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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K/A
AMENDMENT NO. 1
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended September 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ____________ to ____________
Commission file number 0-11527
MPSI SYSTEMS INC.
(Exact name of registrant as specified in its charter)
DELAWARE 73-1064024
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8282 SOUTH MEMORIAL DRIVE, TULSA, OKLAHOMA 74133
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code (918) 250-9611
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK, $.05 PAR VALUE
----------------------------
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements or any amendment to this Form 10-K. [ X ]
The aggregate market value of common stock held by non-affiliates of the
registrant on December 5, 1997 was approximately $3,980,000.
The number of shares outstanding of the registrant's common stock was
2,841,455 shares of $0.05 Par Value Common Stock as of December 5, 1997.
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
INFORMATION WITH RESPECT TO DIRECTORS
The following table sets forth the directors, 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 January 30, 1997.
<TABLE>
<CAPTION>
NAME AND PRINCIPAL OCCUPATION AT PRESENT DIRECTOR
AND FOR THE PAST FIVE YEARS; OTHER DIRECTORSHIPS SINCE AGE
- ---------------------------------------------------------- -------- ---
<S> <C> <C>
Ronald G. Harper(1)................................................... 1970 59
Mr. Harper, who founded the Company in 1970, has served as its
President, Chairman of the Board and Chief Executive Officer
since inception.
John C. Bumgarner, Jr.(1)(2)(3)....................................... 1982 55
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 66
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 63
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 1 Biomedical, Inc., each of which are publicly-held
companies.
John J. McQueen(2)(3)................................................. 1982 76
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>
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(1) The individual identified is a member of the Compensation Committee.
(2) The individual identified is a member of the Audit Committee.
(3) The individual identified is a member of the Nominating Committee.
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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. 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 OFFICE HELD WITH THE COMPANY SINCE AGE
- ------------------------------------------------------- ---------- ---
<S> <C> <C>
Ronald G. Harper.................................................... 1970 59
Mr. Harper, who founded the Company in 1970, has served as its
President, Chairman of the Board and Chief Executive Officer
since inception.
James C. Auten...................................................... 1996 49
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 57
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, General Manager -- Technical Services, and
Vice President, Pacific Rim Region.
Bryan D. Porto...................................................... 1996 48
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, Vice President of
MPSI's Brazilian subsidiary, and most recently served as Vice
President, North/Central/South America Region.
John C. Bergman..................................................... 1995 63
Mr. Bergman affiliated with MPSI in 1995 as Senior Advisory
Consultant and in 1997 was named interim president of MPSI
Consulting. He is an officer and principal owner of JCB Marketing,
a marketing company generally engaged in business consulting
services. Prior to that, he was employed by Amoco Oil Company in a
variety of executive management positions in the marketing area.
Mr. Bergman serves on the Board of Travelserve and on the Advisory
Board of Northern Trust Bank.
</TABLE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based upon a review of Forms 4 and 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 filed on a timely basis.
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ITEM 11. EXECUTIVE COMPENSATION
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 $100,000 or more during the fiscal
year ended September 30, 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
-----------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
--------------------------- --------------------- -----------
OTHER
ANNUAL
COMPEN- RESTRICTED ALL OTHER
NAME AND SALARY BONUS SATION STOCK OPTIONS/ LTIP COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($)(1) AWARD(S) SARS(#) PAYOUTS($) ($)(2)
- -------------------------- --------- ---------- --------- -------- ----------- ---------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ronald G. Harper ........ 1997 194,158 -- 8,242 -- -- -- 9,657
Chairman of the ....... 1996 196,961 -- 8,242 -- -- -- 8,085
Board, President ...... 1995 181,456 5,599 8,232 -- -- -- 8,128
and Chief
Executive Officer
Jyo Umezawa ............. 1997 125,022 -- -- -- -- -- 17,153
Vice President ........ 1996 100,122 3,690 -- -- -- -- 3,237
Pacific Rim ........... 1995 100,022 4,701 -- -- 7,000 -- 3,155
Bryan D. Porto .......... 1997 125,022 -- -- -- -- -- 12,200
Vice President ........ 1996 100,122 3,690 -- -- -- -- 672
Americas .............. 1995 100,022 4,000 -- -- 5,400 -- 624
John C. Bergman ......... 1997 -- -- 131,950 -- -- -- --
Sr. Advisory .......... 1996 -- -- 73,349 -- -- -- --
Consultant ............ 1995 -- -- -- -- -- -- --
</TABLE>
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(1) Represents automobile lease paid to or on behalf of Mr. Harper and
consulting fees paid to Mr. Bergman.
(2) The components of "All Other Compensation" for the fiscal years ended
September 30, 1997, 1996, and 1995 include (a) Company matching
contributions to the Company's 401(k) defined contribution plan (Mr. Harper
-- $4,750, $3,278, and $3,865, and Mr. Umezawa -- $2,831, $2,565, and
$2,531, respectively), (b) supplemental life insurance premiums paid by the
Company (Mr. Harper -- $4,907, $4,807, and $4,263, Mr. Umezawa -- $822,
$672, and $624 and Mr. Porto -- $822, $672, and $624, respectively) and (c)
accrued deferred compensation, accrued and payable (Mr. Umezawa -- $13,500
and Mr. Porto -- $8,700). At September 30, 1995, the Company approved
discretionary employee performance awards in the form of deferred
compensation to a group of 19 employees including the indicated executive
officers. Such amounts were earned based on the employee's performance
during the year ended September 30, 1994. The Company agreed to pay future
cash awards to the specified employees upon the achievement, for thirty
consecutive business days, of a $6.00 per share market price for the
Company's Common Stock and upon exercise of the underlying options. Such
payments could be made at any point after November 29, 1995, assuming stock
price and other vesting requirements have been met. The amounts reflected
above vested based upon the stock price at September 19, 1997, which
triggered the Company's obligation under the plan.
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OPTIONS EXERCISED TABLE
The following table sets forth information concerning each exercise of
stock options by the named executive officers during the last completed fiscal
year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY END OPTION VALUES
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
- ----------------- ------------- ----------------- --------------- --------------------
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN THE MONEY
OPTIONS AT OPTIONS AT
SHARES FY END(#) FY END($)
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE//
NAME EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
- ----------------- ------------- ----------------- --------------- --------------------
<S> <C> <C> <C> <C>
Jyo Umezawa 10,000 23,135 11,167/10,833 27,185/14,116
Bryan Porto 2,000 10,000 17,067/9,833 43,025/12,996
</TABLE>
EMPLOYMENT CONTRACTS AND SEVERANCE AGREEMENTS
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 Mr. Ronald G. Harper. Mr. Harper's
aggregate severance would be approximately $124,000 at September 30, 1997.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee") was
composed of Ronald G. Harper, President and Chief Executive Officer of the
Company, and independent outside directors, John C. Bumgarner, Jr., Joseph C.
McNay and Dr. David L. Huff. This Committee is responsible for overseeing and
administering the Company's executive compensation program described below.
Compensation Policy
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.
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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 annual salary adjustments for the Company's
executive officers, including those named in the Summary Compensation Table.
Salary adjustments are designed to reflect internal comparability,
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 nonfinancial 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 are eligible to participate in the stock option plan.
Chief Executive Officer Compensation
Mr. Harper's overall compensation package has increased by approximately 7%
during the three years ended September 30, 1997 in recognition of the Company's
progress. Additionally, Mr. Harper received an annual incentive award in 1995
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 affected 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 Board of Directors did not reject or modify any compensation
recommendation of the Compensation Committee.
The Compensation Committee
John C. Bumgarner, Jr.
Ronald G. Harper
Dr. David L. Huff
Joseph C. McNay
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. 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.
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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.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of January 9, 1998, as to
shares of Common Stock beneficially owned by the directors, the executive
officers, the directors and officers of the Company as a group, and certain
persons known to the Company to own beneficially more than five percent of the
Common Stock. At that date, there were 2,841,455 shares of Common Stock
outstanding. 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(2)........................ 1,185,873(1) 41.73%
8282 South Memorial Drive
Tulsa, Oklahoma 74133
John C. Bumgarner, Jr...................... 222,322 7.82%
4900 Bank of Oklahoma Tower
One Williams Center
Tulsa, Oklahoma 74172
Joseph C. McNay............................ 242,722 8.54%
125 High Street, 29th Floor
Boston, Massachusetts 02110
Bank of Oklahoma, N.A...................... 285,714 10.05%
P. O. Box 2300
Tulsa, Oklahoma 74192
The Robertson Stephens Orphan Fund......... 244,888 8.61%
555 California Street, Suite 2600
San Francisco, California 94104
</TABLE>
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ITEM 12. (Continued)
<TABLE>
<CAPTION>
BENEFICIAL
OWNERSHIP
OF COMMON STOCK
----------------------------
NUMBER PERCENT
NAME OF COMMON STOCKHOLDER OF SHARES OF CLASS
- ------------------------------------------- ----------- ----------
<S> <C> <C>
Sanford Orkin.............................. 222,222 7.82%
3414 Peachtree Road, N.E., Suite 236
Atlanta, Georgia 30326
James C. Auten (2)......................... 22,021 .77%
Jyo Umezawa (2)............................ 26,718 .94%
Bryan D. Porto (2)......................... 23,402 .82%
John C. Bergman (2) ....................... 5,000 .17%
All officers and directors as a group (9 persons) 1,728,058 60.82%
</TABLE>
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(1) Includes 331,614 shares of Common Stock held directly by Mr. Harper's
family or in trust for the benefit of Mr. Harper's family and 424,209
shares held in trust for the benefit of certain charities. Mr. Harper
disclaims beneficial ownership of these trust shares.
(2) The indicated individuals are executive officers of the Company.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company entered into a number of agreements on or about September 29,
1993 with certain of its directors, executive officers and stockholders,
including 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 in connection with a recapitalization transaction.
Among other undertakings, the Company agreed that upon the request of certain
stockholders owning a specified percentage of shares of Common Stock, the
Company would register under the 1933 Act and applicable state securities laws,
the sale of the Common Stock owned by such stockholders. The Company's
obligation is subject to certain limitations regarding the timing of
registrations and other matters. The Company is also obligated to offer, on up
to two occasions, to such 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 such 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 such stockholders participating in the registration. The Company
is obligated to pay all expenses incident to such registration, except
underwriting discounts and commissions allocable to the sale of shares by such
stockholders. All of the obligations to such stockholders set forth above expire
September 29, 1998.
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 by 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.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant, a corporation organized and existing
under the laws of the State of Delaware, has duly caused this Report to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Tulsa, State of Oklahoma, on the 27th day of January 1998.
MPSI SYSTEMS INC.
By /s/ Ronald G. Harper
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Ronald G. Harper
Chairman of the Board,
President and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1934, this Report has
been signed below by the following persons on behalf of the Registrant, in the
capacities and on the date indicated.
<TABLE>
<S> <C> <C>
/s/ Ronald G. Harper Chairman of the Board, January 27, 1998
-------------------------------- President and Chief
Ronald G. Harper Executive Officer
/s/ James C. Auten Vice President and Chief-- January 27, 1998
------------------------------- Financial Officer
James C. Auten
/s/ John C. Bumgarner, Jr. Director January 27, 1998
-------------------------------
John C. Bumgarner, Jr.
/s/ David L. Huff Director January 27, 1998
--------------------------------
David L. Huff
/s/ Joseph C. McNay Director January 27, 1998
--------------------------------
Joseph C. McNay
/s/ John J. McQueen Director January 27, 1998
--------------------------------
John J. McQueen
</TABLE>
The Company's proxy statement for the Annual Meeting of Stockholders to be
held March 5, 1998 has not yet been sent to stockholders of record on January
9, 1998. Copies of such materials will be furnished to the Commission at such
time as they are sent to stockholders.
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