, directly or indirectly, in
the ownership, management, financing or control of any business
that is the same as or similar to the present or future businesses
of the Company or its parent or any Subsidiary. Such participation
could be by way of employment, consulting services, directorship or
officership. Ownership of less than five percent (5%) of the shares
of any corporation whose shares are traded publicly on any national
or regional stock exchange or over the counter shall not be deemed
Competition.
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2.8
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"Incentive Award" means the award or grant of an Option,
Restricted Stock or Tax Benefit Right to a Participant under the
Plan.
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2.9
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"Market Value" of any security on any given date means: (a) if
the security is listed for trading on one or more national
securities exchanges (including the NASDAQ National Market System),
the last reported sales price on the principal such exchange on the
date in question, or if such security shall not have been traded on
such principal exchange on such date, the last reported sales price
on such principal exchange on the first day prior thereto on which
such security was so traded; or (b) if the security is not listed
for trading on a national securities exchange (including the NASDAQ
National Market System) but is traded in the over-the-counter
market, the mean of highest and lowest bid prices for such security
on the date in question, or if there are no such bid prices for
such security on such date, the mean of the highest and lowest bid
prices on the first day prior thereto on which such prices existed;
or (c) if neither (a) nor (b) is applicable, the value as
determined by any means deemed fair and reasonable by the
Committee, which determination shall be final and binding on all
parties.
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2.10
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"Option" means the right to purchase Common Stock at a stated
price for a specified period of time. For purposes of the Plan, an
Option may be either an incentive stock option within the meaning
of Section 422(b) of the Code or a nonstatutory stock option.
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2.11
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"Participant" means directors, corporate officers and other key
employees of the Company and its Subsidiaries who the Committee
determines are eligible to participate in the Plan and who are
designated to be granted an Incentive Award under the Plan.
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2.12
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"Reload Options" means Options granted to Participants that,
upon exercise, commit the Company to automatically grant to the
Participant on the date of exercise additional options.
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2.13
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"Restricted Period" means the period of time during which
Restricted Stock awarded under the Plan is subject to restrictions.
The Restricted Period may differ among Participants and may have
different expiration dates with respect to shares of Common Stock
covered by the same Incentive Award.
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2.14
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"Restricted Stock" means Common Stock awarded to a Participant
under Section 6 of the Plan.
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2.15
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"Retirement" means the voluntary termination of all employment
by a Participant.
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2.16
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"Subsidiary" means any corporation of which a majority of the
outstanding voting stock is directly or indirectly owned or
controlled by the Company, or by one or more Subsidiaries.
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2.17
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"Tax Benefit Right" means any right granted to a Participant
under Section 7 of the Plan.
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SECTION 3
Administration
3.1
Power and Authority . The
Committee shall administer the Plan, shall have full power and
authority to interpret the provisions of the Plan, and shall have
full power and authority to supervise the administration of the
Plan. All determinations, interpretations and selections made by
the Committee regarding the Plan shall be final and conclusive. The
Committee shall hold its meetings at such times and places as it
deems advisable. Action may be taken by a written instrument signed
by all of the members of the Committee, and any action so taken
shall be fully as effective as if it had been taken at a meeting
duly called and held. The Committee shall make such rules and
regulations for the conduct of its business as it deems advisable.
The members of the Committee shall be paid reasonable fees for
their services.
3.2
Grants or Awards to
Participants . In accordance with and subject to the
provisions of the Plan, the Committee shall have the authority to:
determine whether and when Incentive Awards will be granted, the
persons to be granted Incentive Awards, the amount of Incentive
Awards to be granted to each person and the terms of the Incentive
Awards to be granted; vary and amend vesting schedules, if any;
permit delivery or withholding of stock in payment of the exercise
price or to satisfy tax withholding obligations; and Waive any
restrictions or conditions applicable to any Incentive Award.
Incentive Awards shall be granted or awarded by the Committee, and
Incentive Awards may be amended by the Committee consistent with
the Plan, provided that no such amendment may become effective
without the consent of the Participant, except to the extent that
the amendment operates solely to the benefit of the
Participant.
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3.3
Indemnification of Committee
Members . Each person who is or shall have been a member of
the Committee shall be indemnified and held harmless by the Company
from and against any cost, liability or expense imposed or incurred
in connection with such person's or the Committee's taking or
failing to take any action under the Plan. Each such person shall
be justified in relying upon information furnished in connection
with the Plan's administration by any appropriate person or
persons.
SECTION 4
Shares Subject to the
Plan
4.1
Number of Shares . Subject to
adjustment as provided in subsection 4.2 of the Plan, a maximum of
500,000 shares of Common Stock shall be available for any form of
Incentive Awards under the Plan. Such shares shall be authorized
and unissued shares.
4.2
Adjustments . If the number of shares of
Common Stock outstanding changes by reason of a stock dividend,
stock split, recapitalization, merger, consolidation, combination,
exchange of shares or any other change in the corporate structure
or shares of the Company, the aggregate number and class of shares
available for grants or awards under the Plan, together with the
Option prices, shall be appropriately adjusted. No fractional
shares shall be issued pursuant to the Plan, and any fractional
shares resulting from adjustments shall be eliminated from the
respective Incentive Award, with an appropriate cash adjustment for
the value of any Incentive Awards eliminated. If an Incentive Award
is cancelled, surrendered, modified, expired or terminated during
the term of the Plan but prior to the exercise or vesting of the
Incentive Award in full, the shares subject to but not delivered
under such Incentive Award shall be available for other Incentive
Awards.
4.3
Limits on Grants . No
Participant shall be granted, during any calendar year, Incentive
Awards for more than twenty-five percent (25%) of the total shares
of Common Stock authorized for issuance under the Plan. The purpose
of this subsection 4.3 is to ensure that the Plan provides
performance based compensation under Section 162(m) of the Code.
This subsection 4.3 shall be interpreted or amended to achieve that
purpose.
SECTION 5
Options
5.1
Grant . A Participant may be granted one or
more Options under the Plan. Options shall be subject to such terms
and conditions, consistent with the other provisions of the Plan,
as shall be determined by the Committee in its sole discretion. The
Committee may vary, among Participants and among Options granted to
the same Participant, any and all of the terms and conditions of
the Options granted under the Plan. Subject to subsection 4.3, the
Committee shall have complete discretion in determining the number
of Options granted to each Participant.
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The Committee may designate whether or not an Option is to be
considered an incentive stock option as defined in Section 422(b)
of the Code.
5.2
Grants to Non-Employee
Directors . Options to non-employee directors shall be
granted under this Plan only pursuant to this subsection 5.2 and
only when and to the extent that there are insufficient shares for
such grants under the Company's 1989 Stock Option Plan or 1994
Long-Term Incentive Plan. Each non-employee director who has served
a full year's term for the prior year shall automatically receive
an Option to purchase 1,000 shares of the Company's Common Stock at
one hundred percent (100%) of the Market Value on the date of
grant. Such Options shall be issued on the date of each annual
meeting of the Company's shareholders. These formula grant
provisions may be amended by the Board from time to time but not
more than once in any six-month period, except as necessary or
desirable to comply with the Employee Retirement Income Security
Act, the Code or the rules thereunder.
5.3
Option Agreements . Each Option shall
be evidenced by an Option agreement containing such terms and
conditions, consistent with the provisions of the Plan, as the
Committee from time to time determines.
5.4
Option Price . The per share Option
price shall be determined by the Committee but shall be equal to or
greater than one hundred percent (100%) of the Market Value on the
date of grant. The date of grant of an Option shall be the date the
Option is authorized by the Committee or such future date specified
by the Committee as the date for issuing the Option.
5.5
Medium and Time of
Payment . The exercise price for each share purchased
pursuant to an Option granted under the Plan shall be payable in
cash or, if the Committee consents, in shares of Common Stock
(including Common Stock to be received upon a simultaneous
exercise). The time and terms of payment may be amended with the
consent of the Participant before or after exercise of the Option,
but such amendment shall not reduce the Option price. The Committee
may from time to time authorize payment of all or a portion of the
Option price in the form of a promissory note or installments
according to such terms as the Committee may approve. The Board may
restrict or suspend the power of the Committee to permit such loans
and may require that adequate security be provided.
5.6
Reload Options . The Committee may
designate whether any Option granted to a Participant is a Reload
Option. Unless the Reload Option Agreement provides otherwise, the
Option price for Options granted automatically to the Participant
upon exercise of a Reload Option shall be equal to the Market Value
on the date the Participant exercised the Reload Option, and the
number of shares of common stock subject to the new option shall be
equal to the number of shares for which the Reload Option was
exercised. The Committee may, in its discretion, add Reload Option
features to options outstanding under this Plan and other option
plans of the Company.
5.7
Options Granted to Ten
Percent Shareholders . No Option granted to any
Participant who at the time of such grant owns, together with stock
attributed to such Participant under Section 424(d) of the Code,
more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or
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