<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant / /
Filed by a Party other than the Registrant /X/
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
MPSI SYSTEMS INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
Bowne of Dallas, Inc.
Turtle Creek Business Center
1931 Market Center
Suite 111
Dallas, Texas 75207-0528
(214) 651-1001
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
N/A
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
N/A
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
N/A
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
N/A
- --------------------------------------------------------------------------------
(5) Total fee paid:
N/A
- --------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-0-
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
N/A
- --------------------------------------------------------------------------------
(3) Filing Party:
N/A
- --------------------------------------------------------------------------------
(4) Date Filed:
N/A
- --------------------------------------------------------------------------------
<PAGE> 2
MPSI SYSTEMS INC. 8282 SOUTH MEMORIAL DRIVE
TULSA, OKLAHOMA 74133
918 250-9611
FACSIMILE 918 254-8764
INTERNATIONAL COMPUTER SOFTWARE AND INFORMATION SERVICES
- --------------------------------------------------------------------------------
[LOGO] January 3, 1997
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of
Stockholders of MPSI Systems Inc. (the "Company") which will
be held on Thursday, January 30, 1997 at 11:00 a.m. at The
Grandview Hotel, Sunset Room, 7900 South Lewis, Tulsa,
Oklahoma 74136.
The formal notice of the Annual Meeting and the Proxy
Statement have been made a part of this invitation.
After reading the Proxy Statement, please mark, date,
sign and return the enclosed Proxy as soon as possible in the
envelope provided. YOUR SHARES CANNOT BE VOTED UNLESS YOU
SIGN AND RETURN THE ENCLOSED PROXY OR ATTEND THE ANNUAL
MEETING IN PERSON.
A copy of the Company's Annual Report to Stockholders is
also enclosed.
The Board of Directors and Management look forward to
seeing you at the meeting.
Sincerely yours,
RONALD G. HARPER
Chairman and Chief
Executive Officer
Encls.
<PAGE> 3
MPSI SYSTEMS INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JANUARY 30, 1997
The Annual Meeting of Stockholders of MPSI Systems Inc. (the "Company")
will be held at The Grandview Hotel, Sunset Room, 7900 South Lewis, Tulsa,
Oklahoma, on January 30, 1997 at 11:00 a.m., for the following purposes:
1. To elect five (5) directors to hold office during the ensuing year.
2. To ratify the appointment of Ernst & Young LLP as the Company's
independent auditors.
3. To transact such other business as may properly come before the
meeting and any postponement or adjournment thereof.
The Board of Directors has fixed the close of business on December 5, 1996
as the record date for determining the stockholders entitled to notice of and to
vote at the Annual Meeting and any postponement or adjournment thereof. A
complete list of stockholders entitled to vote will be available at the
Company's headquarters, 8282 South Memorial Drive, Tulsa, Oklahoma, for ten days
prior to the meeting.
We hope that you will use this opportunity to take an active part in the
affairs of your Company by voting on the business to come before the meeting
either by executing and returning the enclosed Proxy or by casting your vote in
person at the meeting. The granting of such proxy will not affect your right to
vote in person should you decide to attend the meeting.
IF YOU DO NOT EXPECT TO ATTEND IN PERSON, IT WOULD BE APPRECIATED IF YOU
WOULD PROMPTLY SIGN AND RETURN THE ENCLOSED PROXY, WHICH IS SOLICITED BY AND ON
BEHALF OF THE BOARD OF DIRECTORS. A PREPAID ENVELOPE IS ENCLOSED FOR YOUR
CONVENIENCE. IF A STOCKHOLDER RECEIVES MORE THAN ONE PROXY BECAUSE HE OR SHE
OWNS SHARES REGISTERED IN DIFFERENT NAMES OR ADDRESSES, EACH PROXY SHOULD BE
COMPLETED AND RETURNED.
By Order of the Board of Directors
LINDA K. WELLS
Secretary
Tulsa, Oklahoma
January 3, 1997
<PAGE> 4
January 3, 1997
MPSI SYSTEMS INC.
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
JANUARY 30, 1997
SOLICITATION OF PROXY, REVOCABILITY AND VOTING
This Proxy Statement and the enclosed proxy are furnished in connection
with the solicitation by the Board of Directors of MPSI Systems Inc., a Delaware
corporation (the "Company"), with principal executive offices at 8282 South
Memorial Drive, Tulsa, Oklahoma 74133, of proxies in the accompanying form to be
used at the Annual Meeting of Stockholders to be held on January 30, 1997, and
any postponement or adjournment thereof. The shares represented by the proxies
received pursuant to this solicitation and not revoked will be voted at the
Annual Meeting. This Proxy Statement and the enclosed proxy are being first sent
to security holders on January 3, 1997.
A proxy may be revoked at any time before it is voted by filing with the
Secretary of the Company a written notice of revocation or by duly executing a
proxy bearing a later date. A proxy may also be revoked by any stockholder
present at the meeting who expresses a desire to vote his or her shares in
person. Subject to any such revocation, all shares represented by properly
executed proxies will be voted in accordance with the specification on the
enclosed proxy. If no choice is so specified, the shares will be voted FOR the
election of the five (5) nominees for director listed in this Proxy Statement
and FOR ratification of the appointment of Ernst & Young LLP as independent
auditors, all as described in the Notice of Annual Meeting of Stockholders and
in this Proxy Statement.
The close of business on December 5, 1996 has been fixed as the record date
for determining the holders of shares entitled to receive notice of and to vote
at the meeting. On such date, the Company had 2,793,164 shares of Common Stock
outstanding and entitled to vote. The holders of a majority of the outstanding
shares of Common Stock present in person or represented by proxy shall
constitute a quorum for the transaction of business at the meeting. Each such
share is entitled to one vote on all matters. An abstained vote will count in
achieving a quorum for transaction of business, but not towards approval or
rejection of the matter under consideration.
The expense of printing and mailing proxy materials will be borne by the
Company. In addition to the solicitation of proxies by mail, solicitation may be
made by certain directors, officers and other employees of the Company by
personal interview, telephone, facsimile or telegraph, and no additional
compensation will be paid for such solicitation. The Company will reimburse
brokers and nominees for their reasonable out-of-pocket expenses in forwarding
soliciting material to beneficial owners of shares held of record by such
brokers and nominees.
<PAGE> 5
DIRECTORS AND EXECUTIVE OFFICERS
ELECTION OF DIRECTORS
Five directors are to be elected to serve until the next Annual Meeting of
Stockholders and until their respective successors are duly elected or appointed
and qualified. All five of the nominees named below are presently directors of
the Company. Unless authority to vote for the directors is withheld, it is
intended that the shares represented by the enclosed Proxy will be voted FOR the
election of all five nominees. In the event that any such nominee is unable or
declines to serve for any reason, it is intended that proxies will be voted for
the election of the balance of those nominees named and for such other persons
as shall be designated by the present Board of Directors, or the Board of
Directors may be reduced in accordance with the Bylaws of the Company. The Board
of Directors has no reason to believe that any of the persons named will be
unable or unwilling to serve. An affirmative vote of a majority of the
outstanding shares of Common Stock present and voting at the meeting is required
for election of the five nominees to the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
ELECTION OF ALL NOMINEES NAMED IN THIS PROXY STATEMENT.
INFORMATION WITH RESPECT TO NOMINEES
The following table sets forth the nominees, their ages, a brief
description of their recent business experience, including present occupations
and employment, certain directorships held by each and the year in which each
became a director of the Company. All were elected at the Company's Annual
Meeting of Stockholders held on February 1, 1996, and have continued to serve
since such time.
<TABLE>
<CAPTION>
NAME AND PRINCIPAL OCCUPATION AT PRESENT DIRECTOR
AND FOR THE PAST FIVE YEARS; DIRECTORSHIPS SINCE AGE
- ---------------------------------------------------------------------- -------- ---
<S> <C> <C>
Ronald G. Harper(1)................................................... 1970 58
Mr. Harper, who founded the Company in 1970, has served as its
President, Chairman of the Board and Chief Executive Officer since
its inception.
John C. Bumgarner, Jr.(1)(2)(3)....................................... 1982 54
In 1979 Mr. Bumgarner was appointed to his present position as
Senior Vice President -- Corporate Development and Planning of The
Williams Companies, Inc., a Tulsa-based conglomerate. He has been
employed by The Williams Companies, Inc. since 1977. He is also a
director of TRANSCO, James River Coal Company, and several privately
held companies.
Dr. David L. Huff(1).................................................. 1982 65
Since 1968 Dr. Huff has been a member of the faculty at the
University of Texas. He has been a Fulbright Lecturer and has
published numerous books and articles, including Market Area
Analysis, "A Graphical Index of Consumer Expectation," "Measures of
Market Area Overlap," and "Retail Location Theory." He is an expert
in computer modeling techniques.
Joseph C. McNay(1)(2)(3).............................................. 1982 62
Since November 1976 Mr. McNay has been the President, a Director and
the Chairman of the Board of Essex Investment Management Company,
Inc., a company engaged in investment and advisory services. Mr.
McNay is also a director of Softech, Inc. and Alpha I Biomedical,
Inc., each of which are publicly-held companies.
</TABLE>
2
<PAGE> 6
<TABLE>
<CAPTION>
NAME AND PRINCIPAL OCCUPATION AT PRESENT DIRECTOR
AND FOR THE PAST FIVE YEARS; DIRECTORSHIPS SINCE AGE
- ---------------------------------------------------------------------- -------- ---
<S> <C> <C>
John J. McQueen(2)(3)................................................. 1982 75
Mr. McQueen has been in the private practice of law in the Tulsa
area since 1959. He has also served as a certified public accountant
with KPMG Peat Marwick, as a tax specialist with Warren Petroleum
Corp., and as controller of Davis Investments, a company engaged in
oil and real estate activities.
</TABLE>
- ---------------
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
(3) Member of the Nominating Committee.
MEETINGS OF THE BOARD AND COMMITTEES OF THE BOARD
During the fiscal year ended September 30, 1996, the Board of Directors
held five meetings. All of the directors attended at least 75% of the meetings
of the Board except Mr. McQueen who attended 60%. To assist it in carrying out
its duties, the Board of Directors has standing Compensation, Audit and
Nominating Committees.
The Audit Committee's functions are to recommend and approve, subject to
ratification by the Board of Directors and the stockholders, the Company's
independent auditors, to review the scope and results of audits by the
independent auditors, to represent the Board of Directors and stockholders in
ensuring that the legal, ethical and regulatory requirements for reporting and
public disclosure are met by the Company and to serve as the channel of
communication between the Board of Directors and Management on matters involving
financial reporting, public disclosure, reporting policy and relationships with
financial and regulatory entities. The Audit Committee held no separate meetings
during the fiscal year ended September 30, 1996, but conducted the necessary
business during the regular meetings of the Board.
The Compensation Committee's functions are to develop and monitor
compensation arrangements. In performing these functions, the Compensation
Committee approves salary ranges and actual salaries for all executive officers,
monitors the effectiveness of and adopts changes as appropriate for all
executive compensation programs, sets requirements for and evaluates performance
under the executive compensation plans and approves all awards under such plans,
and administers and makes awards, interpretations and other decisions under
certain other employee benefit and compensation plans. The Compensation
Committee held no separate meetings during the fiscal year ended September 30,
1996, but conducted the necessary business during the regular meetings of the
Board. See also "Board Compensation Committee Report on Executive Compensation"
below.
The Nominating Committee was created in September 1993 to seek qualified
individuals for consideration to serve as directors of the Company. The
committee will function to identify, investigate and obtain consents before any
such person's name is placed in nomination to serve as a director of the
Company. The committee held no meetings during the fiscal year ended September
30, 1996 and has not yet established procedures governing submission and
qualifications for nominees by Company security holders or the committee itself,
but the Committee will consider nominees proposed by Company security holders.
3
<PAGE> 7
INFORMATION WITH RESPECT TO EXECUTIVE OFFICERS
The following table sets forth the executive officers currently serving the
Company, their ages, all positions and offices held with the Company and their
tenure in such office. If such officer has been employed by the Company for less
than five years, other background information and experience is listed. All
officers of the Company serve at the pleasure of its Board of Directors, and
there exists no arrangement or understanding among any of the Company's
executive officers with any other person pertaining to their selection to serve
in such position.
<TABLE>
<CAPTION>
SERVING IN
CURRENT
NAME AND ALL POSITIONS POSITION
AND OFFICES HELD WITH THE COMPANY SINCE AGE
- ---------------------------------------------------------------------- ---------- ---
<S> <C> <C>
Ronald G. Harper...................................................... 1970 58
Mr. Harper, who founded the Company in 1970, has served as its
President, Chairman of the Board and Chief Executive Officer since
its inception.
Roger A. Finn......................................................... 1996 59
Mr. Finn was appointed as Vice President on July 11, 1996. Mr. Finn
joined MPSI in 1982 as Director of Network Planning. Subsequent
assignments included General Manager -- Network Planning, Chief
Marketing Officer, Vice President of Operations, Vice President of
American Petroleum, and Vice President -- Marketing and Product
Development and Chief Operating Officer.
James C. Auten........................................................ 1996 48
Mr. Auten was appointed Vice President and Chief Financial Officer
on January 1, 1996. Mr. Auten joined MPSI in 1984 as Corporate
Controller and held such position until December 1992 when he was
appointed Principal Accounting Officer.
Jyo Umezawa........................................................... 1996 56
Mr. Umezawa was appointed Sr. Vice President -- Retail Petroleum on
July 11, 1996. Mr. Umezawa joined MPSI in 1983 and has served as
Manager -- Market Development, Director -- Market Studies, Chief
Information Officer and General Manager -- Technical Services and
Vice President, Pacific Rim Region.
Mark R. Davis......................................................... 1996 44
Mr. Davis was appointed to his present position as Vice
President -- Consulting on July 11, 1996. Mr. Davis joined MPSI in
1978 and has served as Project Manager, Manager -- Network Planning,
Director of Marketing, Director -- Product Development,
Director -- Network Planning, General Manager -- Production, Vice
President -- Production and Vice President -- Government/Financial
Services, and Vice President Europe/Middle East/Africa Region.
</TABLE>
4
<PAGE> 8
<TABLE>
<CAPTION>
SERVING IN
CURRENT
NAME AND ALL POSITIONS POSITION
AND OFFICES HELD WITH THE COMPANY SINCE AGE
- ---------------------------------------------------------------------- ---------- ---
<S> <C> <C>
Bryan D. Porto........................................................ 1996 47
Mr. Porto was appointed to his present position as Sr. Vice
President -- Retail Petroleum on July 11, 1996. Mr. Porto joined
MPSI's Rio de Janeiro office in 1985 and has served as
Director -- Network Planning, General Manager -- Marketing and Vice
President of MPSI's Brazilian subsidiary and most recently served as
Vice President North/Central/South America Region prior to his
present position.
Lance Taylor.......................................................... 1996 38
Mr. Taylor was appointed to his present position as General
Manager -- Retail Services Consulting on October 1, 1996. Mr. Taylor
joined MPSI in 1981 and has served as a Network Planner, Production
Manager -- North America Region, Production Director -- Americas
Region and General Manager of Production.
</TABLE>
STOCK OWNERSHIP
The following table sets forth information as of December 5, 1996, as to
shares of Common Stock beneficially owned by the directors (all of whom are
nominees for another term), certain executive officers, the directors and
executive officers of the Company as a group, and certain persons known to the
Company to own beneficially more than five percent of the Company's Common
Stock. Except as otherwise indicated, each person has sole investment and voting
power with respect to the shares shown. Ownership information is based upon
information furnished by the respective individuals.
<TABLE>
<CAPTION>
BENEFICIAL
OWNERSHIP OF COMMON STOCK
--------------------------------
NUMBER PERCENT
NAME OF COMMON STOCKHOLDER OF SHARES OF CLASS
- -------------------------------------------------------------- --------- --------
<S> <C> <C>
Ronald G. Harper.............................................. 1,172,391(1) 42.00%
8282 South Memorial Drive
Tulsa, Oklahoma 74133
John C. Bumgarner, Jr......................................... 222,322 8.00%
4900 Bank of Oklahoma Tower
One Williams Center
Tulsa, Oklahoma 74172
Joseph C. McNay............................................... 261,322 9.34%
125 High Street, 29th Floor
Boston, Massachusetts 02110
Bank of Oklahoma, N.A......................................... 285,714 10.23%
P.O. Box 2300
Tulsa, Oklahoma 74192
The Robertson Stephens Orphan Fund............................ 263,971 9.50%
555 California Street, Suite 2600
San Francisco, California 94104
Sanford Orkin................................................. 222,222 8.00%
3414 Peachtree Road, N.E., Suite 236
Atlanta, Georgia 30326
Dr. David L. Huff............................................. 5,000(3) .18%
</TABLE>
5
<PAGE> 9
<TABLE>
<CAPTION>
BENEFICIAL
OWNERSHIP OF COMMON STOCK
--------------------------------
NUMBER PERCENT
NAME OF COMMON STOCKHOLDER OF SHARES OF CLASS
- -------------------------------------------------------------- --------- --------
<S> <C> <C>
John J. McQueen............................................... -- --%
Roger A. Finn................................................. 23,238(2) .83%
Jyo Umezawa................................................... 25,229(2) .90%
Mark R. Davis................................................. 15,566(2) .56%
Bryan D. Porto................................................ 15,443(2) .55%
All officers and directors as a group (11 persons)............ 1,761,900(1)(3) 63.08%
</TABLE>
- ---------------
(1) Includes 308,177 shares of Common Stock held directly by Mr. Harper's family
or in trust for the benefit of Mr. Harper's family and 396,030 shares held
in trust for the benefit of certain charities. Mr. Harper disclaims
beneficial ownership of 449,830 shares held in certain of such trusts.
(2) The individuals indicated are the four most highly compensated executive
officers of the Company after Mr. Harper.
(3) Represents shares held by Dr. Huff's wife, as to which Dr. Huff disclaims
beneficial ownership.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely upon a review of Forms 5 furnished to the Company with respect
to its most recent fiscal year, the Company has determined that reports required
pursuant to Section 16(a) of the Securities Exchange Act of 1934, as amended,
were not filed on a timely basis. The Company believes that Forms 4 for Ronald
G. Harper, Roger A. Finn, and Mark R. Davis were filed late. The late filings
encompassed one Form 4 for Mr. Harper covering two transactions, two Forms 4 for
Mr. Finn covering two transactions, and two Forms 4 for Mr. Davis covering three
transactions. The Forms 5 for such individuals were filed at year end and
reflected all information which was required to be filed as to such individuals.
6
<PAGE> 10
COMPENSATION OF DIRECTORS AND OFFICERS
Summary Compensation Table. The following table summarizes the compensation
paid over the last three completed fiscal years to the Company's CEO and the
other executive officers of the Company who received compensation of $100,000 or
more during the fiscal year ended September 30, 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
ANNUAL COMPENSATION -------------------------------------
--------------------------------
OTHER AWARDS ALL
ANNUAL ----------------------- PAYOUTS OTHER
COMPEN- RESTRICTED ----------- COMPEN-
NAME AND SATION STOCK OPTIONS/ LTIP SATION
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($)(1) AWARD(S) ($) SARS (#) PAYOUTS ($) ($)(2)
- ------------------------------ ----- ---------- --------- ------- ------------ -------- ----------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ronald G. Harper.............. 1996 196,961 -- 8,242 -- -- -- 8,085
Chairman of the Board, 1995
President 181,456 5,599 8,232 -- -- -- 8,128
and Chief Executive Officer 1994 155,402 6,994 34,285 -- -- -- 8,754
Roger A. Finn................. 1996 106,109 1,023 4,500 -- -- -- 3,980
Vice President and Chief 1995 101,013 4,092 6,000 -- 6,000 -- 4,006
Operating Officer 1994 102,674 4,620 6,000 -- -- -- 3,817
Jyo Umezawa................... 1996 100,122 3,690 -- -- -- -- 3,237
Vice President 1995 100,022 4,701 -- -- 7,000 -- 3,155
Pacific Rim 1994 93,970 6,354 -- -- -- -- 3,476
Mark R. Davis................. 1996 100,122 3,690 -- -- -- -- 3,772
Vice President 1995 100,022 3,300 -- -- 5,400 -- 3,599
Europe/Africa 1994 92,236 3,084 -- -- 5,000 -- 1,575
Bryan D. Porto................ 1996 100,122 3,690 -- -- -- -- 672
Vice President 1995 100,022 4,000 -- -- 5,400 -- 624
Americas 1994 92,809 3,480 -- -- 8,000 -- 612
</TABLE>
- ---------------
(1) Represents automobile allowances paid to or on behalf of the named executive
officers.
(2) Disclosure of the components of "All Other Compensation" is omitted for the
fiscal year ended September 30, 1994 as permitted by Securities and Exchange
Commission rules. The amounts presented for the fiscal years ended September
30, 1996 and 1995 include (a) Company matching contributions to the
Company's 401(k) defined contribution plan (Mr. Harper -- $3,278 and $3,865,
Mr. Finn -- $3,183 and $3,244, Mr. Umezawa -- $2,565 and $2,531, Mr.
Davis -- $3,100 and $2,975, respectively), and (b) supplemental life
insurance premiums paid by the Company (Mr. Harper -- $4,807 and $4,263, Mr.
Finn -- $797 and $762, Mr. Umezawa -- $672 and $624, Mr. Davis -- $672 and
$624 and Mr. Porto -- $672 and $624, respectively).
Option/SAR Grants Table. The following table sets forth certain information
with respect to stock options (whether or not in tandem with stock appreciation
rights) and freestanding stock appreciation rights (SARs) granted to the named
executive officers during the last completed fiscal year:
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
INDIVIDUAL GRANTS REALIZABLE
--------------------------------------------- VALUE AT ASSUMED
% OF TOTAL
OPTIONS/ ANNUAL RATES OF
SARS STOCK PRICE
OPTIONS/ GRANTED TO EXERCISE APPRECIATION FOR
SARS EMPLOYEES OR BASE OPTION TERM
GRANTED IN FISCAL PRICE EXPIRATION ----------------
NAME (#) YEAR ($/SH) DATE 5% ($) 10% ($)
- --------------------------------------------------------- -------- ---------- -------- ---------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Roger A. Finn............................................ 15,000 11% $ 5.38 12-19-00 22,275 49,222
Mark R. Davis............................................ 10,000 7% 5.38 12-19-00 14,850 32,815
Bryan D. Porto........................................... 13,500 10% 5.38 12-19-00 20,048 44,300
Jyo Umezawa.............................................. 15,000 11% 5.38 12-19-00 22,275 49,222
James C. Auten........................................... 7,500 5% 5.38 12-19-00 11,138 24,611
Lance B. Taylor.......................................... 3,100 2% 5.38 12-19-00 4,604 10,173
</TABLE>
7
<PAGE> 11
OPTIONS EXERCISED TABLE
The following table sets forth information concerning each exercise of
stock options by the named executive officers during the last completed fiscal
year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY END OPTION VALUES
<TABLE>
<CAPTION>
(D)
NUMBER OF (E)
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
(B) (C) FY END(#) FY END($)
(A) SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
- ---------------------------------------------------------------- ----------- ------------- ---------------
<S> <C> <C> <C> <C>
Mark R. Davis.................................... 3,334 $ 5,418 6,800/18,600 --
Lance B. Taylor.................................. 4,233 5,250 1,000/ 9,000 --
</TABLE>
EMPLOYMENT CONTRACTS AND SEVERANCE ARRANGEMENTS
The Company maintains a severance policy applicable to all full-time
regular employees with at least one year of full-time service. Eligible
employees are those who are terminated as the result of (1) a reduction of the
Company's work force, (2) elimination of a job or position, (3) inability to
satisfactorily perform required responsibilities, or (4) relocation of
applicable Company facilities. The amount of severance paid is based upon the
employee's base salary and length of service, and includes payment for vested
but unused vacations and pro rated automobile allowances, if applicable. The
only named executive officer who would receive aggregate severance in excess of
$100,000 under the current policy is Ronald G. Harper. Mr. Harper's aggregate
severance would be approximately $116,000 at September 30, 1996.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee") is
composed of Ronald G. Harper, Chairman, President and Chief Executive Officer of
the Company, and independent outside directors, John C. Bumgarner, Jr., David L.
Huff and Joseph C. McNay. This Committee was responsible for overseeing and
administering the Company's executive compensation program described below.
The executive compensation program of the Company is reviewed and approved
annually by the Committee and is designed to serve the interest of the Company
and its stockholders by aligning executive compensation with stockholder
objectives and to encourage and reward management initiatives and good
performance. Specifically, the executive compensation program seeks to:
(i) implement compensation practices which allow the Company to
attract and retain highly qualified executives and maintain a competitive
position in the executive marketplace with employers of comparable size and
in similar lines of business;
(ii) enhance the compensation potential of executives who are in the
best position to contribute to the development and success of the Company
by providing the flexibility to compensate individual performance; and
(iii) directly align the interest of executives with the long-term
interest of stockholders through compensation opportunities in the form of
Common Stock ownership.
8
<PAGE> 12
These objectives are met through a program comprised of base salary and
annual cash or stock incentive awards, which are tied to operating performance,
and long-term incentive opportunities primarily in the form of incentive stock
options.
Salary. The Committee considers on an annual basis salary adjustments for
the Company's executive officers, including those named in the Summary
Compensation Table. Salary adjustments are designed to reflect internal
comparability and organizational considerations, and competitive data provided
by outside surveys. As a general rule, salary ranges are targeted toward the
median of survey results.
Incentive Awards. Executives are eligible for cash awards annually based
upon financial and non-financial results relative to pre-established performance
targets and objectives.
Stock Options. The Company's 1988 Stock Option Plan, approved by the
stockholders in 1989, permits the Committee, to grant incentive or nonstatutory
stock options to executive officers. The plan provides for stock option awards
giving executives the right to purchase Common Stock over a five-year period at
the fair market value per share as of the date the option is granted. Options
generally become exercisable in three equal annual installments beginning one
year after grant. Neither Mr. Harper nor any other member of the Board of
Directors is eligible to participate in the stock option plan.
Chief Executive Officer Compensation. Mr. Harper's total compensation
package has increased by approximately 27% during the three years ended
September 30, 1996 in recognition of the Company's progress. Mr. Harper received
annual incentive awards as set forth in the Summary Compensation Table. In
determining the amount of annual incentive awards, the Committee took into
consideration the Company's operating results in an environment effected by
adverse economic conditions, the increased quality of core assets as a result of
the Company's emphasis on its core client industry (retail petroleum), and Mr.
Harper's increased personal attention to revitalization of certain significant
client relationships and introduction of new products.
THE COMPENSATION COMMITTEE
John C. Bumgarner, Jr.
Ronald G. Harper
David L. Huff
Joseph C. McNay
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Ronald G. Harper, Chief Executive Officer of the Company, is the only
member of the Compensation Committee who is also an employee or officer of the
Company. In addition, Mr. Harper is a party to certain relationships and
transactions with the Company which are described in "Certain Transactions"
below.
DIRECTORS' COMPENSATION
Members of the Board of Directors who are employees of the Company receive
no additional compensation as a result of their service as directors. Directors
who are not employees of the Company are compensated at the rate of $1,500 for
each board meeting attended and are reimbursed for any out-of-pocket expenses
incurred in attending meetings.
9
<PAGE> 13
PERFORMANCE GRAPH
The following graph sets forth the yearly percentage change in the
cumulative total shareholder return on the Company's Common Stock during the
preceding five fiscal years ended September 30, 1996 compared with the
cumulative total returns of the NASDAQ Stock Market -- U.S. index and an
industry peer group. The comparison assumes $100 was invested on September 30,
1991 in the Company's Common Stock and in each of the foregoing indices and
assumes reinvestment of dividends.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG MPSI SYSTEMS INC., THE NASDAQ STOCK MARKET-US INDEX AND A PEER GROUP
<TABLE>
<CAPTION>
MEASUREMENT PERIOD MPSI SYSTEMS NASDAQ STOCK
(FISCAL YEAR COVERED) INC. PEER GROUP MARKET-US
<S> <C> <C> <C>
9/91 100 100 100
9/92 18 121 112
9/93 41 147 147
9/94 182 142 148
9/95 545 164 204
9/96 70 187 242
</TABLE>
For comparative purposes, the Company has identified a peer group including
companies who are competitors or who are known to provide services similar to
those provided by the Company. The peer group companies are CACI International
Incorporated, Information Research Incorporated, MARC Incorporated, Equifax
Incorporated, Dun & Bradstreet, Acxiom Corporation, Market Facts Incorporated,
SEI Corporation, and Fair Issac & Company.
CERTAIN TRANSACTIONS
The Company entered into a number of agreements on or about September 29,
1993 with certain directors, executive officers and stockholders in connection
with an equity recapitalization transaction. Participants in such equity
recapitalization transaction included Ronald G. Harper, John C. Bumgarner, Jr.,
Joseph C. McNay, Dr. David L. Huff, Bank of Oklahoma, N.A., the Robertson
Stephens Orphan Fund and Sanford Orkin (collectively, "Significant
Stockholders"). Under the terms of such agreements, the Company has agreed that,
upon the request of Significant Stockholders owning a specified percentage of
shares of Common Stock, on one additional occasion (one such registration
request having already been satisfied), the Company will register under the
Securities Act of 1933, as amended, and applicable states securities laws, the
10
<PAGE> 14
sale of the Common Stock owned by the Significant Stockholders. The Company's
obligation is subject to certain limitations regarding the timing of
registrations and certain other matters. The Company is also obligated to offer,
on up to two occasions, to the Significant Stockholders the opportunity to
include shares of Common Stock owned by them in certain registration statements
filed by the Company. In addition, the Company has agreed to indemnify the
Significant Stockholders against securities law liabilities arising in
connection with such offerings, other than liabilities arising as a result of
information furnished to the Company by the Significant Stockholders
participating in the registration. The Company is obligated to pay all expenses
incident to such registrations, except underwriter's discounts and commissions
allocable to the sale of shares by the Significant Stockholders.
The Company believes that the terms of the above described transactions
were competitive and no less beneficial to the Company than would have been made
available from unaffiliated parties. The Board of Directors of the Company has a
policy that the Company not enter into any related party transactions unless
approved by a majority of the Company's independent directors based upon
independent evidence of fair value.
APPOINTMENT OF INDEPENDENT AUDITORS
The Company's Board of Directors has reappointed Ernst & Young LLP, the
independent auditors who examined the consolidated financial statements of the
Company for the fiscal year ended September 30, 1996, to act as the Company's
independent auditors for the current fiscal year, subject to ratification by the
stockholders. The decision of the Board of Directors to reappoint Ernst & Young
LLP is based on the recommendation of the Audit Committee. In making its
recommendation, the Audit Committee reviewed the auditor's independence, the
audit scope and audit fees. Representatives of Ernst & Young LLP will attend the
Annual Meeting and will be prepared to answer stockholders' questions but do not
plan to make a presentation.
An affirmative vote of a majority of the outstanding shares of Common Stock
present and voting at the meeting is required for ratification of the
appointment of the independent auditors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF ITS
SELECTION OF INDEPENDENT AUDITORS.
STOCKHOLDER PROPOSALS
To be considered for presentation at the Annual Meeting of Stockholders to
be held in 1998, a stockholder proposal must be received by the Secretary at the
offices of the Company at the address set forth in the first page of this Proxy
Statement, not later than October 31, 1997.
11
<PAGE> 15
OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING
The Board of Directors knows of no business which will be presented for
consideration at the Annual Meeting other than as stated in the Notice of Annual
Meeting of Stockholders. If, however, other matters are properly brought before
the meeting, it is the intention of the persons named in the accompanying form
of proxy to vote the shares represented thereby on such matters in accordance
with their best judgment.
Whether or not you intend to be present at this meeting, you are urged to
return your proxy promptly. If you are present at this meeting and wish to vote
your shares in person, your proxy may be revoked upon request.
By Order of the Board of Directors
LINDA K. WELLS
Secretary
Tulsa, Oklahoma
January 3, 1997
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR NOT
YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO SIGN AND PROMPTLY RETURN
THE ACCOMPANYING PROXY IN THE ENCLOSED PREPAID ENVELOPE.
12
<PAGE> 16
THIS PROXY WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1 AND 2.
Your vote as indicated in this example. [X]
1. ELECTION OF DIRECTORS
FOR all nominees listed WITHHOLD AUTHORITY
to the right (except as to vote for all nominees
marked to the contrary) listed to the right
[ ] [ ]
NOMINEES: Ronald G. Harper, John C. Bumgamer, Jr., Dr. David L. Huff, Joseph
C. McNay and John J. McQueen
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
- -------------------------------------------------------------------------------
2. Ratification of Ernst & Young LLP as the independent certified public
accountants of the corporation.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
Please sign exactly as name appears
hereon. When shares are held by joint
tenants, both should sign. When signing
as attorney, executor, administrator,
trustee, or guardian, please give full
title as such. If a corporation, please
sign in full corporate name by President
or other authorized officer. If a
partnership, please sign in partnership
name by authorized person.
Dated: , 1997
---------------------------
----------------------------------------
Signature
----------------------------------------
(Signature if held jointly)
PLEASE SIGN, DATE, AND RETURN THE PROXY
CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
Admission Ticket
ANNUAL MEETING
OF
MPSI SYSTEMS INC. STOCKHOLDERS
THURSDAY, JANUARY 30, 1997
11:00 A.M. CST
THE GRANDVIEW HOTEL
SUNSET ROOM
7900 SOUTH LEWIS
TULSA, OKLAHOMA 74136
================================================================================
AGENDA
* Election of Directors
* Ratification of the appointment of independent public accountants
* Report on the progress of the corporation
* Discussion on matters of current interest
================================================================================
<PAGE> 17
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
MPSI SYSTEMS INC.
The undersigned hereby appoints Ronald G. Harper and Linda K. Wells
proxies, with power to act without the other and with power of substitution,
and hereby authorizes them to represent and vote, as designated on the other
side, all the shares of stock of MPSI Systems Inc. standing in the name of the
undersigned with all powers which the undersigned would posses if present at
the Annual Meeting of Stockholders of the Company to be held January 30, 1997
or any adjournment thereof.
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
MPSI SYSTEMS INC.
ANNUAL MEETING OF STOCKHOLDERS
JANUARY 30, 1997
11:00 A.M. CST
THE GRANDVIEW HOTEL
SUNSET ROOM
7900 SOUTH LEWIS
TULSA, OKLAHOMA 74136
