<PAGE> 1
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
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
TYLER CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(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)(l) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(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):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] 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:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
[TYLER CORPORATION LOGO]
March 27, 1998
Dear Stockholder:
You are cordially invited to attend the annual meeting of stockholders of
Tyler Corporation to be held on Tuesday, April 28, 1998, at San Jacinto Tower,
2121 San Jacinto Street, Suite 2820, Dallas, Texas, commencing at 10:00 a.m. At
this meeting you will be asked to elect six directors for the ensuing year and
to consider and vote upon a proposal to amend the Tyler Corporation Stock Option
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/ LOUIS A. WATERS
LOUIS A. WATERS
Chairman of the Board
<PAGE> 3
TYLER CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 28, 1998
To the Stockholders of
TYLER CORPORATION:
Tyler Corporation will hold its annual meeting of stockholders at San
Jacinto Tower, 2121 San Jacinto Street, Suite 2820, Dallas, Texas, on Tuesday,
April 28, 1998, at 10:00 a.m., Dallas time, for the following purposes:
(a) to elect six directors to serve until the next annual meeting of
stockholders or until their successors are elected and qualified;
(b) to consider and vote upon a proposal to amend the Tyler Corporation
Stock Option Plan; and
(c) to transact such other business as may properly come before the meeting
or any adjournment thereof.
Only stockholders of record at the close of business on March 10, 1998, are
entitled to notice of, and to vote at, the meeting or any adjournment thereof. A
list of stockholders entitled to vote at the meeting will be available for
examination at the offices of Tyler Corporation, 2121 San Jacinto Street, Suite
3200, Dallas, Texas, for ten days before the 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.
By Order of the Board of Directors,
/s/ JAMES E. RUSSELL
JAMES E. RUSSELL
Secretary
Dallas, Texas
March 27, 1998
<PAGE> 4
TYLER CORPORATION
2121 SAN JACINTO STREET
SUITE 3200
DALLAS, TEXAS 75201
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 28, 1998
Tyler Corporation, a Delaware corporation (the "Company"), furnishes this
Proxy Statement to its stockholders in connection with the solicitation on
behalf of the Board of Directors of the Company (the "Board") of proxies to be
used at the annual meeting of stockholders of the Company to be held April 28,
1998 (the "Meeting"). Proxies in the form enclosed will be voted at the Meeting
if properly executed, returned to the Company before the Meeting, and not
revoked. You may revoke the proxy at any time before it is exercised by
delivering written notice of revocation to the Secretary of the Company, by
delivering a subsequently dated proxy, or by attending the Meeting, withdrawing
your proxy, and voting your shares personally. The approximate date on which
this Proxy Statement and the enclosed proxy card will first be sent to
stockholders is March 27, 1998.
The enclosed 1997 Annual Report of the Company does not form any part of
the proxy solicitation material.
OUTSTANDING CAPITAL STOCK
The record date for stockholders entitled to notice of, and to vote at, the
annual meeting of stockholders is the close of business on March 10, 1998. At
the close of business on that date, the Company had issued and outstanding and
entitled to vote at the Meeting 33,981,709 shares of Common Stock, $.01 par
value ("Common Stock").
As of March 10, 1998, the following entities were known by the Company to
own beneficially more than 5% of the Common Stock of the Company:
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT
BENEFICIALLY OF
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED NATURE OF BENEFICIAL OWNERSHIP CLASS
- ------------------------------------ ---------------- ------------------------------ --------
<S> <C> <C> <C>
William D. Oates 6,565,000 Sole voting and 25.8
2800 West Mockingbird Lane investment power
Dallas, Texas 75235 2,200,000(1) Sole voting power
Richmond Partners, Ltd. 4,000,000(2) Sole voting and 11.1
10375 Richmond Ave., Suite 1615 investment power
Houston, Texas 77042
Gabelli Funds, Inc. 2,161,500(3) Sole voting and 6.4
One Corporate Center investment power
Rye, New York 10580 6,500(3) Sole investment power
William H. Oates 2,000,000(1) Sole investment power 5.9
2800 West Mockingbird Lane
Dallas, Texas 75235
</TABLE>
- ---------------
(1) Voting power and record ownership of these shares is retained by Mr. Oates
pursuant to collateral pledge arrangements securing payment for these shares
sold to family members (including William H. Oates) and a former in-law.
<PAGE> 5
(2) Includes a warrant to purchase 2,000,000 shares of the Company's Common
Stock at $2.50 per share. Louis A. Waters is deemed to have beneficial
ownership of these shares.
(3) Share amounts are as of January 27, 1998. Shares are held by Gabelli Funds,
Inc. and its affiliate, GAMCO Investors, Inc. Also, Mr. Mario J. Gabelli is
deemed to have beneficial ownership of these shares.
ACTION TO BE TAKEN AT THE MEETING
The presence, in person or by proxy, of the holders of a majority of the
outstanding shares of the Common Stock is necessary to constitute a quorum at
the Meeting. Abstentions shall be treated as shares of the Common Stock that are
present and entitled to vote for purposes of determining the presence of a
quorum. In deciding all questions, a holder of Common Stock is entitled to one
vote, in person or by proxy, for each share held in his name on the record date.
The accompanying proxy, unless the stockholder otherwise specifies therein,
will be voted (i) for the election as directors of the Company of the six
persons designated under the caption "Directors and Executive
Officers -- Nominees for Director", (ii) for the amendment to the Tyler
Corporation Stock Option Plan (the "Stock Option Plan") and (iii) at the
discretion of the proxy holders on any other matter that may properly come
before the Meeting or any adjournment thereof.
To be elected a director, each nominee must receive a plurality of all the
votes cast at the meeting for the election of directors. Any abstentions or
broker non-votes will have no effect on the election of directors. Should any
nominee become unable or unwilling to accept nomination or election, the proxy
holders may vote for the election in his stead of any other person the Board may
recommend. Each nominee has expressed to the Board his intention to serve the
entire term for which his election is sought.
A favorable vote of the holders of a majority of the shares of Common Stock
present in person or represented by proxy and entitled to vote at the Meeting is
required for approval and adoption of the amendment to the Stock Option Plan.
Abstentions will have the same effect as a vote against the adoption of the
amendment to the Stock Option Plan, while broker non-votes will have no effect
on the vote on the amendment to the Stock Option Plan.
Where stockholders have appropriately specified how their proxies are to be
voted, the proxies will be voted accordingly. If any other matter or business is
brought before the Meeting, the proxy holders may vote the proxies at their
discretion. The Board does not know of any such other matter or business.
2
<PAGE> 6
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the beneficial ownership of the Company's
Common Stock as of March 10, 1998, by each director and named executive officer
and the directors and executive officers of the Company as a group:
<TABLE>
<CAPTION>
SHARES OF COMPANY PERCENT
NAME COMMON STOCK OF CLASS
---- ----------------- --------
<S> <C> <C>
Ernest H. Lorch............................................ 50,000 *
Frederick R. Meyer......................................... 227,349 *
Brian K. Miller............................................ -- --
William D. Oates(1)........................................ 8,765,000 25.8
Harold W. Parkison......................................... 12,500 *
E. Peter Raisbeck(2)....................................... -- --
C.A. Rundell, Jr........................................... 368,657 1.1
James E. Russell........................................... 257,543 *
Louis A. Waters(3)......................................... 4,000,000 11.1
Bruce W. Wilkinson(4)...................................... 133,333 *
All directors and executive officers of the Company as a
group (10 persons)....................................... 13,814,382 38.1
</TABLE>
- ---------------
* Less than 1% of the outstanding Common Stock
(1) Includes 2,200,000 shares of Common Stock over which Mr. Oates has sole
voting power, but no investment power, pursuant to collateral pledge
arrangements securing payment for the sale of such shares to family members
and a former in-law.
(2) Until June 1997, Mr. Raisbeck served as Chief Executive Officer and
President of Institutional Financing Services, Inc. ("IFS"), a former
subsidiary of the Company which was sold in October 1997.
(3) Includes 2,000,000 shares owned by Richmond Partners, Ltd. ("Richmond") and
2,000,000 shares subject to a warrant issued to Richmond at an exercise
price of $2.50 per share. Mr. Waters is the sole general partner of Richmond
and deemed beneficial owner of these shares.
(4) Mr. Wilkinson served as President and Chief Executive Officer of the Company
from March 1997 to October 1997.
The number of shares of Common Stock beneficially owned by some officers
and directors of the Company includes certain shares they have the right to
acquire pursuant to options granted under the Company's Stock Option Plan and
through a warrant to purchase Common Stock. Shares subject to options and a
warrant exercisable within 60 days after March 10, 1998, are held by the
following persons and group: Mr. Parkison -- 12,500; Mr. Rundell -- 167,288; Mr.
Wilkinson -- 133,333; Mr. Waters -- 2,000,000; and all directors and executive
officers of the Company as a group -- 2,313,121.
Unless noted above, each director and executive officer of the Company may
be deemed to have sole voting and investment power over the shares of Common
Stock reflected as beneficially owned.
3
<PAGE> 7
DIRECTORS AND EXECUTIVE OFFICERS
A brief description of each nominee for director and of each executive
officer of the Company is provided below. Directors hold office until the next
annual meeting of stockholders or until their successors are elected and
qualified. Executive officers are elected by the Board of Directors at its
annual meeting and hold office until its next annual meeting.
NOMINEES FOR DIRECTOR
Ernest H. Lorch. Mr. Lorch, age 65, is counsel to the law firm of Whitman,
Breed, Abbott & Morgan, a position he has held since December 1992. He retired
as Chairman of the Board and Chief Executive Officer of Dyson-Kissner-Moran
Corporation ("DKM"), a private investment company, in December 1992, a position
he held since January 1990. Mr. Lorch was President and Chief Operating Officer
of DKM from June 1984 to January 1990. He is also Senior Chairman of the Board
of Varlen Corporation and a director of Dorsey Trailers, Inc. Mr. Lorch was
elected to the Board of Directors of the Company in October 1993, and is a
member of the Compensation Committee and the Audit Committee of the Board of
Directors.
Frederick R. Meyer. Mr. Meyer, age 70, has since July 1985 been Chairman of
the Board of Aladdin Industries, Inc., a diversified company principally engaged
in the manufacture of children's lunch kits, thermosware, insulated food
delivery systems and related products. He has also been President and Chief
Executive Officer of Aladdin Industries, Inc. from October 1995 to present and
from May 1987 to September 1994. He was President of Tyler Corporation from
August 1983 through December 1986. Mr. Meyer has been a director of the Company
since 1967 and is a member of the Compensation Committee of the Board of
Directors. He is also a director of Arvin Industries, Inc., Palm Harbor Homes,
Inc., and Southwest Securities Group, Inc.
William D. Oates. Mr. Oates, age 58, has been Chairman of the Board and
President of Business Resources Corporation ("Resources") since its inception in
1993. From 1987 through 1994, Mr. Oates acquired or formed and served as
President or a principal executive officer of American Title Company of Dallas,
Austin Title Company, Commercial Abstract and Title Company and other title
insurance agencies in Texas, as well as a title insurance underwriting company.
Mr. Oates held these companies through American Title Company of Dallas, of
which he was the principal owner and President until his sale of the company in
November 1994. Mr. Oates was appointed a director of the Company in February
1998 following the Company's acquisition of Resources and is a member of the
Executive Committee of the Board of Directors.
C. A. Rundell, Jr. Mr. Rundell, age 66, was elected President and Chief
Executive Officer of the Company in October 1997. From October 1996 to October
1997, Mr. Rundell served as Chairman of the Board and from October 1996 to March
1997 served as Interim Chief Executive Officer of the Company. Mr. Rundell has
also served as President of Rundell Enterprises, a venture capital and
investment company, since June 1988 and as Chairman of the Board of NCI Building
Systems, Inc. since April 1989. Mr. Rundell served as Chief Executive Officer of
Cronus Industries, Inc. from April 1977 to June 1988 as well as its President
from April 1977 to April 1987 and its Chairman of the Board from April 1987 to
April 1988. Mr. Rundell has been a director of the Company since 1966 and is a
member of the Executive Committee of the Board of Directors. He is also a
director of Dain Rauscher Corporation and Tandy Brands Accessories, Inc.
James E. Russell. Mr. Russell, age 62, was elected Vice President, Chief
Financial Officer and Secretary of the Company in October 1997. Mr. Russell has
been a director of the Company since May 1990 and has been affiliated with the
Company for more than 25 years. He served as Vice President of the Company from
January 1992 to August 1995 and was Chairman of the Board of Tyler Pipe
Industries, Inc. ("Tyler Pipe"), a former subsidiary, until his retirement in
August 1995. He was President and Chief Executive Officer of Tyler Pipe from
December 1988 to December 1991 and was President and Chief Operating Officer of
Tyler Pipe from February 1988 to December 1988.
4
<PAGE> 8
Louis A. Waters. Mr. Waters, age 59, was elected Chairman of the Board in
October 1997 after being appointed a director of the Company in August 1997. Mr.
Waters is a member of the Executive Committee, the Audit Committee, and the
Compensation Committee of the Board of Directors. Mr. Waters was the founding
Chairman of the Board and Chief Executive Officer of Browning-Ferris Industries,
Inc. ("BFI"). He recently directed BFI's international activities, serving as
Chairman and Chief Executive Officer of BFI International, Inc. from 1991 to
March 1997 at which time he retired from full-time employment with BFI. From
1988 to March of 1997 he was Chairman of the BFI Finance Committee and from 1980
through 1988 he was Chairman of the BFI Executive Committee. Mr. Waters also
served as Chairman of the Board and Chief Executive Officer of BFI from 1969
through 1980.
OTHER EXECUTIVE OFFICERS
Harold W. Parkison. Mr. Parkison, age 49, has been President and Chief
Executive Officer of Forest City Auto Parts Company ("Forest City") since
February 1997. Mr. Parkison had previously been Vice President-International
Store Development at Federal-Mogul Corporation since March 1995. Prior to March
1995, he was Vice President-Merchandise Manager at Auto Express from 1993. From
1991 to 1993 he held the position of Vice President-Automotive for Kmart
Corporation. Between 1971 and 1991 he held various management positions at
Goodyear Tire and Rubber Company.
Brian K. Miller. Mr. Miller, age 39, has been Vice President and Chief
Accounting Officer of the Company since December 1997. 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.
5
<PAGE> 9
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth all compensation paid or accrued for
services rendered to the Company and its subsidiaries for the last three fiscal
years by the Chief Executive Officer, former Chief Executive Officer, retired
Chief Executive Officer of a former subsidiary and the three highest-paid
executive officers of the Company:
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION AWARDS
ANNUAL COMPENSATION -----------------------
------------------------------------- SECURITIES
OTHER RESTRICTED UNDERLYING
ANNUAL STOCK OPTIONS/ ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) AWARDS SARS COMPENSATION
- ----------------------------- ----- -------- -------- --------------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
C. A. Rundell, Jr. 1997 $ 80,077 $461,250(3) 350,000
President and Chief 1996 0 100,000
Executive Officer of the
Company(2)
Bruce W. Wilkinson 1997 143,077 $347,180 40,625(5) 666,666
Former President and Chief
Executive Officer of the
Company(4)
James E. Russell 1997 81,409
Vice President and Chief
Financial Officer of the
Company(6)
Brian K. Miller 1997 10,795 50,000
Vice President and Chief
Accounting Officer of the
Company(7)
Harold W. Parkison 1997 183,333 $170,000 75,000 50,000
President and Chief
Executive Officer of Forest
City(8)
Peter Raisbeck 1997 208,719
Chief Executive 1996 320,000 $40,980
Officer and President of
IFS, 1995 305,011 49,412
a former subsidiary(9)
</TABLE>
- ---------------
(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. Rundell has served as President and Chief Executive Officer of the
Company since October 1997 at an annual salary of $210,000. From October
1996 to October 1997, he served as Chairman of the Board, and from October
1996 to March 1997 served as Interim Chief Executive Officer of the Company.
He elected not to accept remuneration for his services from October 1996 to
March 1997.
(3) On October 8, 1997, Mr. Rundell was granted 125,000 shares of the Company's
Common Stock with a market value of $3.69 per share. Mr. Rundell will vest
in these shares in increments of 25,000 shares every six months beginning
April 8, 1998 and ending April 8, 2000.
(4) Mr. Wilkinson served as President and Chief Executive Officer of the Company
from March 1997 to October 1997. Mr. Wilkinson's other annual compensation
includes $260,000 for stock appreciation rights and $87,180 for amounts
reimbursed for payment of taxes.
(5) In March 1997, Mr. Wilkinson was granted 125,000 shares with a market value
of $1.625 per share. The shares were to vest over 30 months. Upon Mr.
Wilkinson's resignation as President and Chief Executive Officer of the
Company in October 1997, 100,000 shares, the unvested portion of the grant,
were forfeited. The 25,000 vested shares were purchased by the Company for
$86,250, valued at the market value of $3.45 per share at the time of
repurchase.
6
<PAGE> 10
(6) Mr. Russell has served as Vice President and Chief Financial Officer of the
Company since October 1997.
(7) Mr. Miller joined the Company in December 1997.
(8) Mr. Parkison has served as President and Chief Executive Officer of Forest
City since February 1997. In connection with his move to Cleveland, Ohio,
Mr. Parkison was paid $75,000 in compensation for expenses resulting from
transportation of household items, disposition of current residence,
acquisition of a new residence and other related expenses associated with
his move.
(9) Mr. Raisbeck retired in June 1997 from IFS, a subsidiary of the Company
which was sold in October 1997.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table shows stock option grants during 1997 to any named
executive officer:
<TABLE>
<CAPTION>
PERCENT OF
NUMBER OF TOTAL
SECURITIES OPTIONS/SARS EXERCISE
UNDERLYING GRANTED TO PRICE GRANT DATE
OPTION/SARS EMPLOYEES IN PER EXPIRATION PRESENT
NAME GRANTED FISCAL YEAR SHARE DATE VALUE $(1)
---- ----------- ---------------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
C. A. Rundell, Jr.(2)............... 350,000 23% $3.69 10/07/07 $1.95
Bruce W. Wilkinson(3)............... 666,666 44% $1.50 03/27/07 $ .79
James E. Russell.................... -- -- -- -- --
Brian K. Miller..................... 50,000 3% $5.25 12/11/07 $2.82
Harold W. Parkison.................. 50,000 3% $2.13 02/02/07 $1.11
E. Peter Raisbeck................... -- -- -- -- --
</TABLE>
- ---------------
(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. In addition, expected volatility and risk-free interest rates,
respectively, were assumed to be as follows: Mr. Rundell -- .40 and 6.1%;
Mr. Wilkinson -- .38 and 6.9%; Mr. Miller -- .42 and 5.8%; and Mr.
Parkison -- .38 and 6.4%.
(2) Includes 132,199 options granted as incentive stock options and 217,801
options granted as non-qualified stock options.
(3) As a result of Mr. Wilkinson's resignation as President and Chief Executive
Officer of the Company in October 1997, he cannot vest in 400,000 options
included in his total options granted.
OPTION/SAR EXERCISES DURING 1997 AND YEAR-END OPTION/SAR VALUES
The following table shows stock option exercises during 1997 by each of the
named executive officers and the value of unexercised options at December 31,
1997:
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
SHARES DECEMBER 31, 1997(1) DECEMBER 31, 1997(2)
EXERCISED VALUE ------------------------- -------------------------
NAME AS SARS REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- --------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
C.A. Rundell..................... 137,677/312,323 $396,596/$575,280
Bruce W. Wilkinson............... 133,333 $260,000 0/133,333 $ 0/$533,332
James E. Russell................. -- --
Brian K. Miller.................. 0/ 50,000 $ 0/$ 12,500
Harold W. Parkison............... 0/ 50,000 $ 0/$168,750
E. Peter Raisbeck................ -- --
</TABLE>
- ---------------
(1) As of December 31, 1997, options to purchase an aggregate of 695,933 shares
of Common Stock were outstanding with a weighted average exercise price per
share of $3.04 and expiring between January 28, 2003, and December 11, 2007.
(2) Amount is based on a year-end market value of $5.50 per share.
7
<PAGE> 11
COMPENSATION OF DIRECTORS
Each non-employee director receives an annual fee of $15,000, plus $1,000
for each Board meeting and $500 for each committee meeting attended.
EMPLOYMENT, NONCOMPETITION AGREEMENTS AND AGREEMENTS WITH NAMED EXECUTIVE
OFFICERS
On October 8, 1997, the Company entered into an employment agreement with
C. A. Rundell, Jr. which provides that the Company will pay Mr. Rundell an
annual salary of $210,000 for his services as President and Chief Executive
Officer of the Company and allows him to participate in performance bonus or
incentive compensation plans made available to comparable level employees of the
Company and its subsidiaries. Mr. Rundell will also receive certain other
employee benefits and perquisites normally offered to the executive employees of
the Company. In addition, the Company granted Mr. Rundell 125,000 shares of
Common Stock. He will vest in these shares in increments of 25,000 shares every
six months beginning April 8, 1998, and ending April 8, 2000. The agreement also
granted him options to purchase 350,000 shares of Common Stock at $3.69 per
share, the closing price on October 8, 1997, of which (i) 132,199 incentive
stock options of which 23,727 will vest and be exercisable on January 1, 1998,
and 27,118 will vest and be exercisable on each of January 1, 1999-2002 and (ii)
217,801 non-qualified stock options, of which 43,561 will vest and be
exercisable on October 8, 1997, and 43,560 will vest and be exercisable on each
of October 8, 1998-2001. Both the stock grant and the 350,000 stock options to
purchase Common Stock fully vest in the event of a change of control of the
Company.
The Company entered into an employment agreement in February 1997, with
Harold W. Parkison which provides that the Company pay Mr. Parkison for his
services as President and Chief Executive Officer of Forest City, a salary of
$200,000, a guaranteed bonus of $60,000 for 1997 and eligibility for an
additional bonus in 1997 if certain profit objectives were achieved. The
agreement also provides for a cash payment of $200,000 if during the first three
years of his employment there is a change in control of Forest City or the
Company. In addition, Mr. Parkison received $75,000 in compensation for expenses
that would be incurred in connection with his move to Cleveland, Ohio, such as
moving expenses and real estate fees associated with the disposition of his
current residence and acquisition of a new residence. Mr. Parkison is also
eligible to receive all employee benefits and perquisites normally offered to
the executive employees of Forest City.
In connection with Bruce W. Wilkinson's resignation as a director and
President and Chief Executive Officer of the Company effective October 8, 1997,
the Company purchased 447,609 shares of the Company's common stock owned by Mr.
Wilkinson for $1,544,000. Mr. Wilkinson purchased these shares in the second
quarter of 1997 as a condition of his employment. In addition, the Company also
made payments to Mr. Wilkinson of approximately $346,000 relating to various
stock compensation plans as provided for under the terms of his resignation as
President and Chief Executive Officer of the Company. Mr. Wilkinson will
continue as an employee until March 31, 1998 (or earlier, if he so elects) at a
monthly salary of $8,333.
The Company has a consulting agreement with James E. Russell that began in
September 1995, part of which expired in August 1997 and the remainder of which
may be terminated upon 30 days' notice. The agreement provides the Company will
pay Mr. Russell $20,000 per year through August 1997 and an additional $4,167
monthly for his services to the Company. In October 1997, Mr. Russell assumed
the duties of Vice President, Chief Financial Officer and Secretary of the
Company and his monthly payment was increased from $4,167 to $8,333 to reflect
these additional responsibilities.
Effective February 19, 1998, the Company entered into an employment,
confidentiality, nonsolicitation and noncompetition agreement with William D.
Oates which provides that the Company will pay Mr. Oates a salary of at least
$200,000 per year for his services to the Company as President and Chief
Executive Officer of Resources. In addition, Mr. Oates is eligible to
participate in performance bonus or incentive compensation plans made available
to comparable level employees of the Company and its subsidiaries. Mr. Oates
will also receive all employee benefits and perquisites normally offered to the
executive employees of Resources. The employment and confidentiality portions of
the agreement expire February 19, 2001, and the nonsolicitation and
noncompetition portions of the agreement expire the later of February 19, 2003,
or the third anniversary of Mr. Oates' termination.
8
<PAGE> 12
In December 1997, the Company entered into an employment agreement with
Brian K. Miller which provides that the Company pay Mr. Miller a salary of
$140,000 for his services as Vice President and Chief Accounting Officer for the
Company. 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 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.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Members of the Compensation Committee are Ernest H. Lorch, Frederick R.
Meyer and Louis A. Waters. Mr. Meyer was previously an officer of the Company.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE
COMPENSATION
The Compensation Committee, a committee of the Board of Directors, has the
responsibility for final approval for all compensation to officers and directors
of the Company including, primarily, 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.
A substantial portion of each executive officer's potential total
compensation is in the form of bonuses and options which are awarded only when
indicated by superior accomplishment. The Company feels very strongly that
bonuses must be earned, and when results are not superior, no bonuses are paid.
In nine of the past thirteen years, including 1997, no bonuses have been paid to
corporate officers as results have not warranted payment of such bonuses. As a
result of excellent performance and based on the purchase contract, Forest City
officers received bonuses for 1991, 1992 and 1993 and an additional bonus in
1996 for cumulative operating profits achieved since 1991. In addition, the
President and Chief Executive Officer of Forest City received a bonus for 1997
in accordance with the terms of his employment and in recognition of 1997
performance.
For 1998, executive officers of operating subsidiaries will be measured on
the results of that subsidiary and, in the case of Resources, The Software
Group, Inc. and Interactive Computer Designs, Inc., will be measured on the
combined results of those companies. The primary criteria for bonus payments for
subsidiary companies in 1998 will be achievement of certain levels of operating
income, which will be evaluated relative to the operating plan established in
December 1997 and approved by Tyler's Board of Directors. In order to be
eligible to receive the maximum bonus, the applicable operation(s) must earn
130% of par (plan operating income plus bonuses). The minimum threshold for
bonuses is 90% of par. Below that level, no bonuses will be paid.
The Company is in the process of redesigning the bonus program for
corporate officers for 1998 in recognition of recent changes in the Company's
business, particularly its entry into the information management services
business. The new program, which must be approved by the Compensation Committee,
is expected to be based on different criteria for measuring the Company's
performance than those previously used, although return on net assets (the
primary factor historically used in determination of bonuses) may still be one
of the criteria considered.
Occasionally, bonuses are paid when specific return targets are not met.
These cases are based on particular contributions to shareholder value or
Company performance. Such bonus payments are not the rule
9
<PAGE> 13
and are generally associated with increases in shareholder value which the
Compensation Committee deems should be recognized with an out-of-the-ordinary
bonus.
CHIEF EXECUTIVE OFFICER COMPENSATION
C.A. Rundell, Jr. was elected President and Chief Executive Officer of the
Company effective October 8, 1997, upon the resignation of Bruce W. Wilkinson.
Mr. Rundell had previously served as Interim Chief Executive Officer without
salary from October 1996 through March 1997.
Effective October 8, 1997, Mr. Rundell's compensation consists of a base
annual salary of $210,000. Mr. Rundell also receives certain health and
insurance benefits provided to executive officers of the Company. In determining
Mr. Rundell's salary, the Compensation Committee considered several factors,
including Mr. Rundell's experience and his ability to enhance the long-term
value of the Company, particularly in light of the Company's strategic plan to
grow through acquisitions in the information management services business. The
committee also considered Mr. Rundell's considerable experience with
acquisitions.
Mr. Rundell was granted options to purchase 350,000 shares of the Company's
Common Stock on October 8, 1997, which options vest over a period of 48 months.
In addition, Mr. Rundell was granted 125,000 shares of the Company's Common
stock on October 8, 1997, with a market value on that date of $3.69 per share.
Mr. Rundell will vest in these shares in increments of 25,000 shares every six
months beginning April 8, 1998 and ending on April 8, 2000. Including stock
options granted in 1996, Mr. Rundell has a total of 450,000 stock options which
combined with his stock grant of 125,000 shares and his direct ownership of
76,369 shares give him a total potential ownership of 651,369 shares once he
completes all respective vesting requirements. The Compensation Committee
believes that the options and grant align the interest of management with those
of the shareholders.
As noted above, the Company is in the process of redesigning the bonus
program for corporate officers. The new program, which must be approved by the
Compensation Committee, will be effective for 1998. Mr. Rundell will participate
in that program. By making a substantial portion of the Chief Executive
Officer's potential total compensation in the form of bonuses that are based on
objective performance measures, the Compensation Committee believes that it will
provide for rewards only when indicated by superior accomplishment. Mr. Rundell
did not receive a bonus for 1997.
This report is submitted by the Compensation Committee
Ernest H. Lorch
Frederick R. Meyer
Louis A. Waters
10
<PAGE> 14
STOCK PERFORMANCE CHARTS
The following two charts compare the return on the Company's Common Stock
for the last five and ten years with the S&P 500 Index and the S&P Consumer
Cyclicals-500 Index. Although Tyler's principal subsidiary from October 15, 1997
to December 31, 1997, was a retailer of automotive parts and supplies, the S&P
Consumer Cyclicals-500 Index was selected because it represents Tyler's past
philosophy of diversification. The comparison assumes $100 was invested on
December 31, 1992 and December 31, 1987 in the Company's Common Stock and in
each of the foregoing indices and assumes reinvestment of dividends and
distributions.
<TABLE>
<CAPTION>
Consumer
Measurement Period Cyclicals -
(Fiscal Year Covered) Tyler S&P 500 500
<S> <C> <C> <C>
1992 100 100 100
1993 113.51 110.08 114.43
1994 70.27 111.53 104.49
1995 59.46 153.45 129.3
1996 40.54 188.68 149.37
1997 118.92 251.63 204.45
</TABLE>
<TABLE>
<CAPTION>
Consumer
Measurement Period Cyclicals -
(Fiscal Year Covered) Tyler S&P 500 500
<S> <C> <C> <C>
1987 100.00 100.00 100.00
1988 152.31 116.61 123.26
1989 394.69 153.56 142.60
1990 389.38 148.79 127.09
1991 387.05 194.12 189.73
1992 622.65 208.91 258.69
1993 706.8 229.97 296.02
1994 437.54 233.00 270.30
1995 370.23 320.56 334.50
1996 252.43 394.16 388.28
1997 740.45 525.67 531.47
</TABLE>
11
<PAGE> 15
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE SECTION 16(A)
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors, executive officers and holders of more than 10% of the
Company's Common Stock to file with the Securities and Exchange Commission
("SEC") 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, 1997, 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.
CERTAIN TRANSACTIONS
In September 1997, Richmond Partners, Ltd., a Houston-based investment
partnership of which Louis A. Waters is the managing general partner, invested
$3,500,000 in a package of Tyler securities consisting of 2,000,000 common
shares and a warrant to acquire 2,000,000 common shares with an exercise price
of $2.50 per common share. Mr. Waters is currently Chairman of the Board of the
Company.
In connection with the Company's purchase of Resources on February 19,
1998, William D. Oates received approximately $15,250,000 in cash and 8,765,000
shares of the Company's Common Stock. In addition, pursuant to the terms of the
merger in which Resources was acquired, Mr. Oates may be entitled to receive
additional merger consideration of up to an aggregate $4,500,000 in cash if
certain contingencies are achieved on or before December 31, 1999 relating to
acquisitions of specified businesses for purposes of geographic expansion.
PROPOSAL FOR APPROVAL OF AMENDMENT TO
STOCK OPTION PLAN
The proposed amendment to the Tyler Corporation Stock Option Plan (the
"Stock Option Plan") is intended to enable the Company to provide additional
incentives to selected key employees of the Company and its subsidiaries whose
substantial contributions are important to the continued growth and
profitability of the Company's business. Stock options are designed to
strengthen the commitment of those key employees to the Company, its
subsidiaries and its stockholders, to motivate those key employees to perform
their assigned responsibilities diligently and skillfully, and to attract and
retain competent entrepreneurial-type management dedicated to the long-term
growth and profitability of the Company. The Company believes this can best be
accomplished by tying a portion of compensation to appreciation in the market
value of the Company's stock so that the management and key employees of the
Company and its subsidiaries are rewarded under the Stock Option Plan only if
the value of the stockholders' investment in the Company has appreciated.
PURPOSE OF THE PLAN
On March 13, 1990, the Company established the Stock Option Plan, pursuant
to which options could be granted to eligible employees for the purchase of a
maximum of 1,100,000 shares of Common Stock of the Company. The Stock Option
Plan was amended effective February 7, 1997, to increase the number of shares of
Common Stock of the Company that may be granted to eligible employees to a
maximum of 1,800,000.
AMENDMENT SUBMITTED FOR APPROVAL
The Board is submitting for stockholder approval an amendment to the Stock
Option Plan, effective October 8, 1997, (i) to increase the maximum number of
shares of Common Stock of the Company that may be purchased pursuant to options
granted to eligible employees under the Stock Option Plan from 1,800,000 shares
to 3,300,000 shares and (ii) to provide that any eligible employee may be
granted options up to the maximum number of shares authorized under the Stock
Option Plan.
12
<PAGE> 16
The approval of the amendment to the Stock Option Plan requires the
favorable vote of the holders of a majority of the shares of Common Stock
present in person or represented by proxy and entitled to vote at the Meeting.
Stockholder approval is required in order for the options to constitute
performance-based compensation under Section 162(m) of the Code (as defined
below). Management recommends voting in favor of the amendment to the Stock
Option Plan.
If the amendment to the Stock Option Plan is not approved by the
stockholders, the Company will maintain the Stock Option Plan without giving
effect to the amendment, and any options for shares not available for grant
prior to the amendment will terminate. Copies of the Stock Option Plan may be
obtained from the Company upon request.
DESCRIPTION OF THE PLAN, AS AMENDED
The Stock Option Plan is designed to permit the appropriate administering
committee to grant options to key employees of the Company or its subsidiaries
to purchase shares of Common Stock of the Company. The Stock Option Plan
requires that the purchase price under each option will not be less than 100% of
the fair market value of the Common Stock at the time of the grant of the
option. The fair market value per share is the reported closing price of the
Common Stock on the New York Stock Exchange on the date of the grant of the
option, or if no sale of Common Stock shall have been reported on such date of
grant, on the next preceding day or the last day prior to the date of grant when
the sale was reported. The option period may not be more than ten years from the
date the option is granted. Except with respect to options granted to officers
and directors, the Executive Committee of the Board of Directors of the Company
grants options to eligible employees, determines the purchase price and option
period at the time the option is granted, and administers and interprets the
Stock Option Plan. The Compensation Committee of the Board of Directors grants
options and administers the Stock Option Plan with respect to officers and
directors of the Company. Options may be exercised in annual installments as
specified by the administering committee. All installments that become
exercisable are cumulative and may be exercised at any time after they become
exercisable until expiration of the option. The administering committee may
accelerate or terminate any or all outstanding options in the event the Company
sells all or substantially all of its assets or all or substantially all of the
outstanding Common Stock is sold or exchanged for or converted into securities
of another corporation or in the event of some other material corporate
restructuring.
The exercise price of options is paid in cash or by check at the time of
exercise. Shares of Common Stock deliverable upon exercise of the options may be
transferred from treasury or issued from authorized but unissued shares. The
Stock Option Plan provides that an option agreement may include a provision
granting stock appreciation rights ("SARs") to the optionee. If this provision
is in the option agreement, the administering committee may determine upon the
exercise of an option whether to issue the number of shares of Common Stock
called for by the option agreement after payment of the purchase price or to pay
cash, Common Stock or a combination of cash and Common Stock to the optionee
pursuant to the SARs provision.
Payment in accordance with the SARs provision would be in an amount equal
to the excess of the fair market value of the shares of Common Stock covered by
the option or portion thereof being exercised over the aggregate option price of
the shares. In addition, the Stock Option Plan provides that the administering
committee may offer to the holder of an option that does not contain a SARs
provision the right to receive cash, Common Stock or a combination of cash and
Common Stock in the amount of such excess rather than the number of shares of
Common Stock called for by the option agreement.
Unless sooner terminated by action of the Board of Directors of the
Company, the Stock Option Plan will terminate on February 6, 2007, and no
options may thereafter be granted under the Stock Option Plan. The Stock Option
Plan may be amended, altered or discontinued by the Board of Directors without
the approval of the stockholders, except that the Board of Directors does not
have the power or authority without stockholder approval to change the employees
or class of employees who are eligible to receive options or the aggregate
number of shares that may be issued under options. The administering committee,
however, may make appropriate adjustments in the number of shares covered by the
Stock Option Plan and the outstanding options, and in the option prices, to
reflect any stock dividend, stock split, share combination or other
13
<PAGE> 17
recapitalization and, with respect to outstanding options and option prices, to
reflect any merger, consolidation, reorganization, liquidation or the like, of
or by the Company.
Options may be granted under the Stock Option Plan only to key employees of
the Company or its subsidiaries. Key employees are defined in the Stock Option
Plan to be those employees whose performance and responsibilities are determined
by the appropriate administering committee to be influential to the success of
the Company and its subsidiaries. Currently approximately 70 employees are
eligible to receive stock options under the Stock Option Plan. Directors who are
not employees of the Company or one of its subsidiaries are not eligible.
Additional options may be granted to persons to whom options have previously
been granted. There is no restriction in the Stock Option Plan on the maximum or
minimum number of shares of Common Stock covered by options that may be granted
to any person.
Both incentive stock options and nonqualified stock options may be granted
under the Stock Option Plan. Incentive stock options are options which meet the
requirements of Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code") and nonqualified options are options which do not meet the
requirements of Section 422 of the Code. No incentive stock option, however, may
be granted under the Stock Option Plan to an employee who owns more than 10% of
the outstanding Common Stock unless the option price is at least 110% of the
fair market value of the Common Stock at the date of grant and the option is not
exercisable more than five years after it is granted. There is no limit on the
fair market value of incentive stock options that may be granted to an employee
in any calendar year, but no employee may be granted incentive stock options
that first become exercisable during a calendar year for the purchase of stock
with an aggregate fair market value (determined as of the date of grant of each
option) in excess of $100,000. An incentive stock option (or an installment
thereof) counts against the annual limitation only in the year it first becomes
exercisable.
The administering committee may provide for termination of options granted
under the Stock Option Plan in case of termination of employment, dishonesty or
any other reason the appropriate committee determines. If an option under the
Stock 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 Stock Option Plan.
Upon termination of the employment of an optionee holding an option under the
Stock Option Plan, his option is exercisable for a period of 30 days after
termination, and thereafter his option terminates. Options may not be
transferred other than by will or the laws of descent and distribution and,
during the lifetime of the optionee, may be exercised only by him. If the
optionee dies before the termination of his right to exercise his option, the
legal representatives of his estate may exercise his option provided the option
is exercised prior to the date of expiration of the option period or one year
from the date of the optionee's death, whichever first occurs, and the option
may be exercised only as to those shares the optionee could have purchased under
the option on the date of death or other termination.
TAX STATUS OF OPTIONS
All stock options that qualify under the rules of Section 422 of the Code
will be entitled to "incentive stock option" treatment. To receive incentive
stock option treatment, an optionee must not dispose of the acquired stock
within two years after the option is granted or within one year after the
exercise. In addition, the individual must have been an employee of the Company
or one of its subsidiaries for the entire time from the date of granting of the
option until three months (one year if the employee is disabled) before the date
of the exercise. The requirement that the individual be an employee and the
two-year and one-year holding periods are waived in the case of death of the
employee. If all such requirements are met, no tax will be imposed upon exercise
of the incentive stock option, and any gain upon sale of the stock will be
entitled to capital gain treatment. The employee's gain on exercise (the excess
of the fair market value at the time of exercise over the exercise price) of an
incentive stock option is a tax preference item and, accordingly, is included in
the computation of alternative minimum taxable income.
If an employee does not meet the two-year and one-year holding requirement
(a "disqualifying disposition"), but does meet all other requirements, tax will
be imposed at the time of sale of the stock. In such event, the employee's gain
on exercise will be treated as ordinary income rather than capital gain and the
Company will be entitled to a corresponding deduction at the time of sale. Any
remaining gain on sale will be
14
<PAGE> 18
short-term, mid-term or long-term capital gain, depending on the holding period
of the stock. If the amount realized on the disqualifying distribution is less
than the value at the date of exercise, the amount includable in gross income,
and the amount deductible by the Company, will equal the excess of the amount
realized on the sale or exchange over the exercise price.
An optionee, upon exercise of a nonqualified stock option that does not
qualify as an incentive stock option, recognizes ordinary income in an amount
equal to the gain on exercise. If the optionee receives cash or stock upon the
exercise of an SAR, instead of paying the exercise price for the shares of
Common Stock called for by his option agreement, the amount of cash or value of
stock he receives is ordinary income to him. The exercise of a nonqualified
stock option or SAR entitles the Company to a tax deduction in the same amount
as is includable in the income of the optionee for the year in which the
exercise occurred. Any gain or loss realized by an optionee on subsequent
disposition of shares generally is a capital gain or loss and does not result in
any tax deduction to the Company. The optionee has no taxable income, and the
Company is not entitled to a deduction, at the time of the grant of an option.
The foregoing statements are based upon present federal income tax laws and
regulations and are subject to change if the tax laws and regulations, or
interpretations thereof, are changed.
OUTSTANDING OPTIONS
Options may be exercised in annual installments as specified by the
administering committee. All installments that become exercisable are cumulative
and may be exercised at any time after they become exercisable until expiration
of the option. The administering committee may grant either nonqualified stock
options or incentive stock options, as defined by the Code.
The following table shows, as to certain executive officers and directors
of the Company and its subsidiaries and as to all executive officers as a group,
the following information with respect to stock options and SARs in tandem
therewith:
<TABLE>
<CAPTION>
ALL EXECUTIVE
C.A. BRUCE W. BRIAN K. HAROLD W. OFFICERS AS A
COMMON STOCK RUNDELL, JR. WILKINSON MILLER PARKISON GROUP
------------ ------------ --------- -------- --------- -------------
<S> <C> <C> <C> <C> <C>
Granted
January 1, 1996 to December 31,
1997.............................. 450,000 666,666* 50,000 50,000 1,216,666
Number of options with SARs.......... 450,000 666,666* 50,000 50,000 1,216,666
Weighted average price per share..... $ 3.47 $ 1.50 $ 5.25 $ 2.13 $ 2.90
Exercised --
January 1, 1996 to December 31,
1997.............................. -- 133,333 -- -- 133,333
Market value of shares less exercise
price or cash received............ -- $260,000 -- -- $ 260,000
</TABLE>
- ---------------
* Includes 400,000 options to purchase Common Stock which terminated as a result
of Mr. Wilkinson's resignation as President and Chief Executive Officer of the
Company in October 1997.
During the period from January 1, 1996, to December 31, 1997, employees of
the Company exercised options and SARs with a net value (market value of shares
less exercise price or cash received) of $792,045. As of December 31, 1997,
options to purchase an aggregate of 695,933 shares of Common Stock of the
Company were outstanding, with a weighted average exercise price per share of
$3.04 and expiring between January 28, 2003, and December 11, 2007.
15
<PAGE> 19
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company has an Executive Committee, an Audit
Committee and a Compensation Committee to assist the Board in carrying out its
duties. The Executive Committee has authority, as delegated by the Board, to act
for the Board but may not commit the Company to an expenditure in excess of
$10,000,000 without Board approval. 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 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. This committee approves
annual salaries and bonuses for Company officers to ensure that the recommended
salaries and bonuses are not unreasonable. The Company has no nominating
committee; the entire Board of Directors is responsible for selecting nominees
for election as directors.
During 1997, the Board of Directors of the Company met a total of eight
times. The Executive Committee met once, the Audit Committee met twice and the
Compensation Committee met three times.
STOCKHOLDER PROPOSALS
Any proposals that stockholders of the Company desire to have presented at
the 1999 annual meeting of stockholders must be received by the Company at its
principal executive offices not later than November 17, 1998.
16
<PAGE> 20
MISCELLANEOUS
Ernst & Young LLP acted as the Company's independent auditors for 1997. 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 1998.
The accompanying proxy is being solicited on behalf of the Board of
Directors of the Company. The Company will bear the expense of preparing,
printing and mailing the proxy solicitation material and the of proxy. In
addition to use of the mail, proxies may be solicited by personal interview,
telephone and telegram by directors and regular officers and employees of the
Company. The Company may also engage the services of a proxy solicitation firm
to assist in the solicitation of proxies. The Company estimates that the fee of
any such firm will not exceed $5,000 plus reimbursement of reasonable
out-of-pocket expenses. Arrangements may also be made with brokerage houses and
other custodians, nominees and fiduciaries for the forwarding of solicitation
material to the beneficial owners of stock held of record by such persons, and
the Company may reimburse them for reasonable out-of-pocket expenses incurred by
them in connection therewith.
By Order of the Board of Directors,
/s/ JAMES E. RUSSELL
JAMES E. RUSSELL
Secretary
Dallas, Texas
March 27, 1998
17
<PAGE> 21
PROXY
TYLER CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned hereby (1) acknowledges receipt of the Notice dated March
27, 1998 of the annual meeting of stockholders of Tyler Corporation (the
"Company") to be held at Suite 2820, San Jacinto Tower, 2121 San Jacinto Street,
Dallas, Texas, on Tuesday, April 28, 1998, at 10:00 a.m., Dallas time, and the
proxy statement in connection therewith, and (2) appoints Louis A. Waters and
C.A. Rundell, Jr., 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 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 SIDE SEE REVERSE SIDE
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
[X]PLEASE MARK VOTE AS IN THIS EXAMPLE.
THIS PROXY WILL BE VOTED AS SPECIFIED BELOW. IF NO SPECIFICATION IS MADE,
THIS PROXY WILL BE VOTED FOR THE MATTERS SPECIFICALLY REFERRED TO BELOW.
1. Election of Directors:
NOMINEES: Lorch, Meyer, Oates, Rundell, Russell, Waters
[ ]FOR ALL NOMINEES
[ ]WITHHOLD AUTHORITY FOR ALL NOMINEES
[ ]
--------------------------------------------------
TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE(S),
MARK ABOVE AND WRITE NOMINEE'S NAME(S) IN SPACE
PROVIDED.
2. Approval of Tyler Corporation Stock Option Plan, as amended and restated
as of February 19, 1998.
[ ]For [ ] AGAINST [ ]ABSTAIN
3. In their discretion, the proxies are authorize to vote upon such other
business as may properly come before the meeting or any adjournments
thereof.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
Please date this proxy and sign your name exactly as it appears hereon. Where
there is more than one owner, each should sign. When signing as an attorney,
administrator, executor, guardian or trustee, please add your title as such.
If executed by a corporation, the proxy should be signed by a duly authorized
officer.
Please sign this proxy and return it promptly whether or not you expect to
attend the meeting. You may nevertheless vote in person if you do attend.
Signature: Date:
--------------------- ---------
Signature: Date:
--------------------- ---------
