March 19, 2004

Dear Stockholder:

          You are cordially invited to attend the annual meeting of stockholders of Tyler Technologies, Inc. to be held on Thursday, May 6, 2004, at the Park City Club, 5956 Sherry Lane, Suite 1700, Dallas, Texas, commencing at 10:00 a.m. Details of the business to be conducted at the meeting are given in the attached Notice of Annual Meeting and Proxy Statement.

          Whether or not you attend the annual meeting, it is important that your shares be represented and voted at the meeting. Therefore, I urge you to sign, date, and return the enclosed proxy at your earliest convenience. If you decide to attend the annual meeting, you will be able to vote in person, even if you have previously submitted your proxy.

          On behalf of the Board of Directors, I would like to express our appreciation for your continued interest in the affairs of the Company.

TYLER TECHNOLOGIES, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 6, 2004

To the Stockholders of
             TYLER TECHNOLOGIES, INC.:

     The annual meeting of stockholders will be at the Park City Club, 5956 Sherry Lane, Suite 1700, Dallas, Texas, on Thursday, May 6, 2004, at 10:00 a.m., Dallas time. At the meeting, you will be asked to:

     Only stockholders of record on March 19, 2004 may vote at the annual meeting. A list of those stockholders will be available for examination at our corporate headquarters, 5949 Sherry Lane, Suite 1400, Dallas, Texas 75225, from April 26 through May 6, 2004.

     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. Your prompt response will reduce the time and expense of solicitation.

     The enclosed 2003 Annual Report does not form any part of the proxy solicitation material.

Dallas, Texas
March 19, 2004

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PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
to be held May 6, 2004

TABLE OF CONTENTS

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THE ANNUAL MEETING

Place, Date, and Time

     The annual meeting will be held at the Park City Club, 5956 Sherry Lane, Suite 1700, Dallas, Texas on Thursday, May 6, 2004, at 10:00 a.m., Dallas time.

Matters to be Considered

     At the annual meeting, you will be asked to consider and vote upon the following proposals:

Record Date and Voting

     Only stockholders of record on March 19, 2004 are entitled to vote at the annual meeting. On March 19, 2004, we had 41,447,035 shares of common stock issued and outstanding. Each stockholder will be entitled to one vote, in person or by proxy, for each share of common stock held in his or her name. A majority of our shares of common stock must be present, either in person or by proxy, to constitute a quorum for action at the meeting. Abstentions and broker nonvotes are counted for purposes of determining a quorum. Abstentions are counted in tabulating the votes cast on any proposal, but are not counted as votes either for or against a proposal. Broker nonvotes are not counted as votes cast for purposes of determining whether a proposal has been approved.

Vote Required

     The following is the required vote necessary to approve each of the proposals:

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Proxy Solicitation, Revocation, and Expense

     The accompanying proxy is being solicited on behalf of the board of directors. Your shares will be voted at the annual meeting as you direct in the enclosed proxy, provided that it is completed, signed, and returned to us prior to the annual meeting. No proxy can vote for more than seven nominees for director. If you return a proxy but fail to indicate how you wish your shares to be voted, then your shares will be voted in favor of each of the nominees for director.

     After you sign and return your proxy, you may revoke it prior to the meeting either by (i) filing a written notice of revocation at our corporate headquarters, (ii) attending the annual meeting and voting your shares in person, or (iii) delivering to us another duly executed proxy that is dated after the initial proxy.

     We will bear the expense of preparing, printing, and mailing the proxy solicitation material and the proxy. In addition to use of the mail, we may solicit proxies by personal interview or telephone by our directors, officers, and employees. We may also engage the services of a proxy solicitation firm to assist us in the solicitation of proxies. We estimate 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 record stockholders, and we may reimburse them for their reasonable out-of-pocket expenses.

PROPOSALS FOR CONSIDERATION

Proposal One – Election of Directors

     At the annual meeting, you will be asked to elect a board of seven directors. The nominees for director are: Donald R. Brattain; J. Luther King, Jr.; John S. Marr, Jr.; G. Stuart Reeves; Michael D. Richards; Glenn A. Smith; and John M. Yeaman. Each of the nominees (other than Messrs. Brattain and King) currently serves on our board of directors. For more information regarding these nominees, see “Tyler Management – Directors, Nominees for Director, and Executive Officers.”

     Each nominee has indicated that he is able and willing to serve as a director. If any of the nominees becomes unable to serve prior to the meeting, the persons named in the enclosed proxy will vote the shares covered by your executed proxy for a substitute nominee as selected by the board of directors. You may withhold authority to vote for any nominee by entering his name in the space provided on the proxy card.

Proposal Two – Amendment to the Stock Option Plan

     At the annual meeting, you will also be asked to consider and vote upon a proposal to amend the Stock Option Plan to increase the number of shares of common stock subject to the plan from 6,500,000 to 7,500,000. The proposed amendment to the Stock Option Plan is intended to enable us to provide additional incentives to selected key employees whose substantial contributions are important to our continued growth and profitability. Currently, there are only 165,834 shares of our common stock available for option grants under the existing Stock Option Plan. Copies of the Stock Option Plan and the proposed amendment are available upon written request.

     Purpose of the Stock Option Plan. Stock options are designed to strengthen the commitment of selected key employees, directors, and consultants, to motivate those individuals to perform their assigned responsibilities diligently and skillfully, and to attract and retain competent entrepreneurial-type management dedicated to our long-term growth and profitability. We believe this can best be accomplished by tying a portion of compensation to appreciation in the market value of our common stock so that the management and key employees, non-employee directors, and consultants are rewarded only if the value of your investment in our common stock has appreciated.

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     Description of the Stock Option Plan. The Stock Option Plan is designed to permit the appropriate administering committee to grant options to key employees, directors, and consultants to purchase shares of our common stock. The Stock Option Plan requires that the purchase price under each stock option will not be less than 100% of the fair market value of our common stock at the time of the grant of the option. The fair market value per share is the reported closing price of our common stock on the New York Stock Exchange on the date of the grant of the option, or if no sale has been reported on such date, 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 grants options to eligible individuals, 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 grants options and administers the Stock Option Plan with respect to officers, and our board of directors, as a whole, grants options and administers the plan with respect to directors. Options may be exercised in annual installments as specified by the administering committee or, if applicable, our board of directors. All installments that become exercisable are cumulative and may be exercised at any time after they become exercisable until expiration of the option. The Stock Option Plan contains provisions governing “Changes of Control,” as defined therein, including accelerated vesting of options under certain circumstances.

     The exercise price of options is paid in cash or by check at the time of exercise or, if approved, by the tender of shares of our common stock, or through a combination thereof; provided that such shares either: (i) have been owned by the optionee for more than six months and have been “paid for” within the meaning of Rule 144 promulgated under the Securities Act of 1933; or (ii) were obtained by the optionee in the public market (“Qualifying Shares”). If the option is exercised by tendering Qualifying Shares, the number of shares tendered shall be determined by the fair market value per share on the date of the exercise, as determined by us. An option agreement may also provide that the exercise price may be paid through the cashless exercise method whereby the optionee authorizes a broker designated by us to sell a specified number of the shares of common stock to be acquired by the optionee on the exercise of the option, having a then fair market value equal to the sum of the exercise price of the option, plus any transaction costs. The remainder of the shares not sold will be delivered to the optionee. Shares of common stock deliverable upon exercise of the options may be transferred from treasury or issued from authorized but unissued shares.

     The Stock Option Plan will terminate on May 11, 2010, and no options may thereafter be granted under the plan. Our board of directors may amend, alter, or discontinue the Stock Option Plan, or any part thereof, at any time and for any reason. However, we will obtain stockholder approval for any amendment to the Stock Option Plan to the extent necessary and desirable to comply with applicable law. The administering committee may also make appropriate adjustments in the number of shares covered by the Stock Option Plan, the number of shares subject to outstanding options, and the option prices to reflect any stock dividend, stock split, share combination, or other recapitalization and, with respect to outstanding options and option prices, to reflect any merger, consolidation, reorganization, liquidation or similar transaction.

     Incentive stock options and nonqualified stock options may be granted under the Stock Option Plan to our key employees. Key employees are defined in the Stock Option Plan to be those employees whose performance and responsibilities are determined to have a direct and significant effect on our success. Non-employee directors, as well as consultants, are eligible for the grant of nonqualified stock options. Additional options may be granted to persons to whom options have previously been granted. There is no restriction in the Stock Option Plan on the maximum or minimum number of shares covered by options that may be granted to any person.

     We estimate that the total number of persons who are eligible to receive awards under the Stock Option Plan at present is approximately 150. Because the granting of stock options under the Stock Option Plan is at the discretion of the Executive Committee or the Compensation Committee, as discussed above, it is not possible to determine which persons (including the persons identified as “Named Executive Officers” in this proxy statement, all current executive officers as a group, all current directors who are not executive officers, and all employees, including current officers who are not executive officers, as a group) may be granted stock options as a result of the proposed amendment of the Stock Option Plan. Also, it is not possible to estimate the number of stock options that may be awarded as a result of the amendment of the Stock Option Plan.

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     Incentive stock options are options that meet the requirements of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), and nonqualified stock options are options that do not meet the requirements of Section 422 of the Code. No incentive stock option, however, may be granted under the Stock Option Plan to an employee who owns more than 10% of the voting power of all classes of securities unless the option price is at least 110% of the fair market value of our 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 appropriate administering committee may provide for the termination of options in case of termination of employment, directorship, consultant relationship, dishonesty, or any other reason the appropriate committee determines. If an option 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. Upon termination of the employment, directorship, or consultant relationship of an optionee, his or her option is exercisable for a period of 30 days after termination, and thereafter the option terminates. If the optionee dies or becomes disabled before the termination of his right to exercise his or her option, the legal representatives of the estate, or the optionee in the event of his disability, may exercise his or her option provided the option is exercised prior to the date of expiration of the option period or one year from the date of the optionee’s death or disability, whichever first occurs, and the option may be exercised only as to those shares the optionee could have purchased under the option on the date of death, disability or other termination. Options may not be transferred other than by will or the laws of descent and distribution and, during the lifetime of the optionee, may be exercised only by optionee.

     Tax Status of Options. An optionee has no taxable income, and we are not entitled to a deduction, at the time of the grant of an option. All stock options that qualify under the rules of Section 422 of the Code will be entitled to “incentive stock option” treatment. To receive incentive stock option treatment, an optionee must not dispose of the acquired stock within two years after the option is granted and within one year after the exercise. In addition, the individual must have been an employee 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, then 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, even though it is not included in taxable income for purposes of determining regular tax liability of an employee. Consequently, an optionee may be obligated to pay alternative minimum tax in the year he or she exercises an incentive stock option.

     If an employee does not meet the two-year and one-year holding requirement (a “disqualifying disposition”), tax will be imposed at the time of sale of the stock. In such event, the employee’s gain on exercise of the incentive stock option will be compensation to him taxed as ordinary income rather than capital gain to the extent the fair market value of the acquired common stock on the date of exercise of the incentive stock option exceeds the aggregate exercise price paid for that common stock, and we will be entitled to a corresponding deduction at the time of sale. If the amount realized on the disqualifying disposition is less than the fair market value of the common stock on the date of exercise of the incentive stock option, the total amount includable in optionee’s gross income, and the amount deductible by us, will equal the excess of the amount realized on the disqualifying disposition over the exercise price.

     An optionee, upon exercise of a nonqualified stock option that does not qualify as an incentive stock option, recognizes ordinary income in an amount equal to the gain on exercise. The exercise of a nonqualified stock option entitles us 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 us.

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     Different tax consequences may result from stock-for-stock exercises of options.

     THE FOREGOING SUMMARY OF THE EFFECT OF THE FEDERAL INCOME TAX UPON PARTICIPANTS IN THE STOCK OPTION PLAN DOES NOT PURPORT TO BE COMPLETE, AND IT IS RECOMMENDED THAT THE PARTICIPANTS CONSULT THEIR OWN TAX ADVISORS FOR COUNSELING. MOREOVER, THE FOREGOING SUMMARY IS BASED UPON PRESENT FEDERAL INCOME TAX LAWS AND IS SUBJECT TO CHANGE. THE TAX TREATMENT UNDER FOREIGN, STATE, OR LOCAL LAW IS NOT COVERED IN THIS SUMMARY.

     Equity Compensation Plan Information. The following table summarizes certain information related to the Stock Option Plan. There are no outstanding warrants or rights related to our equity compensation plans as of December 31, 2003.

Proposal Three – Adoption of the Employee Stock Purchase Plan

     At the annual meeting, you will also be asked to adopt the Employee Stock Purchase Plan. The following is a summary of the major terms of the Employee Stock Purchase Plan. A copy of the Employee Stock Purchase Plan may be obtained upon written request.

     Purpose of the Employee Stock Purchase Plan. The Employee Stock Purchase Plan is intended to encourage our employees to invest in our common stock. We believe that such an investment strengthens the commitment of all our employees to our long-term growth and profitability. The Employee Stock Purchase Plan, in conjunction with the provisions of the Code, achieves this goal by allowing our employees to purchase our common stock at an attractive price and by creating incentives for them to hold such stock as a long-term investment.

     Description of the Employee Stock Purchase Plan. The Employee Stock Purchase Plan, if approved by the stockholders, is intended to satisfy the requirements of Section 423 of the Code. The Employee Stock Purchase Plan will allow all of our full-time employees who have been employed for at least six months to authorize after-tax payroll deductions at any whole percentage rate from 1% to 15% of cash performance-based pay (including bonuses) to be applied toward the purchase of our common stock. There will be 1,000,000 shares of our common stock reserved for issuance under the Employee Stock Purchase Plan. As of March 19, 2004, there would have been approximately 1,200 employees eligible to participate in the Employee Stock Purchase Plan. The Employee Stock Purchase Plan will terminate on December 31, 2014, or earlier at the discretion of our board of directors or in the event all shares reserved for issuance under the plan have been purchased.

     We estimate that the total number of persons who are eligible to purchase shares under the Employee Stock Purchase Plan at present is approximately 1,200. Because the purchase of shares under the Employee Stock Purchase Plan is at the discretion of each eligible employee pursuant to the terms of the plan, it is not possible to

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determine which persons (including the persons identified as “Named Executive Officers” in this proxy statement, all current executive officers as a group, all current directors who are not executive officers, and all employees, including current officers who are not executive officers, as a group) may purchase shares under the plan.

     Separate three-month offerings will commence on January 1, April 1, July 1, and October 1 of each year. An employee must authorize a payroll deduction before the start of an offering in order to participate in that offering. On the last business day of the offering, the employee will be deemed to have exercised the option to purchase as many shares as the employee’s payroll deduction will allow at the option price. The option price is 85% of the lesser of (a) the fair market value of our common stock on the first business day of the offering or (b) the fair market value of our common stock on the last business day of the offering. The fair market value will be the closing sale price of our common stock on the deemed exercise date as reported on the New York Stock Exchange. Fractional shares will not be purchased; instead, excess funds will roll over into the next offering period unless otherwise designated by the employee.

     An employee may withdraw at any time prior to two weeks before the last day of the offering period. Upon withdrawal, the amount in the employee’s account will be refunded to the employee without interest. An employee may suspend participation in an offering at any time before the first day of the last month of the offering period by reducing his or her payroll deduction percentage election to 0% for the remainder of the offering. In such a case, the amount accumulated in the employee’s account prior to the suspension is not refunded, but is used to purchase shares as described above. An employee who has withdrawn from or suspended participation in an offering may not again participate in the Employee Stock Purchase Plan until the next offering commences.

     No employee may purchase more than 750 shares of stock during any single offering. In addition, an employee will not be permitted to purchase any shares under the Employee Stock Purchase Plan if such employee, immediately after such purchase, would own shares possessing 5% or more of the total combined voting power or value of our common stock. The fair market value of all shares purchased by an employee under the Employee Stock Purchase Plan during any calendar year may not exceed $25,000, which is based on the fair market value of our common stock at the beginning of each offering period.

     All shares purchased under the Employee Stock Purchase Plan must be held in designated accounts until the shares are sold. Employees may not sell any shares purchased for a period of at least one hundred and eighty days after the purchase, unless such employee is terminated during this holding period. If an employee desires to sell shares after the expiration of the holding period, the employee must request that the shares be transferred to his or her broker’s account for future sale. Employees will be responsible for all commissions related to future sales. Employees must notify us of the date and terms of any actual sale that occurs within two years of the beginning of the offering period in which such shares were acquired.

     Our board of directors may at any time amend or terminate the Employee Stock Purchase Plan, provided that no employee’s existing rights under any offering already commenced may be adversely affected thereby. Any amendment will be consistent with applicable law, including first obtaining the prior approval of our shareholders if such amendment would increase the number of shares reserved for issuance under the plan or materially modify the eligibility requirements.

     Federal Income Tax Consequences Relating to the Employee Stock Purchase Plan. The Employee Stock Purchase Plan is intended to qualify under the provisions of Section 421 and Section 423 of the Code. Under those provisions, no income will be taxable to a participant at the time of grant of the option or purchase of shares. However, a participant may become liable for tax upon dispositions of shares acquired under the Employee Stock Purchase Plan, and the tax consequences will depend on how long a participant has held the shares prior to disposition.

     If the shares are disposed of (a) at least two years after the date of the beginning of the offering period and (b) at least one year after the stock is purchased in accordance with the Employee Stock Purchase Plan (or, if the employee dies while holding the shares), the following tax consequences will apply. The lesser of (a) the excess of fair market value of the shares at the time of such disposition over the purchase price of the shares (the “option price”), or (b) the excess of the fair market value of the shares at the time the option was granted over the option price will be taxed as

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ordinary income to the participant. Any further gain upon disposition generally will be taxed at long-term capital gain rates. If the shares are sold and the sales price is less than the option price, there is no ordinary income and the participant has a long-term capital loss equal to the difference. If a participant holds the shares for the holding periods described above, we will not be allowed a federal income tax deduction for the amount determined to be ordinary income to the participant.

     If the shares are sold or disposed of (including by way of gift) before the expiration of either the two-year or one-year holding periods described above, the following tax consequences will apply. The amount by which the fair market value of the shares on the date the option is exercised (i.e., the last business day of the offering period or the “termination date”) exceeds the option price will be taxed as ordinary income to the participant. This excess will constitute ordinary income in the year of the sale or other disposition even if no gain is realized on the sale or a gratuitous transfer of the shares is made. The balance of any gain will be taxed as a capital gain and will qualify for long-term capital gain treatment if the shares have been held for more than one year following the exercise of the option. If the shares are sold for an amount less than their fair market value as of the termination date, the participant recognizes ordinary income equal to the excess of the fair market value of the shares as of the termination date over the option price, and the participant may recognize a capital loss equal to the difference between the sales price and the value of such shares on the termination date. In the event of an early disposition, we will be allowed a deduction for federal income tax purposes equal to the ordinary income realized by the disposing employee.

     Currently, we are not required to withhold employment or income taxes upon the exercise of the options under Sections 421 and 423 of the Code. However, the IRS may issue guidance in the future requiring us to withhold employment and/or income taxes upon the exercise of options under the Employee Stock Purchase Plan.

     THE FOREGOING SUMMARY OF THE EFFECT OF THE FEDERAL INCOME TAX UPON PARTICIPANTS IN THE EMPLOYEE STOCK PURCHASE PLAN DOES NOT PURPORT TO BE COMPLETE, AND IT IS RECOMMENDED THAT THE PARTICIPANTS CONSULT THEIR OWN TAX ADVISORS FOR COUNSELING. MOREOVER, THE FOREGOING SUMMARY IS BASED UPON PRESENT FEDERAL INCOME TAX LAWS AND IS SUBJECT TO CHANGE. THE TAX TREATMENT UNDER FOREIGN, STATE, OR LOCAL LAW IS NOT COVERED IN THIS SUMMARY.

Proposal Four – Ratification of Ernst & Young LLP as Our Independent Auditors for Fiscal Year 2004

     The Audit Committee has selected Ernst & Young LLP, independent certified public accountants, as our independent auditors for fiscal year 2004, subject to ratification by the stockholders. Ernst & Young LLP served as our independent auditors for fiscal years 2003 and 2002. A representative of Ernst & Young LLP is expected to be present at the annual meeting. That representative will have an opportunity to make a statement, if desired, and will be available to respond to appropriate questions.

     Ernst & Young’s fees for all professional services during each of the last two fiscal years were as follows:

     Audit Fees. Fees for audit services include fees associated with the annual audit and the review of our interim financial statements.

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     Audit-Related Fees. Fees for audit-related services generally include fees for accounting consultations, SEC filings, and audit of our employee benefit plan.

     Tax Fees. Fees for tax services include fees for tax consulting and tax compliance and preparation work.

     All Other Fees. We did not pay Ernst & Young LLP any other fees during the last two fiscal years.

     The Audit Committee approved all of the independent auditors’ engagements and fees presented above. Our Audit Committee Charter requires that the Audit Committee pre-approve all audit and non-audit services provided to us by our independent auditors. All such services performed in 2003 were pre-approved by the Audit Committee. For more information on these policies and procedures, see “Corporate Governance Principles and Board Matters – Pre-Approval Policies and Procedures for Audit and Non-Audit Services.”

TYLER MANAGEMENT

Directors, Nominees for Director, and Executive Officers

     Below is a brief description of our directors, nominees for director, and executive officers. Each director holds office until our next annual meeting or until his successor is elected and qualified. Executive officers are elected annually by the board of directors and hold office until the next annual board meeting or until their successors are elected and qualified.

Directors, Nominees for Director, and Executive Officers

Business Experience of Directors, Nominees for Director, and Executive Officers

     G. Stuart Reeves has served on our board of directors since June 2001. Mr. Reeves also serves as Chairman of the Executive Committee and the Nominating and Governance Committee and is a member of both the Audit Committee and the Compensation Committee. From 1967 to 1999, Mr. Reeves worked for Electronic Data Systems Corporation (“EDS”), a professional services company that offers its clients a portfolio of related systems worldwide

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within the broad categories of systems and technology services, business process management, management consulting, and electronic business. During his thirty-two years of service with EDS, Mr. Reeves held a variety of positions, including Executive Vice President, North and South America, from 1996 to 1999; Senior Vice President, Europe, Middle East, and Africa, from 1990 to 1996; Senior Vice President, Government Services Group, from 1988 to 1990; Corporate Vice President, Human Resources, from 1984 to 1988; Corporate Vice President, Financial Services Division, from 1979 to 1984; Project Sales Team Manager, from 1974 to 1979; and Systems Engineer and Sales Executive, from 1967 to 1974. Mr. Reeves also served on the EDS Board of Directors from 1988 until 1996. Mr. Reeves retired from EDS in 1999. Mr. Reeves also serves on the Board of Governors of Oklahoma State University Foundation.

     John M. Yeaman has served as President and Chief Executive Officer since April 2002. From March 2000 until April 2002, Mr. Yeaman served as President and Co-Chief Executive Officer, and from December 1998 until March 2000, Mr. Yeaman was President and Chief Executive Officer. Mr. Yeaman was elected to our board of directors in February 1999. Mr. Yeaman currently serves on the Executive Committee. From 1980 until 1998, Mr. Yeaman was associated with EDS, where he most recently served as the director of a worldwide Strategic Support Unit managing $2 billion in real estate assets. Mr. Yeaman began his career with Eastman Kodak Company.

     John S. Marr, Jr. has served on our board of directors since May 2002 and is currently a member of the Executive Committee. Mr. Marr has served as Chief Operating Officer since July 2003. Mr. Marr has also served as President of MUNIS, Inc. (“MUNIS”) since 1994. Mr. Marr began his career with MUNIS in 1983 and we acquired MUNIS in 1998. MUNIS develops and markets a wide range of software products and related services for county and city governments, schools, and not-for-profit organizations, with a focus on integrated financial and land management systems.

     Glenn A. Smith has served on our board of directors since June 2001 and is currently a member of the Executive Committee. Mr. Smith has served as Executive Vice President since July 2003. Mr. Smith is also President of our Courts and Justice Division and The Software Group, Inc. (“TSG”), a company he co-founded in 1981 and which we acquired in 1998. TSG develops and markets a wide range of software products and related services for county governments, with a focus on integrated judicial management and law enforcement systems. Prior to founding TSG, Mr. Smith was employed at Distributed Data Systems of Raleigh, North Carolina, in a software development project management capacity and, prior to that, at Texas Instruments Incorporated in Dallas, Texas as a software developer.

     Michael D. Richards has served on our board of directors since May 2002. Mr. Richards also serves as Chairman of the Compensation Committee and is a member of the Audit Committee and the Nominating and Governance Committee. Mr. Richards is the Chairman and Chief Executive Officer of Suburban Title, LLC d/b/a Reunion Title, an independent title insurance agency founded by Mr. Richards in September 2000 that operates in Dallas, Denton, Collin, Tarrant, and Rockwall Counties in Texas. From 1989 until September 2000, Mr. Richards served as President and Chief Executive Officer of American Title Company, Dallas, Texas, an affiliate of American Title Group, Inc., one of the largest title insurance underwriters in Texas during that time. From 1982 until 1989, Mr. Richards held various management positions with Hexter-Fair Title Company, Dallas, Texas, including President from 1988 until 1989. From 1974 until 1982, Mr. Richards worked for Stewart Title Guaranty Company, Dallas, Texas, during which time he held several key management positions including serving on its board of directors. Mr. Richards holds several positions with various associations, some of which include: Greater Dallas Chamber of Commerce, member of the Economic Development Advisory Council; Leukemia Society of America, Advisory Board Member; Greater Dallas Association of Realtors, Board Member; and Home Builders Association, Board Member.

     Donald R. Brattain has been nominated by the Nominating and Governance Committee to serve as a director. Since 1985, Mr. Brattain has served as President of Brattain & Associates, LLC, a private investment company founded by Mr. Brattain in 1985 and located in Minneapolis, Minnesota. From 1981 until 1988, Mr. Brattain purchased and operated Barefoot Grass Lawn Service Company, a company that grew from $3.2 million in sales to over $100 million in sales and was sold to ServiceMaster, Ltd. in 1998. From 1962 until 1981, Mr. Brattain held various positions with Marathon Oil Company, including Senior Vice President – Administration in the Minneapolis, Minnesota office from 1975 until 1981, Vice President – Compensation, Human Resources, and Store Operations in

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the Minneapolis, Minnesota office from 1969 until 1975, and other administrative positions in the Denver, Colorado and Findlay, Ohio offices from 1962 until 1968.

     J. Luther King, Jr. has been nominated by the Nominating and Governance Committee to serve as a director. Mr. King is the Chief Executive Officer, Chief Financial Officer and a director of Luther King Capital Management (“LKCM”), a registered investment advisory firm that he founded in 1979. Mr. King also serves as a director of the University of Texas Investment Management Company (“UTIMCO”), a company that manages the endowment assets of the University of Texas system and a portion of the endowment assets of Texas A&M University. Mr. King serves as Chairman of the Compensation Committee of UTIMCO.

     Theodore L. Bathurst has been Vice President and Chief Financial Officer since October 1998. Mr. Bathurst was previously an audit partner in the Dallas office of KPMG Peat Marwick LLP (“KPMG”), where he served as engagement partner on the accounts of a variety of information, communications, and technology companies. Mr. Bathurst was also designated by KPMG as a Securities and Exchange Commission (“SEC”) partner responsible for the review of filings made by public companies with the SEC. Mr. Bathurst, a certified public accountant, is a member of the board of directors of the Texas Society of CPAs and of the Dallas CPA Society.

     Brian K. Miller has been Vice President – Finance and Treasurer since May 1999 and was Vice President – Chief Accounting Officer and Treasurer from December 1997 to April 1999. From June 1986 through December 1997, Mr. Miller held various senior financial management positions at Metro Airlines, Inc. (“Metro”), a publicly-held regional airline holding company operating as American Eagle. 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. Mr. Miller is a certified public accountant.

     H. Lynn Moore, Jr. has been General Counsel since September 1998 and has been Vice President and Secretary since October 2000. From August 1992 to August 1998, Mr. Moore was associated with the law firm of Hughes & Luce, L.L.P. in Dallas, Texas where he represented numerous publicly-held and privately-owned entities in various corporate and securities, finance, litigation, and other legal related matters. Mr. Moore is a member of the State Bar of Texas.

     Dustin R. Womble has been Executive Vice President in charge of corporate-wide product strategy since July 2003. Mr. Womble also serves as President of INCODE, Inc. (“INCODE”), which we acquired in 1998. INCODE develops, implements, and supports software and services for local governments. INCODE focuses on enterprise wide solutions that address integrated financial systems, customer service, and law enforcement for counties, cities, and towns.

CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS

Corporate Governance Initiatives

     On February 24, 2004, our board of directors adopted a number of corporate governance initiatives, including the following:

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Code of Business Conduct and Ethics

     On February 24, 2004, our board of directors adopted a Code of Business Conduct and Ethics, which applies to all of our directors, executive officers (including, without limitation, the chief executive officer, chief financial officer, principal accounting officer, and controller), and employees. The purpose of the Code of Business Conduct and Ethics is to promote:

13

A copy of our Code of Business Conduct and Ethics may be found on our website, www.tylerworks.com, or will be furnished, without charge, upon written request at our principal executive offices. Any future amendments or waivers related to our Code of Business Conduct and Ethics will be promptly posted on our website.

Board Independence

     Our board of directors has determined, after considering all of the relevant facts and circumstances, that each of the non-employee directors standing for re-election as director (Messrs. Reeves and Richards) and the two nominees for election as director (Messrs. Brattain and King) has no material relationship with us (either directly or as a partner, shareholder, or officer of an organization that has a relationship with us) and is “independent” within the meaning of the New York Stock Exchange director independence standards, as currently in effect and as may be changed from time to time. As a result, if each of the nominees for director is elected at the annual meeting, our board of directors will be comprised of a majority of “independent” directors as required by the New York Stock Exchange. Furthermore, our board of directors has determined that each of the members of the Audit Committee, Compensation Committee, and Nominating and Governance Committee has no material relationship with us (either directly or as a partner, shareholder, or officer of an organization that has a relationship with us) and is “independent” within the meaning of our director independence standards.

Committees of the Board of Directors

     During 2003, the standing committees of our board of directors were the Audit Committee, Compensation Committee, and Executive Committee. We did not have a Nominating and Governance Committee during fiscal 2003; instead, our board of directors, as a whole, was responsible for selecting nominees for election as directors and electing executive officers. The board met four times during 2003. Each board member participated in at least 75% of all board and committee meetings held during the portion of 2003 that he served as a director and/or committee member.

     Audit Committee. During 2003, the Audit Committee was comprised of Ben T. Morris (Chairman), G. Stuart Reeves, and Michael D. Richards, each of who is “independent” as defined above. Mr. Morris is not standing for re-election as a director in 2004. The Audit Committee’s duties include:

The Audit Committee met four times during 2003. On February 24, 2004, the board amended and adopted the Tyler Audit Committee Charter, which is attached to this proxy statement as Appendix B and may also be found on our website, www.tylerworks.com.

     Compensation Committee. During 2003, the Compensation Committee was comprised of Michael D. Richards (Chairman), Ben T. Morris, and G. Stuart Reeves. The Compensation Committee has final authority on all executive compensation and periodically reviews compensation and other benefits paid to or provided for our officers and directors. The Compensation Committee also approves annual salaries and bonuses for officers to ensure that the

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recommended salaries and bonuses are not unreasonable. The Compensation Committee met twice during 2003. Mr. Morris is not standing for re-election as a director in 2004.

     Executive Committee. During 2003, the Executive Committee was comprised of G. Stuart Reeves (Chairman), John S. Marr, Jr., Glenn A. Smith, and John M. Yeaman. The Executive Committee has the authority to act for the entire board of directors, but may not commit to an expenditure in excess of $5,000,000 without full board approval. The Executive Committee meets periodically throughout the year.

     During 2004, the standing committees of our board of directors will be the Audit Committee, the Compensation Committee, the Nominating and Governance Committee, and the Executive Committee. In addition, our board of directors has established a policy under which our non-management members will meet at regularly scheduled (and in any event at least twice per fiscal year) executive sessions without management present and with Mr. G. Stuart Reeves presiding over such meetings.

Audit Committee Financial Expert

     Our board of directors determined that Ben T. Morris, current chairman of the Audit Committee, possesses the attributes necessary to qualify as an “audit committee financial expert” as set forth in Item 401(h) of the SEC’s Regulation S-K. Mr. Morris is not standing for re-election to our board of directors in 2004. Our board of directors further determined that each of Donald R. Brattain and J. Luther King, Jr., nominees for director, possesses the attributes necessary to qualify as an “audit committee financial expert” should either or both be elected to our board of directors.

Pre-Approval Policies and Procedures for Audit and Non-Audit Services

     The Audit Committee Charter requires that the Audit Committee pre-approve all of the audit and non-audit services performed by our independent auditors. The purpose of these pre-approval procedures is to ensure that the provision of services by our independent auditors does not impair their independence. Each year, beginning in 2003, the Audit Committee receives fee estimates from our independent auditors for each category of services to be performed by the independent auditors during the upcoming fiscal reporting year. These categories of services include Audit Services, Audit-Related Services, Tax Services, and All Other Services. Upon review of the types of services to be performed and the estimated fees related thereto, the Audit Committee will determine which services and fees should be pre-approved, which pre-approval will be in effect for a period of twelve months. The Audit Committee may periodically review the list of pre-approved services based on subsequent determinations. Unless a type of service to be provided by the independent auditor has received general pre-approval, it will require specific pre-approval by the Audit Committee (or delegated member of the Audit Committee) prior to the performance of such service. Any proposed services exceeding the pre-approved cost levels will also require specific pre-approval by the Audit Committee (or delegated member of the Audit Committee).

Director Nominating Process

     The Nominating and Governance Committee is responsible for reviewing and interviewing qualified candidates to serve on our board of directors and to select both “independent” as well as management nominees for director to be elected by our stockholders at each annual meeting. The Nominating and Governance Committee is comprised solely of independent directors and operates under a Charter for the Nominating and Governance Committee, which is attached to this proxy statement as Appendix D and may also be found on our website, www.tylerworks.com.

     Our Corporate Governance Guidelines include the criteria our board of directors believes are important in the selection of director nominees, which includes the following qualifications:

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A copy of our Corporate Governance Guidelines is attached to this proxy statement as Appendix A and may also be found on our website, www.tylerworks.com.

     The Nominating and Governance Committee may, in the exercise of its discretion, actively solicit nominee candidates; however, nominee recommendations submitted by other directors or stockholders will also be considered as described below.

     Our new nominees for director, Messrs. Brattain and King, were recommended to the Nominating and Governance Committee by John M. Yeaman and G. Stuart Reeves, respectively.

     The Nominating and Governance Committee will consider qualified nominees recommended by stockholders who may submit recommendations to the committee in care of our Corporate Secretary at our corporate headquarters, 5949 Sherry Lane, Suite 1400, Dallas, Texas 75225. To be considered by the Nominating and Governance Committee, stockholder nominations must be submitted before our fiscal year-end and must be accompanied by a description of the qualifications of the proposed candidate and a written statement from the proposed candidate that he or she is willing to be nominated and desires to serve, if elected. Nominees for director who are recommended by our stockholders will be evaluated in the same manner as any other nominee for director.

     Nominations by stockholders may also be made at an annual meeting of stockholders in the manner provided in our bylaws. Our bylaws require that a stockholder entitled to vote for the election of directors may make nominations of persons for election to our board at a meeting of stockholders by complying with required notice procedures. Nominations must be received at our corporate headquarters not less than 75 days or more than 85 days before any annual meeting of stockholders. If, however, notice or prior public disclosure of an annual meeting is given or made less than 75 days before the date of the annual meeting, the notice must be received no later than the 10th day following the date of mailing of the notice of annual meeting or the date of public disclosure of the date of the annual meeting, whichever is earlier. The notice must specify the following:

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     We may require that the proposed nominee furnish us with other information as we may reasonably request to assist us in determining the eligibility of the proposed nominee to serve as a director. At any meeting of stockholders, the presiding officer may disregard the purported nomination of any person not made in compliance with these procedures.

Communications with Our Board of Directors

     Any stockholder or interested party who wishes to communicate with our board of directors or any specific directors, including non-management directors may write to:

Board of Directors
Tyler Technologies, Inc.
5949 Sherry Lane, Suite 1400
Dallas, Texas 75225

     Depending on the subject matter, management will:

     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.

Director Attendance at Annual Meetings

     Directors are not required to attend our annual meetings of stockholders. However, our board of directors typically holds a meeting immediately following the annual meeting of stockholders. Therefore, in most cases, all of our directors will be present at the annual meeting. All of our directors were present at the 2003 annual meeting of stockholders.

Director Compensation

     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.

     On May 1, 2003, the board approved discretionary grants to Messrs. Reeves, Morris, and Richards, our non-employee directors, of stock options to purchase 5,000 shares each of our common stock. Each of these option grants vests in equal installments on the first, second, and third anniversary of the date of grant and each has an exercise price of $3.93 per share, the quoted market price of our common stock on the date of grant.

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SECURITIES OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth certain information concerning the beneficial ownership of our common stock as of March 19, 2004 by (i) each “Named Executive Officer” (as defined in the SEC’s Regulation S-K), (ii) each director or nominee for director, (iii) each beneficial owner of more than 5% of our common stock, and (iv) all of our executive officers and directors as a group.

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Section 16(a) Beneficial Ownership Reporting Compliance

     Section 16(a) of the Securities Exchange Act requires that our directors, executive officers, and 10% or more stockholders file with the SEC and New York Stock Exchange initial reports of ownership and reports of changes in ownership of our common stock. These persons are required to furnish us with copies of all Section 16(a) reports they file with the SEC. To our knowledge, based solely on our review of the copies of the forms we received during 2003 and without further inquiry, we believe that all of our directors, officers, and 10% or more stockholders complied with all Section 16(a) filing requirements during 2003.

EXECUTIVE COMPENSATION

Summary Compensation Table

     The following table sets forth certain information regarding the compensation paid to our “Named Executive Officers” for all of the services they rendered to us during fiscal years 2003, 2002, and 2001.

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Option Grants in 2003

     The following table sets forth certain information relating to stock option grants to the “Named Executive Officers” during 2003.

Option/SAR Grants In 2003

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Option Exercises in 2003 and Year-End Option Values

     The following table shows stock option exercises during 2003 by each of the “Named Executive Officers” and the value of unexercised options at December 31, 2003:

Employment Contracts

     Effective July 1, 2003, we entered into a five-year employment agreement with John M. Yeaman. Under the terms of the agreement, Mr. Yeaman will receive a minimum base salary of $325,000 during the first two years of the agreement. During years three through five, Mr. Yeaman’s base salary will be set by the Compensation Committee on a basis that, will be consistent with Mr. Yeaman’s contributions and then existing duties. Mr. Yeaman will also 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 two times the annual cash compensation received during the immediately preceding twelve-month period upon a “change of control” (as defined in the agreement) or if he is terminated for any reason other than “cause” (as defined in the agreement). The agreement also contains certain non-competition, non-solicitation, and confidentiality covenants.

     Effective July 1, 2003, we entered into a five-year employment agreement with John S. Marr, Jr. Under the terms of the agreement, Mr. Marr will receive a minimum base salary of $275,000 during the first year of the agreement and $300,000 during the remaining term. Mr. Marr will also 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 Mr. Marr’s base salary (a) still due for the remainder of the term of the agreement or (b) for a period of twenty-four months, whichever is greater, upon a “change of control” (as defined in the agreement) or if he is terminated for any reason other than “cause” (as defined in the agreement). The agreement also contains certain non-competition, non-solicitation, and confidentiality covenants.

     Effective July 1, 2003, we entered into a five-year employment agreement with Dustin R. Womble. Under the terms of the agreement, Mr. Womble will receive a minimum base salary of $220,000 during the term of the agreement. Mr. Womble will also 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 Mr. Womble’s base salary (a) still due for the remainder of the term of the agreement or (b) for a period of twenty-four months, whichever is greater, upon a “change of control” (as defined in the agreement) or if he is terminated for any reason other than “cause” (as defined in the agreement). The agreement also contains certain non-competition, non-solicitation, and confidentiality covenants.

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     On October 7, 1998, we entered into an employment agreement with Theodore L. Bathurst, which provides that we pay Mr. Bathurst for his services as Vice President and Chief Financial Officer of the company a salary of $250,000. Mr. Bathurst will participate in performance bonus or incentive compensation plans made available to comparable level employees of the company and its subsidiaries and receive all employee benefits and perquisites normally offered to the executive employees of the company. The agreement also provides for a severance payment equal to one year of his current base salary if he is terminated for any reason other than “cause”, as specified in the agreement.

Compensation Committee Interlocks and Insider Participation

     In 2003, the Compensation Committee consisted of Michael D. Richards (Chairman), Ben T. Morris, and G. Stuart Reeves. No member of the Compensation Committee was an officer or employee of the company or any of our subsidiaries. None of our executive officers served on the board of directors or compensation committee of any other entity. Mr. Morris is not standing for re-election as a director in 2004.

Report of the Compensation Committee on Executive Compensation

     The Compensation Committee has the responsibility for final approval for all compensation to our officers and directors, including the duty to ensure that compensation paid to executive officers does not exceed reasonable amounts and is based on objective standards. The Compensation Committee approves or disapproves the recommendations of management regarding compensation according to the guidelines set forth below. The specific duties and responsibilities of the Compensation Committee are set forth in the Compensation Committee Charter.

     We strive to employ outstanding management in order to obtain outstanding results. To attract and retain high-level individuals, we may pay above-median compensation or provide stock ownership and stock option incentives to our executive officers. From time to time, salaries, bonuses, and other compensation of our executive officers are evaluated by reference to nationwide comparisons for the industries in which we operate.

     A substantial portion of each of our executive officer’s potential total compensation is in the form of bonuses and options. Annual bonuses vary significantly based on our financial results and revenue growth, the achievement of strategic objectives, extraordinary individual achievement, and each individual’s contribution toward our performance. The Compensation Committee met twice during 2003.

Chief Executive Officer Compensation

     John M. Yeaman has served as President since December 1998 and Chief Executive Officer since April 2002. In 2003, Mr. Yeaman’s cash compensation consisted of a base salary of $325,000 with a bonus equal to 100% of his base salary. In addition, Mr. Yeaman was granted options to purchase 200,000 shares of our common stock. In determining Mr. Yeaman’s cash compensation in 2003, the Compensation Committee considered several factors, including:

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          This report is submitted by the Compensation Committee.

Michael D. Richards, Chairman
Ben T. Morris
G. Stuart Reeves

REPORT OF THE AUDIT COMMITTEE

     The Audit Committee assists the board of directors in fulfilling its responsibilities for general oversight of the integrity of our financial statements, our compliance with legal and regulatory requirements, the independent auditors’ qualifications and independence, the performance of our independent auditors, the effectiveness of our disclosure controls and of our internal controls over financial reporting, and risk assessment and risk management. The Audit Committee manages the relationship with our independent auditors (who report directly to the Audit Committee). The Audit Committee has the authority to obtain advice and assistance from outside legal, accounting, or other advisors as the Audit Committee deems necessary to carry out its duties and to receive appropriate funding, as determined by the Audit Committee, from the company for such advice and assistance.

     Management has the primary responsibility for our reporting process, including our systems of internal controls, and for preparing our financial statements. In fulfilling its oversight responsibilities, the Audit Committee reviewed with management the audited financial statements contained in the Annual Report, including a detailed discussion of the quality, not just the acceptability, of the accounting principles, the reasonableness of the significant judgments, and the clarity of disclosures in the financial statements.

     The Audit Committee meets with the independent auditors, with and without management present, to discuss the overall scope and plans for the audits, the results of their examinations, their evaluations of the company’s internal controls, and the overall quality of the company’s financial reporting. The Audit Committee reviewed with the independent auditors, who are responsible for expressing an opinion on the conformity of those audited financial statements with accounting principles generally accepted in the United States, their judgments as to the quality, not just the acceptability, of the accounting principles and such other matters as are required to be discussed with the Audit Committee under generally accepted auditing standards. In addition, the Audit Committee discussed with the independent auditors the auditors’ independence from management and the company, including the matters in the written disclosures required by the Independence Standards Board, and considered the compatibility of non-audit services with the auditors’ independence. The Audit Committee met four times during 2003.

     In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the board of directors (and the board approved) that the audited financial statements be included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2003 for filing with the SEC.

     This report is submitted by the Audit Committee.

Ben T. Morris, Chairman
G. Stuart Reeves
Michael D. Richards

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STOCK PERFORMANCE CHART

     The following chart compares the return on our common stock for the last five years with the Standard and Poors (“S&P”) 500 Index and the S&P 600 Information Technology Index. The comparison assumes $100 was invested on December 31, 1998 in our common stock and in each of the foregoing indices and assumes reinvestment of dividends and distributions.

STOCKHOLDER PROPOSALS

     Any proposal that a stockholder desires to present at the 2005 annual meeting must be received by us at our corporate headquarters no later than January 1, 2005.

Dallas, Texas

March 19, 2004

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APPENDIX A

Corporate Governance Guidelines
Adopted by the Board of Directors
of
Tyler Technologies, Inc.

As Adopted February 24, 2004

PURPOSE

The purpose of the Guidelines is to assist the Company’s Board of Directors in maintaining effective corporate governance practices for the long-term benefit of its stockholders. The Guidelines formalize certain practices previously followed by the Tyler Board, and also establish new governance practices the Board has implemented to strengthen the Company’s corporate governance and to comply with new listing standards of the New York Stock Exchange and new legal requirements. The Tyler Board intends to review the Guidelines periodically and revise the Guidelines as the Board deems appropriate in light of continuing developments in corporate governance principles.

BOARD ROLE AND RESPONSIBILITIES

A-1

resign. All directors must recuse themselves from any decision affecting their personal, business or professional interests.

BOARD COMPOSITION

A-2

BOARD OPERATING

A-3

BOARD COMMITTEES

A-4

BOARD COMPENSATION AND STOCK OWNERSHIP

MANAGEMENT REVIEW AND SUCCESSION PLANNING

A-5

OTHER PRACTICES

A-6

APPENDIX B

Tyler Technologies, Inc.

AUDIT COMMITTEE CHARTER
AS AMENDED FEBRUARY 24, 2004

PURPOSE

The Audit Committee is appointed by the Board of Directors of the Company to: (1) assist the Board in monitoring (a) the integrity of the financial reporting process, systems of internal controls, the corporate accounting practices, the financial statements and reports of the Company, (b) the performance of the Company’s internal audit function, and (c) the compliance by the Company with legal and regulatory requirements; (2) monitor the independence and qualifications of the independent auditors (the “Independent Auditor”) and be directly responsible for the appointment, compensation and oversight of the Company’s independent auditor employed by the Company for the purpose of preparing or issuing an audit report or related work; and (3) prepare the report required by the rules of the Commission to be included in the Company’s annual proxy statement.

COMMITTEE MEMBERSHIP

The Audit Committee shall consist of no fewer than three members, as determined annually by the Board on the recommendation of the Nominating Committee. The members of the Audit Committee shall meet the independence and expertise requirements of the New York Stock Exchange, any other exchange on which the Company’s securities are traded, Section 10A(m)(3) of the Securities Exchange Act of 1934 (the “Exchange Act”) and the rules and regulations of the Securities and Exchange Commission (the “Commission”). All members of the Committee shall be able to read and understand fundamental financial statements, including a balance sheet, income statement and cash flow statement. The Board, in the exercise of its business judgment, shall determine that (a) all members of the Committee are financially literate and (b) at least one member of the Committee shall be a financial expert (as defined in SEC Regulation S-K, item 401(H), and any amendment thereof). Committee members may enhance their familiarity with finance and accounting by participating in education programs conducted by the Company or an outside consultant. Audit Committee members shall not serve simultaneously on the audit committees of more than two other public companies without the approval of the full Board.

The members of the Audit Committee shall be appointed annually by the Board on the recommendation of the Nominating Committee. Audit Committee members may be replaced by the Board at any time. The Board shall designate the Chairman or Chairwoman (“Chairperson”) of the Audit Committee.

COMMITTEE AUTHORITY AND RESPONSIBILITIES

     The basic responsibility of the members of the Audit Committee is to exercise their business judgment to act in what they reasonably believe to be in the best interests of the Company and its shareholders. In discharging that obligation, members should be entitled to rely on the honesty and integrity of the Company’s senior executives and its outside advisors and auditors, to the fullest extent permitted by law.

     In carrying out its responsibilities, the Committee, and each member of the Committee in his or her capacity as such, shall be entitled to rely, in good faith, on information, opinions, reports or statements, or other information prepared or presented to them by 1) officers and other employees of the Company or its subsidiaries, whom such member believes to be reliable and competent in the matters presented, and 2) counsel,

B-1

public accountants, consultants or other persons as to matters which the member believes to be within the professional competence of such person, including, without limitation, representations by management and the independent auditors regarding non-audit services provided to the Company by independent auditors.

     The Audit Committee shall be directly responsible for the appointment (subject, if applicable, to shareholder ratification), retention, termination, compensation and terms of engagement, evaluation, and oversight of the work of the Independent Auditor (including resolution of disagreements between management and the Independent Auditor regarding financial reporting). The Independent Auditor shall report directly to the Audit Committee.

     The Audit Committee shall oversee the integrity of the audit process, financial reporting and internal accounting controls of the Company, oversee the work of the Company’s management, internal auditor function (the “Internal Auditors”) and the Independent Auditor in these areas, oversee management’s development of, and adherence to, a sound system of internal accounting and financial controls, review whether the Internal Auditors and the Independent Auditor objectively assess the Company’s financial reporting, accounting practices and internal controls, and provide an open avenue of communication among the Independent Auditor, the Internal Auditors and the Board. It is the responsibility of: (i) management of the Company and the Independent Auditor, under the oversight of the Audit Committee and the Board, to plan and conduct financial audits and to determine that the Company’s financial statements and disclosures are complete and accurate in accordance with generally accepted accounting principles (“GAAP”) and applicable rules and regulations and fairly present, in all material respects, the financial condition of the Company; and (ii) the Internal Auditors, under the oversight of the Audit Committee and the Board, to review the Company’s internal transactions and accounting which do not require involvement in the detailed presentation of the Company’s financial statements.

     The Audit Committee shall pre-approve all audit services and permitted non-audit services (including the fees and terms thereof) to be performed for the Company by the Independent Auditor to the extent required by and in a manner consistent with applicable law.

     The Audit Committee shall meet as often as it determines necessary or appropriate, but not less frequently than quarterly. The Chairperson shall preside at each meeting and, in the absence of the Chairperson, one of the other members of the Audit Committee shall be designated as the acting chair of the meeting. The Chairperson (or acting chair) may direct appropriate members of management and staff to prepare draft agendas and related background information for each Audit Committee meeting. The draft agenda shall be reviewed and approved by the Audit Committee Chairperson (or acting chair) in advance of distribution to the other Audit Committee members. Any background materials, together with the agenda, should be distributed to the Audit Committee members in advance of the meeting. All meetings of the Audit Committee shall be held pursuant to the by-laws of the Company with regard to notice and waiver thereof, and written minutes of each meeting, in the form approved by the Audit Committee, shall be duly filed in the Company records. Reports of meetings of the Audit Committee shall be made to the Board at its next regularly scheduled meeting following the Audit Committee meeting accompanied by any recommendations to the Board approved by the Audit Committee.

     The Audit Committee may form and delegate authority to subcommittees consisting of one or more members when appropriate.

     The Audit Committee shall have the authority, to the extent it deems necessary or appropriate, to retain independent legal, accounting or other advisers. The Company shall provide for appropriate funding, as determined by the Audit Committee, for payment of compensation to the Independent Auditor for the purpose of rendering or issuing an audit report and to any advisers employed by the Audit Committee, subject only to any limitations imposed by applicable rules and regulations. The Audit Committee may request any officer or associate of the Company or the Company’s outside counsel or Independent Auditor to attend a meeting of the Audit Committee or to meet with any members of, or consultants to, the Audit Committee. The Audit Committee shall meet with management, the Internal Auditors and the Independent Auditor in separate executive sessions at least semi-annually to discuss matters for which the Audit Committee has responsibility.

B-2

     The Audit Committee shall make regular reports to the Board. The Audit Committee shall review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board for approval. The Audit Committee shall annually review its own performance.

     In performing its functions, the Audit Committee shall undertake those tasks and responsibilities that, in its judgment, would contribute most effectively to and implement the purposes of the Audit Committee. In addition to the general tasks and responsibilities noted above, the following are the specific functions of the Audit Committee:

B-3

OVERSIGHT OF THE COMPANY’S RELATIONSHIP WITH THE INDEPENDENT AUDITOR

B-4

OVERSIGHT OF THE COMPANY’S INTERNAL AUDIT FUNCTION

B-5

COMPLIANCE OVERSIGHT RESPONSIBILITIES

ADDITIONAL RESPONSIBILITIES

B-6

LIMITATIONS OF THE COMMITTEE’S ROLE

B-7

Attachment To APPENDIX B

INDEPENDENCE FOR AUDIT COMMITTEE MEMBERS

INDEPENDENCE

The Audit Committee is required to consist of at least three directors, each of whom must be independent. An independent director is a director whom the Board has determined has no material relationship with the Company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company) and otherwise meets the requirements for “independence” under the rules of the New York Stock Exchange and any other applicable legal or regulatory requirement. Set forth below are current criteria affecting Audit Committee membership:

B-8

APPENDIX C

Tyler Technologies, Inc.

     Charter for the Compensation Committee
of the Board of Directors

As Adopted February 24, 2004

1. PURPOSE

     The Compensation Committee’s (the “Committee”) basic responsibility is to review the performance and development of Company management in achieving corporate goals and objectives and to assure that the senior executives of the Company are compensated effectively in a manner consistent with the strategy of the Company, competitive practice, and the requirements of the appropriate regulatory bodies. Toward that end, the Committee will oversee, review and administer all compensation, equity and employee benefit plans and programs.

2. COMPOSITION OF THE COMMITTEE

     The Committee will consist of not less than two independent directors, each of whom will be both a “non-employee director” within the meaning of Rule 16b-3 issued by the Securities and Exchange Commission (“SEC”) and an “outside director” within the meaning of Section 162(m) of the Internal Revenue Code, as amended. Each appointed Committee member will be subject to annual reconfirmation and may be removed by the Board of Directors (the “Board”) at any time.

3. RESPONSIBILITIES AND DUTIES

C-1

     Notwithstanding the foregoing, any action of the Committee, other than the grant of stock options or other discretionary awards under the Company’s stock option or other equity incentive plans, may be subject to Board review and may be revised, modified or rescinded by the Board.

C-2

4. COMMITTEE MEETING

     The Committee will meet as often as necessary to carry out its responsibilities. Meetings may be called by the Chairman of the Committee and/or by the management of the Company. Reports of meetings of the Committee will be made to the Board of Directors at its next regularly scheduled meeting following the Committee meeting accompanied by any recommendations to the Board of Directors approved by the Committee.

     The Committee will also meet as and when necessary to act upon any other matters within its jurisdiction under this Charter. A majority of the total number of members of the Compensation Committee will constitute a quorum at all Committee meetings.

C-3

APPENDIX D

Tyler Technologies, Inc.

Charter for the Nominating and Governance Committee
of the Board of Directors

As Adopted February 24, 2004

1. PURPOSE

     The Nominating and Governance Committee shall, in consultation with the Chief Executive Officer (CEO), recommend candidates for elections to the Company’s Board of Directors.

2. COMPOSITION OF THE NOMINATING AND GOVERNANCE COMMITTEE

     The Nominating and Governance Committee shall be comprised of not less than three directors each of whom shall be a non-employee director within the meaning of Rule 16b-3 issued under the Securities and Exchange Act of 1934, as amended. Each Committee member shall be subject to annual reconfirmation and may be removed by the Board at any time.

3. RESPONSIBILITIES AND DUTIES

In carrying out the purpose set forth in Section 1 above, the Nominating and Governance Committee shall:

4. RESPONSIBILITIES AND DUTIES

     The Nominating and Governance Committee will meet periodically as necessary to act upon any matter within its jurisdiction. A majority of the total number of members of the Nominating and Governance Committee shall constitute a quorum at all Committee meetings.

D-1

ANNUAL MEETING OF STOCKHOLDERS OF

TYLER TECHNOLOGIES, INC.

May 6, 2004

PROOF #1

Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.

ê Please detach along perforated line and mail in the envelope provided. ê

PROOF #6

0

PROXY

TYLER TECHNOLOGIES, INC.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY

     The undersigned hereby (1) acknowledges receipt of the Notice dated March 19, 2004 of the annual meeting of stockholders of Tyler Technologies, Inc. (the “Company”) to be held at the Park City Club, 5956 Sherry Ln., Suite 1700, Dallas, Texas, on Thursday, May 6, 2004 at 10:00 a.m. Dallas time, and the proxy statement in connection therewith, and (2) appoints G. Stuart Reeves and John M. Yeaman,and each of them, his proxies with full power of substitution and revocation, for and in the name, place and stead of the undersigned to vote upon and act with respect to, all of the shares of Common Stock of the Company standing in the name of the undersigned, or with respect to which the undersigned is entitled to vote and act at said meeting and at any adjournment thereof, and the undersigned directs that his proxy be voted as indicated on the reverse side hereof. If only one of the above proxies shall be present in person, or by substitute, at such meeting or 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 substitute or any of them may lawfully do by virtue hereof.

(Continued and to be signed on the reverse side)

ANNUAL MEETING OF STOCKHOLDERS OF

TYLER TECHNOLOGIES, INC.

May 6, 2004

PROXY VOTING INSTRUCTIONS

PROOF #2

ê Please detach along perforated line and mail in the envelope provided. IF you are not voting via the Internet. ê