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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, 1999.
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.
4343 SOUTH 118TH EAST AVENUE
TULSA, OKLAHOMA 74146
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MPSI SYSTEMS INC. MATCHING INVESTMENT PLAN
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
AS OF DECEMBER 31, 1999 AND 1998, AND FOR THE YEAR ENDED
DECEMBER 31, 1999
CONTENTS
<TABLE>
<CAPTION>
Page No.
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<S> <C>
(a) Financial Statements:
(1) Report of Independent Auditors.................................................. 3
(2) Statements of Net Assets Available for Benefits ................................ 4
(3) Statement of Changes in Net Assets Available for Benefits....................... 5
(4) Notes to Financial Statements .................................................. 6
(5) Supplemental Schedules:
Schedule H; Line 4i: - Schedule of Assets Held for Investment
Purposes at End of Year..................................................... 10
Schedule G; Schedule of Non-Exempt Transactions............................. 11
(b) Signatures.......................................................................... 12
(c) Exhibits
23 Consent of Independent Auditors.................................................. 13
</TABLE>
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REPORT OF INDEPENDENT AUDITORS
Plan Administrator
MPSI Systems Inc. Matching Investment Plan
We have audited the accompanying statements of net assets available for benefits
of MPSI Systems Inc. Matching Investment Plan as of December 31, 1999 and 1998,
and the related statement of changes in net assets available for benefits for
the year ended December 31, 1999. 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 auditing standards generally accepted
in the United States. 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 net assets available for benefits of the Plan at
December 31, 1999 and 1998, and the changes in its net assets available for
benefits for the year ended December 31, 1999, in conformity with accounting
principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
held for investment purposes at end of year as of December 31, 1999 and schedule
of non-exempt transactions for the year ended December 31, 1999 are presented
for purposes of additional analysis and are not a required part of the financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. These supplemental schedules are the
responsibility of the Plan's management. The supplemental schedules have been
subjected to the auditing procedures applied in our audits of the financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ ERNST & YOUNG LLP
Tulsa, Oklahoma
June 27, 2000
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MPSI SYSTEMS INC.
MATCHING INVESTMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
DECEMBER 31, 1999 DECEMBER 31, 1998
----------------- -----------------
<S> <C> <C>
ASSETS
Investments, at fair value $5,640,892 $4,009,263
RECEIVABLES:
Employee contributions 31,060 32,999
Employer contributions 147,983 166,515
Accrued interest / dividends 64,363 48,500
---------- ----------
243,406 248,014
---------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $5,884,298 $4,257,277
========== ==========
</TABLE>
See accompanying notes to financial statements
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MPSI SYSTEMS INC.
MATCHING INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1999
----------------------------
<S> <C>
ADDITIONS
Investment income:
Net realized and unrealized appreciation
in fair value of investments $ 751,019
Interest and dividends 410,024
-----------
Contributions:
Employees 517,977
Employer 148,221
Rollovers 10,518
-----------
676,716
-----------
Total additions 1,837,759
DEDUCTIONS
Benefit payments (210,738)
-----------
Net increase 1,627,021
Net assets available for benefits, at beginning of 4,257,277
year
-----------
NET ASSETS AVAILABLE FOR BENEFITS, AT END OF YEAR $ 5,884,298
===========
</TABLE>
See accompanying notes to financial statements
5
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MPSI SYSTEMS INC.
MATCHING INVESTMENT PLAN
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1999
(1) DESCRIPTION OF THE PLAN
The following description of MPSI Systems Inc. Matching Investment Plan
provides only general information. Participants should refer to the
Summary Plan Description for a more complete description of the Plan's
provisions.
GENERAL
The Plan is a defined contribution plan covering all full-time employees
of MPSI Systems Inc. and its wholly owned U.S. subsidiary, DataMetrix
Inc. (the "Company"). All employees of 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 following their completion of a six-month
period of service. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA).
CONTRIBUTIONS
Each year, participants may contribute as salary deferrals up to 16% of
their annual earnings. Participant contributions in excess of 9% of a
participant's salary may also be made subject to certain limitations as
designed to prevent the Plan from failing Annual Tax Compliance Testing.
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. If the participant is rehired within five years, the
forfeited amounts may be restored to the participant's accounts under
certain circumstances.
The Company made contributions under the Plan during the year ended
December 31, 1999 based upon a Matching Percentage applied to the
participants' qualifying contributions. Participants' qualifying
contributions equal the aggregate of each participant's salary deferral
and contributions up to 6% of that participant's earnings for the Plan
year. 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>
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In 1999, the Employer Match was made in cash and allocated to
participant accounts based upon contribution elections made by each
participant.
The Company's matching percentage was 50 percent for Plan year 1999, as
calculated below:
<TABLE>
<CAPTION>
Year Ended December 31, 1999
----------------------------
<S> <C>
Net employee contributions
(including nonelective contributions) $ 517,977
Nonqualifying contributions (186,535)
---------
Qualifying employee contributions 331,442
Applicable matching percentage x 50%
---------
165,721
Forfeitures (17,500)
---------
Required company contribution $ 148,221
=========
</TABLE>
INVESTMENT OPTIONS
Participants may direct their employee contributions in any of the
investment options selected by the plan administrator.
PARTICIPANT LOANS
A participant in the Plan may request a loan not in excess of the lesser
of: (1) 50% of the vested account balance or (2) $50,000. A participant
may have only one loan outstanding at any time. The repayment terms of
loans may not exceed five years except for loans used to acquire the
participant's principal residence which may not exceed ten years. Each
loan bears interest at a rate commensurate with market rates for similar
loans and repayments are made by payroll deduction.
PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of
Plan termination, participants will become 100 percent vested in their
accounts.
PAYMENT OF BENEFITS
On termination of service, a participant may receive a lump-sum amount
equal to the vested value of his or her account, or upon death,
disability or retirement, elect to receive annual installments over a
ten-year period.
(2) SUMMARY OF ACCOUNTING POLICIES
INVESTMENTS
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 quoted market prices based upon the asset
value of shares held by the Plan at year end. Investments in money
market funds were stated at par value, which approximates fair value.
The Merrill Lynch Retirement Preservation Trust Fund investments are
valued by Merrill Lynch based on the fair value of the underlying
assets. Participant loans are stated at cost, which approximates fair
value.
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ADMINISTRATION OF THE PLAN
Committee members are appointed by the Company to administer the Plan.
The Company bears all costs associated with administering the Plan,
except for minor administrative expenses paid by the Plan.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management
to make estimates that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from
those estimates.
RECLASSIFICATION
Certain amounts in the 1998 financial statements have been reclassified
to conform to the 1999 presentation.
(3) INVESTMENTS
During 1999, the Plan's investments (including investments purchased,
sold as well as held during the year) appreciated (depreciated) in fair
value as determined by quoted market prices as follows:
<TABLE>
<CAPTION>
Net Realized and
Unrealized
Appreciation
(Depreciation)
in Fair Value of
Investments
----------------
<S> <C>
Corporate bonds and notes $ (4,841)
MPSI common stock 22,208
Shares of mutual funds 733,652
---------
Total $ 751,019
=========
</TABLE>
The fair value of individual investments that represent 5% or more of
the Plan's net assets are as follows:
<TABLE>
<CAPTION>
December 31,
1999
------------
<S> <C>
Merrill Lynch Phoenix Fund $ 864,205
Merrill Lynch Global Allocation Fund 1,099,108
Merrill Lynch Retirement Preservation Trust 584,952
Merrill Lynch Equity Index Trust 612,569
Oppenheimer Total Return Fund 347,575
----------
</TABLE>
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<TABLE>
<CAPTION>
December 31,
1998
------------
<S> <C>
Merrill Lynch Phoenix Fund $ 633,530
Merrill Lynch Global Allocation Fund 1,064,315
MPSI Systems Inc. Common Stock 242,245
Merrill Lynch Retirement Preservation Trust 521,388
Merrill Lynch Equity Index Trust 491,850
Oppenheimer Total Return Fund 352,647
AIM Balanced Fund 215,470
</TABLE>
(4) RECONCILIATION TO FORM 5500
The following is a reconciliation of net assets available for benefits
per the financial statements to the Form 5500:
<TABLE>
<CAPTION>
December 31,
1999 1998
----------------------
<S> <C> <C>
Net assets available for benefits per the financial statements $5,884,298 $4,257,277
Less: Receivables -- 247,476
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Net assets available for benefits per the Form 5500 $5,884,298 $4,009,801
========== ==========
</TABLE>
(5) INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue
Service dated June 8, 1995, stating that the Plan is qualified under
Section 401(a) of the Internal Revenue Code (the "Code") and, therefore,
the related trust is exempt from taxation. Once qualified, the Plan is
required to operate in conformity with the Code to maintain its
qualification. The plan administrator believes the Plan is being
operated in compliance with the applicable requirements of the Code and,
therefore, believes that the Plan is qualified and the related trust is
tax exempt.
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MPSI SYSTEMS INC. MATCHING INVESTMENT PLAN
EIN: 73-1064024, PLAN #: 001
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS HELD FOR
INVESTMENT PURPOSES AT END OF YEAR
DECEMBER 31, 1999
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
------------------------------------- -------------------------------- ----- -------
Description of Investment,
Identity of Issue, Borrower, Lessor Including Maturity Date, Rate of Current
of Similar Party Interest, Par or Maturity Value Cost Value
------------------------------------- -------------------------------- ----- --------
<S> <C> <C>
MUTUAL FUNDS
* Merrill Lynch Phoenix Fund 62,897 Class B Shares ** $ 864,205
* Merrill Lynch Global Allocation Fund 79,703 Class B Shares ** 1,099,108
* Merrill Lynch Corporate Bond Fund 7,752 Class B Shares ** 117,024
* Merrill Lynch Equity Index Trust 6,053 Class B Shares ** 612,569
* Merrill Lynch Growth Fund (Class B) 7,420 Class B Shares ** 185,809
Oppenheimer Total Return Fund 26,232 Class A Shares ** 347,575
AIM Balanced 6,370 Class A Shares ** 208,224
AIM International Fund 700 Class B Shares ** 19,468
John Hancock Small Cap Fund 69 Class A Shares ** 177,525
Pioneer Growth Shares Fund 8,265 Class B Shares ** 166,627
Munder Net Net Fund 3,201 Class B Shares ** 244,692
Alliance Premier Growth Fund 4,821 Class B Shares ** 175,987
Seligman Communication Fund 5,662 Class B Shares ** 268,454
MFS Capital Opportunity Fund 6,143 Class A Shares ** 129,069
Mass Investors Growth Stock Fund 2,963 Class B Shares ** 60,236
MONEY FUNDS
* Merrill Lynch Retirement Preservation Trust 584,952 Units ** 584,952
COMMON STOCKS
* MPSI Systems Inc. 121,456 Common Shares ** 250,543
* LOANS TO PARTICIPANTS 7.75% to 10.50% interest rate -- 128,825
------ ----------
$ -- $5,640,892
====== ==========
</TABLE>
* Indicates party-in-Interest to the Plan.
** Investments are participant directed, thus cost information is not
applicable.
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MPSI SYSTEMS INC. MATCHING INVESTMENT PLAN
EIN: 73-1064024, PLAN #: 001
SCHEDULE G - SCHEDULE OF NON-EXEMPT TRANSACTIONS
YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
(a) (b) (c)
Description of transactions
Relationship to plan, including maturity date, rate of
employer or other interest, collateral, par
Identity of party involved party-in-interest or maturity value
----------------------------- --------------------- ----------------------------------
<S> <C> <C>
MPSI Matching Investment Plan Employer/Plan Sponsor Contributions of $3,220 for 4
participants for the February 1999
payroll period were deposited in
May 1999. Investment earnings of
$536 were allocated to the
affected participants.
</TABLE>
Columns (d) through (j) are not applicable.
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S I G N A T U R E S
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, 2000 By \s\ James C. Auten
------------------------
James C. Auten
Chief Financial Officer
12
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
23 Consent of Independent Auditors
</TABLE>
