SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for use of the
[X] Definitive proxy statement Commission only (as permitted by
[ ] Definitive additional materials Rule 14a-6(e)(2))
[ ] Soliciting material pursuant to Rule 14a-11(C)or Rule 14a-12
TYLER TECHNOLOGIES, INC.
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(Name of Registrant as specified in Its Charter)
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(Name of Person[s] Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
(1) Title of each class of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined.):
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[ ] Fee paid previously with preliminary materials.
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
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[TYLER TECHNOLOGIES, INC.]
April 4, 2002
Dear Stockholder:
You are cordially invited to attend the annual meeting of stockholders of
Tyler Technologies, Inc. to be held on Thursday, May 9, 2002, at the Park
Cities Hilton, 5954 Luther Lane, Dallas, Texas, commencing at 10:00 a.m. At
this meeting you will be asked to select seven directors for the ensuing year
and to approve a proposal to amend the Company's stock option plan increasing
the number of shares subject to the plan.
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/ John M. Yeaman
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JOHN M. YEAMAN
President and Chief Executive Officer
TYLER TECHNOLOGIES, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 9, 2002
TO THE STOCKHOLDERS OF TYLER TECHNOLOGIES INC.:
Tyler Technologies, Inc. ("Tyler" or the "Company") will hold its annual
meeting of stockholders (the "Annual Meeting") at the Park Cities Hilton, 5954
Luther Lane, Dallas, Texas, on Thursday, May 9, 2002, at 10:00 a.m., Dallas
time, for the following purposes:
(1) to elect seven 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 the Tyler Technologies,
Inc. Stock Option Plan (the "Tyler Option Plan") to increase the
number of shares of Tyler common stock subject to the Tyler Option
Plan from 5,500,000 to 6,500,000; and
(3) 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 22, 2002 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 the Company, 5949 Sherry Lane,
Suite 1400, Dallas, Texas 75225, 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 2001 Annual Report does not form any part of the proxy
solicitation material.
Dallas, Texas By Order of the Board of Directors
April 4, 2002
/s/ H. Lynn Moore, Jr.
--------------------------------------
H. Lynn Moore, Jr.
Vice President, General Counsel, and Secretary
THE ANNUAL MEETING
Place, Date, and Time
The Annual Meeting will be held at the Park Cities Hilton Hotel, 5954
Luther Lane, Dallas, Texas on Thursday, May 9, 2002, at 10:00 a.m., Dallas
time.
Matters to be Considered
At the Annual Meeting, the stockholders of Tyler 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) amend the Tyler Option Plan increasing the number of shares
of Company common stock, $.01 par value per share ("Common Stock"), subject to
issuance under the Tyler Option Plan from 5,500,000 to 6,500,000; and (iii)
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 seven directors. The nominees for director are John S. Marr,
Jr., Ben T. Morris, G. Stuart Reeves, Michael D. Richards, Glenn A. Smith, John
D. Woolf, and John M. Yeaman. Each of the nominees (other than John S. Marr,
Jr. and Michael D. Richards) currently serves on the Company's Board of
Directors (the "Tyler Board"). For more information regarding the nominees for
director 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 seven nominees for the Tyler Board as
described herein. The proxies cannot be voted for more than seven 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 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 5,500,000 to
6,500,000. 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.
Copies of the Tyler Option Plan are available from the Company upon request.
Purpose of the Tyler Option Plan. Stock options are designed to strengthen
the commitment of selected key employees, directors, and consultants to the
Company, its subsidiaries and its stockholders, to motivate those individuals
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 and non-employee directors and
consultants are rewarded only if the value of the stockholders' investment in
the Company has appreciated.
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Description of the Tyler Option Plan. The Tyler Option Plan is designed to
permit the appropriate administering committee to grant options to key
employees, directors, and consultants of the Company or its subsidiaries to
purchase shares of Common Stock. The Tyler Option Plan requires that the
purchase price under each incentive stock 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 individuals, 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 of the Company
and the entire Tyler Board grants options and administers the Tyler Option Plan
with respect to directors of the Company. Options may be exercised in annual
installments as specified by the administering committee or, if applicable, the
Tyler Board. All installments that become exercisable are cumulative and may be
exercised at any time after they become exercisable until expiration of the
option. The Tyler Option Plan contains provisions governing "Changes of
Control", as defined therein, including accelerated vesting of options under
certain circumstances.
The exercise price of options is paid in cash or by check at the time of
exercise or, if the option agreement allows and if approved by the
administering committee or, if applicable, the Tyler Board, by the tender of
Common Stock owned by the optionee in lieu of cash payment of the option price,
or through a combination thereof; provided that such shares either (i) have
been owned by the optionee for more than six months and have been "paid for"
within the meaning of Rule 144 promulgated under the Securities Act of 1933 or
(ii) were obtained by the optionee in the public market (hereunder referred to
as "Qualifying Shares"). If the option is exercised by tendering Qualifying
Shares, the number of shares tendered shall be determined by the fair market
value per share of the Common Stock on the date of the exercise, as determined
by the Company. An option agreement may also provide that the exercise price of
an option may be paid through the cashless exercise method whereby the optionee
authorizes a broker designated by the Company to sell a specified number of the
shares of Common Stock to be acquired by the optionee on the exercise of the
option, having a then fair market value equal to the sum of the exercise price
of the option, plus any transaction costs. The remainder of the shares not sold
will be delivered to the optionee. Shares of Common Stock deliverable upon
exercise of the options may be transferred from treasury or issued from
authorized but unissued shares.
Unless sooner terminated by action of the Tyler Board, the Tyler Option
Plan will terminate on May 11, 2010, 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 any amendment to change the individuals or class of individuals who
are eligible to receive options or the aggregate number of shares that may be
issued under options shall be submitted to the stockholders for approval. The
administering committee or, if applicable, the Tyler Board, 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.
Incentive stock options and nonqualified stock options may be granted
under the Tyler Option Plan 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 have a direct and significant effect on
the success of the Company and its subsidiaries. Directors who are not
employees of the Company or one of its subsidiaries, as well as consultants,
are eligible for the grant of nonqualified stock options. 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.
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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 stock 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 voting
power of all classes of securities of the Company or its parent or subsidiaries
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 or, if applicable, the Tyler Board may provide
for termination of options granted under the Tyler Option Plan in case of
termination of employment, directorship, consultant relationship, dishonesty,
or any other reason the appropriate committee or, if applicable, the Tyler
Board 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, directorship, or consultant relationship 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. If the
optionee dies or becomes disabled before the termination of his right to
exercise his option, the legal representatives of his estate, or the optionee
in the event of his disability, 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 or disability, 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, disability or other
termination. 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.
Tax Status of Options. An optionee has no taxable income, and the Company
is not entitled to a deduction, at the time of the grant of an option. 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 (or their predecessors) 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 any gain upon
sale of the stock will be entitled to capital gain treatment. The 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"), tax will be imposed at the time of sale of the
stock. In such event, the employee's gain on exercise of the incentive stock
option will be compensation to him taxed as ordinary income rather than capital
gain to the extent the fair market value of the acquired Common Stock on the
date of exercise of the incentive stock option exceeds the aggregate exercise
price paid for that Common Stock, and the Company will be entitled to a
corresponding deduction at the time of sale. If the amount realized on the
disqualifying disposition is less than the fair market value of the Common
Stock on the date of exercise of the incentive stock option, the total amount
includable in optionee's gross income, and the amount deductible by the
Company, will equal the excess of the amount realized on the disqualifying
disposition 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. The exercise of a
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nonqualified stock option 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.
Different tax consequences may result from stock-for-stock and cashless
exercises of options.
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 OPTION PLAN.
Record Date and Voting
Only holders of record of Common Stock on March 22, 2002 (the "Record
Date") are entitled to notice of, and to vote at, the Annual Meeting. There
were issued and outstanding 47,599,164 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 shares actually
voted at the Annual Meeting, is required to approve the amendment to the Tyler
Option Plan.
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 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.
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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 each director, nominee for
director, and executive officer 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 or until their successors
are elected and qualified.
Directors, Nominees for Director, and Executive Officers of Tyler
Name/Age Present Position Served Since
- -------- ---------------- ------------
John M. Yeaman, 61 ............ Chief Executive Officer 2000
President 1998
Director 1999
Ben T. Morris, 56 ............. Director 2001
G. Stuart Reeves, 62 .......... Director 2001
Glenn A. Smith, 48 ............ Director 2001
John D. Woolf, 57 ............. Director 2001
John S. Marr, Jr., 42 ......... Nominee for Director --
Michael D. Richards, 51 ....... Nominee for Director --
Theodore T. Bathurst, 52 ...... Vice President and Chief 1998
Financial Officer
Brian K. Miller, 43 ........... Vice President -- Finance 1999
Treasurer 1997
H. Lynn Moore, Jr., 34 ........ Vice President and Secretary 2000
General Counsel 1998
Business Experience of Directors, Nominees for Director, and Executive Officers
John M. Yeaman is President and Chief Executive Officer of the Company, a
position he has held since April 2002. From March 2000 until April 2002, Mr.
Yeaman was President and Co-Chief Executive Officer of the Company, and from
December 1998 until March 2000, Mr. Yeaman was President and Chief Executive
Officer of the Company. Mr. Yeaman was elected to the Tyler Board in February
1999. Mr. Yeaman is currently a member of the Executive Committee of the Tyler
Board. Mr. Yeaman was previously 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 since 1980. Mr. Yeaman began his career
with Eastman Kodak Company. Mr. Yeaman also serves on the Board of Directors of
Park Cities Bank in Dallas, Texas.
Ben T. Morris has served as a director of the Company since June 2001. Mr.
Morris is currently a member of the Audit Committee of the Tyler Board. 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 and 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 Sanders Morris Harris Group, the parent
corporation of SMH, Capital Title Group, and American Equity Investment Life
Holding Company. Mr. Morris is a certified public accountant.
5
G. Stuart Reeves has served as a director of the Company since June 2001.
Mr. Reeves is currently the Chairman of the Audit Committee and a member of the
Compensation Committee of the Tyler Board. From 1967 to 1999, Mr. Reeves worked
for 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 with 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, Dallas, Texas.
Glenn A. Smith has served as a director of the Company since June 2001.
Mr. Smith is currently a member of the Executive Committee of the Tyler Board
and serves as President of the Company's Justice and Courts Division. In 1981,
Mr. Smith co-founded The Software Group, Inc. ("TSG"), which was acquired by
the Company in 1998 and of which Mr. Smith serves as President. 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 served as a director of the Company since June 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
operating subsidiaries that are engaged in providing business process
management software and services in the areas of information management,
process management, and enterprise 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 Group, Inc., the largest independently owned group of title
insurance agencies and a title insurance underwriter operating in the State of
Texas at that time. From 1984 to 1987, Mr. Woolf was Vice President -- Finance
of Business Records Corporation, an affiliate of Cronus Industries, Inc., which
was spun off from the Company in 1977. From 1979 to 1984, Mr. Woolf served as
Vice President -- Finance of Holly Corporation, a publicly-owned company
engaged in oil and gas refining, exploration, and production. From 1973 to
1979, Mr. Woolf served in various corporate staff and financial management
positions with the Company. Prior to 1973, Mr. Woolf was engaged in auditing
and tax services for Price Waterhouse & Co. Mr. Woolf is a certified public
accountant.
John S. Marr, Jr. has been nominated by the Tyler Board to serve as a
director of the Company in 2002. Mr. Marr currently serves as President of the
Company's Large City Financial Division. Mr. Marr began his career with MUNIS,
Inc. ("MUNIS") in 1983, a company that was acquired by Tyler in 1998 and of
which Mr. Marr has served as President since 1994. MUNIS develops and markets a
wide range of software products and related services for county and city
governments, schools, and not-for-profit organizations, with a focus on
integrated financial and land management systems.
Michael D. Richards has been nominated by the Tyler Board to serve as a
director of the Company in 2002. Mr. Richards currently serves as the Chairman
and Chief Executive Officer of Suburban Title, LLC d/b/a Reunion Title, an
independent title insurance agency founded by Mr. Richards in September 2000
that operates in Dallas, Denton, Collin, Tarrant, and Rockwall Counties in
Texas. From 1989 until September 2000, Mr. Richards served as President and
Chief Executive Officer of American Title Company, Dallas, Texas, an affiliate
of American Title Group, Inc., one of the largest title insurance underwriters
in Texas during that time. From 1982 until 1989, Mr. Richards held various
management positions with Hexter-Fair Title Company, Dallas, Texas, including
President from 1988 until 1989. From
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1974 until 1982, Mr. Richards worked for Stewart Title Guaranty Company,
Dallas, Texas, during which time he held several key management positions
including serving on its board of directors. Mr. Richards holds several
positions with various associations, some of which include: Greater Dallas
Chamber of Commerce, member of the Economic Development Advisory Council;
Leukemia Society of America, Advisory Board Member; Greater Dallas Association
of Realtors, Board Member; and Home Builders Association, Board Member.
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 variety of information, communications,
and 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 the Texas Society of 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 from December 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.
H. Lynn Moore, Jr. has been General Counsel of the Company since September
1998 and has been Vice President and Secretary of the Company since October
2000. From August 1992 to August 1998, Mr. Moore was associated with the law
firm of Hughes & Luce, L.L.P. in Dallas, Texas where he represented numerous
publicly-held and privately-owned entities in various corporate and securities,
finance, litigation, and other legal related matters. Mr. Moore is a member of
the State Bar of Texas.
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 met seven times during 2001. Each member of the Tyler
Board participated in at least 75% of all Tyler Board and committee meetings
held during the portion of 2001 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 are described below. The Company has no
nominating committee; instead, the entire Tyler Board is responsible for
selecting nominees for election as directors and executive officers.
Audit Committee. During 2001, the Audit Committee was comprised of G.
Stuart Reeves (Chairman), Ben T. Morris, and Ulrich Otto, 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
four times during 2001. On May 11, 2000, the Tyler Board adopted the Tyler
Audit Committee Charter, a copy of which may be obtained from the Company upon
request. For more information on the Audit Committee's activities during 2001,
see "Report of the Audit Committee."
7
Compensation Committee. During 2001, the Compensation Committee was
comprised of Ulrich Otto (Chairman), G. Stuart Reeves, and 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 2001.
Executive Committee. During 2001, the Executive Committee was comprised of
Louis A. Waters (Chairman), Glenn A. Smith, and John M. Yeaman. 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.
Mr. Waters resigned as Chairman of the Tyler Board in April 2002. Mr. Otto
is not standing for re-election to the Tyler Board in 2002.
8
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 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, 2001, 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.
Security Ownership of Directors, Nominees for Director, Executive Officers, and
Principal Stockholders
The following table sets forth certain information concerning the
beneficial ownership of the Company's Common Stock as of March 22, 2002 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 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 the
Company as a group.
Amount and Nature Percent
of of
Name and Address of Beneficial Owner (1) Ownership Class (2)(3)
- ---------------------------------------- --------- ------------
William D. Oates
2911 Turtle Creek Blvd., Suite 1100
Dallas, Texas 75219 .............................. 7,751,000 (4) 16.28%
Ulrich Otto ....................................... 3,383,600 (5) 7.11%
Louis A. Waters
520 Post Oak Blvd, Suite 850
Houston, Texas 77027 ............................. 2,509,900 (6) 5.06%
John S. Marr, Jr. ................................. 1,767,310 (7) 3.71%
Glenn A. Smith .................................... 960,905 (8) 2.02%
John M. Yeaman .................................... 682,184 (9) 1.43%
Ben T. Morris ..................................... 389,980 (10) *
Theodore L. Bathurst .............................. 185,000 (11) *
John D. Woolf ..................................... 150,000 *
H. Lynn Moore, Jr. ................................ 117,334 (12) *
Brian K. Miller ................................... 76,000 (13) *
G. Stuart Reeves .................................. 65,000 *
Michael D. Richards ............................... 40,000 *
Directors, nominees, and executive officers as a
group (11 persons) ............................... 7,817,313 (14) 16.09%
- ----------
* Less than one percent of the outstanding Common Stock.
(1) Unless otherwise noted herein, the address of each beneficial owner is
the address of the Company's principal place of business located at 5949
Sherry Lane, Suite 1400, Dallas, Texas 75225.
(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.
(3) Based on 47,599,164 shares of Common Stock issued and outstanding at
March 22, 2002. Each owner's percentage is calculated by dividing (a) the
number of shares beneficially held by such owner by (b) the sum of (i)
47,599,164 plus (ii) the number of shares such owner has the right to
acquire within sixty days.
9
(4) Includes beneficial ownership of 1,600,000 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.
(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.
(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
is deemed the beneficial owner of these shares.
(7) Includes beneficial ownership of (a) 469,700 shares of Common Stock held
by a partnership in which Mr. Marr is the general partner and has sole
voting power and investment power and (b) 33,334 shares of Common Stock
issuable upon the exercise of stock options granted pursuant to the Tyler
Option Plan that are exercisable within sixty days.
(8) Includes beneficial ownership of 33,334 shares of Common Stock issuable
upon the exercise of stock options granted pursuant to the Tyler Option
Plan that are exercisable within sixty days.
(9) Includes beneficial ownership of (a) 258,334 shares of Common Stock
issuable upon the exercise of stock options granted pursuant to the Tyler
Option that are exercisable within sixty days and (b) 7,300 shares of
Common Stock owned by a foundation in which Mr. Yeaman is deemed to have
shared voting power.
(10) Includes beneficial ownership of 333,380 shares of Common Stock subject
to a warrant issued to SMH, of which Mr. Morris is President and Chief
Executive Officer and is therefore deemed to have investment power over
the shares.
(11) Includes beneficial ownership of 175,000 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 67,334 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 beneficial ownership of 75,000 shares of Common Stock issuable
upon the exercise of stock options granted pursuant to the Tyler Option
Plan that are exercisable within sixty days.
(14) Includes 333,380 shares of Common Stock subject to warrants, 642,336
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 3,860,600 shares of Common Stock held in
investment entities, partnerships, foundations, and other arrangements in
which named persons have sole or shared voting and/or investment power.
Mr. Waters resigned as Chairman of the Tyler Board in April 2002. Mr.
Otto is not standing for re-election to the Tyler Board.
10
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 2001, 2000, and 1999 by the Company's "Named
Executive Officers" (as defined in Regulation S-K of the Securities Act of
1933, as amended) whose total annual salary and bonus earned during fiscal year
2001 exceeded $100,000.
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation Awards
---------------------------------------------- -----------------------------
Securities
Other Restricted Underlying
Annual Stock Options/ All Other
Name and Principal Position Year Salary Bonus Compensation (1) Awards SARs Compensation
- --------------------------- ------ -------------- ----------- ---------------- ----------------- ----------- -------------
Louis A. Waters 2001 $ 300,000 $210,000 $ -- $ -- $ -- $ --
Chairman and Co- 2000 233,077(2) -- -- -- -- --
Chief Executive 1999 -- -- -- -- -- --
Officer ....................
John M. Yeaman 2001 225,000 157,500 -- -- 250,000 --
President and Co- 2000 225,000 -- -- -- -- --
Chief Executive 1999 225,000 200,000 -- -- 25,000 --
Officer (4) ................
Theodore L. Bathurst 2001 252,400 35,000 -- -- 60,000 --
Vice President and 2000 252,400 -- -- -- -- --
Chief Financial 1999 252,400 125,000 -- -- 15,000 --
Officer ....................
H. Lynn Moore, Jr. 2001 120,000 150,000 -- 53,500 (3) 100,000 --
Vice President, 2000 120,000 80,000 -- -- -- --
General Counsel, 1999 120,000 90,000 -- -- 10,000 --
and Secretary ..............
Brian K. Miller 2001 162,400 56,840 -- -- 30,000 --
Vice President -- 2000 162,400 8,500 -- -- -- --
Finance .................... 1999 149,908 81,200 -- -- 25,000 --
Glenn A. Smith 2001 200,000 174,441 -- -- 100,000 --
President -- Justice 2000 200,000 120,000 -- -- -- --
& Courts Division .......... 1999 200,000 253,250 -- -- -- --
- ----------
(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) Mr. Waters was elected Co-Chief Executive Officer in March 2000. Mr.
Waters resigned as Chairman of the Board and Co-Chief Executive Officer
in April 2002.
(3) On April 4, 2001, Mr. Moore vested in 50,000 restricted shares of the
Company's Common Stock with a market value of $1.07 per share.
(4) Mr. Yeaman has been President and Chief Executive Officer since April
2002.
11
Option Grants
The following table sets forth certain information relating to stock
option grants made by the Company to the Named Executive Officers during 2001.
OPTION/SAR GRANTS IN 2001
Number of Percent of Total
Securities Options/SARs
Underlying Granted to Exercise Grant date
Option/SARs Employees in Price Expiration Present
Name Granted Fiscal Year Per Share Date Value $(1)
- ---- ------------- ---------------- ----------- ---------- ----------
Louis A. Waters ................. -- -- -- -- --
John M. Yeaman(2) ............... 250,000 11% $1.62 5/8/11 $1.22
Theodore L. Bathurst(3) ......... 60,000 3% $1.62 5/8/11 $1.22
H. Lynn Moore, Jr. (4) .......... 100,000 5% $1.62 5/8/11 $1.22
Brian K. Miller(4) .............. 30,000 1% $1.62 5/8/11 $1.22
Glenn A. Smith (4) .............. 100,000 5% $1.62 5/8/11 $1.22
- ----------
(1) The present value was determined using the Black-Scholes option-pricing
model and assuming an expected life of seven years and a dividend yield
of $0, expected volatility of .78 and risk-free interest rate of 5%.
(2) Includes 61,732 options granted as incentive stock options (2 of which
vest on 5/8/02, 2 of which vest on 5/8/03, and 61,728 of which vest on
5/8/04) and 188,268 options granted as non-qualified stock options
(83,332 of which vest on 5/8/02, 83,331 of which vest on 5/8/03, and
21,605 of which vest on 5/8/04).
(3) Includes 20,006 options granted as incentive stock options (3 of which
vest on 5/8/02, 3 of which vest on 5/8/03, and 20,000 of which vest on
5/8/04) and 39,994 options granted as non-qualified stock options (19,997
of which vest on each of 5/8/03 and 5/8/04).
(4) All are incentive stock options that vest in equal installments on the
first, second, and third anniversary of the date of grant.
Option/SAR Exercises During 2001 and Year-End Option/SAR Values
The following table shows stock option exercises during 2001 by each of
the "Named Executive Officers" and the value of unexercised options at December
31, 2001:
Value of Unexercised
Number of Unexercised In-the-Money
Options/SARs at Options/SARs at
Number December 31, 2001 December 31, 2001(1)
of Shares Value --------------------------- --------------------------
Name Exercised Realized Exercisable/Unexercisable Exercisable/Unexercisable
- ---- ----------- --------- --------------------------- --------------------------
Louis A. Waters .............. -- -- -- --
John M. Yeaman ............... -- -- 175,000 / 350,000 $16,875 / $732,500
Theodore L. Bathurst ......... -- -- 155,000 / 160,000 $ 3,375 / $175,800
H. Lynn Moore, Jr. ........... -- -- 34,000 / 116,000 $ 6,750 / $293,000
Brian K. Miller .............. -- -- 65,000 / 40,000 $16,875 / $ 87,900
Glenn A. Smith ............... -- -- -- / 100,000 $ -- / $293,000
- ----------
(1) Amount is based on a year-end market value of $4.55 per share.
12
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 June 5, 2001, the Tyler Board
granted options to purchase 20,000 shares of Company Common Stock to each of
Ben T. Morris, Ulrich Otto, G. Stuart Reeves, and John D. Woolf at an exercise
price of $2.65 per share, which options vest in equal installments on the
first, second, and third anniversary of the date of grant.
Employment Contracts
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. 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. 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.
On December 9, 1998, the Company entered into a five-year employment
agreement with H. Lynn Moore, Jr., which provides that the Company pay Mr.
Moore for his services as General Counsel of the Company annual compensation of
$200,000 per year. Mr. Moore will participate in additional 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. The
agreement provides for a severance payment equal to the amount of compensation
due for the remainder of the term of the agreement if he is terminated for any
reason other than cause or upon a change in control of the Company.
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 -- 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.
Compensation Committee Interlocks and Insider Participation
Members of the Compensation Committee of the Tyler Board during 2001 were
Ulrich Otto (Chairman), G. Stuart Reeves, and Louis A. Waters. During 2001, Mr.
Waters served as Chairman of the Board and 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.
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.
13
A substantial portion of each executive officer's potential total
compensation is in the form of bonuses and options. Annual bonuses vary
significantly based on the Company's results and revenue growth, the
achievement of strategic objectives of the Company, and each individual's
contribution toward that performance. The Compensation Committee met once
during 2001.
Chief Executive Officer Compensation
Louis A. Waters was elected Co-Chief Executive Officer of the Company in
March 2000. In 2001, Mr. Waters' cash compensation consisted of a base salary
of $300,000 with a bonus equal to 70% of base salary. In determining Mr.
Waters' cash compensation in 2001, the Compensation Committee considered
several factors, including the Company's strategic goal of paying off its
acquisition debt and strengthening its balance sheet, the Company's decision to
focus its core business on its software systems and services segment, the
Company's strategic goal of increasing profitability through a combination of
sustained internal growth coupled with a reduction in expenses associated with
such growth, the Company's continued development of premier technology, Mr.
Waters' contributions to the achievement of these strategic initiatives, and
the levels of compensation of chief executive officers of companies of similar
size in similar industries. Mr. Waters resigned his position as Chairman and
Co-Chief Executive Officer of the Company in April 2002.
John M. Yeaman was elected President and Chief Executive Officer of the
Company in December 1998, and in March 2000, Mr. Yeaman shared his Co-Chief
Executive Officer duties with Mr. Waters. In 2001, Mr. Yeaman's cash
compensation consisted of a base salary of $225,000 with a bonus equal to 70%
of base salary. In addition, Mr. Yeaman was awarded a grant of options to
acquire 250,000 shares of Company Common Stock. In determining Mr. Yeaman's
cash compensation in 2001, the Compensation Committee considered several
factors, including the Company's strategic goal to maintain its low levels of
outstanding indebtedness, the Company's decision to focus its core business on
its software systems and services segment, the Company's strategic goal of
increasing profitability through a combination of sustained internal growth
coupled with a reduction in expenses associated with such growth, the Company's
continued development of premier technology, Mr. Yeaman's contributions to the
achievement of these strategic initiatives, and the levels of compensation of
chief executive officers of companies of similar size in similar industries.
Mr. Yeaman became President and Chief Executive Officer of the Company in April
2002.
This report is submitted by the Compensation Committee.
Ulrich Otto, Chairman
G. Stuart Reeves
Louis A. Waters
14
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 accounting principles generally accepted in the
United States, 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 four times during 2001.
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, 2001 for filing with the Securities and
Exchange Commission.
This report is submitted by the Audit Committee.
G. Stuart Reeves, Chairman
Ben T. Morris
Ulrich Otto
15
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 the S&P
600 Information Technology Index. The comparison assumes $100 was invested on
December 31, 1996 in the Company's Common Stock and in each of the foregoing
indices and assumes reinvestment of dividends and distributions.
1996 1997 1998 1999 2000 2001
---- ---- ---- ---- ---- ----
TYLER TECHNOLOGIES INC 100 293.33 326.67 293.33 90.00 242.67
S&P 500 INDEX 100 133.36 171.48 207.56 188.66 166.24
SP600 INFORMATION TECH 100 103.12 102.79 174.28 124.16 119.52
STOCKHOLDER PROPOSALS
Any proposals that stockholders of the Company desire to have presented at
the 2003 annual meeting of stockholders must be received by the Company at its
principal executive offices not later than December 5, 2002.
16
INDEPENDENT AUDITORS
Ernst & Young LLP acted as the Company's independent auditors for 2001.
Fees for the fiscal year 2001 annual audit were $325,000 and all other fees
were $63,000, including audit related services of $48,000 and non-audit
services of $15,000. 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 2002.
Dallas, Texas By Order of the Board of Directors,
April 4, 2002
/s/ H. Lynn Moore, Jr.
----------------------------------------------
H. Lynn Moore, Jr.
Vice President, General Counsel, and Secretary
17
[TYLER TECHNOLOGIES, INC. LOGO]
5949 SHERRY LANE
SUITE 1400
DALLAS, TX 75225
VOTE 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 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: TYLER 1 KEEP THIS PORTION FOR YOUR RECORDS
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
- -------------------------------------------------------------------------------
---
TYLER TECHNOLOGIES, INC. |
|
THIS PROXY WILL BE VOTED AS SPECIFIED BELOW. IF NO SPECIFICATIONS MADE, THIS
PROXY WILL BE VOTED FOR THE MATTERS SPECIFICALLY REFERRED TO BELOW.
1. Election of Directors
NOMINEES: 01) John S. Marr, Jr., 02) Ben T. Morris, 03) G. Stuart Reeves,
04) Michael D. Richards, 05) Glenn A. Smith, 06) John D. Woolf,
07) John M. Yeaman
FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]
To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below.
----------------------------------------------------------------------------
2. Amendment to the Tyler Option Plan increasing the number of shares authorized
for issuance under the Tyler Option Plan from 5,500,000 to 6,500,000.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. 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 RIGHT. [ ]
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.
- ------------------------------------------- --------------------------------
| | | | |
- ------------------------------------------- --------------------------------
Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
- --------------------------------------------------------------------------------
DETACH HERE
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
PROXY
TYLER TECHNOLOGIES, 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 4, 2002 of the annual meeting of stockholders of Tyler Technologies, Inc.
(the Company) to be held at the Park Cities Hilton, 5954 Luther Lane, Dallas,
Texas, on Thursday, May 9, 2002, at 10:00 a.m., Dallas time, and the proxy
statement in connection therewith, and (2) appoints G. Stuart Reeves 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.
- ------------ ------------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
- ------------ ------------