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Tyler CorporationTechnologies, Inc.
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[TYLER CORPORATIONTECHNOLOGIES, INC. LOGO]
April 19, 1999May 7, 2001
Dear Stockholder:
You are cordially invited to attend the annual meeting of stockholders
of Tyler CorporationTechnologies, Inc. to be held on Wednesday, May 19, 1999,Tuesday, June 5, 2001, at the Renaissance
DallasPark
Cities Hilton Hotel, in the Presidente Room, 2222 N. Stemmons Freeway,5954 Luther Lane, Dallas, Texas, commencing at 10:00 a.m.
At this meeting you will be asked to elect sixseven directors for the ensuing year, to consider and vote upon a proposal to change
the name of the Company, and to consider and vote upon a proposal to amend the
Tyler Corporation Stock Option Plan.year.
It is important that your shares be represented at the meeting whether
or not you are personally in attendance, and I urge you to sign, date, and
return the enclosed proxy at your earliest convenience.
Yours very truly,
/s/ LOUIS A.A WATERS
LOUIS A. WATERS
Chairman of the Board
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TYLER CORPORATIONTECHNOLOGIES, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 19, 1999JUNE 5, 2001
To the Stockholders of
TYLER CORPORATION:TECHNOLOGIES, INC.:
Tyler CorporationTechnologies, Inc. ("Tyler" or the "Company") will hold its annual
meeting of stockholders (the "Annual Meeting") at the Renaissance DallasPark Cities Hilton Hotel,
in the Presidente Room, 2222 N.
Stemmons Freeway,5954 Luther Lane, Dallas, Texas, on Wednesday, May 19, 1999,Tuesday, June 5, 2001, at 10:00 a.m., Dallas
time, for the following purposes:
(1) to elect sixseven directors to serve until the next annual meeting of
stockholders or until their respective successors are duly elected and
qualified; (2) to consider and
vote upon a proposal to amend Article First of the
Company's Restated Certificate of Incorporation to change the name of
the Company to "Tyler Technologies, Inc.";
(3) to consider and vote upon a proposal to amend the Tyler Corporation
Stock Option Plan (the "Tyler Option Plan") to increase the number of
shares of Tyler Corporation common stock subject to the Tyler Option
Plan from 3,300,000 to 4,300,000; and
(4)(2) to transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.
Only stockholders of record at the close of business on March 25, 1999April 6, 2001 are
entitled to notice of, and to vote at, the Annual Meeting or any adjournment
thereof. A list of stockholders entitled to vote at the Annual Meeting will be
available for examination at the offices of Tyler Corporation,the Company, 2800 WestW. Mockingbird
Lane, Dallas, Texas 75235, for the ten day period immediately before the Annual
Meeting.
PLEASE DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE. No postage is required if the proxy card is mailed in the
United States. Prompt response by our stockholders will reduce the time and
expense of solicitation.
The enclosed 19982000 Annual Report of Tyler Corporation does not form any part of the proxy
solicitation material.
By Order of the Board of Directors
/s/ DEANIE MOREL
Deanie MorelH. LYNN MOORE, JR.
H. Lynn Moore, Jr.
Vice President, General Counsel, and
Secretary
Dallas, Texas
April 19, 1999May 7, 2001
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THE ANNUAL MEETING
PLACE, DATE, AND TIME
The Annual Meeting will be held at the Renaissance DallasPark Cities Hilton Hotel, in the
Presidente Room, 2222 N. Stemmons Freeway,5954
Luther Lane, Dallas, Texas on Wednesday, May 19,
1999,Tuesday, June 5, 2001, at 10:00 a.m., localDallas time.
MATTERS TO BE CONSIDERED
At the Annual Meeting, the stockholders of Tyler Corporation ("Tyler" or
the "Company") will be asked to consider
and vote upon proposals to (i) elect a board of directors to serve until the
next annual meeting of stockholders or until their successors are duly elected
and qualified; (ii) approve an amendment
to the Company's Restated Certificate of Incorporation (the "Tyler Charter")
changing the name of the Company to "Tyler Technologies, Inc."; (iii) to amend
the Tyler Option Plan increasing the number of shares of Company common stock,
$.01 par value per share (the "Common Stock"), subject to issuance under the
Tyler Option Plan from 3,300,000 shares to 4,300,000; and (iv)(ii) transact such other business as may properly come before
the Annual Meeting or any adjournment thereof.
Proposal One - Election of Directors
At the Annual Meeting, the stockholders of the Company will be asked to
elect a board of sixseven directors. Each of the sixThe nominees for directorsdirector are Ben T. Morris,
Ulrich Otto, G. Stuart Reeves, Glenn A. Smith, Louis A. Waters, John D. Woolf
and John M. Yeaman. Messrs. Waters and Yeaman currently serve on the Company's
Board of Directors (the "Tyler Board"). The nominees for
director for the Tyler Board are Ernest H. Lorch, Frederick R. Meyer, William D.
Oates, C.A. Rundell, Jr., Louis A. Waters, and John M. Yeaman. For more information regarding the
nominees for directorsdirector to the Tyler Board, see "Tyler Management - Directors,
Nominees for Director, and Executive Officers."
Shares represented by proxies returned duly executed will be voted, unless
otherwise specified, in favor of the sixseven nominees for the Tyler Board as
described herein. The proxies cannot be voted for more than sixseven nominees. The
nominees have indicated that they are able and willing to serve as directors. If
any (or all) such persons should be unable to serve, the persons named in the
enclosed proxy will vote the shares covered thereby for such substitute nominee
(or nominees) as the Tyler Board may select. Stockholders may withhold authority
to vote for any nominee by entering the name of such nominee in the space
provided for such purpose on the proxy card.
THE TYLER BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR
EACH OF THE NOMINEES FOR DIRECTOR.
Proposal Two - Amendment to the Tyler Charter Changing the Name of the Company
to "Tyler Technologies, Inc."
At the Annual Meeting, the stockholders will also be asked to consider and
vote upon a proposal to amend the Tyler Charter to change the name of the
Company to "Tyler Technologies, Inc." This amendment was adopted by the Tyler
Board on February 18, 1999, subject to stockholder approval. The purpose of the
amendment is to establish a brand name that is consistent with the Company's
growth strategy of building a nationally integrated information management
services, systems, and outsourcing company serving local governments and other
enterprises.
To accomplish this change in the name of the Company, Article First of the
Tyler Charter must be amended to be and read as follows:
"FIRST. The name of the Corporation is Tyler Technologies, Inc."
THE TYLER BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR
THE AMENDMENT TO THE TYLER CHARTER.
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Proposal Three - Amendment to the Tyler Option Plan
At the Annual Meeting, the stockholders will also be asked to consider and
vote upon a proposal to amend the Tyler Option Plan to increase the number of
shares of Common Stock subject to the Tyler Option Plan from 3,300,000 to
4,300,000. The proposed amendment to the Tyler Option Plan is intended to enable
the Company to provide additional incentives to selected key employees of the
Company and its subsidiaries whose substantial contributions are important to
the continued growth and profitability of the Company's business. Stock options
are designed to strengthen the commitment of those key employees to the Company,
its subsidiaries and its stockholders, to motivate those key employees to
perform their assigned responsibilities diligently and skillfully, and to
attract and retain competent entrepreneurial-type management dedicated to the
long-term growth and profitability of the Company. The Company believes this can
best be accomplished by tying a portion of compensation to appreciation in the
market value of the Company's Common Stock so that the management and key
employees of the Company and its subsidiaries are rewarded under the Tyler
Option Plan only if the value of the stockholders' investment in the Company has
appreciated. The increase in shares subject to the Tyler Option Plan has become
increasingly important as the Company pursues its growth strategy of building a
nationally integrated information management services, systems, and outsourcing
company serving local governments and other enterprises. Copies of the Tyler
Option Plan are available from the Company upon request.
Purpose of the Plan. On March 13, 1990, the Company established the Tyler
Option Plan, pursuant to which the Company could award key employees with
options that would provide additional incentive to such employees whose
substantial contributions are important to the continued growth and
profitability of the Company's business. Initially, the Tyler Option Plan
provided for the grant of options to purchase up to 1,100,000 shares of Common
Stock. The Tyler Option Plan has since been amended on two separate occasions
(effective February 7, 1997 and October 8, 1997) to increase the number of
shares of Common Stock subject to option under the Tyler Option Plan to a
maximum of 3,300,000.
Description of the Plan, as Amended. The Tyler Option Plan is designed to
permit the appropriate administering committee to grant options to key employees
of the Company or its subsidiaries to purchase shares of Common Stock. The Tyler
Option Plan requires that the purchase price under each option will not be less
than 100% of the fair market value of the Common Stock at the time of the grant
of the option. The fair market value per share is the reported closing price of
the Common Stock on the New York Stock Exchange on the date of the grant of the
option, or if no sale of Common Stock shall have been reported on such date of
grant, on the next preceding day or the last day prior to the date of grant when
the sale was reported. The option period may not be more than ten years from the
date the option is granted. Except with respect to options granted to officers
and directors, the Executive Committee of the Tyler Board grants options to
eligible employees, determines the purchase price and option period at the time
the option is granted, and administers and interprets the Tyler Option Plan. The
Compensation Committee of the Tyler Board grants options and administers the
Tyler Option Plan with respect to officers and directors of the Company. Options
may be exercised in annual installments as specified by the administering
committee. All installments that become exercisable are cumulative and may be
exercised at any time after they become exercisable until expiration of the
option. The administering committee may accelerate or terminate any or all
outstanding options in the event the Company sells all or substantially all of
its assets or all or substantially all of the outstanding Common Stock is sold
or exchanged for or converted into securities of another corporation or in the
event of some other material corporate restructuring.
The exercise price of options is paid in cash or by check at the time of
exercise. Shares of Common Stock deliverable upon exercise of the options may be
transferred from treasury or issued from authorized but unissued shares. The
Tyler Option Plan provides that an option agreement may include a provision
granting stock appreciation rights ("SARs") to the optionee. If this provision
is in the option agreement, the administering committee may determine upon the
exercise of an option whether to issue the number of shares of Common Stock
called for by the option agreement after payment of the purchase price or to pay
cash, Common Stock, or a combination of cash and Common Stock to the optionee
pursuant to the SARs provision.
Payment in accordance with the SARs provision would be in an amount equal
to the excess of the fair market value of the shares of Common Stock covered by
the option or portion thereof being exercised over the aggregate option price of
the shares. In addition, the Tyler Option Plan provides that the administering
committee may offer to the holder of an option that does not contain a SARs
provision the right to receive cash, Common Stock, or a combination of cash and
Common Stock in the amount of such excess rather than the number of shares of
Common Stock called for by the option agreement.
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Unless sooner terminated by action of the Tyler Board, the Tyler Option
Plan will terminate on February 6, 2007, and no options may thereafter be
granted under the Tyler Option Plan. The Tyler Option Plan may be amended,
altered, or discontinued by the Tyler Board without the approval of the
stockholders, except that the Tyler Board does not have the power or authority
without stockholder approval to change the employees or class of employees who
are eligible to receive options or the aggregate number of shares that may be
issued under options. The administering committee, however, may make appropriate
adjustments in the number of shares covered by the Tyler Option Plan, the number
of shares subject to outstanding options, and the option prices to reflect any
stock dividend, stock split, share combination, or other recapitalization and,
with respect to outstanding options and option prices, to reflect any merger,
consolidation, reorganization, liquidation or similar transaction of or by the
Company.
Options may be granted under the Tyler Option Plan only to key employees of
the Company or its subsidiaries. Key employees are defined in the Tyler Option
Plan to be those employees whose performance and responsibilities are determined
by the appropriate administering committee to be influential to the success of
the Company and its subsidiaries. Currently approximately 80 employees are
eligible to receive stock options under the Tyler Option Plan. Directors who are
not employees of the Company or one of its subsidiaries are not eligible.
Additional options may be granted to persons to whom options have previously
been granted. There is no restriction in the Tyler Option Plan on the maximum or
minimum number of shares of Common Stock covered by options that may be granted
to any person.
Both incentive stock options and nonqualified stock options may be granted
under the Tyler Option Plan. Incentive stock options are options that meet the
requirements of Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code"), and nonqualified options are options that do not meet the
requirements of Section 422 of the Code. No incentive stock option, however, may
be granted under the Tyler Option Plan to an employee who owns more than 10% of
the outstanding Common Stock unless the option price is at least 110% of the
fair market value of the Common Stock at the date of grant and the option is not
exercisable more than five years after it is granted. There is no limit on the
fair market value of incentive stock options that may be granted to an employee
in any calendar year, but no employee may be granted incentive stock options
that first become exercisable during a calendar year for the purchase of stock
with an aggregate fair market value (determined as of the date of grant of each
option) in excess of $100,000. An incentive stock option (or an installment
thereof) counts against the annual limitation only in the year it first becomes
exercisable.
The administering committee may provide for termination of options granted
under the Tyler Option Plan in case of termination of employment, fraud, or any
other reason the appropriate committee determines. If an option under the Tyler
Option Plan expires or terminates before it has been exercised in full, the
shares of Common Stock allocable to the unexercised portion of that option may
be made the subject of future grants of options under the Tyler Option Plan.
Upon termination of the employment of an optionee holding an option under the
Tyler Option Plan, his option is exercisable for a period of 30 days after
termination, and thereafter his option terminates. Options may not be
transferred other than by will or the laws of descent and distribution and,
during the lifetime of the optionee, may be exercised only by him. If the
optionee dies before the termination of his right to exercise his option, the
legal representatives of his estate may exercise his option provided the option
is exercised prior to the date of expiration of the option period or one year
from the date of the optionee's death, whichever first occurs, and the option
may be exercised only as to those shares the optionee could have purchased under
the option on the date of death or other termination.
Tax Status of Options. All stock options that qualify under the rules of
Section 422 of the Code will be entitled to "incentive stock option" treatment.
To receive incentive stock option treatment, an optionee must not dispose of the
acquired stock within two years after the option is granted or within one year
after the exercise. In addition, the individual must have been an employee of
the Company or one of its subsidiaries for the entire time from the date of
granting of the option until three months (one year if the employee is disabled)
before the date of the exercise. The requirement that the individual be an
employee and the two-year and one-year holding periods are waived in the case of
death of the employee. If all such requirements are met, no tax will be imposed
upon exercise of the incentive stock option, and any gain upon sale of the stock
will be entitled to capital gain treatment. The
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employee's gain on exercise (the excess of the fair market value at the time of
exercise over the exercise price) of an incentive stock option is a tax
preference item and, accordingly, is included in the computation of alternative
minimum taxable income.
If an employee does not meet the two-year and one-year holding requirement
(a "disqualifying disposition"), but does meet all other requirements, tax will
be imposed at the time of sale of the stock. In such event, the employee's gain
on exercise will be treated as ordinary income rather than capital gain and the
Company will be entitled to a corresponding deduction at the time of sale. Any
remaining gain on sale will be short-term, mid-term or long-term capital gain,
depending on the holding period of the stock. If the amount realized on the
disqualifying distribution is less than the value at the date of exercise, the
amount includable in gross income, and the amount deductible by the Company,
will equal the excess of the amount realized on the sale or exchange over the
exercise price.
An optionee, upon exercise of a nonqualified stock option that does not
qualify as an incentive stock option, recognizes ordinary income in an amount
equal to the gain on exercise. If the optionee receives cash or stock upon the
exercise of an SAR, instead of paying the exercise price for the shares of
Common Stock called for by his option agreement, the amount of cash or value of
stock he receives is ordinary income to him. The exercise of a nonqualified
stock option or SAR entitles the Company to a tax deduction in the same amount
as is includable in the income of the optionee for the year in which the
exercise occurred. Any gain or loss realized by an optionee on subsequent
disposition of shares generally is a capital gain or loss and does not result in
any tax deduction to the Company. The optionee has no taxable income, and the
Company is not entitled to a deduction, at the time of the grant of an option.
THE FOREGOING SUMMARY OF THE EFFECT OF THE FEDERAL INCOME TAX UPON
PARTICIPANTS IN THE TYLER OPTION PLAN DOES NOT PURPORT TO BE COMPLETE, AND IT IS
RECOMMENDED THAT THE PARTICIPANTS CONSULT THEIR OWN TAX ADVISORS FOR COUNSELING.
MOREOVER, THE FOREGOING SUMMARY IS BASED UPON PRESENT FEDERAL INCOME TAX LAWS
AND ARE SUBJECT TO CHANGE. THE TAX TREATMENT UNDER FOREIGN, STATE, OR LOCAL LAW
IS NOT COVERED IN THIS SUMMARY.
THE TYLER BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR
THE AMENDMENT TO THE TYLER STOCK OPTION PLAN.
RECORD DATE AND VOTING
Only holders of record of Common Stock on March 25, 1999April 6, 2001 (the "Record Date")
are entitled to notice of, and to vote at, the Annual Meeting. There were issued
and outstanding 35,542,46447,179,371 shares of Common Stock on the Record Date. Each
holder of Common Stock will be entitled to one vote, in person or by proxy, for
each share of Common Stock standing in his or her name on the books of Tyler on
the Record Date on any matter submitted to a vote of the Company's stockholders.
The presence, in person or by proxy, of holders of record of a majority of the
shares entitled to vote constitutes a quorum for action at the Annual Meeting.
Abstentions and broker nonvotes are counted for purposes of determining the
presence or absence of a quorum for transaction of business. Abstentions are
counted in tabulations of the votes cast on proposals presented to the
stockholders to determine total number of votes cast. Abstentions are not
counted as votes for or against any proposal. Broker nonvotes are not counted as
votes cast for purposes of determining whether a proposal has been approved.
VOTE REQUIRED
The affirmative vote of the holders of shares of Common Stock, having a
plurality of the voting power of the Company, in person or by proxy, is required
to elect directors.
The affirmative vote of the holders of shares of Common
Stock, having a majority of the voting power of the total issued and outstanding
Common Stock (regardless of the number of shares actually voted at the Annual
Meeting), in person or by proxy, is required to approve the proposed amendment
to the Tyler Charter. The affirmative vote of the holders of shares of Common
Stock, having a majority of the voting power of the shares actually voted at the
Annual Meeting, is required to approve the amendment to the Tyler Option Plan.
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PROXY SOLICITATION, REVOCATION, AND EXPENSE
The accompanying proxy is being solicited on behalf of the Tyler Board. All
proxies that are properly completed, signed, and returned prior to the Annual
Meeting will be voted as indicated on the proxy. If the enclosed proxy is signed
and returned, it may, nevertheless, be revoked at any time prior to the voting
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thereof at the pleasure of the stockholder signing it, either by (i) filing a
written notice of revocation received by the person or persons named therein,
(ii) the stockholder attending the Annual Meeting and voting the shares covered
thereby in person, or (iii) delivering another duly executed proxy dated
subsequent to the date thereof to the addressee named in the enclosed proxy.
Shares represented by duly executed proxies in the accompanying form will
be voted in accordance with the instructions indicated on such proxies, and, if
no such instructions are indicated thereon, will be voted in favor of each of
the proposals considered and of each of the nominees for director named therein.
The Company will bear the expense of preparing, printing, and mailing the
proxy solicitation material and the proxy. In addition to use of the mail,
proxies may be solicited by personal interview, telephone, and telegram by
directors, officers, and employees of the Company. The Company may also engage
the services of a proxy solicitation firm to assist in the solicitation of
proxies. The Company estimates that the fee of any such firm will not exceed
$5,000 plus reimbursement of reasonable out-of-pocket expenses. Arrangements may
also be made with brokerage houses and other custodians, nominees, and
fiduciaries for the forwarding of solicitation material to the beneficial owners
of stock held of record by such persons, and the Company may reimburse them for
reasonable out-of-pocket expenses incurred by them in connection therewith.
TYLER MANAGEMENT
DIRECTORS, NOMINEES FOR DIRECTOR, AND EXECUTIVE OFFICERS
The following is a brief description of the directorseach director, nominee for
director, and executive officersofficer of the Company. Directors hold office until the
next annual meeting of stockholders or until their successors are elected and
qualified. Executive officers are elected by the Tyler Board at its annual
meeting and hold office until its next annual meeting.meeting or until their successors
are elected and qualified.
Directors, Nominees for Director, and Executive Officers of Tyler
Name / Age Present Position Served Since
- ---------- ---------------- ------------
Louis A. Waters, 62 Co-Chief Executive Officer 2000
Chairman of the Board 1997
John M. Yeaman, 58 President and Chief60 Co-Chief Executive Officer 2000
President 1998
Director 1999
Ernest H. Lorch, 68 Director 1993
William D. Oates, 60 Director 1998
Ben T. Morris, 55 Nominee for Director --
Ulrich Otto, 51 Nominee for Director --
G. Stuart Reeves, 61 Nominee for Director --
Glenn A. Smith, 47 Nominee for Director --
John D. Woolf, 56 Nominee for Director --
Theodore L. Bathurst, 4951 Vice President and Chief Financial Officer 1998
Brian B. Berry, 43K. Miller, 42 Vice President - Corporate Development 1998
Brian K. Miller, 40Finance 1999
Treasurer 1997
H. Lynn Moore, Jr., 33 Vice President and Chief Accounting Officer 1997
Louis A. Waters, 60 Chairman of the Board 1997
William D. Oates, 59 Chairman of the Executive Committee and DirectorSecretary 2000
General Counsel 1998
C.A. Rundell, Jr., 67 Director 1966
Ernest H. Lorch, 66 Director 1993
Frederick R. Meyer, 71 Director 1967
Business Experience of Directors, Nominees for Director, and Executive Officers
Louis A. Waters has been Chairman of the Board of the Company since October
1997, after being elected director of the Company in August 1997. In March 2000,
Mr. Waters was also elected Co-Chief Executive Officer of the Company. Mr.
Waters is currently a member of the Executive Committee and the Compensation
Committee of the Tyler Board. Mr. Waters was the founding Chairman of the Board
and Chief Executive Officer of Browning-Ferris Industries, Inc. ("BFI"). He
recently directed BFI's international activities, serving as Chairman and Chief
Executive Officer of BFI International, Inc. from
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1991 to March 1997, at which time he retired from full-time employment with BFI.
From 1988 to March 1997, Mr. Waters was Chairman of the BFI Finance Committee,
and from 1980 through 1988, he was Chairman of the BFI Executive Committee. Mr.
Waters also served as Chairman of the Board and Chief Executive Officer of BFI
from 1969 through 1980. Mr. Waters is also a director of Team, Inc.
John M. Yeaman is President and ChiefCo-Chief Executive Officer of the Company,
a position he has held since December 1998.March 2000. From SeptemberDecember 1998 until December
1998,March 2000,
Mr. Yeaman served aswas President and Chief Executive Officer of Business
Resources Corporation, a subsidiary of the Company. Mr. Yeaman
was appointedelected to the Tyler Board in February 1999. Mr. Yeaman hadwas previously been
employed by Electronic Data Systems Corporation ("EDS"), where he served as the
director of a worldwide Strategic Support Unit managing $2 billion in real
estate assets. Prior to that position, Mr. Yeaman had been associated with EDS
as a service provider since 1980. Mr. Yeaman began his career with Eastman Kodak
Company. Mr. Yeaman also serves on the Board of Directors of Eagle NationalPark Cities Bank in
Dallas.
6Dallas, Texas.
Ernest H. Lorch was elected to the Tyler Board in October 1993, and he
currently serves as a member of the Compensation Committee and as Chairman of
the Audit Committee of the Tyler Board. Mr. Lorch is counsel to the law firm of
Whitman Breed Abbott & Morgan LLP, a position he has held since December 1992.
Mr. Lorch retired as Chairman of the Board and Chief Executive Officer of
Dyson-Kissner-Moran Corporation ("DKM"), a private investment company, in
December 1992, a position he held since January 1990. Mr. Lorch was President
and Chief Operating Officer of DKM from June 1984 to January 1990. He was also
Senior Chairman of the Board of Varlen Corporation until 1999 when Varlen was
acquired by a third party.
William D. Oates has been a director of the Company since 1998 and is a
member of the Executive Committee of the Tyler Board. Since August 2000, Mr.
Oates has served as Chairman of the Board, President, and Chief Executive
Officer of eiStream, Inc., a holding company with subsidiaries that are engaged
in the business of providing software systems and solutions in the areas of
document management, imaging, and workflow. Mr. Oates was appointed director of
the Company in February 1998 following the Company's acquisition of Business
Resources Corporation, a former affiliate of the Company. Mr. Oates served as
President of Resources from 1993 until September 1998. From 1987 through 1994,
Mr. Oates acquired or formed and served as President or principal executive
officer of American Title Company, Austin Title Company, Commercial Abstract and
Title Company, and other title insurance agencies in Texas, as well as a title
insurance underwriting company.
Ben T. Morris has been nominated by the Tyler Board to serve as a director
of the Company in 2001. In 1987, Mr. Morris co-founded Sanders Morris Harris
("SMH"), a full service investment banking, money management, and principal
investor organization based in Houston, Texas, where he has served as its
President and Chief Executive Officer since 1996, and from 1987 to 1996, he
served as its Executive Vice President & Director of Investment Banking. From
1980 to 1986, Mr. Morris served as Chief Operating Officer of Tatham
Corporation, a corporation principally engaged in the transportation and
marketing of natural gas. From 1973 to 1980, Mr. Morris served in various
executive capacities, including President and Chief Financial Officer, of Mid
American Oil and Gas Inc., a company engaged in the business of oil and gas
exploration and transportation. Prior to 1973, Mr. Morris was an accountant with
Price Waterhouse & Co. Mr. Morris also serves as a director of Pinnacle Global
Group, the parent corporation of SMH, Capital Title Group, and American Equity
Investment Life Holding Company. Mr. Morris is a certified public accountant.
Ulrich Otto has been nominated by the Tyler Board to serve as a director of
the Company in 2001. Since 1997, Mr. Otto has been Chairman of the Board and
Chief Executive Officer of Otto Holding, B.V. ("Otto Holding"), an international
diversified holding company based in the Netherlands with subsidiaries devoted
to the waste container systems business, which maintain an active presence in
over 30 countries; venture capital transactions, including investments in
software companies, with offices located in Paris, France, Tel Aviv, Israel, and
Singapore; and corporate finance, also with offices in Paris, France and
Singapore. Since 1990, Mr. Otto has also served as Chairman of the Board and
Chief Executive Officer of Otto Holding International B.V., also an
international diversified holding company based in Germany with similar business
lines as Otto Holding. Since 1980, Mr. Otto has served as Managing Partner of
Gebr. Otto KG, Koln, Germany. During the past fifteen years, Mr. Otto has also
held positions with various international councils, associations, supervisory
boards, and management boards, some of which include Vice Chairman of the
Supervisory Board of Interseroh AG, Koln, Germany, from 1993 to 2000; Vice
Chairman of the Bundesverband der Deutschen Entsorgungswirtchaft e.V., Koln,
Germany, from 1992 to 1996 and in which he was a member of the Managing Board of
Directors from 1996 to 1999; member of the Board of Directors of BFI from 1994
to 1997; Vice Chairman of the Federation Europeenne des Activites du Dechet,
Brussells, Belgium from 1996 to 1998; member of the General Assembly and Foreign
Trade Committee of the Chamber of Industry and Commerce, Koln, Germany, from
1992 to 1999 and in which he was Chairman from 1996 to 1999; member of the
Central and Management Committee of the Chamber of Industry and Commerce, Koln,
Germany, from 1996 to 1999; member of the Council of INSEAD, Hamburg, Germany,
since 1995; and member of the Land Advisory Board Northrhine-Westfalia of
Commerzbank AG, Dusseldorf, Germany, since 1985. Mr. Otto also holds a law
degree.
4
97
G. Stuart Reeves has been nominated by the Tyler Board to serve as a
director of the Company in 2001. From 1967 to 1999, Mr. Reeves worked for
Electronic Data Systems Corporation ("EDS"), a professional services company
that offers its clients a portfolio of related systems worldwide within the
broad categories of systems and technology services, business process
management, management consulting, and electronic business. During his 32 years
of service for EDS, Mr. Reeves held a variety of positions, including Executive
Vice President, North and South America, from 1996 to 1999; Senior Vice
President, Europe, Middle East, and Africa, from 1990 to 1996; Senior Vice
President, Government Services Group, from 1988 to 1990; Corporate Vice
President, Human Resources, from 1984 to 1988; Corporate Vice President,
Financial Services Division, from 1979 to 1984; Project Sales Team Manager, from
1974 to 1979; and Systems Engineer and Sales Executive, from 1967 to 1974. Mr.
Reeves also served on the EDS Board of Directors from 1988 until 1996. Mr.
Reeves retired from EDS in 1999. Mr. Reeves also serves on the Board of
Governors of Oklahoma State University Foundation and the Board of Directors of
Park Cities Bank.
Glenn A. Smith has been nominated by the Tyler Board to serve as a director
of the Company in 2001. Mr. Smith currently serves as President of The Software
Group, Inc. ("TSG"), a principal subsidiary of the Company that was co-founded
by Mr. Smith in 1981 and acquired by the Company in 1998. TSG develops and
markets a wide range of software products and related services for county
governments, with a focus on integrated judicial management and law enforcement
systems. Prior to founding TSG, Mr. Smith was employed at Distributed Data
Systems of Raleigh, North Carolina, in a software development project management
capacity and, prior to that, at Texas Instruments Incorporated in Dallas, Texas
as a software developer.
John D. Woolf has been nominated by the Tyler Board to serve as a director
of the Company in 2001. Since August 2000, Mr. Woolf has served as a director
and as Executive Vice President and Chief Financial Officer of eiStream, Inc.,
a holding company with subsidiaries that are engaged in the business of
providing software systems and solutions in the areas of document management,
imaging, and workflow. From December 1999 until August 2000, Mr. Woolf served
as Senior Vice President -- Administration of the Company. From 1994 until
December 2000, Mr. Woolf also served as Executive Vice President and Chief
Financial Officer of Business Resources Corporation, a former affiliate of the
Company. From 1987 to 1994, Mr. Woolf served as a director and as Executive
Vice President and Chief Financial Officer of American Title. Mr. Woolf is a
certified public accountant.
Theodore L. Bathurst has been Vice President and Chief Financial Officer of
the Company since October 1998. Mr. Bathurst was previously an audit partner in
the Dallas office of KPMG Peat Marwick LLP ("KPMG"), where he served as
engagement partner on the accounts of a wide variety of information, technology, communications,
and high technology companies. Mr. Bathurst was also designated by KPMG as a
Securities and Exchange Commission ("SEC") partner responsible for the review of
filings made by public companies with the SEC. Mr. Bathurst, a certified public
accountant, serves as a board member of both the Dallas Chapter
and the Texas Society of CPA's.
Brian B. Berry was appointed Vice President-Corporate Development of the
Company in August 1998. Mr. Berry is one of the founders of The Software Group
("TSG") and has served as an officer and director of TSG with various
responsibilities since its inception in 1981. He is currently Vice President and
Treasurer of TSG.CPAs.
Brian K. Miller has been Vice President - Finance and Treasurer of the
Company since May 1999 and was Vice President - Chief Accounting Officer and
Treasurer of the Company sincefrom December 1997.1997 to April 1999. From June 1986
through December 1997, Mr. Miller held various senior financial management
positions at Metro Airlines, Inc. ("Metro"), a regional airline holding company.
Mr. Miller was Chief Financial Officer of Metro from May 1991 to December 1997
and also held the office of President of Metro from January 1993 to December
1997. From March 1994 to November 1995, Mr. Miller also held the position of
Vice President and Chief Financial Officer of Lone Star Airlines, a regional
airline. Mr. Miller is a certified public accountant.
Louis A. Waters was elected Chairman of the Board of the Company in October
1997 after being appointed director of the Company in August 1997. Mr. Waters is
a member of the Executive Committee, the Audit Committee, and the Compensation
Committee of the Tyler Board. Mr. Waters was the founding Chairman of the Board
and Chief Executive Officer of Browning-Ferris Industries, Inc. ("BFI"). He
recently directed BFI's international activities, serving as Chairman and Chief
Executive Officer of BFI International, Inc. from 1991 to March 1997, at which
time he retired from full-time employment with BFI. From 1988 to March 1997, Mr.
Waters was Chairman of the BFI Finance Committee, and from 1980 through 1988, he
was Chairman of the BFI Executive Committee. Mr. Waters also served as Chairman
of the Board and Chief Executive Officer of BFI from 1969 through 1980. Mr.
Waters is also a director of Team, Inc.
William D. Oates has been Chairman of the Board of Business Resources
Corporation ("Resources") since its inception in 1993 and President of Resources
from 1993 until September 1998 and from December 1998 until the present. From
1987 through 1994, Mr. Oates acquired or formed and served as President or a
principal executive officer of American Title Company of Dallas, Austin Title
Company, Commercial Abstract and Title Company, and other title insurance
agencies in Texas, as well as a title insurance underwriting company. Mr. Oates
held these companies through American Title Company of Dallas, of which he was
the principal owner and President until his sale of the company in November
1994. Mr. Oates was appointed director of the Company in February 1998 following
the Company's acquisition of Resources and is Chairman of the Executive
Committee of the Tyler Board.
C. A. Rundell,H. Lynn Moore, Jr. has been a directorGeneral Counsel of the Company since 1966September
1998 and is a
member of the Executive Committee of the Tyler Board. Mr. Rundell served ashas been Vice President and Chief Executive OfficerSecretary of the Company fromsince October
19972000. From August 1992 to DecemberAugust 1998, Chairman of the Board from October 1996 to October 1997, and as
Interim Chief Executive Officer of the Company from October 1996 to March 1997.
Mr. Rundell has also owned and operated Rundell Enterprises, a sole
proprietorship engaged in providing acquisition and financial consulting
services to various business enterprises, since June 1988 and as Chairman of the
Board of NCI Building Systems, Inc. since April 1989. He is also a director of
Dain Rauscher Corporation, NCI Building Systems, Inc., Tandy Brands Accessories,
Inc., and Integrated Security Systems, Inc.
Ernest H. Lorch is counsel toMoore was associated with the law
firm of Whitman, Breed, AbbottHughes & Morgan, a positionLuce, L.L.P. in Dallas, Texas where he has held since December 1992. Mr. Lorch retired as
Chairman of the Boardrepresented numerous
publicly-held and Chief Executive Officer of Dyson-Kissner-Moran
Corporation ("DKM"), a private investment company,privately-owned entities in December 1992, a position
he held since January 1990. Mr. Lorch was Presidentvarious corporate and Chief Operating Officer
of DKM from June 1984 to January 1990. He is also Senior Chairman of the Board
of Varlen Corporation. Mr. Lorch was elected to the Tyler Board in October 1993,securities,
finance, litigation, and he serves as a member of the Compensation Committee and the Audit Committee
of the Tyler Board.
7
10
Frederick R. Meyer has been Chairman of the Board of Aladdin Industries,
Inc., a diversified company principally engaged in the manufacture of children's
lunch kits, thermosware, insulated food delivery systems, andother legal related products
since July 1985. Mr. Meyer has also been President and Chief Executive Officer
of Aladdin Industries, Inc. from October 1995 to present and from May 1987 to
September 1994. Mr. Meyer served as President of Tyler Corporation from August
1983 through December 1986. Mr. Meyer has been a director of the Company since
1967 and is a member of the Compensation Committee of the Tyler Board. He is
also a director of Arvin Industries, Inc., Palm Harbor Homes, Inc., and
Southwest Securities Group, Inc.matters.
COMMITTEES AND MEETINGS OF THE TYLER BOARD
The business of the Company is managed under the Tyler Board. The Tyler
Board meets periodically during the fiscal year to review significant
developments affecting the Company and to act on matters requiring Tyler Board
approval. The Tyler Board held four formal meetingsmet eleven times during 1998.2000. Each member of the Tyler
Board participated in at least 75% of all Tyler Board and committee meetings
held during 19982000 that he served as a director and/or committee member.
The Tyler Board has established an Audit Committee, Compensation Committee,
and Executive Committee to devote attention to specific subjects and to assist
the Tyler Board in the discharge of its responsibilities. The functions of these
committees isare described below. The Company has no nominating
5
8
committee; instead, the entire Tyler Board is responsible for selecting nominees
for election as directors.directors and executive officers.
Audit Committee. During 1998,2000, the Audit Committee was comprised of Louis A.
Waters and Ernest
H. Lorch.Lorch and Frederick R. Meyer, each of whom is "independent" as defined by the
New York Stock Exchange Listing Standards. The Audit Committee's duties include
considering the independence of the independent auditors before the Company
engages them; reviewing with the independent auditors the fee, scope, and timing
of the audit; reviewing the completed audit with the independent auditors
regarding any significant accounting adjustments, recommendations for improving
internal controls, appropriateness of accounting policies, appropriateness of
accounting and disclosure decisions with respect to significant unusual
transactions or material obligations and significant findings during the audit;
reviewing the Company's financial statements and related regulatory filings with
the independent auditors; and meeting periodically with the Company's management
to discuss internal accounting and financial controls. The Audit Committee met
oncesix times during 1998.2000. On May 11, 2000, the Tyler Board adopted the Tyler Audit
Committee Charter, which is attached hereto as Appendix A. Immediately following
the Annual Meeting, the Tyler Board intends to appoint a minimum of three of its
"independent" directors to the Audit Committee for 2001. For more information on
the Audit Committee's activities during 2000, see "Report of the Audit
Committee."
Compensation Committee. During 1998,2000, the Compensation Committee was
comprised of Louis A. Waters, Ernest H. Lorch and Frederick R. Meyer.Louis A. Waters. The Compensation Committee has
final authority on all executive compensation and periodically reviews
compensation, employee benefit plans, and other benefits paid to or provided for
officers and directors of the Company. The Compensation Committee also approves
annual salaries and bonuses for Company officers to ensure that the recommended
salaries and bonuses are not unreasonable. The Compensation Committee met once
during 1998.2000.
Executive Committee. During 1998,2000, the Executive Committee was comprised of
Louis A. Waters, William D. Oates and(Chairman), C.A. Rundell, Jr., and Louis A. Waters. The
Executive Committee has authority, as delegated by the Tyler Board, to act for
the Tyler Board, but may not commit the Company to an expenditure in excess of
$10,000,000 without full Tyler Board approval. The Executive Committee meets
periodically throughout the year.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors, executive officers, and holders of more than 10% of the
Company's Common Stock to file with the Securities and Exchange Commission
("SEC")SEC and New York Stock Exchange initial
reports of ownership and reports of changes in ownership of the Company's Common
Stock. Such persons are required by SEC regulations to furnish the Company with
copies of all Section 16(a) reports they file with the SEC. Based solely on the
Company's review of the copies of such forms it has received during the year,
the Company believes that during the year ended December 31, 1998,2000, all the
Company's directors, officers, and holders of more than 10% of the Company's
Common Stock complied with all Section 16(a) filing requirements.
86
119
SECURITY OWNERSHIP OF DIRECTORS, AND EXECUTIVE OFFICERS, AND PRINCIPAL STOCKHOLDERS
The following table sets forth certain information with respect to sharesconcerning the
beneficial ownership of the Company's Common Stock as of March 25, 1999 beneficially ownedApril 6, 2001 by (i)
each of the "Named Executive Officers" (as defined in Regulation S-K of the
Securities Act of 1933, as amended), (ii) each director or nominee for director
of Tyler,the Company, (iii) each beneficial owner of more than 5% of the outstanding
shares of Common Stock, and (iv) all executive officers and directors of Tylerthe
Company as a group.
Name and Address of Beneficial OwnerOwner(1) Amount and Nature of Ownership Percent of Class (1)(2)(3)
- --------------------------------------------------------------------------- ------------------------------ -----------------------
William D. Oates 8,065,000(3) 22.7%
2800 W. Mockingbird Lane6,220,374(4) 13.18%
2911 Turtle Creek Blvd., Suite 1100
Dallas, Texas 7523575219
Ulrich Otto 3,866,378(5) 8.20%
Louis A. Waters 2,509,900(4) 6.7%
520 Post Oak Boulevard, Suite 850
Houston, Texas 77027
Richmond Partners, Ltd. 2,000,000(5) 5.3%
10375 Richmond Ave., Suite 1615
Houston, Texas 77042
Brian B. Berry 795,774(6) 2.2%
2800 W. Mockingbird Lane
Dallas, Texas 752352,509,900(6) 5.10%
Glenn A. Smith 927,571 1.97%
John M. Yeaman 416,550(7) 1.2%
2800 W. Mockingbird Lane
Dallas, Texas 75235
C.A. Rundell, Jr. 389,045(8) 1.1%
2121 San Jacinto, Suite 2900
Dallas, Texas 75201
Frederick R. Meyer 201,249(9)548,850(7) 1.16%
Ben T. Morris 389,980(8) *
2121 San Jacinto, Suite 895
Dallas, Texas 75201John P. Harvell 220,000 *
John D. Woolf 150,000 *
Theodore L. Bathurst 125,000(9) *
H. Lynn Moore, Jr 76,000(10) *
G. Stuart Reeves 65,000 *
Ernest H. Lorch 50,00065,000(11) *
c/o Whitman, Breed, Abbott & Morgan
200 Park Avenue
New York, New York 10066
Brian K. Miller 10,000(10)56,000(12) *
2800 W. Mockingbird Lane
Dallas, Texas 75235
Theodore L. Bathurst --- ---
2800 W. Mockingbird Lane
Dallas, Texas 75235
All directorsDirectors, nominees, and executive officers as a group (9(13 persons) 12,437,518(11) 33.0%15,220,053(13) 30.53%
- ---------------------------------------
* Less than one percent of the outstanding Common Stock
9
12
(1) Unless otherwise noted herein, the address of each beneficial owner is
the address of the Company's principal place of business located at
2800 W. Mockingbird Lane, Dallas, Texas 75235.
(2) Reported in accordance with the beneficial ownership rules of the SEC.
Unless otherwise noted, the stockholders listed in the table have both
sole voting power and sole investment power with respect to such
shares, subject to community property laws where applicable and the
information contained in the other footnotes to the table.
(2)(3) Based on 35,542,46447,179,371 shares of Common Stock issued and outstanding at
March 25,
1999.April 6, 2001. Each owner's percentage is calculated by dividing (a)
the number of shares beneficially held by such owner by (b) the sum of
35,542,464 and(i) 47,179,371 plus (ii) the number of shares such owner has the right
to acquire within sixty days.
(3)(4) Includes beneficial ownership of 1,900,0001,600,000 shares of Common Stock over
which Mr. Oates has sole voting power, but no investment power,
pursuant to collateral pledge agreements securing payment for the sale
of such shares.
(4)(5) Includes beneficial ownership of 3,383,600 shares of Common Stock held
in various investment entities in which Mr. Otto has sole voting and
investment power.
7
10
(6) Includes beneficial ownership of 2,000,000 shares of Common Stock
subject to a warrant issued to Richmond Partners, Ltd. at an exercise
price of $2.50 per share. Mr. Waters is the sole general partner of
Richmond and deemed the beneficial owner of these shares.
(5)(7) Includes beneficial ownership of 2,000,000125,000 shares of Common Stock
issuable upon the exercise of stock options granted pursuant to the
Tyler Technologies, Inc. Stock Option Plan (the "Tyler Option Plan")
that are exercisable within sixty days and 7,300 shares of Common Stock
owned by a foundation in which Mr. Yeaman is deemed to have shared
voting power.
(8) Includes beneficial ownership of 333,380 shares of Common Stock subject
to a warrant issued to Richmond Partners, Ltd. at an exercise
priceSMH, of $2.50 per share.
(6)which Mr. Morris is President and Chief
Executive Officer and is therefore deemed to have investment power over
the shares.
(9) Includes beneficial ownership of 80,000 shares of Common Stock held in
a foundation in which Mr. Berry is deemed to have sole voting power.
(7) Includes beneficial ownership of 200,000 shares of Common Stock held by
a third party of which Mr. Yeaman has an option to purchase that is
exercisable within sixty days.
(8) Includes beneficial ownership of 237,966115,000 shares of Common Stock
issuable upon the exercise of stock options granted pursuant to the
Tyler Option Plan that are exercisable within 60 days and beneficial
ownership of 20,000 shares of Common Stock held in a foundation in
which Mr. Rundell has sole voting power.
(9) Includes beneficial ownership of 60,000 shares of Common Stock held in
an individual retirement account in which Mr. Meyer has sole voting
power.sixty days.
(10) Includes beneficial ownership of 10,00026,000 shares of Common Stock issuable
upon the exercise of stock options granted pursuant to the Tyler Option
Plan that are exercisable within sixty days.
(11) Includes 2,000,000beneficial ownership of 15,000 shares of Common Stock issuable
upon the exercise of stock options granted pursuant to the Tyler Option
Plan that are exercisable within sixty days.
(12) Includes beneficial ownership of 55,000 shares of Common Stock issuable
upon the exercise of stock options granted pursuant to the Tyler Option
Plan that are exercisable within sixty days.
(13) Includes 2,333,380 shares of Common Stock subject to a warrant, 247,966warrants, 336,000
shares of Common Stock that are issuable upon the exercise of stock
options granted pursuant to the Tyler Option Plan that are exercisable
within sixty days, and 200,0004,990,900 shares of Common Stock that may be
acquired within sixty days from a third party beneficial owner.
10held in
investment entities, foundations, and other arrangements in which named
persons have sole or shared voting and/or investment power.
8
1311
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth certain information regarding compensation
paid for all services rendered to the Company and its subsidiaries in all
capacities during fiscal years 1998, 1997,2000, 1999, and 19961998 by the Tyler ChiefCompany's "Named
Executive Officer andOfficers" (as defined in Regulation S-K of the four other most highly compensated executive officersSecurities Act of Tyler1933,
as amended) whose total annual salary and bonus earned during fiscal years 1998, 1997, and
1996year 2000
exceeded $100,000.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM COMPENSATION AWARDS
----------------------------------------------------------------------------------- -----------------------------
OTHER SECURITIES
ANNUAL RESTRICTED UNDERLYING
NAME AND PRINCIPAL COMPEN- STOCK OPTIONS/ ALL OTHER
POSITION YEAR SALARY BONUS SATION(1) AWARDS SARS COMPENSATION(2)COMPENSATION
- -------------------- ------------------------- ---- ---------- ---------- ---------- --------------------- ---------- ------------ ---------------
Louis A. Waters 2000 $ 233,077(2) $ -- $ -- $ -- $ -- $ --
Chairman and Co- 1999 -- -- -- -- -- --
Chief Executive 1998 -- -- -- -- -- --
Officer
John M. Yeaman 1998 $ 76,302(3) $ 100,000 250,0002000 225,000 -- -- -- -- --
President and Chief1999 225,000 200,000 -- -- 25,000 --
Co-Chief Executive 1998 76,302(3) 100,000 -- -- 250,000 --
Officer of the
Company
Theodore L. Bathurst 2000 252,400 -- -- -- -- --
Vice President and 1999 252,400 125,000 -- -- 15,000 --
Chief Financial 1998 57,841(4) 40,000 -- -- 250,000 --
Officer
John P. Harvell 2000 180,000 150,000(6) -- 168,750(7) -- --
Vice President and- 1999 156,923 90,000 -- -- 15,000 --
Chief Financial
Officer of the
Company
Brian B. BerryTechnology 1998 172,945(5) 100,000 $1,631120,000 50,000 -- -- -- --
Officer(5)
H. Lynn Moore, Jr 2000 120,000 80,000 -- -- -- --
Vice President, of
TSG1999 120,000 90,000 -- -- 10,000 --
General Counsel, 1998 40,000(3) 30,000 -- -- 40,000 --
and Vice
President of
Corporate
Development of
the Company
William D. Oates 1998 157,083(6)
President
and Chief
Executive Officer
of
ResourcesSecretary
Brian K. Miller 2000 162,400 8,500 -- -- -- --
Vice President - 1999 149,908 81,200 -- -- 25,000 --
Finance 1998 140,000 35,000 Vice President 1997 10,795 50,000
and
Chief Accounting
Officer of the
Company
C. A. Rundell, Jr. 1998 210,489
Former President 1997 80,077 $ 461,250(8) 350,000
and Chief 1996 0 100,000
Executive Officer
of the Company(7)
- ---------------- -- -- --
- ----------
(1) Certain of the Company's executive officers receive personal benefits in
addition to salary. The aggregate amount of the personal benefits, however,
does not exceed the lesser of $50,000 or 10% of the total annual salary for
the named executive officer and therefore has been omitted.
(2) Employer contributions to a Profit-Sharing Plan.Mr. Waters was elected Co-Chief Executive Officer in March 2000.
(3) Salary since beginning employmentEmployment commenced in September 1998.
Mr. Yeaman has served
as President and Chief Executive Officer since December 1998.
(4) Salary since beginning employmentEmployment commenced in October 1998.
(5) Salary since the acquisition of TSG on February 19, 1998.
11
14
(6) Salary since the acquisition of Resources on February 19, 1998.
(7) Mr. Rundell served as President and Chief Executive Officer ofResigned from the Company from October 1997 toeffective December 1998 at an annual salary of $210,000. From
October 1996 to October 1997, Mr. Rundell served as Chairman of the Board,
and from October 1996 to March 1997, he served as Interim Chief Executive
Officer of the Company. Mr. Rundell elected not to accept remuneration for
his services from October 1996 to March 1997.
(8) On October 8, 1997, Mr. Rundell was granted 125,000 shares of the Company's
Common Stock with a market value of $3.69 per share, all of which vested on
March 26, 19992000 upon the consummation of the
sale of Forest City Auto Parts
Company. See "Employment Agreements, Non-Competition Agreements,the Company's operating unit Business Resources Corporation ("BRC")
to Affiliated Computer Services, Inc. ("ACS").
(6) Bonus compensation relates to services provided to the Company during 2000
and Agreementsfor services provided in connection with Named Executive Officers."
OPTION/SAR GRANTS IN 1998
The following table shows stock option grantsthe sale of BRC to ACS in
December 2000 for $71,000,000.
9
12
(7) Restricted shares of Company Common Stock granted in December 2000 for
services provided to the Company during 19982000 and for services provided in
connection with the sale of BRC to any named executive
officer:
NUMBER OF PERCENT OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE GRANT DATE
OPTION/SARS EMPLOYEES IN PRICE PER EXPIRATION PRESENT
NAME GRANTED FISCAL YEAR SHARE DATE VALUE $(1)
- ---------------------------- -------------- ----------------- ----------- ---------- ------------
John M. Yeaman(2) .......... 250,000 18% 5.44 10/07/08 $ 3.76
C. A. Rundell, Jr .......... -- -- -- -- --
Theodore L. Bathurst(3) .... 250,000 18% 6.44 10/06/08 $ 4.43
Brian B. Berry ............. -- -- -- -- --
William D. Oates ........... -- -- -- -- --
Brian K. Miller ............ -- -- -- -- --
- ----------------------
(1) The present value was determined using the Black-Scholes option-pricing
model, assuming an expected life of seven years and a dividend yield of $0.
In addition, expected volatility and risk-free interest rates, were assumed
to be, respectively, as follows: Mr. Yeaman - .68 and 4.7%; and Mr.
Bathurst - .68 and 4.5%.
(2) Includes 91,950 options granted as incentive stock options and 158,050
options granted as non-qualified stock options.
(3) Includes 77,665 options granted as incentive stock options and 172,335
options granted as non-qualified stock options.
12
15ACS in December 2000 for $71,000,000.
OPTION/SAR EXERCISES DURING 19982000 AND YEAR-END OPTION/SAR VALUES
The following table shows stock option exercises during 19982000 by each of the
named executive officers"Named Executive Officers" and the value of unexercised options at December 31,
1998:2000:
NUMBER OF
VALUE OF UNEXERCISED
NUMBER OF IN-THE-MONEY
UNEXERCISED IN-THE-MONEY OPTIONS/SARS AT OPTIONS/SARS AT
SHARESNUMBER OF DECEMBER 31, 1998(1)2000 DECEMBER 31, 1998(2)
EXERCISED2000(1)
SHARES VALUE --------------------------- -------------------------
NAME AS SARSEXERCISED REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- -------------------------------- --------- --------- ------------------------------- ---------- ---------- -------------------------- -------------------------
Louis A. Waters ............ -- -- -- --
John M. Yeaman.................. 0Yeaman ............. -- -- 116,667 / 250,000 0/$173,125
C.A. Rundell, Jr................ 210,848 / 239,152 $671,246 / $584,129158,333 --
Theodore L. Bathurst............ 0Bathurst ....... 5,000 $ 7,187 110,000 / 250,000 (2)
Brian B. Berry..................145,000 --
John P. Harvell(2) ......... -- -- William D. Oates................ --(3) --
H. Lynn Moore, Jr .......... -- -- 22,667 / 27,333 --
Brian K. Miller................. 10,000Miller ............ -- -- 46,667 / 40,000 $8,800 / $35,20028,333 --
- -------------------------------------
(1) As of December 31, 1998, options to purchase an aggregate of 1,917,700
shares of Common Stock were outstanding with a weighted average exercise
price per share of $6.03 and expiring between January 28, 2003, and
November 22, 2008.
(2) Amount is based on a year-end market value of $6.13$1.69 per share.
Theodore L.
Bathurst's exercise price exceeded(2) Mr. Harvell resigned from the year-end market value.Company in December 2000 in connection with
the sale of BRC to ACS.
(3) Pursuant to the Tyler Option Plan, the unvested options of Mr. Harvell were
forfeited upon his resignation in December 2000, and his vested and
unexercised options (all of which were unexercised) were forfeited 60 days
thereafter.
COMPENSATION OF DIRECTORS
Each non-employee director receives an annual fee of $15,000, plus $1,000
for each Tyler Board meeting and $500 for each committee meeting attended.
The Tyler Board further approved discretionary grants of stock options to
non-employee directors of the Tyler Board. On May 11, 2000, the Tyler Board
granted options to purchase 20,000 shares of Company Common Stock to Ernest H.
Lorch at an exercise price of $4.8125 per share, which options vest in equal
installments on the date of grant and on the first and second anniversary of the
date of grant. On June 28, 2000, the Tyler Board granted options to purchase
5,000 shares of Company Common Stock to Ernest H. Lorch at an exercise price of
$3.1875 per share, which options vest in equal installments on the first,
second, and third anniversary of the date of grant.
EMPLOYMENT AGREEMENTS, NON-COMPETITION AGREEMENTS, AND AGREEMENTS WITH NAMED
EXECUTIVE OFFICERSCONTRACTS
On October 7, 1998, the Company entered into an employment agreement with
Theodore L. Bathurst, which provides that the Company pay Mr. Bathurst for his
services as Vice President and Chief Financial Officer of the Company a salary
of $250,000 and a minimum guaranteed bonus of $37,500 for 1998.$250,000. Mr. Bathurst will participate in performance bonus or incentive
compensation plans made available to comparable level employees of the Company
and its subsidiaries and receive all employee benefits and perquisites normally
offered to the executive employees of the Company.
In addition,On December 9, 1998, the Company grantedentered into a five-year employment
agreement with H. Lynn Moore, Jr., which provides that the Company pay Mr. Bathurst optionsMoore
for his services as General Counsel of the Company a minimum salary of $120,000
and a minimum bonus of $80,000 per year. Mr. Moore will participate in
additional performance bonus or incentive compensation plans made available to
purchase 250,000 sharescomparable
10
13
level employees of Common Stock (77,665the Company and its subsidiaries and receive all employee
benefits and perquisites normally offered to the executive employees of which are incentive stock
options and 172,335 of which are non-qualified stock options) at $6.44 per
share, the
closing price on October 7, 1998. The incentive and non-qualified
stock options will vest ratably on each October 7, 1999-2003.Company. The agreement also provides for a severance payment equal to one yearthe amount of
his then current base
salarycompensation due for the remainder of the term of the agreement if he is
terminated for any reason other than cause as specifiedor upon a change in the
agreement.
Effective February 19, 1998, the Company entered into an employment,
confidentiality, non-solicitation, and non-competition agreement with Brian B.
Berry, which provides that the Company will pay Mr. Berry a salary of at least
$200,000 per year for his services to the Company as Vice President and
Secretary of TSG. In addition, Mr. Berry is eligible to participate in
performance bonus or incentive compensation plans made available to comparable
level employeescontrol of the
Company and its subsidiaries. Mr. Berry will also receive
all employee benefits and prerequisites normally offered to the executive
employees of TSG. The employment and confidentiality portions of the agreement
expire February 19, 2003, and the non-solicitation and non-competition portions
of the agreement expire the later of February 19, 2003 or the second anniversary
of Mr. Berry's termination.
13
16Company.
In December 1997, the Company entered into an employment agreement with
Brian K. Miller, which provides that the Company pay Mr. Miller a salary of
$140,000 for his services as Vice President and Chief Accounting Officer for the
Company.- Finance. In addition, Mr. Miller
will participate in performance bonus or incentive compensation plans made
available to comparable level employees of the Company and its subsidiaries and
receive all employee benefits and prerequisites normally offered to the
executive employees of the Company. The agreement also provides for a severance
payment equal to one year of his current base salary if he is terminated for any
reason other than cause, as specified in the agreement.
Effective February 19, 1998, the Company entered into an employment,
confidentiality, non-solicitation, and non-competition agreement with William D.
Oates, which provides that the Company will pay Mr. Oates a salary of at least
$200,000 per year for his services to the Company as President and Chief
Executive Officer of Resources. In addition, Mr. Oates is eligible to
participate in performance bonus or incentive compensation plans made available
to comparable level employees of the Company and its subsidiaries. Mr. Oates
will also receive all employee benefits and prerequisites normally offered to
the executive employees of Resources. The employment and confidentiality
portions of the agreement expire February 19, 2001, and the non-solicitation and
non-competition portions of the agreement expire the later of February 19, 2003
or the third anniversary of Mr. Oates' termination.
On December 9, 1998, the Company entered into an employment agreement with
C.A. Rundell, Jr., which superseded the agreement dated October 8, 1997.
Pursuant to this agreement, Mr. Rundell resigned as President and Chief
Executive Officer of the Company, but remained as an employee director and
member of the Executive Committee of the Company and was appointed Chairman of
Forest City Auto Parts Company ("FCAP"). As Chairman of FCAP, Mr. Rundell's
duties would consist of the development and implementation of a strategy to
maximize the shareholder value of FCAP through the sale or liquidation of all or
substantially all of FCAP, upon terms to be approved by the Tyler Board. For
these services, Mr. Rundell will receive a total cash compensation of $315,000.
Mr. Rundell will also receive certain other employee benefits and prerequisites
normally offered to the executive employees of the Company. In addition, the
unvested 75,000 shares of restricted Tyler common stock originally granted to
him under the October 8, 1997 agreement will vest in increments of 25,000 shares
every six months beginning April 8, 1999 and ending April 8, 2000, except that
all of such shares will vest immediately upon the closing of a sale of all or
substantially all of FCAP, which was consummated on March 26, 1999. Since the
sale of FCAP, Mr. Rundell will remain an employee of the Company and receive a
salary equal to $1,250 per month until January 1, 2002. For this additional
service, Mr. Rundell's current outstanding and unvested stock options will vest
according to the original schedule modified as follows: (i) of the original
132,199 Incentive Stock Options previously granted, 23,727 are vested and
exercisable; of the remaining 108,472 Incentive Stock Options, 27,118 will vest
and be exercisable on each of January 1, 1999-2002 and (ii) of the original
217,801 Non-Qualified Stock Options previously granted, 87,121 are vested and
exercisable; of the remaining 130,680 Non-Qualified Stock Options, 43,560 will
vest and be exercisable on October 8, 1999 and 87,120 will vest and be
exercisable on June 30, 2000.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Members of the Compensation Committee of the Tyler Board are Ernest H.
Lorch Frederick R.
Meyer, and Louis A. Waters. Mr. Meyer was previously an officerWaters is Co-Chief Executive Officer of the
Company.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE
COMPENSATION
The Compensation Committee, a committee of the Tyler Board, has the
responsibility for final approval for all compensation to officers and directors
of the Company, including the duty to ensure that compensation paid to executive
officers does not exceed reasonable amounts and is based on objective standards.
The Compensation Committee approves or disapproves the recommendations of
management regarding compensation according to the guidelines set forth below.
14
17
The Company's personnel policy is to employ outstanding management in order
to obtain outstanding results. To attract and retain high-level individuals, the
Company may pay above-median compensation or provide stock ownership and stock
option incentives to its executive officers. From time to time, salaries,
bonuses, and other compensation of executive officers are evaluated by reference
to nationwide comparisons for the industries in which the Company operates.
A substantial portion of each executive officer's potential total
compensation is in the form of bonuses and options, which are awarded only when
indicated by superior accomplishment. The Company feels very strongly thatoptions. Annual bonuses must be earned,vary
significantly based on the Company's results and when results are not superior, no bonuses are paid.
In ninerevenue growth, the achievement
of strategic objectives of the past fourteen years,Company, and each individual's contribution
toward that performance.
Chief Executive Officer Compensation
Louis A. Waters was elected Co-Chief Executive Officer of the Company in
March 2000. In 2000, Mr. Waters' cash compensation consisted of a base salary of
$300,000 with no bonuses have been paidbonus. In determining Mr. Waters' cash compensation in 2000,
the Compensation Committee considered several factors, including the Company's
strategic goal to corporatereduce its outstanding indebtedness, the Company's decision to
exit the information and property records services segment of its business, the
Company's decision to focus its core business on its software systems and
services segment, Mr. Waters' contributions to the achievement of these
strategic initiatives, and the levels of compensation of chief executive
officers as results have not warranted payment of such bonuses.
CHIEF EXECUTIVE OFFICER COMPENSATIONcompanies of similar size in similar industries.
John M. Yeaman was elected President and Chief Executive Officer of the
Company onin December 9, 1998.1998, and in March 2000, Mr. Yeaman shared his Co-Chief
Executive Officer duties with Mr. Waters. In 2000, Mr. Yeaman's cash
compensation consistsconsisted of a base annual
salary of $250,000. Mr. Yeaman will also receive certain health and insurance
benefits provided to executive officers of the Company.$225,000 with no bonus. In
determining Mr. Yeaman's salary,cash compensation in 2000, the Compensation Committee
considered several factors, including Mr. Yeaman's experience and his ability to enhance the long-term value
of the Company, particularly in light of the Company's strategic plangoal to grow
through acquisitions inreduce its
outstanding indebtedness, the Company's decision to exit the information managementand
property records services business. In
addition, Mr. Yeaman was granted optionssegment of its business, the Company's decision to
acquire 250,000 shares of Common
Stock, which will vest ratably over a five-year period. The Compensation
Committee believes that these options will alignfocus its core business on its software systems and services segment, Mr.
Yeaman's interest withcontributions to the long-term growth interestsachievement of the Companythese strategic initiatives, and
the stockholders.
C.A. Rundell, Jr. was elected President and Chief Executive Officerlevels of the
Company effective October 8, 1997, upon the resignationcompensation of Bruce W. Wilkinson.
Mr. Rundell had previously served as Interim Chief Executive Officer without
salary from October 1996 through March 1997. Mr. Rundell resigned as President
and Chief Executive Officer of the Company effective December 9, 1998. Effective
October 8, 1997 (and through December 9, 1998), Mr. Rundell's compensation
consisted of a base annual salary of $210,000. Mr. Rundell also received certain
health and insurance benefits provided tochief executive officers of the Company. In
determining Mr. Rundell's salary, the Compensation Committee considered several
factors, including Mr. Rundell's considerable experience with acquisitions and
the Company's overall growth strategy. Mr. Rundell was also granted options to
purchase 350,000 sharescompanies of the Company's Common Stock on October 8, 1997, which
options vest over a period of 48 months. In addition, Mr. Rundell was granted
125,000 shares of the Company's Common stock on October 8, 1997, with a market
value on that date of $3.69 per share, all unvested shares of which became
vested on March 26, 1999 with the consummation of the sale of FCAP (See
"Employment Agreements, Non-Competition Agreements, and Agreements with Named
Executive Officers"). The Compensation Committee believes that the options and
grant aligned the interest of management with those of the stockholders.similar
size in similar industries.
11
14
This report is submitted by the Compensation Committee.
Ernest H. Lorch
Louis A. Waters
REPORT OF THE AUDIT COMMITTEE
The Audit Committee oversees the Company's financial reporting process on
behalf of the Tyler Board. Management has the primary responsibility for the
financial statements and the reporting process, including the systems of
internal controls. In fulfilling its oversight responsibilities, the Audit
Committee reviewed the audited financial statements in the Annual Report with
management, including a discussion of the quality, not just the acceptability,
of the accounting principles, the reasonableness of the significant judgments,
and the clarity of disclosures in the financial statements.
The Audit Committee reviewed with the independent auditors, who are
responsible for expressing an opinion on the conformity of those audited
financial statements with generally accepted accounting principles, their
judgments as to the quality, not just the acceptability, of the Company's
accounting principles and such other matters as are required to be discussed
with the Audit Committee under generally accepted auditing standards. In
addition, the Audit Committee has discussed with the independent auditors the
auditors' independence from management and the Company, including the matters in
the written disclosures required by the Independence Standards Board and
considered the compatibility of non audit services with the auditors'
independence.
The Audit Committee discussed with the Company's independent auditors the
overall scope and plans for their respective audits. The Audit Committee meets
with the independent auditors, with and without management present, to discuss
the results of their examinations, their evaluations of the Company's internal
controls, and the overall quality of the Company's financial reporting. The
Audit Committee met six times during 2000.
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Tyler Board (and the Tyler Board approved) that the
audited financial statements be included in the Annual Report on Form 10-K for
the fiscal year ended December 31, 2000 for filing with the Securities and
Exchange Commission.
This report is submitted by the Audit Committee
Ernest H. Lorch, Chairman
Frederick R. Meyer
Louis A. Waters12
15 18
STOCK PERFORMANCE CHART
The following chart compares the return on the Company's Common Stock for
the last five years with the Standard and Poors ("S&P") 500 Index and a new Peer
Group Index andwhich is comprised of companies with similar market capitalization
of approximately $50 million. A list of the S&P Consumer Cyclical - 500 Index.Companies included in the Peer Group
Index is located at Appendix B. Prior to 1998, the Company was a diversely based
enterprise selling products and services through a few distinctly different
operating companies. In 1998,2000, the Company implementedadopted a new
strategyformal plan to build a nationally integrateddispose of
its businesses and assets related to its information managementand property records
services segment and to focus the Company's resources on its software systems
and outsourcing company initially serving local governmentsservices segment and other
enterprises. As a result, the Company has replaced the S&P Consumer Cyclical -
500 Index with a new Peer Group Index which is comprised of companies with
similar market capitalization of approximately $200 million. The Companies
included in the new Peer Group Index are Advanced Radio Telecom Corporation,
Cascade Natural Gas Corporation, CFSB Bancorp, Inc., Copley Pharmaceutical,
Inc., General Communication - CLA, Getty Realty Corporation, Hecla Mining
Company, Learning Tree International, Inc., Massmutual Corporate Investors,
Medallion Financial Corporation, Municipal High Income Fund, Inc., Nelson
(Thomas), Inc. North Pittsburgh Systems, Nuveen Michigan Quality Income
Municipal Fund, Nuveen Select Tax-Free Income Portfolio 3, Nymagic, Inc.,
Players International, Inc., Resource America, Singer Company - N.V. and St.
Mary Land and Exploration Company.to reduce debt. The Company believes the Peer Group
Index is more representative of its current strategy and prior history. The
comparison assumes $100 was invested on December 31, 19931995 in the Company's
Common Stock and in each of the foregoing indices and assumes reinvestment of
dividends and distributions.
[STOCK PERFORMANCE CHART]
Tyler S&P 500 Peer Group S&P Consumer Cyclicals
----- -------BASE YEARS ENDING
PERIOD ----------------------------------------------------------------------
COMPANY NAME / INDEX 1995 1996 1997 1998 1999 2000
- -------------------- ---------- -------------------------------- ---------- ---------- ---------- ----------
1993
TYLER TECHNOLOGIES INC 100 68.18 200.00 222.73 200.00 61.38
S&P 500 INDEX 100 122.96 163.98 210.85 255.21 231.98
PEER GROUP 100 100
1994 61.91 101.32 78.31 91.1
1995 52.38 139.4 74.42 112.39
1996 35.72 171.4 76.80 130.56
1997 104.77 228.59 72.31 178.71
1998 116.67 293.91 55.84 243.59105.98 88.04 72.29 74.91 19.31
16
19
CERTAIN TRANSACTIONS
InOn September 1997, Richmond Partners, Ltd., a Houston-based investment
partnership29, 2000, the Company sold for cash certain net assets of
which Louis A. Waters isKofile, Inc. ("Kofile") and another subsidiary, the managing general partner, invested
$3,500,000Company's interest in a
package of Tyler securities consisting of 2,000,000 shares of
Common Stockcertain intangible work product, and a warrantbuilding and related building
improvements to acquire 2,000,000 shares of Common Stock with an
exercise price of $2.50 per common share. On June 2, 1998, Richmond Partners
distributed the 2,000,000 shares of Common Stock to its shareholders of which
Mr. Waters received 509,900 shares. Mr. Waters is currentlyinvestment entities beneficially owned by William D. Oates, a
principal shareholder who was also a director and Chairman of the Tyler Board.
In connectionExecutive
Committee of the Company at the time of the sale. The Kofile sale was consistent
with the Company's purchasedecision to exit the information and property records
services segment of Resourcesits business, focus the Company's resources on February 19,
1998,its software
systems and services segment of its business, and to reduce the Company's debt.
The cash sale price was $14.4 million, which was determined after lengthy
negotiations between Mr. Oates and the Tyler Board. The Company received an
opinion from an investment banker that the cash sale price was fair to the
Company from a financial point of view.
Periodically during 2000, the Company leased a private airplane owned by
William D. Oates, received approximately $15,250,000 in cash and 8,765,000
sharesa former director of the Company's Common Stock. In addition, pursuant to the terms of such
merger agreement, Mr. Oates may be entitled to receive additional merger
consideration of up to an aggregate $4,500,000 in cash if certain contingencies
are achieved on or before December 31, 1999 relating to the acquisition of
specified businessesCompany, for purposes of geographic expansion.business related trips,
for which payments aggregated approximately $325,000.
13
16
STOCKHOLDER PROPOSALS
Any proposals that stockholders of the Company desire to have presented at
the 20002002 annual meeting of stockholders must be received by the Company at its
principal executive offices not later than November 10, 1999.February 1, 2002.
INDEPENDENT AUDITORS
Ernst & Young LLP acted as the Company's independent auditors for 1998.2000.
Fees for the fiscal year 2000 annual audit were $412,000 and all other fees were
$215,000, including audit related services of $153,000 and non audit services of
$62,000. Audit related services generally include fees for business acquisitions
and/or dispositions, accounting consultations, SEC filings, and audit of the
Company's employee benefit plan.
One or more representatives of Ernst & Young LLP will attend the Annual
Meeting, will have an opportunity to make a statement, and will respond to
appropriate questions from stockholders. The Audit Committee has not yet
appointed the independent auditors for 1999.2001.
By Order of the Board of Directors,
/s/ DEANIE MOREL
Deanie MorelH. LYNN MOORE, JR.
H. Lynn Moore, Jr.
Vice President, General Counsel,
and Secretary
Dallas, Texas
AprilMay 7, 2001
14
17
APPENDIX A
TYLER TECHNOLOGIES, INC.
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
CHARTER
STATEMENT OF POLICY
The Audit Committee shall provide assistance to the Board of Directors in
fulfilling their oversight responsibility to the shareholders, potential
shareholders, the investment community, and others relating to the Company's
financial statements and the financial reporting process, the systems of
internal accounting and financial controls, the internal audit function (if
any), the annual independent audit of the Company's financial statements, and
the legal compliance and ethics programs as established by management and the
Board. In so doing, it is the responsibility of the committee to maintain free
and open communication between the committee, independent auditors, and
management of the Company. In discharging its oversight role, the committee is
empowered to investigate any matter brought to its attention with full access to
all books, records, facilities, and personnel of the Company and the power to
retain outside counsel, or other experts for this purpose.
The Audit Committee fulfills its oversight responsibilities by reviewing: the
financial reports and other financial information provided by the Corporation to
any governmental body or the public; the Corporation's systems of internal
controls regarding finance, accounting, legal compliance and ethics that
management and the Board have established; and the Corporation's auditing,
accounting and financial reporting processes generally. Consistent with this
function, the Audit Committee should encourage continuous improvement of, and
should foster adherence to, the corporation's policies, procedures and practices
at all levels. The audit committee's primary duties and responsibilities are to:
[ ] Serve as an independent and objective party to monitor the
Corporation's financial reporting process and internal control system.
[ ] Review and appraise the audit efforts of the Corporation's independent
accountants.
[ ] Provide an open avenue of communication among the independent
accountants, financial and senior management, and the Board of
Directors.
The Audit Committee will primarily fulfill these responsibilities by carrying
out the activities enumerated below.
COMPOSITION
By June 14, 2001, the Audit Committee shall be comprised of three or more
directors as determined by the Board, each of whom shall be independent
directors, and free from any relationship with management of the Company that,
in the opinion of the Board, would interfere with the exercise of his or her
independent judgment as a member of the Committee. Members of the committee
shall be considered independent if they have no relationship that may interfere
with the exercise of their independence from management and the Company. All
members of the Committee shall have a working familiarity with basic finance and
accounting practices, and at least one member of the Committee shall have
accounting or related financial management expertise. Committee members may
enhance their familiarity with finance and accounting by participating in
educational programs conducted by the Corporation or an outside consultant.
The members of the Committee shall be elected by the Board at the annual
organizational meeting of the Board or until their successors shall be duly
elected and qualified. Unless a Chair is elected by the full Board, the members
of the committee may designate a Chair by majority vote of the full Committee
membership.
15
18
MEETINGS
The Committee shall meet at least four times annually, or more frequently as
circumstances dictate. As part of its job to foster open communication, the
Committee should meet at least annually with management and the independent
accountants in separate executive sessions to discuss any matters that the
Committee or each of these groups believe should be discussed privately. In
addition, the Committee, or at least its Chair, shall review telephonically or
in person, the interim financial statements with management and the independent
auditors prior to the filing of the Company's Quarterly Report on Form 10-Q.
Also, the Committee shall discuss the results of the quarterly review and any
other matters required to be communicated to the committee by the independent
auditors under generally accepted auditing standards. The Committee shall review
with management and the independent auditors the financial statements to be
included in the Company's Annual Report on Form 10-K, including their judgment
about the quality, not just acceptability, of accounting principles, the
reasonableness of significant judgments, and the clarity of the disclosures in
the financial statements. Also, the Committee shall discuss the results of the
annual audit and any other matters required to be communicated to the committee
by the independent auditors under generally accepted auditing standards.
RESPONSIBILITIES, PROCESSES, AND DUTIES
The primary responsibility of the Audit Committee is to oversee the Company's
financial reporting process on behalf of the Board and report the results of
their activities to the Board. Management is responsible for preparing the
Company's financial statements, and the independent auditors are responsible for
auditing those financial statements. The Committee in carrying out its
responsibilities believes its policies and procedures should remain flexible, in
order to best react to changing conditions and circumstances. The Committee
should take the appropriate actions to set the overall corporate "tone" for
quality financial reporting, sound business risk practices, and ethical
behavior.
To fulfill its responsibilities and duties the Audit Committee shall:
DOCUMENTS/REPORTS REVIEW
1. Review and update this Charter periodically, at least annually,
as conditions dictate.
2. Review the Company's annual financial statements and any other
significant reports submitted to the Securities and Exchange
Commission and the New York Stock Exchange.
3. Review with financial management and the independent accountants
the Form 10-Q and Form 10-K prior to their filing or prior to the
release of earnings. The Chair of the Committee may represent the
entire Committee for purposes of the review of the Form 10-Q.
INDEPENDENT ACCOUNTANTS
4. Recommend to the Board of Directors on an annual basis the
selection of the independent accountants.
5. Provide a clear understanding to management and the independent
auditors that the independent auditors are ultimately accountable
to the Board and the Audit Committee, as representatives of the
Company's shareholders. The Committee shall have the ultimate
authority and responsibility to evaluate and, where appropriate,
replace the independent auditors.
6. Discuss with the independent auditors on an annual basis their
independence from management and the Company and the matters
included in the written disclosures required by the Independence
Standards Board.
7. Discuss with the independent auditors the overall scope and plans
for their respective audits including the adequacy of staffing
and compensation. Also, the Committee shall discuss with
management and the independent auditors the adequacy and
effectiveness of the accounting and financial controls, including
the Company's system to monitor and manage business risk, and
legal and ethical compliance programs. Further, the Committee
shall meet separately with the independent auditors, with and
without management present, to discuss the results of their
examinations.
16
19
19998. Review the performance of the independent accountants and approve
any proposed discharge of the independent accountants when
circumstances warrant.
FINANCIAL REPORTING PROCESSES
9. In consultation with the independent accountants, review the
integrity of the Company's financial reporting processes, both
internal and external.
10. Consider the independent accountants' judgments about the quality
and appropriateness of the Corporation's accounting principles as
applied in its financial reporting.
11. Consider and approve, if appropriate, major changes to the
Corporation's auditing and accounting principles and practices as
suggested by the independent accountants or management.
PROCESS IMPROVEMENT
12. Establish regular and separate systems of reporting to the Audit
Committee by management and by the independent accountants
regarding any significant judgments made in management
preparation of the financial statements and the view of each as
to appropriateness of such judgments.
13. Following completion of the annual audit, review separately with
management and with the independent accountants any significant
difficulties encountered during the course of the audit,
including any restrictions on the scope of work or access to
required information.
14. Review any significant disagreement among management and the
independent accountants in connection with the preparation of the
financial statements.
15. Review with the independent accountants and management the extent
to which changes or improvements in financial or accounting
practices, as approved by the Audit Committee, have been
implemented.
ETHICAL AND LEGAL COMPLIANCE
16. Establish, review and update periodically a Code of Ethical
Conduct and ensure that management has established a system to
enforce this Code.
17. Ensure that management has the proper review system in place to
ensure that Corporation's financial statements, reports and other
financial information disseminated to governmental organizations,
and the public satisfy legal requirements.
18. Review, with the organization's counsel, legal compliance matters
including corporate securities trading policies.
19. Review, with the organization's counsel, any legal matter that
could have a significant impact on the Company's financial
statements.
20. Perform any other activities consistent with this Charter, the
Corporation's By-laws and governing law, as the Committee or the
Board deems necessary or appropriate.
17
20
[DETACH HERE]
- -------------------------------------------------------------------------------APPENDIX B
PEER GROUP INDEX
ADVANCED POLYMER SYSTEMS
AFTERMARKET TECHNOLOGY CORP
AMERICA FIRST APT INVESTORS
APPLIED SIGNAL TECHNOLOGY
APPLIEDTHEORY CORP
AT PLASTICS INC
ATTUNITY LTD
AVITAR INC
BANK OF THE OZARKS INC
BAR HARBOR BANKSHARES
BIOJECT MEDICAL TECHNOL
BITWISE DESIGNS INC
BRIGHT STATION PLC-ADR
CAGLE'S INC-CLA
CANTEL MEDICAL CORP-CLB
CAPITAL CROSSING BANK
CAPITAL SENIOR LIVING CORP
CASCADE FINL CORP
CASTLE ENERGY CORP
CFM TECHNOLOGIES INC
CHAPARRAL RESOURCES INC
CHART HOUSE ENTERPRISES INC
CHATTEM INC
CLICKSOFTWARE TECHNOLOGIES LTD
CNB FLORIDA BANCSHARES INC
COLONIAL INSD MUN FD
COMPUTER MOTION INC
CORNELL COMPANIES INC
COVEST BANCSHARES INC
CRIIMI MAE INC
CYRK INC
DAN RIVER INC-CLA
DAXOR CORP
DECKERS OUTDOOR CORP
DELTA NATURAL GAS CO INC
E MEDSOFT.COM
EASTERN CO
EATON VANCE FL MUNI INC TR
ECONNECT
EDUTREK INTERNATIONAL INC-CLA
EMERGING MARKETS INCOME FD INC
ENCHIRA BIOTECHNOLOGY CORP
EPRISE CORP
18
21
FINANCIAL INDS CORP
FLORIDA PUBLIC UTILITIES CO
FNB FINANCIAL SERVICES CORP
FRANKLIN MULTI-INCOME TR
FUSION MED TECHNOLOGIES INC
GASTON FED BANCORP INC
GLOBAL VACATION GROUP INC
GLOBAL-TECH APPLIANCES INC
HAWK CORP
HEI INC
HISPANIC TV NETWORK INC
HOLLYWOOD ENTMT CORP
HOME STAKE OIL & GAS CO
HUNT CORP
INTERPHASE CORP
JOHNSON OUTDOORS INC-CLA
JPS INDUSTRIES INC
KVH INDUSTRIES INC
LANDEC CORP
LARSCOM INC-CLA
LASER MORTGAGE MGT INC
LAWRENCE SAVINGS BANK MA
LEAP TECHNOLOGY INC
MACATAWA BANK CORP
MAGIC SOFTWARE ENTERPRISES
MARINE PETROLEUM TRUST
MARKETWATCH.COM INC
MARTEN TRANSPORT LTD
MARVEL ENTERPRISES-CLA
MATRIX BANCORP INC
MATRIX SERVICE CO
MAXX PETROLEUM LTD
MEDIX RESOURCES INC
MFN FINANCIAL CORP
MICRO THERAPEUTICS INC
MICROCIDE PHARMACEUTICALS
MOMENTUM BUSINESS APPS INC
MPHASE TECHNOLOGIES INC
MUNIHOLDINGS FLA INSD FD V
MUNIHOLDINGS MICH INSD FD II
MYPOINTS.COM INC
NASTECH PHARMACEUTICAL
NATIONAL STEEL CORP-CLB
NATIONS BALANCD TARGT MAT FD
NEOGEN CORP
NEOTHERAPEUTICS INC
NESS ENERGY INTL INC
NETERGY NETWORKS INC
NETWORK COMMERCE INC
NEWMIL BANCORP INC
19
22
NORTHPOINT COMMUNICATIONS GP
NORTHWEST PIPE CO
OBIE MEDIA CORP
OEC COMPRESSION CORP
OREGON TRAIL FINANCIAL CORP
OWENS CORNING
PENNSYLVANIA COMM BANCORP
PETRIE STORES LIQUIDATION TR
PROFESSIONAL STAFF PLC -ADR
PROGRESSIVE RETURN FUND INC
PUTNAM INV GRADE MUNI TR III
QUALITY SYSTEMS INC
QUIPP INC
RAINMAKER SYSTEMS
REPEATER TECHNOLOGIES INC
ROYCE GLOBAL TRUST INC
RWD TECHNOLOGIES INC
SAUCONY INC-CLB
SCC COMMUNICATIONS CORP
SCIENTIFIC LEARNING CORP
SCOPE INDUSTRIES INC
SCUDDER GLOBAL HIGH INCM FD
SECURITY CAPITAL/DE-CLA
SHILOH INDUSTRIES INC
SHOP AT HOME INC
SIERRACITIES.COM INC
SOFTNET SYSTEMS INC
SOUTHERN MINERAL CORP
SPORTS CLUB COMPANY INC
SWISS ARMY BRANDS INC
SYNSORB BIOTECH INC
TEAMSTAFF INC
TEFRON LTD
TELEHUBLINK CORP
TEXOIL INC
THERMOGENESIS CORP
TRACK DATA CORP
TRADESTATION GROUP INC
TRANSMEDIA NETWORK
TURKISH INVT FD INC
TWINLAB CORP
UGLY DUCKLING CORP
USLIFE INCOME FUND
VAN KAMPEN HIGH INCOME TR II
VENTRO CORP
VISIONICS CORP
WINTON FINANCIAL CORP
WISER OIL CO
WOLOHAN LUMBER CO
ZEMEX CDA CORP
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PROXY
TYLER CORPORATIONTECHNOLOGIES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned hereby (1) acknowledges receipt of the Notice dated April
19, 1999May 7,
2001 of the annual meeting of stockholders of Tyler CorporationTechnologies, Inc. (the
"Company") to be held at the Renaissance Dallas Hotel in the Presidente Room,
2222 N. Stemmons Freeway,Park Cities Hilton, 5954 Luther Lane, Dallas,
Texas, on Wednesday, May 19, 1999,Tuesday, June 5, 2001, at 10:0010.00 a.m., Dallas time, and the proxy
statement in connection therewith, and (2) appoints Louis A. Waters and John M.
Yeaman, and each of them, his proxies with full power of substitution and
revocation, for and in the name, place and stead of the undersigned, to vote
upon and act with respect to all of the shares of Common Stock of the Company
standing in the name of the undersigned or with respect to which the undersigned
is entitled to vote and act at said meeting and at any adjournment thereof, and
the undersigned directs that his proxy be voted as indicated on the reverse side
hereof. If only one of the above proxies shall be present in person or by
substitute at such meeting or at any adjournment thereof, that proxy so present
and voting, either in person or by substitute, shall exercise all of the powers
hereby given.
The undersigned hereby revokes any proxy or proxies heretofore given to
vote upon or act with respect to such stock and hereby ratifies and confirms all
that said proxies, their substitutes or any of them may lawfully do by virtue
hereof.
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SEE REVERSE SEE REVERSE
SIDE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
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DETACH HERE
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[X] PLEASE MARK
VOTES AS IN
THIS EXAMPLE.
THIS PROXY WILL BE VOTED AS SPECIFIED BELOW. IF NO SPECIFICATION IS MADE, THIS
PROXY WILL BE VOTED FOR THE MATTERS SPECIFICALLY REFERRED TO BELOW.
1. Election of Directors:
NOMINEES: Lorch, Meyer, Oates, Rundell, Waters, Yeaman
FOR WITHHELD
ALL [ ] [ ] FROM ALL
NOMINEES NOMINEES
[ ]
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TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE(S), MARK ABOVE AND WRITE
NOMINEE'S NAME(S) IN SPACE PROVIDED.
2. Approval of amendment to the Company's Restated Certificate of
Incorporation to change the name of the Company.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. Approval of amendment to the Tyler Corporation Stock Option Plan.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournments thereof.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
Please date this proxy and sign your name exactly as it appears hereon. Where
there is more than one owner, each should sign. When signing as an attorney,
administrator, executor, guardian or trustee, please add your title as such. If
executed by a corporation, the proxy should be signed by a duly authorized
officer.
Please sign this proxy and return it promptly whether or not you expect to
attend the meeting. You may nevertheless vote in person if you do attend.
Signature: Date:
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Signature: Date:
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[TYLER LETTERHEAD] VOTE BY INTERNET-www.proxyvote.com
Use the internet to transmit your voting
instructions and for electronic delivery of
information up until 11:59 P.M. Eastern Time
the day before the cut-off date or meeting
date. Have your proxy card in hand when you
access the web site. You will be prompted to
enter your 12-digit Control Number, which is
located below, to obtain your records and to
create an electronic voting instruction form.
VOTE BY MAIL
Mark, sign, and date your proxy card and
return it in the postage-paid envelope we
have provided or return it to Tyler
Technologies, Inc., c/o ADP, 51 Mercedes
Way, Edgewood, NY 11717.
YOUR VOTE IS IMPORTANT!
Do not return your Proxy Card if you are
voting by Telephone or Internet.
Please sign this proxy and return it promptly
whether or not you expect to attend the
meeting. You may nevertheless vote in person
if you do attend.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: TYLER1 KEEP THIS PORTION FOR YOUR RECORDS
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THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY
TYLER TECHNOLOGIES, INC.
THIS PROXY WILL BE VOTED AS SPECIFIED BELOW,
IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED FOR THE MATTERS SPECIFICALLY
REFERRED TO BELOW. For Withhold For All To withhold authority to vote, mark "For
All All Except All Except" and write the nominees's
1. Election of Directors [ ] [ ] [ ] number on the line below.
NOMINEES: 01) Ben T. Morris, 02) Ulrich
Otto, 03) G. Stuart Reeves,
04) Glenn A. Smith, 05) Louis A. Waters, ----------------------------------------
06) John D. Woolf, 07) John M. Yeaman
2. In their discretion, the proxies are
authorized to vote upon such other business
as may properly come before the meeting or
any adjournments thereof.
Please date this proxy and sign your name exactly
as it appears hereon. Where there is more than one
owner, each should sign. When signing as an attorney,
administrator, executor, guardian or trustee, please
add your title as such. If executed by a corporation,
the proxy should be signed by a duly authorized officer.
MARK HERE FOR ADDRESS CHANGE AND NOTE ON REVERSE [ ]
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Signature [PLEASE SIGN WITHIN BOX] Date Signature [Joint Owners] Date