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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Tyler Technologies Corp | NYSE:TYL | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 461.55 | 0 | 11:08:59 |
Filed by the Registrant ☒
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Filed by a Party other than the Registrant ☐
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material under § 240.14a-12
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Yours very truly,
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JOHN S. MARR, JR.
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Executive Chairman of the Board
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(1)
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elect nine directors to serve until the next annual meeting or until their respective successors are duly elected and qualified;
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(2)
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ratify the selection of our independent auditors for fiscal year 2020; and
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approve an advisory resolution on executive compensation.
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By Order of the Board of Directors
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ABIGAIL DIAZ
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Chief Legal Officer
Corporate Secretary |
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BY INTERNET
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BY TELEPHONE
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BY MAIL
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AT THE MEETING
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Go to www.proxyvote.com
and follow the instructions |
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Call 1-800-690-6903
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Sign, date and return
your proxy card or voting instruction form |
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Attend the annual meeting
in Plano, Texas |
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2
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2020 Proxy Statement
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2020 Proxy Statement 3
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Page
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4
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2020 Proxy Statement
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Proposal One – Election of nine directors;
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Proposal Two – Ratification of our independent auditors for fiscal year 2020; and
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Proposal Three – Approval of an advisory resolution on our executive compensation.
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2020 Proxy Statement 5
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Our Board of Directors unanimously recommends that the shareholders vote FOR each of the nominees for director.
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6
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2020 Proxy Statement
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2019
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2018
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Audit Fees
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$2,575,250
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$2,146,300
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Audit-Related Fees
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—
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8,000
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Other Fees
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—
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—
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Tax Fees
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—
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77,500
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Total
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$2,575,250
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$2,231,800
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Our Board of Directors unanimously recommends that the shareholders vote FOR the ratification of Ernst & Young LLP as our independent auditors for fiscal year 2020.
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2020 Proxy Statement 7
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Our Board of Directors unanimously recommends that the shareholders vote FOR the advisory resolution on our executive compensation.
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8
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2020 Proxy Statement
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2020 Proxy Statement 9
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10
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2020 Proxy Statement
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2020 Proxy Statement 11
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12
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2020 Proxy Statement
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2020 Proxy Statement 13
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•
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Sound personal and professional integrity
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An inquiring and independent mind
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Practical wisdom and mature judgment
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Broad training and experience at the policy-making level of business, finance and accounting, government, education, or technology
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Expertise that is useful to the company and complementary to the background and experience of other Board members, so that an optimal balance of Board members can be achieved and maintained
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Willingness to devote the required time to carrying out the duties and responsibilities of board membership
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Commitment to serve on the Board for several years to develop knowledge about our business
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Willingness to represent the best interests of all shareholders and objectively appraise management performance
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Involvement only in activities or interests that do not conflict with the director’s responsibilities to the company or our shareholders
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14
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2020 Proxy Statement
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Independence Standards, which determine the independence of our non-employee directors. These standards are consistent with the independence standards set forth in NYSE Rule 303A.02.
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Corporate Governance Guidelines, which include, among other things
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Annual submission of independent auditors to shareholders for approval
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Formation of a Nominating and Governance Committee comprised solely of independent directors
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Prohibition of stock option repricing
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Formalization of the ability of independent directors to retain outside advisors
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Performance of periodic formal Board evaluation
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Limitation on the number of additional public company boards on which a director may serve to a maximum of four
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An Audit Committee Charter, which requires, among other things, that the committee be comprised solely of independent directors (as defined by the New York Stock Exchange), at least one of whom will qualify as an “audit committee financial expert” as set forth in Item 401(h) of the SEC’s Regulation S-K. A copy of our Audit Committee Charter may be found on our website, www.tylertech.com.
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A Compensation Committee Charter, which requires, among other things, that the committee be comprised solely of independent directors and sets forth the guidelines for determining executive compensation. A copy of our Compensation Committee Charter may be found on our website, www.tylertech.com.
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A Nominating and Governance Committee Charter, which requires, among other things, that the committee be comprised of at least three independent directors who are responsible for recommending candidates for election to the Board of Directors. A copy of our Nominating and Governance Committee Charter may be found on our website, www.tylertech.com.
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Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships
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Full, fair, accurate, timely, and understandable disclosure in our public communications and reports filed with the SEC
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Compliance with applicable governmental laws, rules, and regulations
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Prompt internal reporting of violations of the policy to the appropriate persons designated therein, including anonymous “whistleblower” provisions
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Accountability for adherence to the policy
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2020 Proxy Statement 15
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Covered Person Position
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Share Ownership Guideline
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Executive Chairman, Chief Executive Officer, President
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6 times base salary
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Other Named Executive Officers
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4 times base salary
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Other Executive Officers as designated by the Compensation Committee of the Board
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1 times base salary
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Non-employee Directors
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4 times annual cash retainer
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16
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2020 Proxy Statement
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Name
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Audit
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Compensation
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Nominating and
Governance |
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Executive
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Donald R. Brattain
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X
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X
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Glenn A. Carter
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X
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Chair
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Brenda A Cline
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Chair
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X
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J. Luther King, Jr.
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X
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Chair
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John S. Marr, Jr.
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Chair
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Daniel M. Pope
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X
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Dustin R. Womble
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H. Lynn Moore, Jr.
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X
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Total Meetings in 2019
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Five
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Two
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Periodically
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Periodically
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Considering the independence of our independent auditors before we engage them
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Reviewing with the independent auditors the fee, scope, and timing of the audit
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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
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Performing periodic formal committee evaluations
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Reviewing our financial statements and related regulatory filings with management and the independent auditors
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Meeting periodically with management and internal audit to discuss internal accounting and financial controls
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Identifying and recommending candidates for election to our Board of Directors
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Identifying and recommending candidates to fill vacancies occurring between annual shareholder meetings
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Reviewing the composition of Board committees
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Periodically reviewing the appropriate skills and characteristics required of Board members in the context of the current make-up of our Board of Directors
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Monitoring adherence to our “Corporate Governance Guidelines”
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2020 Proxy Statement 17
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Presiding at all meetings of the Board at which the Executive Chairman of the Board is not present, as well as executive sessions of the independent directors
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Serving as liaison between the Executive Chairman of the Board and the independent directors
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Having the authority to call meetings of the independent directors and preparing the agenda for such meetings
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Coordinating the activities of the independent directors when acting as a group
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Approving meeting schedules to ensure there is sufficient time for discussion of all agenda items
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Advising the Executive Chairman and Chief Executive Officer as to the quality, quantity, and timeliness of the flow of information from management, including the materials provided to directors at Board meetings
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18
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2020 Proxy Statement
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As to each person the shareholder proposes to nominate for election or re-election as a director
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The name, age, business address, and residence address of the person
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The principal occupation or employment of the person
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The class and number of shares of our capital stock that are beneficially owned by the person
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A description of all direct and indirect compensation and other material monetary agreements, arrangements, or understandings during the previous three years, and any other material relationships, between the shareholder and the proposed nominee
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Any other information relating to the person that is required to be disclosed in solicitations for proxies for election of directors under Regulation 14A of the Exchange Act
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As to the shareholder giving notice
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The name and record address of the shareholder and any other shareholder known to be supporting the nominee
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The class and number of shares of our capital stock that are beneficially owned by the shareholder making the nomination and by any other supporting shareholders
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2020 Proxy Statement 19
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Any proxy, contract, arrangement, understanding, or relationship pursuant to which the shareholder has a right to vote any company shares
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Forward the communication to the director or directors to whom it is addressed (for example, if the communication received relates to our “whistleblower policy” found on our website, www.tylertech.com, including questions, concerns, or complaints regarding accounting, internal accounting controls, and auditing matters, it will be forwarded by management to the Chairman of the Audit Committee for review);
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Attempt to handle the inquiry directly (for example, if the communication is a request for information about us or our operations or it is a stock-related matter that does not appear to require direct attention by our Board of Directors); and/or
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Not forward the communication if it is primarily commercial in nature or if it relates to an improper or irrelevant topic. At each meeting of our Board of Directors, our Chairman will present a summary of all communications received since the last meeting of the Board of Directors that were not forwarded and will make those communications available to any director on request.
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20
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2020 Proxy Statement
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2020 Proxy Statement 21
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Name and Address of Beneficial Owner(1)
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Direct(2)
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Options
Exercisable Within 60 Days(3) |
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Stock
Awards Vested Within 60 Days(4) |
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Other(5)
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Total
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Percent of
Class(6) |
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BlackRock, Inc.
55 East 52nd Street New York, NY 10055 |
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4,941,717(7)
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—
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—
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4,941,717
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12.4%
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The Vanguard Group
100 Vanguard Blvd. Malvern, PA 19355 |
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3,673,176(8)
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—
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—
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3,673,176
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9.2%
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Brown Capital Management, LLC
1201 N. Calvert Street Baltimore, MD 21202 |
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1,854,286(9)
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—
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—
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1,854,286
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4.7%
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Janus Henderson Group PLC
201 Bishopsgate EC2M 3AE United Kingdom |
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1,480,959(10)
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—
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—
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1,480,959
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3.7%
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Directors and Nominees
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Donald R. Brattain
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8,169
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5,000
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1,150
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3,000(11)
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17,319
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*
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Glenn A. Carter
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774
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20,775
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1,150
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—
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22,699
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*
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Brenda A. Cline
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2,099
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15,000
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1,150
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—
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18,249
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*
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J. Luther King, Jr.
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82,996
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30,000
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1,150
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61,179(12)
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175,325
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*
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Mary L. Landrieu
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—(13)
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—
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—
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—
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—
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Daniel M. Pope
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—
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10,000
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1,150
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—
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11,150
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*
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Dustin R. Womble
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165,622(14)
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93,118
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1,150
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—
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259,890
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*
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Named Executive Officers
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John S. Marr, Jr.
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196,317
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331,924
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75,150(15)
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603,391
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1.5%
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H. Lynn Moore, Jr.
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68,038
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208,835
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—
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276,873
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*
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Brian K. Miller
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48,096
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32,000
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—
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80,096
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*
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Directors and executive officers as a group (9 persons)
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572,111
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746,652
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6,900
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139,329
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1,464,992
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3.6%
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*
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Less than one percent of our outstanding common stock
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(1)
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Unless otherwise noted, the address of each beneficial owner is our corporate headquarters: 5101 Tennyson Parkway, Plano, Texas 75024.
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(2)
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“Direct” represents shares as to which each named individual has sole voting or dispositive power.
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(3)
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“Options Exercisable within 60 Days” reflects the number of shares that could be purchased by exercise of options at March 20, 2020, or within 60 days thereafter.
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(4)
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“Stock Awards Vested within 60 Days” reflects the number of restricted stock units that will vest and be settled in shares at March 20, 2020, or within 60 days thereafter.
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(5)
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“Other” represents the number of shares of common stock as to which the named entity or individual share voting and dispositive power with another entity or individual(s).
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(6)
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Based on 39,751,343 shares of our common stock issued and outstanding at March 20, 2020. Each shareholder’s percentage is calculated by dividing (a) the number of shares beneficially owned by (b) the sum of (i) 39,751,343 plus (ii) the number of shares such owner has the right to acquire within 60 days.
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(7)
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Based on information reported by BlackRock, Inc. on Amendment No. 11 to Schedule 13G that was filed with the SEC on February 3, 2020. BlackRock, Inc. is deemed to have beneficial ownership of all of these shares, which includes sole voting power for 4,724,172 shares, sole investment power for all 4,941,717 shares.
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22
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2020 Proxy Statement
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(8)
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Based on information reported by The Vanguard Group on Amendment No. 7 to Schedule 13G that was filed with the SEC on February 10, 2020. The Vanguard Group is deemed to have beneficial ownership of these shares, which includes sole voting power of 31,466 shares, sole investment power of 3,636,965 shares, shared voting power of 9,918 shares, and shared investment power of 36,211 shares.
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(9)
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Based on information reported by Brown Capital Management, LLC on Amendment No. 13 to Schedule 13G that was filed with the SEC on February 14, 2020. Brown Capital Management, LLC is deemed to have beneficial ownership of these shares, which includes sole voting power of 1,084,616 shares and sole investment power for all 1,854,286 shares.
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(10)
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Based on information reported by Janus Henderson Group PLC on Amendment No.1 to Schedule 13G that was filed with the SEC on February 11, 2019. Janus Henderson Group PLC is deemed to have beneficial ownership of these shares, which includes shared voting power of all 1,480,959 shares and shared investment power for all 1,480,959 shares.
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(11)
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Includes (a) 7,070 shares held by Deephaven Enterprises, Inc., of which Mr. Brattain is the sole shareholder, and (b) 3,000 shares held in an investment retirement account for the benefit of Mr. Brattain's spouse.
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(12)
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Represents shares of common stock held by clients of Luther King Capital Management, an investment advisory firm controlled by Mr. King in which he is deemed to have voting and investment power. Mr. King expressly disclaims beneficial ownership of such shares except to the extent of his pecuniary interest therein.
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(13)
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2020 Board nominee
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(14)
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Includes: 41,182 shares of our common stock pledged and held in a margin account.
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(15)
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Includes: (a) 59,500 shares of common stock held in a partnership in which Mr. Marr is the general partner and has sole voting and investment power (the partnership is owned 99% by a trust in which Mr. Marr’s disclaims beneficial ownership and 1% by the general partner); and (b) 15,650 shares held in two trusts for which Mr. Marr is a co-trustee and is deemed to have shared voting and dispositive power. Mr. Marr disclaims beneficial ownership of such securities except to the extent of his pecuniary interest therein.
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2020 Proxy Statement 23
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Tyler achieved record annual Generally Accepted Accounting Principles (“GAAP”) revenue of $1.086 billion, a 16 percent increase over 2018;
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Recurring revenues increased 20 percent over 2018 to $727 million, and comprised approximately 67 percent of our total revenues in 2019;
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GAAP earnings per diluted share decreased 0.6 percent to $3.65 in 2019, and non-GAAP earnings per diluted share increased 10 percent to $5.30;
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We generated a record $255 million in cash provided by operations during the year, and ended the year with total cash and investments of $314 million and no debt;
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We generated a record Adjusted EBITDA of $303 million;
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In 2019 we signed over 1,100 new software arrangements, a 44% increase over 2018: and
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We closed the year with record backlog of $1.46 billion, up nearly 17 percent from 2018.
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Continued progress in achieving our Connected Communities vision and the signing of a strategic collaboration agreement with Amazon Web Services;
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Completed three acquisitions, increasing our footprint in the federal space and strengthening our local government and courts and justice offerings;
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Recognized as a “Best Place to Work” for several Tyler offices;
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Ranked by Forbes on its “Best Employers for Diversity” list for the first time as well as Forbes’ list of “America’s Best Midsize Employers” for the second time.
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Each Named Executive Officer received a base salary increase of 3%. Mr. Marr’s 3% increase followed a 30% decrease in his pay in 2018 to reflect his transition to the role of Executive Chairman;
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No changes were made to short-term incentive target levels for 2019; and
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The number of stock options granted to Mr. Marr was reduced 39%, from 22,500 stock options in 2018 to 13,750 in 2019. Option grants to Mr. Moore and Mr. Miller remained unchanged from 2018 grant levels.
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24
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2020 Proxy Statement
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2020 Proxy Statement 25
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•
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Confidence in the strength of our executive team and appreciation for the consistency and strength of our performance over time;
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Support for our decision in 2018 to include performance-based restricted stock units as part of our long-term equity grant;
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Understanding of our objectives in the use of stock options, including our view of options as a form of compensation having no value at the time of grant, unless additional value is created for our shareholders;
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•
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Appreciation for our history of investor outreach and support for continued outreach in the future;
|
•
|
Questions to further understand the rationale for the use of equity grants associated with our five-year employment agreements versus including that value in the annual equity grant;
|
•
|
Perspectives regarding additional performance metrics for consideration in long-term incentive programs;
|
|
|
| |
|
| |
|
|
|
26
|
| |
|
| |
2020 Proxy Statement
|
|
•
|
Questions regarding the duties and responsibilities and corresponding level of compensation of the Executive Chairman role, in total and relative to the Chief Executive Officer role, as well as the expected duration of the transition;
|
•
|
Support for ongoing assessment of board composition, tenure, and board diversity, including varied experiences in alignment with our strategic objectives as board composition changes over time; and
|
•
|
Requests for enhanced communication of the Company’s current environmental, social and governance practices.
|
|
|
| |
|
|
|
|
| |
2020 Proxy Statement 27
|
|
|
Point of Discussion with
Shareholders |
| |
Tyler Actions
|
| |||
|
Equity grant associated with
the five-year employment agreements |
| |
The Company provides an annual grant that includes a combination of stock options and long-term performance-based restricted stock units (PSUs) to our Named Executive Officers. The annual grant has generally been set at or below the level of our peer comparators and the PSUs are based on the achievement of average three-year revenue growth. In addition, corresponding with the renewal of five-year employment agreements, the Company has provided an additional grant in time-based restricted stock units that vest over the five-year term of the employment agreements. Target total compensation to our Named Executive Officers, including the value of the annual grants plus the annual value of the five-year grant associated with the employment agreements, has consistently remained at or below the levels within our peer group.
|
| |||
|
|
| |
|
| |||
|
|
| |
As a result of feedback from investors, and to ensure we continue to provide and disclose compensation that represents our executive compensation philosophy and objectives, we do not plan to issue an equity grant to our Named Executive Officers with any future employment agreements after the current agreements expire in 2023.
|
| |||
|
Roles, responsibilities and
compensation of the Executive Chairman and CEO during the CEO leadership transition |
| |
In May 2018, Mr. Marr became Executive Chairman of the Board after more than 12 years in the role of President and Chief Executive Officer of the Company. At that time, Mr. Moore became President and Chief Executive Officer. Early in the transition, Mr. Marr continued to participate in daily operational matters, in addition to strategic and Board-related matters. As the transition has evolved, Mr. Moore has taken over full responsibility for daily operations, with Mr. Marr as a resource for advice and other guidance. Mr. Marr's focus has turned to participating in strategic and Board-related matters.
|
| |||
|
|
| |
|
| |||
|
|
| |
In anticipation of Mr. Marr moving to the role of Executive Chairman of the Board, in February 2018, the Compensation Committee approved a decrease in Mr. Marr’s annual salary of 30% from $425,000 to $300,000.
|
| |||
|
|
| |
|
| |||
|
|
| |
In February 2019, the Compensation Committee approved a 3% increase in base salary for Mr. Marr with no change to his short-term incentive target or the number of stock options and performance-based restricted stock units for 2019. The Compensation Committee considered multiple factors including the continued leadership transition at the Company and Mr. Marr’s continuing involvement in strategic initiatives as his first full year as Executive Chairman continued.
|
|
|
|
| |
|
| |
|
|
|
28
|
| |
|
| |
2020 Proxy Statement
|
|
|
Point of Discussion with
Shareholders |
| |
Tyler Actions
|
| |||
|
|
| |
On May 28, 2019, following the 2019 Annual Meeting of Shareholders, after reviewing a request from Mr. Marr to reduce his 2019 long-term compensation, the Compensation Committee recommended, and the Board of Directors approved, a 39% reduction in options to be granted to Mr. Marr in 2019 from 22,500 to 13,750 stock options.
|
| |||
|
|
| |
|
| |||
|
|
| |
In February 2020, the Compensation Committee requested, and the Board of Directors approved, a further reduction in Mr. Marr’s compensation to reflect continued success in the transition of Mr. Marr to the Executive Chairman role as follows:
|
| |||
|
|
| |
•
|
| |
3% reduction in annual salary to $300,000
|
|
|
|
| |
•
|
| |
Elimination of short-term incentive for 2020
|
|
|
|
| |
•
|
| |
Adjustment to total long-term incentive with reduction in stock options from 13,750 to 7,500 and elimination of performance-based restricted stock units
|
|
|
|
| |
|
| |||
|
|
| |
The Compensation Committee believes the changes to Mr. Marr’s compensation, beginning in 2018 continuing through 2020, are consistent with the multi-year leadership transition at Tyler and with feedback received in our discussions with investors.
|
| |||
|
Communication of Environmental,
Social and Governance Practices |
| |
The Company has consistently invested in those social and governance practices most important to our clients, employees and shareholders. In our say-on-pay outreach discussions, investors agreed and recommended more robust communications about our corporate social responsibility and sustainability efforts and accomplishments.
|
| |||
|
|
| |
|
| |||
|
|
| |
We have enhanced our ESG reporting in the “Environmental and Social Responsibility” section of the Proxy and on our website and will continue to provide enhanced disclosure of our continuing efforts and accomplishments in each of the areas noted. The Company is proud to share these examples of our commitment to environmental, social and governance practices that are important to our shareholders, employees and clients.
|
| |||
|
Board Composition
|
| |
We have a consistent record of selecting director nominees according to the qualifications and philosophies set forth in “Tyler Management—Board Diversity and Director Nominee Qualifications.” As noted therein, we do not apply a strict formula for measuring diversity on our Board, but instead take a holistic view towards achieving a mix of backgrounds, perspectives, and experiences. In our say-on-pay outreach discussions, investors commented favorably on Tyler leadership, including Board leadership. While no single element of diversity was specifically called out for improvement, some investors did comment on the tenure of certain directors. We appreciate the long-term perspective and wisdom our longer-serving directors bring to our Board and believe we have balanced that perspective with directors of more medium- and short-term tenure. This year, we are also nominating a new director. We will continue to evaluate the overall composition of not just our Board but also each Committee on our Board to ensure that fresh and new perspectives are represented.
|
|
|
|
| |
|
|
|
|
| |
2020 Proxy Statement 29
|
|
•
|
Provide compensation that attracts, motivates, retains and rewards a talented executive team with deep experience in the public sector and the technology industry;
|
•
|
Design compensation to prevent excessive risk taking and responsible cost management with a mix of compensation elements balanced between fixed pay, annual incentives, and long-term incentives; and
|
•
|
Deliver compensation based on the achievement of key operational results and long-term strategic objectives which drive company performance and align executive compensation with increased shareholder value.
|
|
Element
|
| |
Form of
Compensation |
| |
Purpose
|
| |
Metric
|
|
|
Base salary
|
| |
Cash
|
| |
Provide competitive, fixed compensation to attract and retain exceptional executive talent
|
| |
Base salary is a fixed component and changes to salary are dependent on individual performance, peer and market comparisons and retention goals
|
|
|
Annual Incentive compensation
|
| |
Cash*
|
| |
Create a strong financial incentive for achieving or exceeding annual financial performance goals
|
| |
Achievement of adjusted earnings per share goals, which are recommended by the CEO and approved by the Compensation Committee
|
|
|
Long-term equity-based compensation
|
| |
Performance- based restricted stock units (PSUs) and stock options
|
| |
Create a strong financial incentive for shareholder value creation with significant company equity stake linked to long-term, future Company performance
|
| |
3-year Average Revenue Growth (PSUs) Stock price; shareholder value created, in the form of increased value per share (Options)
|
|
*
|
Delivered as cash upon achievement of performance goals in 2019. In February 2020, the Compensation Committee recommended, and the Board of Directors approved, future annual incentives to executive management to be delivered in the form of short-term PSUs based on the achievement of annual performance goals.
|
|
|
| |
|
| |
|
|
|
30
|
| |
|
| |
2020 Proxy Statement
|
|
|
Our Philosophy
|
| |
Our Practice
|
|
|
Our executive compensation program and practices are designed for performance, not perquisites
|
| |
Total Target Compensation for our Named Executive Officers is consistently set at or below levels within our peer group.
|
|
|
|
| |||
|
78% of total target compensation to our Named Executive Officers is “at risk” compensation.
|
| |||
|
|
| |||
|
Our Named Executive Officers receive no material non-cash benefits, deferred compensation benefits or other executive perquisites.
|
| |||
|
|
| |||
|
Our Named Executive Officers participate in the same health and welfare benefits available to all employees of the Company and on the same terms as broadly available.
|
| |||
|
We deliver pay for performance that consistently meets or exceeds expectations
|
| |
Performance-based incentives are provided upon the achievement of annual growth and operational goals and long-term growth goals that increase shareholder value. The potential for additional compensation is linked to performance levels that exceed Board of Directors and shareholder expectations for performance and growth.
|
|
|
We administer our executive compensation programs and practices with responsibility on behalf of our shareholders
|
| |
Our Compensation Committee is comprised solely of independent directors
|
|
|
|
| |||
|
We maintain an executive compensation recovery policy described further in the “Other Important Elements of our Executive Compensation” section.
|
| |||
|
|
| |||
|
We maintain stock ownership guidelines, referenced in more detail in the “Stock Ownership Guidelines” section, which require our executives to hold a meaningful ownership stake in the Company.
|
| |||
|
|
| |||
|
We design and administer our executive compensation program to ensure excessive risk taking is not incentivized as described in the “Other Important Elements of our Executive Compensation” section.
|
| |||
|
|
| |||
|
Our 2018 Stock Incentive Plan does not permit stock option exchanges or repricing without shareholder approval.
|
| |||
|
|
| |||
|
We maintain a Stock Anti-Hedging and Pledging Policy, described in the “Stock Anti-Hedging and Pledging Policy” section, to prohibit our executives from engaging in transaction that could reduce or limit their holdings, ownership or interest in Company securities.
|
| |||
|
|
| |||
|
We conduct an annual shareholder advisory vote on Named Executive Officer compensation and maintain ongoing outreach to our investors to understand their perspectives on our executive compensation program.
|
| |||
|
|
| |||
|
Our Compensation Committee conducts an Annual Compensation-Related Risk Assessment.
|
| |||
|
|
| |||
|
We do not provide excise tax payments or “gross ups” on future post-employment on compensation to our Named Executive Officers if they become eligible for severance payments under the terms of their employment agreements.
|
|
|
|
| |
|
|
|
|
| |
2020 Proxy Statement 31
|
|
•
|
Reviewing and approving all compensation of our CEO and other Named Executive Officers;
|
•
|
Reviewing and approving performance goals used in the design of our annual and long-term incentive plans;
|
•
|
Reviewing and approving CEO and Named Executive Officer post-employment compensation arrangements; and
|
•
|
Reviewing and approving this Compensation Discussion and Analysis.
|
•
|
Our executive compensation program objectives;
|
•
|
Corporate performance, as reflected in the achievement of key strategic, financial and operational objectives;
|
•
|
Responsible compensation pay practices and mix of pay elements which minimize excessive risk taking;
|
•
|
Base salaries, annual incentives and long-term incentives provided in our peer group and for peer roles in the Radford Global Technology Survey; and
|
•
|
Performance and retention of the named executive officers and the value of that retention to shareholders.
|
|
|
| |
|
| |
|
|
|
32
|
| |
|
| |
2020 Proxy Statement
|
|
|
ACI Worldwide, Inc.
|
| |
MicroStrategy, Incorporated
|
|
|
Ansys, Inc.
|
| |
NetScout Systems, Inc.
|
|
|
Aspen Technology, Inc.
|
| |
Pegasystems, Inc.
|
|
|
athenahealth, Inc.
|
| |
RealPage, Inc.
|
|
|
Blackbaud, Inc.
|
| |
ServiceNow, Inc.
|
|
|
Guidewire Software, Inc.
|
| |
Splunk, Inc.
|
|
|
Jack Henry & Associates, Inc.
|
| |
SS&C Technologies Holdings, Inc.
|
|
|
j2 Global, Inc.
|
| |
Tableau Software, Inc.
|
|
|
Manhattan Associates, Inc.
|
| |
The Ultimate Software Group, Inc.
|
|
|
Medidata Solutions, Inc.
|
| |
Veeva Systems Inc.
|
|
|
|
| |
Revenues
|
| |
Net Income
|
| |
Market
Capitalization |
| |
Total Assets
|
|
|
|
| |
(in millions)
|
| |
(in billions)
|
| ||||||
|
Tyler Technologies, Inc.
|
| |
$841
|
| |
$164
|
| |
$7.4
|
| |
$1.6
|
|
|
Peer Group Average
|
| |
$973
|
| |
$191(a)
|
| |
$8.5
|
| |
$1.9
|
|
(a)
|
Excludes peer companies with net losses
|
|
|
| |
|
|
|
|
| |
2020 Proxy Statement 33
|
|
|
Name
|
| |
Increase
(Decrease) |
| |
2018
|
| |
2019
|
|
|
John S. Marr, Jr.
|
| |
3%
|
| |
$300,000
|
| |
$309,000
|
|
|
H. Lynn Moore, Jr.
|
| |
3%
|
| |
$500,000
|
| |
$515,000
|
|
|
Brian K. Miller
|
| |
3%
|
| |
$383,000
|
| |
$394,490
|
|
|
Annual Incentive Metric
|
| |
Rationale for Metric
|
|
|
Non-GAAP Earnings per Share*
|
| |
We believe that non-GAAP earnings per share removes certain uncontrollable variables and provides a more accurate picture of our financial performance.
|
|
*
|
Excludes write-downs of acquisition-related deferred revenue and acquired leases, share-based compensation expense, employer portion of payroll taxes on employee stock transactions, acquisition-related costs, and expenses associated with amortization of intangibles arising from business combinations.
|
|
|
| |
|
| |
|
|
|
34
|
| |
|
| |
2020 Proxy Statement
|
|
•
|
175% of target based on achieving 112.9% of adjusted earnings per share goal
|
•
|
170% of target based on achieving 112.1% of adjusted earnings per share goal
|
•
|
165% of target based on achieving 111.4% of adjusted earnings per share goal
|
•
|
160% of target based on achieving 110.6% of adjusted earnings per share goal
|
•
|
155% of target based on achieving 109.9% of adjusted earnings per share goal
|
•
|
150% of target based on achieving 109.1% of adjusted earnings per share goal
|
•
|
145% of target based on achieving 108.3% of adjusted earnings per share goal
|
•
|
140% of target based on achieving 107.6% of adjusted earnings per share goal
|
•
|
135% of target based on achieving 106.8% of adjusted earnings per share goal
|
•
|
130% of target based on achieving 106.1% of adjusted earnings per share goal
|
•
|
125% of target based on achieving 105.3% of adjusted earnings per share goal
|
•
|
120% of target based on achieving 104.6% of adjusted earnings per share goal
|
•
|
115% of target based on achieving 103.8% of adjusted earnings per share goal
|
•
|
110% of target based on achieving 103.0% of adjusted earnings per share goal
|
•
|
100% of target based on achieving 102.3% of adjusted earnings per share goal
|
•
|
95% of target based on achieving 101.5% of adjusted earnings per share goal
|
•
|
90% of target based on achieving 100.8% of adjusted earnings per share goal
|
•
|
85% of target based on achieving 100.0% of adjusted earnings per share goal
|
•
|
80% of target based on achieving 99.2% of adjusted earnings per share goal
|
•
|
75% of target based on achieving 98.5% of adjusted earnings per share goal
|
•
|
70% of target based on achieving 97.7% of adjusted earnings per share goal
|
•
|
65% of target based on achieving 97.0% of adjusted earnings per share goal
|
•
|
60% of target based on achieving 96.2% of adjusted earnings per share goal
|
•
|
55% of target based on achieving 95.4% of adjusted earnings per share goal
|
•
|
50% of target based on achieving 94.7% of adjusted earnings per share goal
|
•
|
45% of target based on achieving 93.9% of adjusted earnings per share goal
|
•
|
40% of target based on achieving 93.2% of adjusted earnings per share goal
|
•
|
0% of target based on achieving less than 93% of adjusted earnings per share goal
|
|
|
| |
|
|
|
|
| |
2020 Proxy Statement 35
|
|
|
Metric
|
| |
Threshold (40%)
|
| |
Target (100%)
|
| |
Max (175%)
|
| |
Actual
Achievement |
| |
% of Target
Achieved |
|
|
Non-GAAP EPS*
|
| |
$4.91
|
| |
$5.39 to $5.429
|
| |
$5.95
|
| |
$5.30
|
| |
85%
|
|
*
|
Included adjustments to 2019 GAAP pre-tax income for (i) $4.9 million of write-downs of acquisition-related deferred revenue and acquired leases, (ii) $61.1 million of share-based compensation expense and employer portion of payroll taxes on employee stock transactions, (iii) $52.1 million of amortization of intangibles arising from business combinations and (iv) $1.4 million of acquisition-related costs.
|
•
|
maintain an overall number and value of equity incentive awards that is reasonable in terms of shareholder dilution; and
|
•
|
focus equity incentive awards on a limited number of key employees who have a direct impact on our ability to achieve our long-term goals; and
|
•
|
provide the largest equity incentive grants to our top performers and individuals with the greatest responsibilities and potential to drive long-term share price appreciation; and
|
•
|
utilize a mix of options, restricted stock units, and performance-based restricted stock units to align recipients with the long-term interests of our shareholders, without promoting excessing risk taking.
|
|
|
| |
|
| |
|
|
|
36
|
| |
|
| |
2020 Proxy Statement
|
|
|
Average Annual
Revenue Growth(1) |
| |
Percentage of PSUs
to be earned and eligible for vesting |
|
|
Under 6%
|
| |
—
|
|
|
6.0% -7.49%
|
| |
50%
|
|
|
7.5%-8.99%
|
| |
80%
|
|
|
9.0%-10.99%
|
| |
100%
|
|
|
11.0% and above
|
| |
120%
|
|
(1)
|
Adjusted to exclude acquisitions with revenue 3% or greater of Tyler consolidated revenue.
|
|
|
| |
PSUs
|
| |
Stock Options
|
| |
Stock Options
|
|
|
Name
|
| |
March 1, 2019
|
| |
June 1, 2019
|
| |
December 1, 2019
|
|
|
John S. Marr, Jr.
|
| |
7,500
|
| |
11,250
|
| |
11,250
|
|
|
H. Lynn Moore, Jr.
|
| |
7,500
|
| |
11,250
|
| |
11,250
|
|
|
Brian K. Miller
|
| |
5,000
|
| |
7,500
|
| |
7,500
|
|
|
|
| |
PSUs
|
| |
Stock Options
|
| |
Stock Options
|
|
|
Name
|
| |
March 1, 2019
|
| |
June 1, 2019
|
| |
December 1, 2019
|
|
|
John S. Marr, Jr.
|
| |
7,500
|
| |
6,875
|
| |
6,875
|
|
|
H. Lynn Moore, Jr.
|
| |
7,500
|
| |
11,250
|
| |
11,250
|
|
|
Brian K. Miller
|
| |
5,000
|
| |
7,500
|
| |
7,500
|
|
|
Name
|
| |
Percentage of total
annually recurring stock incentive awards |
|
|
John S. Marr, Jr.
|
| |
5.1%
|
|
|
H. Lynn Moore, Jr.
|
| |
7.2%
|
|
|
Brian K. Miller
|
| |
4.8%
|
|
|
|
| |
|
|
|
|
| |
2020 Proxy Statement 37
|
|
|
Name
|
| |
Base Salary
|
| |
Compensation at Risk
|
| |||
|
Bonus
|
| |
Stock Incentive
Awards |
| ||||||
|
John S. Marr, Jr.
|
| |
10%
|
| |
8%
|
| |
82%
|
|
|
H. Lynn Moore, Jr.
|
| |
12%
|
| |
11%
|
| |
77%
|
|
|
Brian K. Miller
|
| |
14%
|
| |
12%
|
| |
74%
|
|
•
|
Key operational and long-term objectives including management’s goal of year-over-year earnings per share growth, continued strengthening of our balance sheet, profitability and growth of recurring revenues;
|
•
|
Management’s objectives to develop and deploy premier technology through continued investment;
|
•
|
Mr. Moore’s increased responsibilities in driving the achievement of each of these strategic initiatives and Mr. Marr's role and level of involvement;
|
•
|
The continued retention of each of our Named Executive Officers through the leadership transition;
|
•
|
Reference to levels of compensation of other chief executive officers of similarly sized, publicly-held companies in similar industries;
|
•
|
Terms of employment agreements, including equity granted with the five-year employment agreements executed in 2018
|
|
|
| |
|
| |
|
|
|
38
|
| |
|
| |
2020 Proxy Statement
|
|
|
Average Annual
Revenue Growth(1) |
| |
Percentage of PSUs
to be earned and eligible for vesting |
|
|
Under 6%
|
| |
—
|
|
|
6.0%-7.49%
|
| |
50%
|
|
|
7.5%-8.99%
|
| |
80%
|
|
|
9.0%-10.99%
|
| |
100%
|
|
|
11.0% and above
|
| |
120%
|
|
(1)
|
Adjusted to exclude acquisitions with revenue 3% or greater of Tyler consolidated revenue.
|
|
|
| |
|
|
|
|
| |
2020 Proxy Statement 39
|
|
|
|
| |
|
| |
|
|
|
40
|
| |
|
| |
2020 Proxy Statement
|
|
|
Equity Type
|
| |
Grant
Frequency |
| |
Vesting
|
| |
Purpose
|
|
|
Performance - based
restricted stock units |
| |
Annual
|
| |
Three - year cliff, only if performance metric achieved
|
| |
Performance - Average three-year revenue growth
|
|
|
Options
|
| |
Annual
|
| |
Vesting over three years
|
| |
Performance - Growth in stock price/shareholder value
|
|
|
Options
|
| |
Every five years
|
| |
Vesting over five years
|
| |
Retention of Named Executive Officers
|
|
|
Restricted stock units
|
| |
Every five years
|
| |
Vesting over five years
|
| |
Retention of Named Executive Officers
|
|
|
|
| |
|
|
|
|
| |
2020 Proxy Statement 41
|
|
|
|
| |
|
| |
|
|
|
42
|
| |
|
| |
2020 Proxy Statement
|
|
|
Name and
Principal Position |
| |
Year
|
| |
Salary
($) |
| |
Bonus
($) |
| |
Stock
Awards ($)(1) |
| |
Option
Awards ($)(2) |
| |
Non-Equity
Incentive Plan Compensation ($)(3) |
| |
Change in
Pension Value and Nonqualified Deferred Compensation Earnings ($) |
| |
All Other
Compensation ($)(4) |
| |
Total
($) |
|
|
John S. Marr, Jr.
Executive Chairman of the Board |
| |
2019
|
| |
$309,000
|
| |
$—
|
| |
$1,547,100
|
| |
$1,025,611
|
| |
$262,650
|
| |
|
| |
$8,590
|
| |
$3,152,951
|
|
|
2018
|
| |
$300,000
|
| |
$—
|
| |
$9,928,320
|
| |
$8,869,480
|
| |
$315,000
|
| |
$—
|
| |
$8,435
|
| |
$19,421,235
|
| |||
|
2017
|
| |
$425,000
|
| |
$—
|
| |
$—
|
| |
$2,780,462
|
| |
$510,000
|
| |
$—
|
| |
$9,630
|
| |
$3,725,092
|
| |||
|
H. Lynn Moore, Jr.
President and Chief Executive Officer |
| |
2019
|
| |
$515,000
|
| |
$—
|
| |
$1,547,100
|
| |
$1,678,272
|
| |
$437,750
|
| |
|
| |
$13,008
|
| |
$4,191,130
|
|
|
2018
|
| |
$500,000
|
| |
$—
|
| |
$9,928,320
|
| |
$8,869,480
|
| |
$525,000
|
| |
$—
|
| |
$12,452
|
| |
$19,835,252
|
| |||
|
2017
|
| |
$425,000
|
| |
$—
|
| |
$—
|
| |
$2,780,462
|
| |
$510,000
|
| |
$—
|
| |
$12,961
|
| |
$3,728,423
|
| |||
|
Brian K. Miller
Executive Vice President, Chief Financial Officer and Treasurer |
| |
2019
|
| |
$394,490
|
| |
$—
|
| |
$1,031,400
|
| |
$1,118,848
|
| |
$335,317
|
| |
$—
|
| |
$12,920
|
| |
$2,892,975
|
|
|
2018
|
| |
$383,000
|
| |
$—
|
| |
$3,888,640
|
| |
$3,641,914
|
| |
$402,150
|
| |
$—
|
| |
$13,890
|
| |
$8,329,594
|
| |||
|
2017
|
| |
$370,000
|
| |
$—
|
| |
$—
|
| |
$1,835,105
|
| |
$444,000
|
| |
$—
|
| |
$12,232
|
| |
$2,661,337
|
|
(1)
|
The reported amounts represent the aggregate grant date fair value of awards of restricted stock units and performance-based restricted stock units, computed in accordance with FASB ASC Topic 718, and, for performance-based restricted stock units, assume performance at the target level for each such award.
|
(2)
|
Represents aggregate grant date fair value of awards granted and calculated in accordance with FASB ASC Topic 718. Such grants provide our executive officers the opportunity to purchase shares of Tyler common stock at some future date at the fair market value of the stock on the date of grant. For additional information on the valuation assumptions, refer to note 9 of the Tyler Technologies’ financial statements in the Form 10-K for the year ended December 31, 2019, as filed with the SEC. This fair value does not represent cash received by the executive in the relevant year, but potential earnings contingent on Tyler’s future performance. Stock option grants are designed to provide long-term (up to ten years) incentives and rewards linked directly to the price of our common stock. Stock options add value to the recipient only when shareholders benefit from stock price appreciation and, as such, further align management’s interest with those of our shareholders.
|
(3)
|
These amounts consist of amounts earned under Tyler’s incentive compensation plan for each respective year and generally paid in the following year.
|
(4)
|
All other compensation includes amounts contributed or accrued by Tyler under our 401(k) Savings Plan and tickets to sporting events.
|
•
|
Annual base pay
|
•
|
The company's matching contributions to the employee's 401(k) account
|
•
|
Calendar year cash bonus
|
•
|
Calendar year share-based awards (incentive or nonqualified stock options and restricted stock units)
|
|
|
| |
|
|
|
|
| |
2020 Proxy Statement 43
|
|
|
|
| |
|
| |
Estimated Future
Payouts Under Non- Equity Incentive Plan Awards(1) |
| |
Estimated Future Payouts
Under Equity Incentive Plan Awards(2) |
| |
All Other
Option Awards: Number of Securities Underlying Options (#)(3) |
| |
Exercise
or Base Price of Option Awards ($/Sh) |
| |
Grant
Date Fair Value of Stock and Option Awards ($)(4) |
| |||||||||
|
Name
|
| |
Grant
Date |
| |
Target
($) |
| |
Maximum
($) |
| |
Threshold
(#) |
| |
Target
(#) |
| |
Maximum
(#) |
| |||||||||
|
John S. Marr, Jr.
|
| |
2/5/2019
|
| |
$309,000
|
| |
$540,750
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
3/1/2019
|
| |
|
| |
|
| |
3,750
|
| |
7,500
|
| |
9,000
|
| |
|
| |
|
| |
|
| |||
|
6/1/2019
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
6,875
|
| |
$213.35
|
| |
$443,308
|
| |||
|
12/1/2019
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
6,875
|
| |
$290.17
|
| |
$582,303
|
| |||
|
H. Lynn Moore, Jr.
|
| |
2/5/2019
|
| |
$515,000
|
| |
$901,250
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
3/1/2019
|
| |
|
| |
|
| |
3,750
|
| |
7,500
|
| |
9,000
|
| |
|
| |
|
| |
|
| |||
|
6/1/2019
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
11,250
|
| |
$213.35
|
| |
$725,412
|
| |||
|
12/1/2019
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
11,250
|
| |
$290.17
|
| |
$952,860
|
| |||
|
Brian K. Miller
|
| |
2/5/2019
|
| |
$394,490
|
| |
$690,358
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
3/1/2019
|
| |
|
| |
|
| |
2,500
|
| |
5,000
|
| |
6,000
|
| |
|
| |
|
| |
|
| |||
|
6/1/2019
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
7,500
|
| |
$213.35
|
| |
$483,608
|
| |||
|
12/1/2019
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
7,500
|
| |
$290.17
|
| |
$635,240
|
|
(1)
|
The target and maximum plan award amounts reported in these columns are derived from our 2019 Incentive Compensation Plan. The actual payout amounts for 2019 are set forth in the Non-Equity Incentive Plan Compensation column of our Summary Compensation Table.
|
(2)
|
The target and maximum plan performance-based restricted stock unit awards reported in these columns are derived from our 2019 Incentive Compensation Plan. The actual vested amounts for 2019 are set forth in the 2019 Equity Incentive Plan Compensation column of our Summary Compensation Table.
|
(3)
|
The options awarded on June 1, 2019, and December 1, 2019, for Messrs. Marr, Moore and Miller were granted as part of Tyler’s broad-based annual stock option grants. These options will vest ratably over a three-year period beginning on the first anniversary of the grant date for each Named Executive Officer who is at least fifty years of age or older and has a tenure with the company of at least fifteen years or more. All options have a contractual term of ten years. The option terms are the same for substantially all the options granted to employees on June 1, 2019, and December 1, 2019; certain key employees who are closer to retirement age may, in the discretion of our Chief Executive Officer, receive shorter vesting periods.
|
(4)
|
The aggregate grant date fair value is determined in accordance with Accounting Standards Codification Topic 718, Stock Compensation, and does not represent cash received by the Named Executive Officers in 2019. The grant date fair value represents potential earnings contingent on Tyler’s future performance. Stock option grants are designed to provide long-term (up to ten years) incentives and rewards linked directly to the price of our common stock. Stock options add value to the recipient only when shareholders benefit from stock price appreciation and, as such, further align management’s interest with those of our shareholders.
|
|
|
| |
|
| |
|
|
|
44
|
| |
|
| |
2020 Proxy Statement
|
|
|
|
| |
|
| |
Option Awards
|
| |
Stock Awards
|
| ||||||||||||||||||
|
|
| |
|
| |
Number of Securities Underlying Unexercised Options (#) |
| |
Number of Securities Underlying Unexercised Options (#)(1) |
| |
Option
Exercise Price ($) |
| |
Option
Expiration Date |
| |
Number of
Shares or Units of Stock that have not vested (#) |
| |
Market
Value of Shares or Units of Stock that have not vested(2) ($) |
| |
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that have not vested (#) |
| |
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that have not vested(3) ($) |
|
|
Name
|
| |
Grant Date
|
| |
Exercisable
|
| |
Unexercisable
|
| ||||||||||||||||||
|
John S. Marr, Jr.
|
| |
5/9/2018
|
| |
|
| |
|
| |
|
| |
|
| |
28,800
|
| |
$8,640,576
|
| |
|
| |
|
|
|
|
| |
3/1/2019
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
7,500
|
| |
$2,250,150
|
|
|
|
| |
6/1/2018
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
7,500
|
| |
$2,250,150
|
|
|
|
| |
6/15/2011
|
| |
4,152
|
| |
—
|
| |
$24.08
|
| |
6/15/2021
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
6/15/2012
|
| |
2,540
|
| |
—
|
| |
$39.36
|
| |
6/15/2022
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
2/11/2013
|
| |
80,000
|
| |
—
|
| |
$54.45
|
| |
2/11/2023
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
6/14/2013
|
| |
28,800
|
| |
—
|
| |
$68.17
|
| |
6/14/2023
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
12/13/2013
|
| |
28,800
|
| |
—
|
| |
$100.43
|
| |
12/13/2023
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
6/13/2014
|
| |
26,000
|
| |
—
|
| |
$81.21
|
| |
6/13/2024
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
12/15/2014
|
| |
26,000
|
| |
—
|
| |
$108.81
|
| |
12/15/2024
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
6/1/2015
|
| |
25,000
|
| |
—
|
| |
$121.05
|
| |
6/1/2025
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
12/1/2015
|
| |
25,000
|
| |
—
|
| |
$176.80
|
| |
12/1/2025
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
6/1/2016
|
| |
25,000
|
| |
—
|
| |
$154.85
|
| |
6/1/2026
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
12/1/2016
|
| |
25,000
|
| |
—
|
| |
$143.42
|
| |
12/1/2026
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
6/1/2017
|
| |
16,666
|
| |
8,334
|
| |
$171.44
|
| |
6/1/2027
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
12/1/2017
|
| |
16,666
|
| |
8,334
|
| |
$181.79
|
| |
12/1/2027
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
2/26/2018
|
| |
22,400
|
| |
89,600
|
| |
$205.66
|
| |
2/26/2028
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
6/1/2018
|
| |
3,750
|
| |
7,500
|
| |
$231.68
|
| |
6/1/2028
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
12/1/2018
|
| |
3,750
|
| |
7,500
|
| |
$192.76
|
| |
12/1/2028
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
6/1/2019
|
| |
—
|
| |
6,875
|
| |
$213.35
|
| |
6/1/2029
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
12/1/2019
|
| |
—
|
| |
6,875
|
| |
$290.17
|
| |
12/1/2029
|
| |
|
| |
|
| |
|
| |
|
|
|
H. Lynn Moore, Jr.
|
| |
5/9/2018
|
| |
|
| |
|
| |
|
| |
|
| |
28,800
|
| |
$8,640,576
|
| |
|
| |
|
|
|
|
| |
3/1/2019
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
7,500
|
| |
$2,250,150
|
|
|
|
| |
6/1/2018
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
7,500
|
| |
$2,250,150
|
|
|
|
| |
2/11/2013
|
| |
50,000
|
| |
—
|
| |
$54.45
|
| |
2/11/2023
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
12/13/2013
|
| |
19,200
|
| |
—
|
| |
$100.43
|
| |
12/13/2023
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
6/13/2014
|
| |
16,269
|
| |
—
|
| |
$81.21
|
| |
6/13/2024
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
12/15/2014
|
| |
17,500
|
| |
—
|
| |
$108.81
|
| |
12/15/2024
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
6/1/2015
|
| |
13,400
|
| |
3,350
|
| |
$121.05
|
| |
6/1/2025
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
12/1/2015
|
| |
13,400
|
| |
3,350
|
| |
$176.80
|
| |
12/1/2025
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
6/1/2016
|
| |
10,050
|
| |
6,700
|
| |
$154.85
|
| |
6/1/2026
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
12/1/2016
|
| |
10,050
|
| |
6,700
|
| |
$143.42
|
| |
12/1/2026
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
6/1/2017
|
| |
10,000
|
| |
15,000
|
| |
$171.44
|
| |
6/1/2027
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
12/1/2017
|
| |
16,666
|
| |
8,334
|
| |
$181.79
|
| |
12/1/2027
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
2/26/2018
|
| |
22,400
|
| |
89,600
|
| |
$205.66
|
| |
2/26/2028
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
6/1/2018
|
| |
3,750
|
| |
7,500
|
| |
$231.68
|
| |
6/1/2028
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
12/1/2018
|
| |
3,750
|
| |
7,500
|
| |
$192.76
|
| |
12/1/2028
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
6/1/2019
|
| |
—
|
| |
11,250
|
| |
$213.35
|
| |
6/1/2029
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
12/1/2019
|
| |
—
|
| |
11,250
|
| |
$290.17
|
| |
12/1/2029
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
|
|
|
|
| |
2020 Proxy Statement 45
|
|
|
|
| |
|
| |
Option Awards
|
| |
Stock Awards
|
| ||||||||||||||||||
|
|
| |
|
| |
Number of Securities Underlying Unexercised Options (#) |
| |
Number of Securities Underlying Unexercised Options (#)(1) |
| |
Option
Exercise Price ($) |
| |
Option
Expiration Date |
| |
Number of
Shares or Units of Stock that have not vested (#) |
| |
Market
Value of Shares or Units of Stock that have not vested(2) ($) |
| |
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that have not vested (#) |
| |
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that have not vested(3) ($) |
|
|
Name
|
| |
Grant Date
|
| |
Exercisable
|
| |
Unexercisable
|
| ||||||||||||||||||
|
Brian K. Miller
|
| |
5/9/2018
|
| |
|
| |
|
| |
|
| |
|
| |
9,600
|
| |
$2,880,192
|
| |
|
| |
|
|
|
|
| |
3/1/2019
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
5,000
|
| |
$1,500,100
|
|
|
|
| |
6/1/2018
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
5,000
|
| |
$1,500,100
|
|
|
|
| |
12/15/2014
|
| |
3,500
|
| |
—
|
| |
$108.81
|
| |
12/15/2024
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
12/1/2016
|
| |
4,250
|
| |
—
|
| |
$143.42
|
| |
12/1/2026
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
6/1/2017
|
| |
11,000
|
| |
5,500
|
| |
$171.44
|
| |
6/1/2027
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
12/1/2017
|
| |
11,000
|
| |
5,500
|
| |
$181.79
|
| |
12/1/2027
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
2/26/2018
|
| |
8,000
|
| |
32,000
|
| |
$205.66
|
| |
2/26/2028
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
6/1/2018
|
| |
2,500
|
| |
5,000
|
| |
$231.68
|
| |
6/1/2028
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
12/1/2018
|
| |
2,500
|
| |
5,000
|
| |
$192.76
|
| |
12/1/2028
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
6/1/2019
|
| |
—
|
| |
7,500
|
| |
$213.35
|
| |
6/1/2029
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
12/1/2019
|
| |
—
|
| |
7,500
|
| |
$290.17
|
| |
12/1/2029
|
| |
|
| |
|
| |
|
| |
|
|
(1)
|
Stock options expire on the tenth anniversary of the date of grant. Stock options granted in 2011 and 2012 vest and become exercisable ratably on the third, fourth, fifth, and sixth anniversaries of the date of grant. All other stock options vest ratably over a five-year period beginning on the first anniversary of the grant date. Beginning in 2016, stock options granted to persons who are at least fifty years of age and have a tenure with the company of at least fifteen years vest ratably over a three-year period beginning on the first anniversary of the grant date, and stock options granted to others vest over a five-year period beginning on the first anniversary of the grant date. Stock options granted on February 26, 2018, vest and become exercisable ratably on the first, second, third, fourth, and fifth anniversaries of the date of grant date.
|
(2)
|
Value based on $300.02, which was the closings market price of our common stock on December 31, 2019. The restricted stock units vest in equal installments on the first, second, third, fourth, and fifth anniversary of the date of the employment agreement. Vesting of restricted stock awards is subject to continue status an eligible person (as defined in the 2018 Stock Incentive Plan).
|
(3)
|
Value based on $300.02, which was the closings market price of our common stock on December 31, 2019. The performance-based restricted stock units cliff vest at the end of a three-year performance period. The performance measure used to determine the number of restricted stock units vested at the end of the three-year performance period is average three-year revenue growth over that period adjusted to exclude material acquisitions completed during the performance period.
|
|
|
| |
Option Awards
|
| |
Stock Awards
|
| ||||||
|
Name
|
| |
Number of Shares
Acquired on Exercise (#) |
| |
Value Realized on
Exercise ($) |
| |
Number of Shares
Acquired on Vesting (#) |
| |
Value Realized on
Vesting ($) |
|
|
John S. Marr, Jr.
|
| |
105,000
|
| |
$19,993,336
|
| |
7,200
|
| |
$1,479,600
|
|
|
H. Lynn Moore, Jr.
|
| |
57,231
|
| |
$11,605,932
|
| |
7,200
|
| |
$1,479,600
|
|
|
Brian K. Miller
|
| |
90,090
|
| |
$12,076,047
|
| |
2,400
|
| |
$493,200
|
|
|
|
| |
|
| |
|
|
|
46
|
| |
|
| |
2020 Proxy Statement
|
|
|
|
| |
Termination Without Cause
|
| |
Upon a Change in Control
|
| ||||||||||||||||||
|
Name
|
| |
Lump Sum
Severance and Non- Compete Payment |
| |
Continuation
of Health Care Benefit |
| |
Accelerated
Vesting of Stock Options |
| |
Accelerated
Vesting of Restricted Stock Units |
| |
Lump Sum
Severance and Non- Compete Payment |
| |
Continuation
of Health Care Benefit |
| |
Accelerated
Vesting of Stock Options |
| |
Accelerated
Vesting of Restricted Stock Units |
|
|
John S. Marr, Jr.
|
| |
$1,236,000
|
| |
$16,233
|
| |
$6,974,427
|
| |
$7,024,086
|
| |
$1,236,000
|
| |
$16,233
|
| |
$6,974,427
|
| |
$7,024,086
|
|
|
H. Lynn Moore, Jr.
|
| |
$2,060,000
|
| |
$23,344
|
| |
$8,768,079
|
| |
$7,024,086
|
| |
$2,060,000
|
| |
$23,344
|
| |
$8,768,079
|
| |
$7,024,086
|
|
|
Brian K. Miller
|
| |
$1,577,960
|
| |
$18,146
|
| |
$3,589,016
|
| |
$2,959,307
|
| |
$1,577,960
|
| |
$18,146
|
| |
$3,589,016
|
| |
$2,959,307
|
|
|
Name
|
| |
Fees Earned or
Paid in Cash ($)(1) |
| |
Stock Awards
($)(2) |
| |
Total
($) |
|
|
Donald R. Brattain
|
| |
$74,250
|
| |
$249,872(3)
|
| |
$324,122
|
|
|
Glenn A. Carter
|
| |
$72,250
|
| |
$249,872(3)
|
| |
$322,122
|
|
|
Brenda A. Cline
|
| |
$89,250
|
| |
$249,872(3)
|
| |
$339,122
|
|
|
J. Luther King, Jr.
|
| |
$87,750
|
| |
$249,872(3)
|
| |
$337,622
|
|
|
Daniel M. Pope
|
| |
$55,750
|
| |
$249,872(3)
|
| |
$305,622
|
|
|
Dustin R. Womble
|
| |
$40,500
|
| |
$249,872(3)
|
| |
$290,372
|
|
(1)
|
Non-employee directors receive the following compensation:
|
•
|
An annual retainer of $60,000 for the chair of the Audit Committee, $55,000 for the chair of the Compensation Committee, $50,000 for the chair of the Nominating Committee and $40,000 for the other non-employee directors
|
•
|
A fee of $3,500 for each Board meeting attended in person and $1,750 for each Board meeting attended via telephone
|
•
|
A fee of $3,000 for each Audit Committee meeting attended in person and $1,500 for each Audit Committee meeting attended via telephone
|
•
|
A fee of $2,500 for each Compensation Committee meeting attended in person and $1,250 for each Compensation Committee meeting attended via telephone
|
•
|
A fee of $1,500 for each Nominating and Governance Committee meeting attended in person and $750 for each Nominating and Governance Committee meeting attended via telephone
|
•
|
Reimbursement for reasonable out-of-pocket expenses incurred in connection with travel to and from, and attendance at, meetings of the Board of Directors or its committees and related activities
|
(2)
|
On May 7, 2019, we granted each of our non-employee directors 1,150 restricted stock units with a grant date fair value of $249,872, computed in accordance with FASB ASC Topic 718. These restricted stock units vest and will be settled in shares on the first anniversary of the grant date. No options to purchase shares of our common stock were granted to our non-employee directors in 2019.
|
(3)
|
The following table shows the aggregate shares underlying outstanding stock options and restricted stock units, based upon grants made as part of director compensation, held by our non-employee directors as of December 31, 2019:
|
|
Name
|
| |
Number of
Stock Options (#) |
| |
Number of
Stock Awards (#) |
|
|
Donald R. Brattain
|
| |
10,000
|
| |
1,150
|
|
|
Glenn A. Carter
|
| |
20,775
|
| |
1,150
|
|
|
Brenda A. Cline
|
| |
15,000
|
| |
1,150
|
|
|
J. Luther King, Jr.
|
| |
30,000
|
| |
1,150
|
|
|
Daniel M. Pope
|
| |
10,000
|
| |
1,150
|
|
|
Dustin R. Womble
|
| |
148,118
|
| |
1,150
|
|
|
|
| |
|
|
|
|
| |
2020 Proxy Statement 47
|
|
|
|
| |
|
| |
|
|
|
48
|
| |
|
| |
2020 Proxy Statement
|
|
•
|
to receive or give more than a token value to anyone that has a business relationship with us;
|
•
|
to lend to or borrow from individuals or concerns that do business with or compete with us, except banks and other financial institutions;
|
•
|
to serve as an officer, director, employee, or consultant of, or receive income from, any enterprise doing business with or competing with us;
|
•
|
to own an interest in or engage in the management of an organization providing services or products to us, or to which we sell or compete, except when such interest (a) comprises publicly traded securities listed on a national securities exchange or the OTC margin list and (b) is not in excess of 5% of the securities of such company; and
|
•
|
to knowingly cause, either directly or indirectly, us to enter into a business transaction with a close relative of the director or executive officer or a business enterprise of such relative.
|
|
|
| |
By Order of the Board of Directors,
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
ABIGAIL DIAZ
|
|
|
|
| |
Chief Legal Officer
Corporate Secretary |
|
|
|
| |
|
|
|
|
| |
2020 Proxy Statement 49
|
|
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