<PAGE> 1
PAGE 1 OF 16 PAGES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE PLAN YEAR ENDED DECEMBER 31, 1995
-----------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO .
------------------ -----------------
COMMISSION FILE NUMBER 0-11527 .
------------------------------
A. MPSI SYSTEMS INC. MATCHING INVESTMENT PLAN
B. MPSI SYSTEMS INC.
8282 SOUTH MEMORIAL DRIVE
TULSA, OKLAHOMA 74133
<PAGE> 2
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
(a) Financial Statements:
(1) Independent Auditors' Report..................................... 3
(2) Statements of Financial Condition, December 31, 1995 and 1994 ... 4
(3) Statements of Income and Changes in Plan Equity for
the years ended December 31, 1995, 1994 and 1993 ................ 6
(4) Notes to Financial Statements ................................... 9
(b) Signatures........................................................... 15
(c) Exhibits
23.1 Auditors' Consent............................................... 16
</TABLE>
2
<PAGE> 3
INDEPENDENT AUDITORS' REPORT
Administrative Committee
MPSI Systems Inc. Matching Investment Plan
We have audited the accompanying statements of financial condition of the MPSI
Systems Inc. Matching Investment Plan (the "Plan") as of December 31, 1995 and
1994, and the related statements of income and changes in Plan equity for each
of the three years in the period ended December 31, 1995. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial condition of the Plan at December 31, 1995
and 1994, and the changes in its Plan equity for each of the three years in the
period ended December 31, 1995, in conformity with generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The Fund Information in the statements of
financial condition and the statements of income and changes in plan equity is
presented for the purposes of additional analysis rather than to present the
financial condition and income and changes in plan equity of each fund. The Fund
Information has been subjected to the auditing procedures applied in our audits
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
ERNST & YOUNG LLP
Tulsa, Oklahoma
May 17, 1996
3
<PAGE> 4
MPSI SYSTEMS INC.
MATCHING INVESTMENT PLAN
STATEMENT OF FINANCIAL CONDITION
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Global MPSI Corporate MLRP
Phoenix Allocation Stock Capital Bond Trust Loan
Fund Fund Fund Fund Fund Fund Fund Total
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investments at market value:
Merrill Lynch Phoenix Fund Inc.
(39,077 units valued at $12.62
per unit, Cost - $495,388) $ 493,154 -- -- -- -- -- -- 493,154
Merrill Lynch Global Allocation
Fund Inc. (72,258 units
valued at $13.73 per unit,
Cost - $955,122) -- 992,116 -- -- -- -- -- 992,116
123,157 shares of $.05 par value
Common Stock of MPSI Systems
Inc. valued at $5.00 per share
(Cost - $1,118,059) (Note 2) -- -- 615,785 -- -- -- -- 615,785
Merrill Lynch Corporate Bond
Fund Inc. (7,287 units at $11.84
per unit Cost $81,290) -- -- -- -- 86,285 -- -- 86,285
Merrill Lynch Capital Fund Inc.
(11,940 units valued at $30.04
per unit, Cost - $334,820) -- -- -- 358,694 -- -- -- 358,694
Merrill Lynch Retirement Preservation
Trust fund (Contract value -
$268,433) -- -- -- -- -- 268,433 -- 268,433
Loans to participants -- -- -- -- -- -- 25,214 25,214
- --------------------------------------------------------------------------------------------------------------------------------
Total investments 493,154 992,116 615,785 358,694 86,285 268,433 25,214 2,839,681
Receivables:
Employer contribution -- -- 133,000 -- -- -- -- 133,000
Employee contributions 8,747 11,808 395 5,857 1,366 2,425 1,575 32,173
Accrued interest and dividends 4,910 5,464 -- 3,846 -- -- -- 14,220
- --------------------------------------------------------------------------------------------------------------------------------
Total receivables 13,657 17,272 133,395 9,703 1,366 2,425 1,575 179,393
Cash and cash equivalents (3,736) 9,385 (2,988) (727) 301 (8,330) 12,885 6,790
Distributions payable to participants (15,535) (6,162) (9,563) (2,824) (4,153) (10,506) -- (48,743)
- --------------------------------------------------------------------------------------------------------------------------------
Plan equity at
December 31, 1995 $ 487,540 1,012,611 736,629 364,846 83,799 252,022 39,674 2,977,121
================================================================================================================================
</TABLE>
See accompanying notes to financial statements
4
<PAGE> 5
MPSI SYSTEMS INC.
MATCHING INVESTMENT PLAN
STATEMENT OF FINANCIAL CONDITION
DECEMBER 31, 1994
<TABLE>
<CAPTION>
Global MPSI Corporate MLRP
Phoenix Allocation Stock Capital Bond Trust Loan
Fund Fund Fund Fund Fund Fund Fund Total
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investments at market value:
Merrill Lynch Phoenix Fund Inc.
(37,151 units valued at $10.95
per unit, Cost - $474,728) $ 406,795 -- -- -- -- -- -- 406,795
Merrill Lynch Global Allocation
Fund Inc. (64,846 units
valued at $12.12 per unit,
Cost - $855,947) -- 785,938 -- -- -- -- -- 785,938
109,228 shares of $.05 par value
Common Stock of MPSI Systems
Inc. valued at $2.50 per share
(Cost - $1,099,508) (Note 2) -- -- 273,070 -- -- -- -- 273,070
Merrill Lynch Corporate Bond
Fund Inc. (7,255 units at $10.60
per unit Cost $80,629) -- -- -- -- 76,890 -- -- 76,890
Merrill Lynch Capital Fund Inc.
(10,444 units valued at $25.34
per unit, Cost - $288,965) -- -- -- 264,654 -- -- -- 264,654
Merrill Lynch Retirement Preservation
Trust fund (Contract value -
$199,081) -- -- -- -- -- 199,081 -- 199,081
Loans to participants -- -- -- -- -- -- 26,360 26,360
- --------------------------------------------------------------------------------------------------------------------------------
Total investments 406,795 785,938 273,070 264,654 76,890 199,081 26,360 2,032,788
Receivables:
Employer contribution -- -- 120,406 -- -- -- -- 120,406
Employee contributions 8,831 12,121 1,067 3,187 1,009 1,923 950 29,088
Accrued interest and dividends 1,627 1,523 -- 955 220 -- -- 4,325
- --------------------------------------------------------------------------------------------------------------------------------
Total receivables 10,458 13,644 121,473 4,142 1,229 1,923 950 153,819
Cash and cash equivalents 1,808 4,988 (2,606) 2,287 481 154,714 610 162,282
Distributions payable to participants (49,208) (58,501) (5,095) (23,579) (14,406) (23,154) -- (173,943)
- --------------------------------------------------------------------------------------------------------------------------------
Plan equity at
December 31, 1994 $ 369,853 746,069 386,842 247,504 64,194 332,564 27,920 2,174,946
================================================================================================================================
</TABLE>
See accompanying notes to financial statements.
5
<PAGE> 6
MPSI SYSTEMS INC.
MATCHING INVESTMENT PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
MPSI Global Corporate MLHP
Stock Phoenix Allocation Capital Bond Trust Loan
Fund Fund Fund Fund Fund Fund Fund Total
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Dividends $ -- 27,346 76,427 36,919 4,472 15,504 2,354 163,022
Contributions:
Employers 136,792 -- -- -- -- -- -- 136,792
Employees 9,981 110,595 135,652 54,394 14,397 26,696 -- 351,715
Distributions:
Cash (10,147) (69,321) (37,525) (20,831) (5,755) (122,742) -- (266,321)
In kind -- (6,149) (5,761) -- -- -- -- (11,910)
MPSI Systems Inc. $.05
Common Stock (96,860) -- -- -- -- -- -- (96,860)
Other income (expense):
Realized loss on
asset dispositions (12,953) (8,063) (5,812) (1,190) (736) -- -- (28,754)
Unrealized appreciation 324,177 65,699 107,001 48,185 8,723 -- -- 553,785
Other income -- -- -- 706 -- -- -- 706
Interfund transfers in (out) (1,203) (2,420) (3,440) (841) (1,496) -- 9,400 --
- ---------------------------------------------------------------------------------------------------------------------------
Change in Plan equity during 1995 349,787 117,687 266,542 117,342 19,605 (80,542) 11,754 802,175
Plan equity at December 31, 1994 386,842 369,853 746,069 247,504 64,194 332,564 27,920 2,174,946
- ---------------------------------------------------------------------------------------------------------------------------
Plan equity at December 31, 1995 $ 736,629 487,540 1,012,611 364,846 83,799 252,022 39,674 2,977,121
============================================================================================================================
</TABLE>
See accompanying notes to financial statements.
6
<PAGE> 7
MPSI SYSTEMS INC.
MATCHING INVESTMENT PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1994
<TABLE>
<CAPTION>
Short Long Inter-
Term Term mediate MPSI
Equity Income Income Income Stock
Fund Fund Fund Fund Fund
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment income:
Dividends $ 1,530 -- 470 -- --
Interest 44 998 2,744 1,072 --
Contributions:
Employers -- -- -- -- 120,608
Employees -- -- -- -- 13,648
Distributions:
Cash -- -- -- -- (6,092)
In kind -- -- -- -- --
MPSI Systems Inc. $.05
Common Stock -- -- -- -- (26,519)
Other income (expense):
Realized gain (loss) on
asset dispositions (3,426) -- (4,871) 2,515 (21,543)
Unrealized appreciation
(depreciation) -- -- -- -- (308,426)
Other income (70) 59 (5) (18) 5,039
Interfund transfers in (out) -- -- -- (267)
- ---------------------------------------------------------------------------------------------
Change in Plan equity during 1994 (1,922) 1,057 (1,662) 3,569 (223,552)
Trustee transfer (701,903) 201,461 (287,000) (561,120) --
Plan equity at December 31, 1993 703,825 200,404 288,662 557,551 610,394
- ---------------------------------------------------------------------------------------------
Plan equity at December 31, 1994 $ -- -- -- -- 386,842
=============================================================================================
<CAPTION>
Global Corporate MLHP
Phoenix Allocation Capital Bond Trust Loan
Fund Fund Fund Fund Fund Fund Total
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Dividends 45,145 39,282 21,906 -- -- -- 108,333
Interest 3,741 7,032 2,335 3,632 13,086 320 35,004
Contributions:
Employers -- -- -- -- -- -- 120,608
Employees 113,577 155,889 40,990 13,012 24,764 -- 361,880
Distributions:
Cash (57,636) (71,717) (26,983) (15,312) (58,697) -- (236,437)
In kind (29,059) (17,981) (367) (8,707) -- -- (56,114)
MPSI Systems Inc.$.05
Common Stock -- -- -- -- -- -- (26,519)
Other income (expense):
Realized gain (loss) on
asset dispositions (126) (898) (144) (39) -- -- (28,532)
Unrealized appreciation
(depreciation) (67,933) (70,008) (24,311) (3,729) -- -- (474,407)
Other income -- 3,977 -- -- 1,312 -- 10,294
Interfund transfers in (out) (5,201) (19,278) (1,672) (42) (1,140) 27,600 --
- ---------------------------------------------------------------------------------------------------------------
Change in Plan equity during 1994 2,508 26,298 11,754 (11,185) (20,675) 27,920 (185,890)
Trustee transfer 367,345 719,771 235,750 75,379 353,239 -- --
Plan equity at December 31, 1993 -- -- -- -- -- -- 2,360,836
- ---------------------------------------------------------------------------------------------------------------
Plan equity at December 31, 1994 369,853 746,069 247,504 64,194 332,564 27,920 2,174,946
===============================================================================================================
</TABLE>
See accompanying notes to financial statements.
7
<PAGE> 8
MPSI SYSTEMS INC.
MATCHING INVESTMENT PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1993
<TABLE>
<CAPTION>
Short-Term MPSI Long-Term Intermediate
Equity Fixed Income Stock Fixed Income Fixed Income
Fund Fund Fund Fund Fund Total
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Dividends $ 81,105 -- -- 18,532 -- 99,637
Interest 1,123 7,239 177 25,936 30,402 64,877
Contributions:
Employers -- -- 102,351 -- -- 102,351
Employees 135,647 43,027 15,265 54,371 33,379 281,689
Employee-directed reinvestments 11,931 (34,532) 667 26,447 (4,513) --
Distributions:
Cash (91,891) (7,515) (498) (45,365) (73,896) (219,165)
MPSI Systems Inc. $.05 Common Stock -- -- (159,307) -- -- (159,307)
Other income (expense):
Realized gain (loss) on asset dispositions 14,405 -- (2,754) 2,865 -- 14,516
Unrealized appreciation (depreciation) (24,463) -- 633,961 (18,948) -- 590,550
- -------------------------------------------------------------------------------------------------------------------------
Change in Plan equity during 1993 127,857 8,219 589,862 63,838 (14,628) 775,148
Plan equity at December 31, 1992 575,968 192,185 20,532 224,824 572,179 1,585,688
- -------------------------------------------------------------------------------------------------------------------------
Plan equity at December 31, 1993 $ 703,825 200,404 610,394 288,662 557,551 2,360,836
=========================================================================================================================
</TABLE>
See accompanying notes to financial statements.
8
<PAGE> 9
MPSI SYSTEMS INC.
MATCHING INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CHANGES IN THE PLAN
In 1993, the Plan was amended (the "Third Amendment") to provide for
quarterly contribution percentage elections and for quarterly investment
elections. This amendment was effective January 1, 1993. The revisions had
no impact on previously issued financial statements.
In October 1993, the Company notified the Plan Trustee, Bank of Oklahoma,
N.A., (former Trustee) that its services as Plan Trustee would be
terminated effective December 31, 1993. Merrill Lynch, Pierce, Fenner &
Smith, Inc. ("Merrill Lynch") was appointed as the new Trustee effective
January 1, 1994. In connection with that transition, a new Plan document
was executed, substantially in the form which governed the Plan during the
three-year period ended December 31, 1993, except that new investment
options were identified to replace those available at December 31, 1993. In
connection with the new Plan document, an option was added allowing
employees to borrow against the assets of their respective account in
amounts not to exceed 50% of the employee's vested account balance in the
Plan. Interest is charged at the published prime rate plus 1-1/2% on the
date of the loan request, and the resulting income is credited solely to
the borrower's Plan account. The term of the loan is determined by the
Administrative Committee and generally shall not exceed five years. Neither
the loan, interest or repayment affect assets of other Plan participants.
On May 11, 1994, at the request of the Internal Revenue Service, a Fourth
Amendment to the old Plan document (as it was stated before January 1,
1994) was adopted to clarify that the allocation of the matching
contribution applies only to participants in the active employ of the
Employer on the last day of the Plan Year or on an Authorized Leave of
Absence on the last day of the Plan Year. The new Plan document, effective
January 1, 1994, already complied with such changes.
CHANGE IN SPONSORING ENTITIES
Effective September 1, 1994, MPSI Systems Inc. sold substantially all of
the assets of Retail Systems, Inc. ("RSI") to Dakota Worldwide Corporation.
As a result, substantially all of the RSI participants were terminated from
the Plan effective on the date of the sale to Dakota.
INVESTMENTS
All investments were held by Merrill Lynch, as Trustee, from March 4, 1994
through December 31, 1995. From January 1, 1994 through March 3, 1994, Plan
assets were held in trust by Bank of Oklahoma, N.A., pending transfer to
the new trustee. Gains and losses resulting from the sale of investments
were determined by the difference between average cost of the investments
sold and the proceeds received. Brokerage commissions, transfer taxes, and
other charges and expenses in connection with the purchase or sale of
securities (if any) were added to the cost of the securities purchased or
deducted from the proceeds of the sale.
The investment in $.05 par value Common Stock of MPSI Systems Inc.
(hereinafter "Common Stock") was stated at the average bid and offer prices
quoted by the National Quotation Bureau. Investments in equity and bond
funds were stated at aggregate unit values as published in a widely
accepted financial journal at December 31, 1995 and as set forth in the
periodic valuation of each fund for 1995. Investments in money market funds
were stated at par value.
9
<PAGE> 10
INVESTMENT FUNDS
Six investment funds as set forth below were maintained by Merrill Lynch under
the terms of a trust agreement beginning January 1, 1994.
Phoenix Fund:
The primary objective of the fund is long term capital growth through a
diversified portfolio of equity and fixed income securities, including
municipal securities, of issuers in weak financial condition or
experiencing poor operating results, that the management of the fund
believes to be undervalued relative to fund management's assessment of the
current or prospective condition of the issuer.
Global Allocation Fund:
The fund in a non-diversified mutual fund seeking high total investment
return, consistent with prudent risk, through a fully managed investment
policy utilizing United States and foreign equity, debt, and money market
securities, the combination of which will be varied from time to time both
with respect to types of securities and markets in response to changing
market and economic trends.
MPSI Systems Inc. Common Stock Fund:
This fund invests solely in the common stock of the registrant, MPSI
Systems Inc. Common stock may be purchased by the Trustee on the open
market or through private transactions, including direct purchases from the
company.
Capital Fund:
The fund seeks to achieve the highest total investment return consistent
with prudent risk through a fully managed investment policy utilizing
equity, debt, and convertible securities. This permits management of the
fund to vary investment policy based on its evaluation of changes in
economic and market trends.
Corporate Bond Fund:
The fund is a professionally managed, diversified, open end investment
company consisting of three separate portfolios. The primary objective of
each Portfolio is to provide shareholders with as high a level of current
return as is consistent with the investment policies of such Portfolio and
with prudent investment management.
Merrill Lynch Retirement Preservation Trust
The fund is maintained by Merrill Lynch Trust Company, which receives
nondiscretionary advice from Merrill Lynch Asset Management. The fund is a
collective trust fund that invests primarily in Guaranteed Investment
Contracts and U.S. government and U.S. government agency securities, as
well as high quality money market instruments. The fund seeks to provide
safety of principal, fiduciary comfort and administrative ease.
Prior to January 1, 1994, employees had the following investment fund options:
Equity Fund The primary objective of this investment fund was long-term
capital growth. Investments consisted of common stock of corporations which
may be purchased individually or by acquisition of units in a fund or funds
which invest in corporate common stocks.
10
<PAGE> 11
Short-Term Fixed Income Fund This fund generally purchased certificates of
deposit, high-grade commercial paper, Treasury Bills and other similar
short-term investments with maximum maturities of 90 days.
MPSI Systems Inc. Common Stock Fund This fund invested solely in the common
stock of the registrant, MPSI Systems Inc. Common stock may be purchased by
the Trustee on the open market or through private transactions, including
direct purchases from the Company.
Long-Term Fixed Income Fund The primary objective of this fund was to
purchase bonds and notes issued by the U.S. Government, agencies of the
U.S. Government, mortgage pass-through certificates and high-grade
corporate debt with a quality rating of "A" or better.
Intermediate Fixed Income Fund The primary investment objective of this
fund was to purchase investment contracts from insurance companies rated
"A" or "A+", or pooled funds of similar contracts. The average maturities
will be 2 to 3 years.
The following tables show the employee participation in the various investment
options:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
Number of Participants at December 31,
--------------------------------------
1995 1994
- -----------------------------------------------------------------------------
<S> <C> <C>
Phoenix Fund 104 118
Global Allocation Fund 126 145
MPSI Systems Inc. Common Stock Fund 159 165
Capital Fund 81 86
Corporate Bond Fund 35 37
Merrill Lynch Retirement Preservation Trust 49 48
Total Participants 175 192
- -----------------------------------------------------------------------------
</TABLE>
INCOME TAXES
The Internal Revenue Service has determined by notice dated April 24, 1986 that
the Plan as amended and restated effective January 1, 1985 was in compliance
with the Retirement Equity Act of 1984 and the Tax Reform Act of 1984 and was
qualified under Section 401 of the Internal Revenue Code. The Plan, as amended
in compliance with the Tax Reform Act of 1986 and as amended and restated
effective January 1, 1990 is intended to comply with Section 401(a) of the
Internal Revenue Code. The Company was notified on June 8, 1995 that the Plan
(adopted on May 11, 1994) was deemed to be a qualified plan under the applicable
code section. The Company is not aware of anything that would adversely impact
the qualified status of the Plan. Under a qualified plan, amounts contributed by
the Company including salary deferrals (see Note 3) will not be taxed to the
employee until the employee receives a distribution from the Plan and further,
any appreciation in value of Common Stock distributed to an employee upon
termination of employment will not be taxed to the employee until disposal of
such shares.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
11
<PAGE> 12
(2) CHANGES IN INVESTMENTS
Realized gains (losses) based on the average cost of investments are
summarized by investment category below:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Aggregate Aggregate Net Gains
Cost Proceeds (Losses)
- ------------------------------------------------------------------
<S> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1995:
Combination Equity/Debt Funds $314,894 $299,829 $(15,065)
MPSI Systems Inc. Common Stock 149,317 136,364 (12,953)
Corporate Bond Funds 180,002 179,266 (736)
YEAR ENDED DECEMBER 31, 1994:
After Trustee Transfer:
Combination Equity/Debt Funds $ 29,591 $ 28,423 $ (1,168)
MPSI Systems Inc. Common Stock 34,320 12,795 (21,543)
Corporate Bond Funds 187,767 187,728 (39)
Prior to Trustee Transfer:
Equity Fund 901,615 898,189 (3,426)
Corporate Bond Funds 777,305 774,951 (2,356)
YEAR ENDED DECEMBER 31, 1993:
Equity Fund $121,195 $135,600 $ 14,405
MPSI Systems Inc. Common Stock 2,836 82 (2,754)
Corporate Bond Funds 109,334 112,199 2,865
</TABLE>
The following schedule summarizes the unrealized depreciation:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Year Ended December 31,
-------------------------------------
1995 1994 1993
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance at January 1 $(992,430) $(514,270) $(1,104,820)
Unrealized gain recognized on asset conversion (3,753) -
Appreciation (depreciation) during the fiscal year 553,785 (474,407) 590,550
- -----------------------------------------------------------------------------------------------
Balance at December 31 $(438,645) $(992,430) $ (514,270)
===============================================================================================
</TABLE>
Effective November 18, 1993, the Company's $.05 par value Common Stock
underwent a one-for-ten reverse stock split. All share amounts and per
share prices herein have been adjusted to give effect to the reverse
split. The market value per share of MPSI Systems Inc. Common Stock was
$5.00, $2.50 and $6.50 at December 31, 1995, 1994, and 1993,
respectively.
At May 17, 1996, the estimated market value of 123,157 shares of MPSI
Systems Inc. Common Stock was approximately $431,050.
(3) PARTICIPANTS AND CONTRIBUTIONS
All employees of MPSI Systems Inc. and certain subsidiaries
(collectively the "Company") meeting eligibility requirements set forth
in the Plan participate in the Plan as of January 1 and July 1 of the
Plan year next
12
<PAGE> 13
following their completion of a six-month period of service. Participants may
contribute as salary deferrals up to 16% of their annual earnings. Voluntary
contributions in excess of 9% of a participant's salary may also be made subject
to certain limitations. A participant's interest in salary deferrals and
voluntary contributions is at all times fully vested. A participant's interest
in amounts attributable to employer contributions is fully vested when
employment terminates due to (1) retirement at age 65, (2) total and permanent
disability or (3) death. When a participant's employment terminates prior to
meeting the above conditions, the participant is fully vested in employer
contributions only if the participant either has completed five years of vesting
service or has satisfied one of the Plan's grandfathered vesting rules. The
remaining balance in the participant's "Company Contributions Account" is
forfeited and used to reduce Company contributions, although if the participant
is rehired within five years, the forfeited amounts may be restored to the
participant's accounts under certain circumstances.
MPSI Systems Inc. and its wholly owned subsidiary, Retail Systems, Inc. (the
"Employer") made contributions under the Plan during the three years ended
December 31, 1995 based upon a Matching Percentage applied to the participants'
qualifying contributions. Participants' qualifying contributions equal the
aggregate of each participant's salary deferral, contributions up to 6% of that
participant's earnings for the Plan year. As previously mentioned in the note
regarding "Change in Sponsoring Entities," the subsidiary, Retail Systems, Inc.,
was sold in a 1994 asset transaction and all the employees were terminated under
rules governing the Plan. The total number of RSI employees terminated was 19
out of total Plan participants of 192. The Employers' Matching Percentage
relative to qualifying participant contributions is based upon the Operating
Income Ratio of the Employers (the ratio of the operating income for the
Employers' fiscal year ending with or within the Plan year to the average
operating income in the three prior fiscal years), is as follows:
<TABLE>
<CAPTION>
Matching
Operating Income Ratio Percentage
---------------------- ----------
<S> <C>
Under 1.01 50%
1.01, but less than 1.50 60%
1.50, but less than 1.75 70%
1.75, but less than 2.00 80%
2.00, but less than 2.25 90%
2.25 or over 100%
</TABLE>
The Company's matching percentage was 50 percent for Plan years 1995 through
1993 resulting in contributions of $136,792, $120,608, and $102,351,
respectively, as calculated below:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
Year Ended December 31,
-----------------------------------
1995 1994 1993
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Net employee contributions
(including nonelective contributions) $ 351,715 $ 361,880 $ 281,689
Refund of excessive salary deferrals - - 21,292
Nonqualifying contributions (78,131) (113,388) (98,279)
- ------------------------------------------------------------------------------
Qualifying employee contributions 273,584 248,492 204,702
Applicable matching percentage x 50% x 50% x 50%
- ------------------------------------------------------------------------------
136,792 124,246 102,351
Less forfeitures - (3,638) -
- ------------------------------------------------------------------------------
Required company contribution $ 136,792 $ 120,608 $ 102,351
==============================================================================
</TABLE>
13
<PAGE> 14
Contributions by sponsoring companies and contributions by participants of each
sponsoring company are summarized below:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------
Year Ended December 31,
----------------------------
1995 1994 1993
- ---------------------------------------------------------------------------------
<S> <C> <C> <C>
Contributions by sponsoring companies:
MPSI Systems Inc. $136,792 $120,608 $ 75,100
Retail Systems, Inc. 27,251
Contributions by employees of sponsoring companies:
MPSI Systems Inc. $351,715 $314,122 $222,077
Retail Systems, Inc. 47,758 59,612
- ---------------------------------------------------------------------------------
</TABLE>
During 1995, participants having account balances of $375,091 withdrew
from the Plan, all of which was distributed to participants.
Distributions from participant accounts are made in cash, in kind, or
Common Stock of the Company.
(4) EXPENSES
All costs and expenses incurred in administering the Plan,
including the expenses of the Administrative Committee, the fees and
expenses of the Trustee, the fees of its counsel, and other
administrative expenses, are borne by the Company and amounted to
approximately $11,567, $24,603, and $24,139 for 1995, 1994, and 1993,
respectively.
14
<PAGE> 15
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the Administrative Committee of the MPSI Systems Inc. Matching Investment Plan
has duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
MPSI SYSTEMS INC. MATCHING INVESTMENT PLAN
------------------------------------------
Name of Plan
Date June 27, 1996 By \s\ William H. Webb, Jr.
------------------- ---------------------------------------
William H. Webb, Jr., Chairman
Administrative Committee
15
<PAGE> 16
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
23.1 Auditors' Consent
<PAGE> 1
EXHIBIT 23.1 TO 1994 FORM 11-K
MPSI SYSTEMS INC.
MATCHING INVESTMENT PLAN
AUDITORS' CONSENT
The Board of Directors
MPSI Systems Inc.:
We consent to incorporation by reference in the Registration Statement (Form S-8
No. 33-32503) pertaining to the MPSI Systems Inc. Matching Investment Plan and
in the related Prospectus of our report dated May 17, 1996, with respect to the
financial statements of the MPSI Systems Inc. Matching Investment Plan included
in this Annual Report (Form 11-K) for the year ended December 31, 1995.
ERNST & YOUNG LLP
Tulsa, Oklahoma
June 27, 1996
16
