Exhibit 10.1

EMPLOYMENT AND NON-COMPETITION AGREEMENT

      This Employment and Non-Competition Agreement (this “Agreement”) is
entered into by and between Tyler Technologies, Inc., a Delaware corporation
(the “Company”), and H. Lynn Moore, Jr. (“Executive”). This Agreement will
become effective upon the date it is executed by Executive as evidenced on the
signature page hereto (the “Effective Date”).

      The Company desires to employ Executive under the terms and subject to the
conditions set forth in this Agreement, Executive hereby representing that he is
free from any other obligation of continuing employment with any other employer.

      Executive desires employment as an employee of the Company under the terms
and subject to the conditions set forth in this Agreement.

      The non-competition and confidentiality obligations of Executive as set
forth in this Agreement are a material inducement for the Company to enter into
this Agreement, and the Company would not enter into this Agreement absent such
covenants by Executive.

      NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which all parties mutually acknowledge, the parties
agree as follows:

      1. Employment. The Company hereby employs Executive, and Executive hereby
accepts such employment, on the terms and subject to the conditions set forth in
this Agreement.

      2. Duties of Executive.

      (a) Executive will serve in the capacity of Vice President and General
Counsel for the Company and, in addition, will serve in such other capacities
and perform such other duties on behalf of the Company as may be assigned to him
from time to time by the Chief Executive Officer or Board of Directors, which
duties will be commensurate with the education, experience, and skills of
Executive. In such capacities, Executive shall have all necessary powers to
discharge his responsibilities.

      (b) Executive will devote his full business time and effort to the
performance of his duties and responsibilities as an executive of the Company,
excluding vacation time and reasonable absence due to illness.

      (c) Executive will perform his duties in a professional manner and will
use his best efforts, skills, and abilities to promote, enhance, and preserve
the business of the Company and its affiliates and the goodwill and
relationships they have with their employees, agents, representatives,
customers, suppliers, and other persons having business relations with any of
them.

      (d) Executive shall observe and comply with the written rules and
regulations of the Company with respect to its business and shall carry out and
perform the directives and policies of the Company as the Board of Directors may
from time to time state them to Executive in writing.

 

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      3. Employment Term. The term of this Agreement will commence as of the
Effective Date and continue for a period of five (5) years; provided, however,
that at the end of such initial term, the term shall automatically extend for an
additional year unless the Company provides, at least six (6) months prior to
the end of such initial term or subsequent anniversary of the end of such
initial term, written notice that it does not wish to extend the term.
Notwithstanding the foregoing, this Agreement may be earlier terminated in
accordance with Section 7 of this Agreement.

      4. Compensation.

      (a) Base Salary. For services performed by Executive pursuant to this
Agreement, the Company will pay Executive during the term of this Agreement a
minimum base salary at the rate of $200,000 per year (the “Base Salary”), which
shall be payable in accordance with the Company’s standard payroll practices but
not less than monthly. The Base Salary shall not be subject to reduction, but
may be increased at the discretion of the Compensation Committee of the Board of
Directors or the Board of Directors as a whole. Any compensation that may be
paid to Executive under any additional compensation or incentive plan of the
Company or which may be otherwise authorized from time to time by the Board of
Directors shall be in addition to the Base Salary to which Executive is entitled
under this Agreement.

      (b) Annual Bonus. For each calendar year during the term of this
Agreement, Executive shall be eligible to receive an annual performance bonus
(the “Bonus”), which shall be established and paid at the discretion of the
Compensation Committee of the Board of Directors or the Board of Directors as a
whole. Executive’s Bonus is targeted each year to equal up to 50% of Executive’s
Base Salary. The Bonus will be paid in accordance with the Company’s standard
bonus payment practices.

      (c) Equity Grants. During the term of this Agreement, Executive shall be
eligible and participate, in an appropriate manner relative to other senior
executives of the Company and consistent with competitive pay practices
generally, in any equity-based incentive compensation plan or program of the
Company, including, without limitation, any plan or program providing for the
grant of (i) options to purchase common stock of the Company, (ii) restricted
stock of the Company, or (iii) similar equity-based units or interests.

      5. Executive Benefits. During the term of this Agreement, the Company
shall provide Executive with all benefits made available from time to time by
the Company to its senior executives and to its employees generally, including,
without limitation, participation in medical and dental benefit plans and
programs, disability and death insurance, 401-K plans, paid vacation, and other
fringe benefits. In addition, the Company will pay all state bar association,
continuing legal education, and other fees and expenses required by the State
Bar of Texas for Executive to remain in good standing to practice law in the
State of Texas.

      6. Reimbursement of Expenses. The Company shall reimburse Executive for
all expenses actually and reasonably incurred by Executive in the business
interests of the Company. Such reimbursement shall be made to Executive upon
appropriate documentation of such expenditures in accordance with the Company’s
policies.

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      7. Early Termination.

      (a) It is the desire and expectation of each party that the
employer-employee relationship will continue for the full term as set forth in
Section 3 of this Agreement. The Company shall, however, be entitled to
terminate Executive’s employment at any time with or without Cause (as defined
below), subject to the restrictions contained in this Section 7.

      (b) If Executive’s employment is terminated by the Company without Cause
prior to the expiration of this Agreement, the Company shall pay Executive a
lump sum amount equal to (i) during the first two years of this Agreement,
Executive’s Base Salary for a period of three years; (ii) during the third year
of this Agreement, Executive’s Base Salary still due for the remainder of the
term of this Agreement; and (iii) following the third year of this Agreement,
Executive’s Base Salary for a period of two years. Executive shall also be
entitled to receive the benefits set forth in Section 5 for a period equal to
two years. A Change of Control (as defined below) of the Company shall be deemed
to be a termination without Cause, unless otherwise agreed by Executive in
writing.

      (c) If Executive dies, is unable to perform his duties and
responsibilities as a result of a disability that continues for one hundred and
eighty (180) consecutive days or more, voluntarily resigns from the Company, or
is terminated by the Company for Cause, the Company shall pay Executive (or his
estate, executor, or legal representative, as the case may be) any accrued and
unpaid Base Salary and finally determined and unpaid Bonus to the date
employment ceases, and the Company’s obligations to pay additional salary, cash
compensation, or benefits shall terminate as of such date. In addition, if the
Company terminates Executive due to disability, the Company will continue to pay
the benefits outlined in Section 5 to Executive and Executive’s dependents for a
period equal to two years.

      (d) For purposes of this Agreement, “Cause” means a determination by the
Board of Directors of the Company that Executive has: (i) failed or been unable
for any reason to devote substantially all of his time during normal business
hours to the business of the Company and its affiliates (except for vacations
and absence due to illness); (ii) been convicted of any felony; (iii) committed
any act or engaged in any conduct that is fraudulent or constitutes malfeasance
or a breach of fiduciary duties of Executive; (iv) persistently failed to abide
by the corporate policies and procedures as set forth in the Company’s employee
handbook; (v) persistently failed to execute the reasonable and lawful
instructions of the Board of Directors relating to the operation of the
Company’s business; or (vi) committed any material or continuing breach of any
of the terms of, or has materially or continually failed to perform any covenant
contained in, this Agreement to be performed by Executive. With respect to (i),
(iv), (v), and (vi) above, Executive may not be terminated for Cause unless
Executive fails to cure such breach or failure of performance within thirty
(30) days after Executive’s receipt of written notice of the breach or failure.

      (e) For purposes of this Agreement, “Change of Control” means approval by
the shareholders of the Company of a merger or consolidation of the Company into
an unaffiliated entity, the dissolution or liquidation of the Company, the sale
of all or substantially all of the assets of the Company, the acquisition by any
person, entity, or group of more than 50% of the voting stock of the Company, or
a change in a majority of the Company’s Board of Directors that was not approved
by the then existing Board of Directors.

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      8. Confidential Information.

      (a) Executive acknowledges that the Company and its affiliates are
continuously developing or receiving Confidential Information (as defined
below), and that during Executive’s employment, Executive will receive
Confidential Information from the Company and its affiliates and will receive
special training relating to the Company’s and its affiliates’ business
methodologies. Executive further acknowledges and agrees that Executive’s
employment by the Company creates a relationship of confidence and trust between
Executive and the Company and its affiliates that extends to all Confidential
Information that becomes known to Executive. Accordingly, Executive will not
disclose or use any Confidential Information, except in connection with the good
faith performance of his duties as an officer and employee, and will take
reasonable precautions against the unauthorized disclosure or use of
Confidential Information. Upon the Company’s request, Executive will execute and
comply with a third party’s agreement to protect its confidential and
proprietary information. In addition, Executive will not solicit or induce the
unauthorized disclosure or use of a third party’s confidential or proprietary
information for the benefit of the Company or its affiliates.

      (b) For purposes of this Agreement, “Confidential Information” means all
written, machine-reproducible, oral and visual data, information, and material,
including, without limitation, business, financial, and technical information,
computer programs, documents, and records (including those that Executive
develops in the scope of his employment) that (i) the Company and its
affiliates, or any of their respective customers or suppliers, treats as
confidential or proprietary through markings or otherwise, (ii) relates to the
Company and its affiliates, or any of their respective customers or suppliers or
any of their respective business activities, products, or services (including
software programs and techniques) and is competitively sensitive or not
generally known in the relevant trade or industry, or (iii) derives independent
economic value from not being known to, and is not generally ascertainable by
proper means by, other persons who can obtain economic value from its disclosure
or use. Confidential Information shall not include information or material that:
(A) was in the public domain prior to the date of this Agreement or subsequently
came into the public domain through no fault of Executive; (B) was lawfully
received by Executive from a third party free of any obligation of
confidentiality; (C) is approved by the Company for unrestricted public
disclosure; or (D) is required to be disclosed in a judicial or administrative
proceeding or by a governmental or regulatory authority, domestic or foreign.

      9. Non Compete; No Solicitation.

      (a) Executive understands that, during the course of his employment by the
Company, Executive will have access to and receive the benefit of Confidential
Information (as defined in Section 8) and special training, as well as come into
contact with the Company’s and its affiliates’ customers and potential
customers, which Confidential Information, training, knowledge, and contacts
would provide invaluable benefits to competitors and potential competitors of
the Company and its affiliates. To protect the Company’s interest in this
information and in these contacts and relationships, and in consideration for
the Company entering into this Agreement, Executive agrees and covenants that
for a period beginning on the Effective Date of this Agreement and continuing
until (i) if Executive voluntarily resigns or is terminated for Cause, the then
remaining term of this Agreement, or (ii)

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if Executive is terminated without Cause pursuant to Section 7(b), the greater
of two years or the then remaining term of this Agreement, Executive will not
(without the prior written consent of the Company), directly or indirectly,
(A) engage in any business that provides the same or competitive products or
services as those provided by the Company and its affiliates in the State of
Texas or in any other state in which the Company or its affiliates is conducting
or conducts such business during the term of this Agreement or at the time of
termination of Executive’s employment hereunder, or (B) solicit or encourage or
assist other persons or entities to solicit or encourage any customers of the
Company or any of its affiliates to terminate or materially alter their
relationship with the Company or its affiliates or to become a customer of any
other person or entity competing with the Company or its affiliates, or
(C) recruit, solicit or hire, or encourage or assist other persons or entities
to recruit, solicit or hire, any employees of the Company or its affiliates. The
foregoing non-compete provisions shall in no way be construed to prohibit
Executive from engaging in the practice of law in the State of Texas.

      (b) Executive understands and agrees that the foregoing covenant is
reasonable as to time, area, and scope and is necessary to protect the
legitimate business interests of the Company and its affiliates. It is further
agreed that such covenant will be regarded as divisible and will be operative as
to time, area, and scope to the extent it may be so operative, and if any part
of such covenant is declared invalid, unenforceable, or void as to time, area,
or scope, the validity and enforceability of the remainder will not be affected.

      (c) Executive understands and acknowledges that the determination of
damages in the event of a breach of any provision of this Section 9 would be
difficult. Executive agrees that the Company or its affiliates, in addition to
all other remedies it or any of them may have at law or in equity and
notwithstanding Section 16, will have the right to injunctive relief if there is
a breach without the necessity of proving the inadequacy or unavailability of
damages as an effective remedy.

      10. Notices. Any notice, consent, demand, or request, or other
communication to be given under this Agreement must be in writing and shall be
deemed given or made when delivered in person or within three (3) days upon
being sent certified mail, postage prepaid with return receipt requested, to the
following addresses:

     
If to the Company:
  Tyler Technologies, Inc.

  5949 Sherry Lane, Suite 1400

  Dallas, Texas 75225
 
   
If to Executive:
  Home address of Executive,

  as shown on current records of the Company

      11. Entire Agreement. This Agreement constitutes the entire agreement
among the parties hereto pertaining to the specific subject matter hereof and
supersedes all prior agreements, whether written or oral, between the parties
with respect to the terms and conditions of employment of Executive by the
Company.

      12. Modification. Any change or modification of this Agreement shall not
be valid or binding upon the parties, nor will any waiver of any term or
condition in the future be binding, unless the change or modification or waiver
is in writing and signed by both the Company and Executive.

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      13. Third Party Beneficiaries. If Executive dies prior to the expiration
of the term of this Agreement, any monies that may be due him under this
Agreement as of the date of his death will be paid to his estate. None of the
provisions of this Agreement shall be for the benefit of or enforceable by any
creditors of Executive.

      14. Waiver of Breach. The waiver by the Company of a breach of any
provision of this Agreement by Executive will not operate or be construed as a
waiver of any subsequent breach by Executive.

      15. Governing Law. This Agreement is governed by, and will be construed in
accordance with, the substantive laws of the State of Texas, without giving
effect to any conflicts-of-law, rule, or principle that might require the
application of the laws of another jurisdiction.

      16. Arbitration. Any controversy, dispute, or claim arising under this
Agreement will be finally settled by arbitration conducted in accordance with
the American Arbitration Association Rules then in effect; provided, however,
that the parties will be obligated to negotiate in good faith for a period of
thirty (30) days to resolve such controversy, dispute, or claim prior to
submitting the same to arbitration. Any such arbitration proceeding will take
place in the City of Dallas, Texas, and the arbitrator will apply the laws of
the State of Texas. Any decision rendered by the arbitrator will be final and
binding and judgment thereon may be entered in any court having jurisdiction or
application thereon may be made to such court for an order of enforcement as the
case may require. The parties intend that this agreement to arbitrate be
irrevocable. If arbitration is invoked in accordance with the provisions of this
Agreement, the prevailing party will be entitled to receive from the other all
costs, fees, and expenses pertaining to or attributable to such arbitration,
including reasonable attorneys’ fees.

      17. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will constitute one document.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and
effective as of the date set forth below.

TYLER TECHNOLOGIES, INC.,
a Delaware corporation

         
By:
  /s/ John M. Yeaman    
 
 

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Name:
  John M. Yeaman    
Title:
  President and Chief Executive Officer    
 
       
EXECUTIVE:
 
       
 
       
By:
  /s/ H. Lynn Moore, Jr.    
 
 

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Name:
  H. Lynn Moore, Jr.    
Date:
  August 5, 2003    

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