Document:

Manatron, Inc. Exhibit 10.8 to Form 10-K - 07-15-05

EXHIBIT 10.8

MANATRON, INC.

EXECUTIVE STOCK PLAN OF 2000

          This Stock Plan of 2000 (the "Agreement") is made as of June 1, 2000 (the "Grant Date"), between MANATRON, INC., a Michigan corporation (the "Company"), and Paul R. Sylvester, Early L. Stephens, James W. Flake, and Robert D. Fry (together "Grantees" and individually "Grantee").  This Agreement is implemented to provide Grantees with a further incentive to contribute to the long-term growth and success of the Company through stock ownership.

          Pursuant to the recommendation and action of the Compensation Committee of the Company's Board of Directors (the "Committee"), which consists of at least two members of the Board all of whom are "outside directors," as that term is defined in Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), the Company hereby grants a stock option and restricted stock to each Grantee, and each Grantee accepts the stock option and restricted stock, subject to the terms, conditions and provisions contained in this Agreement.

          1.          Stock Option.

          a.          Grant.  The Company grants to each Grantee an option (the "Option") to purchase the number of shares of the Company's common stock, no par value ("Common Stock"), identified opposite Grantee's name in Appendix A at $6.75 per share (the "Exercise Price"), subject to the terms and conditions of this Agreement.  The Option is not an incentive stock option as defined in Section 422(b) of the Code.

          b.          Vesting.  Except as provided below, Grantee's right to exercise the Grantee's Option shall vest at a rate of ten percent (10%) of Grantee's Options per year on each of the first through tenth anniversaries of the Grant Date.  Notwithstanding that general rule, one hundred percent (100%) of Grantee's Options shall vest on the later of the (i)  fifth anniversary of the Grant Date or (ii) if the per share sales price of shares of Common Stock on the Nasdaq SmallCap Market or the Nasdaq Stock Market, as the case may be (or any successor quotation system that is the primary quotation system for trading of Common Stock) ("Nasdaq") is equal to or greater than $20.00 on at least 10 trading days on or before the fifth anniversary of the Grant Date.

          c.          Payment by Grantee for Option. Grantee may pay the Exercise Price for each share of Common Stock underlying the Option purchased in cash or, if the Committee consents, in shares of Common Stock (including Common Stock to be received upon a simultaneous exercise).

          d.          Exercise of Option.  Grantee may exercise the Option by giving the Company written notice of the exercise of the Option.  The notice shall set forth the number of shares to be purchased and shall be effective when received by the corporate Secretary at the Company's main office, accompanied by full payment of the Exercise

Price for each share purchased.  The Company will deliver to Grantee a certificate or certificates for such shares out of previously authorized but unissued shares of its Common Stock, as it may elect; provided, however, that the time of delivery shall be postponed for such period as may be required for the Company with reasonable diligence to comply with any registration or exemption requirements under the Securities Act of 1933, as amended, the Exchange Act of 1934, as amended (the "Exchange Act") and any requirements under this Agreement or any other law, regulation or agreement applicable to the issuance, listing or transfer of such shares.  If Grantee fails to accept delivery of and pay for all or any part of the number of shares specified in the notice upon tender or delivery of the shares, Grantee's right to exercise the Option with respect to such undelivered shares shall terminate.  In such event, Grantee's remaining Options not yet exercised or terminated shall continue in force.

          e.          Rights as a Shareholder.  Grantee shall have no rights as a shareholder with respect to any shares covered by the Option until Grantee's exercise of the Option and payment for such shares. 

          2.          Restricted Stock.

          a.          Grant. The Company grants to each Grantee the number of shares of Common Stock identified opposite Grantee's name in Appendix A, subject to the terms and conditions of this Agreement (the "Restricted Stock").

          b.          Vesting.  Except as provided below, Grantee's right to receive the Restricted Stock shall vest at a rate of ten percent (10%) of Grantee's shares of Restricted Stock per year on each of the first through tenth anniversaries of the Grant Date.  Notwithstanding that general rule, one hundred percent (100%) of Grantee's shares of Restricted Stock shall vest on the later of the (i) fifth anniversary of the Grant Date or (ii) if the per share sales price of shares of Common Stock on the Nasdaq SmallCap Market or the Nasdaq Stock Market, as the case may be (or any successor quotation system that is the primary quotation system for trading of Common Stock) ("Nasdaq") is equal to or greater than $20.00 on at least 10 trading days on or before the fifth anniversary of the Grant Date.

          c.          Rights as a Shareholder.  Grantee will have all rights as a shareholder with respect to Grantee's Restricted Stock, including (i) the right to vote the Restricted Stock at shareholders' meetings, (ii) the right to receive, without restriction, all cash dividends paid with respect to the Restricted Stock, and (iii) the right to participate with respect to the Restricted Stock in any stock dividend, stock split, recapitalization or other adjustment in the capital stock of the Company, or any merger, consolidation or other reorganization involving an increase, decrease or adjustment in the capital stock of the Company. Any shares or other security received as a result of any stock dividend, stock split or reorganization will be subject to the same terms, conditions and restrictions as those relating to the Restricted Stock granted under this Agreement.

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          3.          Conditions.  Notwithstanding any other provision of this Agreement, Grantee's right to exercise Grantee's Option and receive Grantee's Restricted Stock is conditional upon (a) the approval for quotation of the Common Stock to be received upon exercise of the Option and the Restricted Stock on Nasdaq; and (b) the approval of this Agreement by the Company's shareholders at the Company's 2000 Annual Meeting of Shareholders or any adjournment.

          4.          Term.  Upon vesting, each Grantee's right to receive shares of Common Stock under this Agreement shall terminate on May 31, 2010, unless earlier terminated as set forth in this Agreement.

          5.          Termination of Employee Status.

          a.          Termination by Grantee "With Cause" or by Company Without "Cause."  If a Grantee terminates his employment with the Company "With Cause" or if the Company terminates a Grantee's employment with the Company "Without Cause", that Grantee's unvested Options and Restricted Stock shall vest immediately.  Grantee may exercise the Option for a period of one year after the date Grantee ceases to be an employee. Termination "Without Cause" shall mean termination of Grantee by the Company for any reason other than "Cause" (as defined below in Paragraph 5(b)).  "With Cause" shall mean:

          (i)          Without Grantee's express written consent, the assignment to Grantee of any duties inconsistent with Grantee's present position or positions, duties, responsibilities and status with Employer or a subsidiary, except in connection with Grantee's termination as provided below in Sections 5(c), (d) or (e) or by Grantee other than "With Cause";

          (ii)          Without Grantee's express written consent, a reduction in Grantee's Base Salary as in effect on the date of this Agreement or as the same may be increased from time to time, by more than fifteen percent (15%); or

          (iii)          Without Grantee's express written consent, a relocation of Grantee to a location outside of Grantee's current employment location, except for required travel on business of Employer to an extent substantially consistent with Grantee's present business travel obligations.

          b.          Termination for "Cause."  If the Company terminates a Grantee's employment with the Company for "Cause", or if a Grantee terminates his employment with the Company for reasons other than "With Cause," that Grantee's right to exercise any outstanding and unvested Options shall terminate as of such termination and any shares of Restricted Stock still subject to restrictions automatically shall be forfeited and returned to the Company.   Termination shall be considered to be for "Cause" if based upon:

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          (i)          Grantee's conviction of a crime involving moral turpitude or embezzlement;

          (ii)          Grantee's willful activities in competition with the Company or in aid of its competitors;

          (iii)          the willful and continued failure to substantially perform Grantee's duties with the Company under this Agreement (other than any other such failure resulting from Disability), after a written demand for substantial performance is delivered to Grantee that specifically identifies the manner in which the Company believes Grantee has willfully failed to substantially perform his duties, and after Grantee has failed to resume substantial performance of his duties on a continuous basis within fourteen (14) calendar days of receiving such demand; or

          (iv)          Grantee willfully engaging in conduct which is demonstrably and materially injurious to the Company, monetarily or otherwise.

                    For purposes of (ii), (iii) and (iv) above, no act, or failure to act, on Grantee's part shall be deemed "willful" unless done, or omitted to be done, by the Grantee not in good faith and without reasonable belief that the action or omission was in the best interest of the Company.  

          c.          Disability or Death.  If a Grantee's employment is terminated as a result of his death or "Disability" (as defined in the Employment Agreement), (i) that Grantee or his personal representative may exercise the Option for a period of one year after the date Grantee ceases to be an employee, but only to the extent that Grantee was entitled to exercise the option on the date Grantee ceased to be an employee; and (ii) the restrictions applicable to the shares of Restricted Stock automatically shall terminate and the Restricted Stock shall vest as of the date of termination.  "Disability" means that as a result of Grantee's incapacity due to physical or mental illness, he shall have been absent from his duties with the Company on a full-time basis for six (6) consecutive months, and if he shall not have returned to the full time performance of his duties within thirty (30) days after written notice after such six (6) month period.

          6.          Change in Control.  Each Grantee's conditional right to exercise the Option and to receive the Restricted Stock shall vest immediately if there is a "Change in Control" (as defined below) of the Company, notwithstanding Sections 1 and 2 of this Agreement.  Grantee may exercise the option for a period of six months after the date of the Change in Control.  "Change in Control" of the Company shall mean a change in control of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Exchange Act, whether or not the Company is then subject to such reporting requirement, other than an acquisition of control by the Company or an employee benefit plan maintained by the Company; provided that, without limitation, such a Change in Control shall be deemed to have occurred if (a) any "person" (as such term is used in Sections 13(d) and 14(d)(2) of the Exchange Act), other than the Company or an employee benefit plan maintained by the

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Company, becomes the "beneficial owner" (as defined in Rule 13d-3 of the General Rules and Regulations under the Exchange Act), directly or indirectly, of securities of the Company representing 20% or more of the combined voting power of the Company's then outstanding securities entitled to vote in the election of directors of the Company (whether or not such person is a member of a group that is deemed to be a single person under Section 13(d)(3) of the Exchange Act and whether or not other members of such group previously had been the beneficial owner of some or all of such securities), (b) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board of Directors of the Company cease for any reason to constitute at least a majority thereof (unless the election or nomination for election by the Company's shareholders of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period), or (c) all or substantially all of the assets of the Company are liquidated, sold or distributed.

          7.          Adjustment Provisions.  If the number of shares of Common Stock outstanding changes by reason of any 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 under this Agreement, together with the Exercise Price, shall be adjusted appropriately.

          8.          No Fractional Shares.  No fractional shares shall be issued pursuant to this Agreement and any fractional shares resulting from adjustments shall be eliminated from the respective Option or Restricted Stock award, with an appropriate cash adjustment for the value of any Option or Restricted Stock eliminated.

          9.          Transferability.  Unless the Committee otherwise consents, Grantee will not sell, exchange, transfer, pledge or otherwise dispose of the Option or Restricted Stock at any time, whether voluntarily or involuntarily, by operation of law or otherwise, except that the provisions of this paragraph will not apply to any Restricted Stock that has vested pursuant to this Agreement and any Option or Restricted Stock that is sold, exchanged, transferred, pledged or otherwise disposed of to the Company or by will or the laws of descent and distribution.  If a Grantee violates the restrictions in this Section 9, that Grantee's right to unvested Options or shares of Restricted Stock immediately will cease and terminate and that Grantee promptly will forfeit and surrender all Options and shares of Restricted Stock that are still subject to restrictions to the Company.

          10.          No Right to Employment.  This Agreement shall not be construed as giving any Grantee the right to be retained in the employ or directorship of the Company.

          11.          Withholding.  The Company shall be entitled to (a) withhold and deduct from future wages of each Grantee (or from other amounts that may be due and owing to Grantee from the Company), or make other arrangements for the collection of, all amounts deemed necessary to satisfy any and all federal, state and local withholding and employment-related tax requirements attributable to this Agreement; or (b) require each Grantee promptly to remit the amount of such withholding to the Company before taking any action with respect to the exercise of the Option or with respect to the Restricted Stock.  Withholding may be satisfied by

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withholding Common Stock to be received upon exercise of the Option or by delivery to the Company of unrestricted Common Stock.

          12.          Investment Intent.  Each Grantee hereby represents and warrants that Grantee is acquiring the Option and Restricted Stock granted under this Agreement for Grantee's own account and investment and without any intent to resell or distribute the shares upon exercise of the Option or upon vesting of the Restricted Stock.  Grantee shall not resell or distribute the shares of Common Stock received except in compliance with this Agreement and such other conditions as the Company reasonably may specify to ensure compliance with federal and state securities laws.

          13.          Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the state of Michigan.

          14.          Severability.  In the event that any provision of this Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of this Agreement, and this Agreement shall be construed and enforced as if such illegal or invalid provision had not been included.

          15.          Binding Effect; Amendment.  This Agreement shall be binding upon, and shall inure to the benefit of, the parties to this Agreement and their respective heirs, successors and permitted assigns.  This Agreement shall not be modified as to a Grantee except in a writing executed by that Grantee and a duly authorized officer of the Company.

	 	
MANATRON, INC.

	 	 
	 	 
	 	
By
	
/s/ Randall L. Peat

	 	 	
Randall L. Peat

	 	 	
Its Chairman

	 	 	 
	 	 	 
	 	
By
	
/s/ Paul R. Sylvester

	 	 	
Paul R. Sylvester, Individually

	 	 	 
	 	 	 
	 	
By
	
/s/ Early L. Stephens

	 	 	
Early L. Stephens, Individually

	 	 	 
	 	 	 
	 	
By
	
/s/ James W. Flake

	 	 	
James W. Flake, Individually

	 	 	 
	 	 	 
	 	
By
	
/s/ Robert D. Fry

	 	 	
Robert D. Fry, Individually

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APPENDIX A

	 	
Options
	 	
Restricted Stock

	 	 	 	 	 
	
Paul R. Sylvester
	
60,000
	 	
60,000
	 
	 	 	 	 	 
	
Early L. Stephens
	
40,000
	 	
40,000
	 
	 	 	 	 	 
	
James W. Flake
	
25,000
	 	
25,000
	 
	 	 	 	 	 
	
Robert D. Fry
	
25,000
	 	
25,000
	 

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MANATRON, INC.

AMENDMENT NO. 1 TO EXECUTIVE STOCK PLAN OF 2000

          This Amendment No. 1 to Executive Stock Plan of 2000 (the "Amendment") is made as of August 1, 2003, between MANATRON, INC., a Michigan corporation (the "Company") and Paul R. Sylvester (the "Grantee").

RECITALS:

          A.          The Company and the Grantee, among others, entered into the Executive Stock Plan of 2000 (the "Plan") which provided for the grant of stock options and restricted stock to specified grantees, including the Grantee.

          B.          Fifteen Thousand (15,000) shares of Restricted Stock, as defined in the Plan (the "Forfeited Shares"), from the original pool of shares of Restricted Stock originally authorized and granted under the Plan were forfeited by a grantee under the Plan and returned to the Company pursuant to the terms of the Plan.

          C.          The Compensation Committee and the Stock Option Committee of the Board of Directors of the Company authorized the grant of the Forfeited Shares to the Grantee.

NOW, THEREFORE, the parties agree as follows:

          1.          Forfeited Shares.  The Company grants the Forfeited Shares to the Grantee, subject to the terms of the Plan, as amended by this Amendment.  To provide consistency with the vesting schedule provided in the Plan and to account for the passage of time since the commencement of the Plan, 40% of the Forfeited Shares shall vest on June 1, 2004, with an additional 10% of the Forfeited Shares vesting on each anniversary of June 1, 2004.  Any provisions of the Plan providing for accelerated vesting upon the occurrence of certain events also apply to the Forfeited Shares.

          2.          Amendment.          Except as expressly modified by this Amendment, the Plan shall remain in full force and effect and shall apply to the Forfeited Shares.

	 	
MANATRON, INC.

	 	 
	 	 
	 	
By
	
/s/ Randall L. Peat

	 	 	
Randall L. Peat

	 	 	
Its Chairman

	 	 	 
	 	 	 
	 	
/s/ Paul R. Sylvester

	 	
Paul R. Sylvester, Individually

8Manatron, Inc. Exhibit 10.14 to Form 10-K - 07-15-05

EXHIBIT 10.14

EMPLOYMENT AGREEMENT

                    This EMPLOYMENT AGREEMENT ("Agreement") dated as of [July 22, 2004], between PAUL R. SYLVESTER ("Employee"), and MANATRON, INC., a Michigan corporation, maintaining its principal executive offices at 2970 South 9th Street, Kalamazoo, Michigan 49009 ("Employer").

                    Accordingly, the parties agree as follows:

          1.          Employment.  Employer hereby employs Employee, and Employee hereby accepts this employment, on the terms and subject to the conditions set forth herein.

          2.          Position.  Employee agrees to serve Employer in the position and with the job description as described on Exhibit A, or to serve Employer and its subsidiaries in such other executive or operational positions commensurate with Employee's experience and expertise as may be determined by Employer.  Employee shall devote his full business time, energies, best efforts, skill and attention to the duties arising out of or incident to his position and responsibilities pursuant to this Agreement, during the term of employment, and shall not engage in other employment or business opportunity, unless the employment or business opportunity is disclosed to and approved by the Compensation Committee of the Board of Directors in advance of the employment or business opportunity.

          3.          Duration.  Employment under this Agreement shall commence on the date set forth above and shall continue until terminated as provided in this Agreement.

          4.          Compensation.  In consideration for his services, Employee shall receive the following compensation:

          (a)          Salary. While this Agreement is in effect, Employer (or, if applicable, an affiliate of Employer) shall pay Employee a salary in an amount determined by the Board of Directors of Employer (the "Base Salary"). The Base Salary shall be reviewed annually and adjusted as the Board of Directors of Employer in its discretion deems appropriate and which shall be commensurate with Employee's position. If the Board of Directors of Employer decides to reduce Employee's Base Salary, Employer shall provide Employee three (3) months' written notice before the reduction shall go into effect.

          (b)          Vacation.  Employee shall receive paid vacation in accordance with Employer's vacation and hiring policies as in effect from time to time.

          (c)          Automobile Expenses. If Employee is provided with an automobile or a car allowance for business purposes, it shall be provided in accordance with Employer's standard automobile use policies and practices.

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          (d)          Bonus.  Employee will be eligible to participate in the Employer's executive incentive bonus plan as in effect from time to time.  A copy of Employer's current executive incentive bonus plan (Manatron, Inc. Executive Incentive Plan for Fiscal 1997) has been or will be separately provided to Employee.  Employee acknowledges that the terms of the bonus plan are subject to revision at Employer's discretion.  If Employee is terminated for any reason described in Section 5, Employee shall be entitled to receive his pro rata share of an Award (as defined in the plan in effect on the date of termination) for the portion of the fiscal year in which Employee participated in the plan.

          (e)          Benefits.   Employee shall receive standard benefits offered to all employees as determined from time to time by the Board of Directors of Employer.

          (f)          Reimbursement of Expenses.  Employer shall reimburse Employee for all reasonable proper travel and out-of-pocket expenses incurred by him in connection with the performance of his duties under this Agreement in accordance with Employer's policies for reimbursement.

          5.          Termination of Employment.  This Agreement and Employee's employment pursuant to this Agreement may be terminated prior to the expiration of the stated term of this Agreement as follows:

          (a)          Termination by Employee.  Employee is free to resign from employment at any time with or without cause, by providing thirty (30) days' prior written notification to Employer.  For purposes of this Agreement, "With Cause" shall mean:  

          (i)          Without Employee's express written consent, the assignment to Employee of any duties inconsistent with Employee's present position or positions, duties, responsibilities and status with Employer or a subsidiary, except in connection with Employee's termination as provided below in Sections 5(c), (d) or (e) or by Employee other than "With Cause";

          (ii)          A reduction in Employee's Base Salary as in effect on the date of this Agreement or as the same may be increased from time to time, by more than fifteen percent (15%); or

          (iii)          Without Employee's express written consent, a relocation of Employee to a location outside of Employee's current employment location, except for required travel on business of Employer to an extent substantially consistent with Employee's present business travel obligations.

          (b)          Termination by Employer.  Employer may terminate Employee's employment at any time, with or without cause and with or without prior review, notice or warning by providing thirty (30) days' prior written notification to Employee.

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          (c)          Death.  Employee's employment under this Agreement shall terminate in the event of Employee's death.  Obligations of Employer hereunder shall terminate as of the date of Employee's termination for death.

          (d)          Disability.  Employer may terminate this Agreement for "Disability" if, as a result of Employee's incapacity due to physical or mental illness, he shall have been absent from his duties with Employer on a full-time basis for six (6) consecutive months, and if he shall not have returned to the full time performance of his duties within thirty (30) days after written notice after such six (6) month period.

          (e)          For Cause.  Employee's employment under this Agreement may be terminated by Employer for "Cause" at any time.  For purposes of this Agreement, termination shall be considered to be for "Cause" if based upon (i) Employee's conviction of a crime involving moral turpitude or embezzlement; (ii) Employee's willful activities in competition with Employer or in aid of its competitors; (iii) the willful and continued failure to substantially perform Employee's duties with Employer under this Agreement (other than any other such failure resulting from Disability), after a written demand for substantial performance is delivered to Employee that specifically identifies the manner in which Employer believes Employee has willfully failed to substantially perform his duties, and after Employee has failed to resume substantial performance of his duties on a continuous basis within fourteen (14) calendar days of receiving such demand; or (iv) Employee willfully engaging in conduct which is demonstrably and materially injurious to Employer, monetarily or otherwise.  For purposes of (ii), (iii) and (iv) above, no act, or failure to act, on Employee's part shall be deemed "willful" unless done, or omitted to be done, by the Employee not in good faith and without reasonable belief that the action or omission was in the best interest of Employer.

          6.          Severance Pay.

          (a)          If Employer terminates Employee under Section 5(b) (Termination by Employer), or if Employee terminates employment under Section 5(a) (Termination by Employee), Employer or its successor in interest shall continue payment of Employee's salary and benefits (to the extent permitted under the terms of Employer's benefit plans and subject to Employee's continuing payment of the normal employee contribution) for a period of one year ("Severance Pay").  Employee agrees that Employee's right to receive Severance Pay is conditioned on the prior execution by Employee of a binding general release (in such form as Employer may determine) of any and all claims against Employer and all co-owned entities, and their officers, directors, employees, agents and owners.

          (b)          If Employee is entitled to Severance Pay pursuant to this Section 6, the presently outstanding loans made to Employee by Employer for the purpose of acquiring common stock of Employer will be canceled in exchange for the common stock purchased by Employee with the proceeds of the loan. If the cancellation and exchange results in compensation income to Employee, Employee shall notify Employer and

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Employer shall reimburse Employee an amount equal to the tax effects of any amounts recognized as compensation income.

          7.          Non-Competition Covenants of Employee. While employed by Employer and during the period after termination during which Employee receives any Severance Pay, Employee shall not:

          (a)          Engage, and shall have no investment, involvement or other connection whatsoever, direct or indirect, with any corporation, partnership, proprietorship, individual or other business entity that is engaged, in whole or in part, in any line of business that is the same as, similar to or directly or indirectly in competition with the business of Employer, or its successors and assigns, as it is now, or as it may during Employee's employment be, conducted in North America ("Competing Entity"); this provision shall not, however, restrict the right of Employee to own less than one percent (1%) of the issued and outstanding shares of capital stock in any company listed on a national or regional stock exchange, or whose stock is quoted on a NASDAQ market, regardless of the nature of the business.

          (b)          Be or become a shareholder, partner or other investor, or an officer, employee, consultant, adviser or director or an agent (whether independent or otherwise) for any Competing Entity; this provision shall not, however, restrict the right of Employee to own less than one percent (1%) of the issued and outstanding shares of capital stock in any company listed on a national or regional stock exchange, or whose stock is quoted on a NASDAQ market, regardless of the nature of the business.

          (c)          Solicit either for himself or on behalf of any Competing Entity, any "active customer of Employer" where an "active customer of Employer" is a person or entity who or which is or has been a customer of Employer during the term of Employee's employment or during the two (2) years preceding Employee's termination of employment.

          (d)          Employee acknowledges that Employer has been conducting its business in North America, and that the restrictive covenants assumed by Employee pursuant to this Agreement are essential to the business of Employer and its goodwill.  To the extent any part of this covenant may be held unenforceable as set forth herein, the restrictions set forth herein shall be severable so as to confine their application to the geographical and time restrictions as a court deems to be reasonable.

          (e)          The provisions set forth in this Section 7 shall be in effect while Employee is employed by Employer and for the period of time during which Employee receives Severance Pay.  In the event Employee breaches any of the terms, conditions or provisions under this Section, the remedy available to Employer shall be the right of Employer to receive actual damages along with the forfeiture of Severance Pay (paid or unpaid) if such breach occurs prior to any employment termination.  If such breach occurs subsequent to any employment termination, the sole remedy of Employer for the

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breach shall be the forfeiture of the right of Employee to receive any unpaid Severance Pay.

          8.          Covenant Not to Solicit Employees.  During the period after termination during which Employee receives any Severance Pay, Employee shall not, directly or indirectly, induce or attempt to influence any employee of Employer to terminate employment, except in his capacity as an officer of Employer in the ordinary course of business or as approved by the Board of Directors of Employer.  The sole remedy of Employer for breach of the covenant set forth in this Section 8 shall be the forfeiture of the right of Employee to receive any unpaid Severance Pay.

          9.          Covenant Not to Disclose Confidential Information.  Employee agrees that all information regarding manufacturing technique, process, formula, development or experimental work, work in process, business, trade secret or any other secret or confidential matter relating to the products, sales or business at Employer, including, but not limited to, customer lists, sales records, financial statements, payroll records, ledgers, corporate records, account numbers, contact lists and other information of any nature whatsoever pertaining to the business of Employer are of a proprietary and confidential nature and that none of such information shall be disclosed, published or made use of for any purpose by Employee without the prior written consent of Employer.

          10.          Covenant Not to Use Trade Name.  Employee agrees that he shall not, directly or indirectly, be or become an investor, partner, shareholder, officer, employee, director, consultant, adviser or agent of, or have any other affiliation with or economic interest in, any corporation, partnership, proprietorship or other business entity that has "Manatron," "ATEK," "Specialized Data Systems" or "Sabre" as any part of its name or trade name except for Employer or any companies or businesses affiliated with Employer; this provision shall not, however, restrict the right of Employee to own less than one percent (1%) of the issued and outstanding shares of capital stock in any company listed on a national or regional stock exchange, or whose stock is quoted on a NASDAQ market, regardless of the nature of the business.

          11.          Specific Performance Available.  The provisions set forth in Sections 9 and 10 shall be in effect while Employee is employed by Employer and also following termination of employment.  Employee recognizes and acknowledges that in the event of any default in, or breach of any of, the terms, conditions and provisions of Sections 9 or 10, Employer's remedies at law shall be inadequate.  Accordingly, Employee agrees that in such event, Employer shall be entitled to the remedies of specific performance and injunctive relief in addition to actual damages and any and all other remedies and rights at law or in equity, and such rights and remedies shall be cumulative.

          12.          Entire Agreement.  This Agreement constitutes the entire agreement among the parties as to Employee's employment.  All prior discussions, compensation understandings, negotiations and agreements notwithstanding, this Agreement constitutes the parties' sole source of rights and duties with respect to Employee's employment.  This Agreement may not be

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changed orally, but only by agreement in writing expressly identifying itself as an amendment to this Agreement and signed by Employee and Employer.

          13.          Agreement Binding on Successors.  This Agreement shall be binding upon Employer and its successors and assigns.  The rights and duties of Employee are personal to him and shall not be subject to transfer, delegation or assignment.

          14.          Amendment and Waiver.  This Agreement has been authorized by Employer's Board of Directors.  No employee or officer of Employer has authority to offer employment other than employment terminable at will, or to limit Employer's ability to terminate employment at will in any way; employment on any other terms may only be authorized by a written resolution of the Board of Directors.  No waiver by either party at any time of any breach by the other party or compliance with any condition or provision of this Agreement to be performed by the other party shall be deemed a waiver of similar or dissimilar provisions or condition at the time or any time prior or subsequent time.

          15.          Severability.  Any provision or term of this Agreement that shall be found to be contrary to law or otherwise unenforceable, in whole or in part, shall not affect the remaining terms of this Agreement, which shall be continued as if the unenforceable provision were absent from this Agreement.  It is the desire and intent of the parties to this Agreement that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought.

          16.          Governing Law.  This Agreement shall be governed, construed and enforced in accordance with the laws of the State of Michigan.

          17.          Arbitration.  Any dispute or controversy under this Agreement shall be settled exclusively by arbitration in Kalamazoo, Michigan, in accordance with the rules of the American Arbitration Association then in effect.  Judgment may be entered on the arbitration award in any court having jurisdiction.  Employer will reimburse Employee for all reasonable attorneys' fees incurred by Employee as a result of any arbitration with regard to any issue under this Agreement (or any judicial proceeding to compel or to enforce such arbitration):  (a) which is initiated by Employee if Employer is found in such proceeding to have violated this Agreement substantially as alleged by Employee; or (b) which is initialed by Employer, unless Employee is found in such proceeding to have violated this Agreement substantially as alleged by Employer.

          18.          Notice.  All notices, request, demands, consents, waivers, instructions, approvals and the communications hereunder shall be in writing and shall be deemed to have been given if personally delivered to or mailed as follows:

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If to Employer:
	 
	 	 	 
	 	 	
Manatron, Inc.

2970 South 9th Street

Kalamazoo, Michigan 49009

Attention: President
	 
	 	 	 	 
	 	
If to Employee:
	 
	 	 	 	 
	 	 	
Paul R. Sylvester
	 
	 	 	___________________	 	 
	 	 	___________________	 	 

                    IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

	 	
/s/ Paul R. Sylvester

	 	
Paul R. Sylvester

	 	
"Employee"

	 	 
	 	 
	 	
MANATRON, INC.

	 	 
	 	 
	 	
By
	
/s/ Randall L. Peat

	 	
 
	
Randall L. Peat

Its Chairman of the Board

7

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