<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] 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 Rule 14a-12
</TABLE>
MPSI Systems Inc.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(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):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
[ ] 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:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
(3) Filing Party:
-----------------------------------------------------------------------
(4) Date Filed:
-----------------------------------------------------------------------
<PAGE> 2
[MPSI SYSTEMS INC. LETTERHEAD]
[MPSI LOGO]
September 1, 2000
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, September 28,
2000 at 2:00 p.m. CDT at the Sheraton Tulsa Hotel, 10918 East 41st Street,
Tulsa, Oklahoma 74146.
The formal notices 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.
In lieu of providing a Company Annual Report to Stockholders, a copy of the
Company's Form 10-K 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 SEPTEMBER 28, 2000
The Annual Meeting of Stockholders of MPSI Systems Inc. (the "Company")
will be held at the Sheraton Tulsa Hotel, 10918 East 41st Street, Tulsa,
Oklahoma 74146, on September 28, 2000 at 2:00 p.m. CDT for the following
purposes:
1. To elect six (6) 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 August 18, 2000
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, 4343 South 118th East Avenue, 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
September 1, 2000
<PAGE> 4
September 1, 2000
MPSI SYSTEMS INC.
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
SEPTEMBER 28, 2000
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 4343 South
118th East Avenue, Tulsa, Oklahoma 74146, of proxies in the accompanying form to
be used at the Annual Meeting of Stockholders to be held on September 28, 2000,
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 September 1, 2000.
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 six (6) 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 August 18, 2000 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 2,911,783 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, certain directors,
officers and other employees of the Company, may make solicitation 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
Six directors are to be elected to serve until the next annual Meeting of
Stockholders and until their respective successors are fully elected or
appointed and qualified. All six 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 six 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 six 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, 1999 and have continued to serve
since that 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 62
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) .......................................................... 1982 58
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 69
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) ................................................................. 1982 66
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 is a publicly held company.
</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) ...................................................................... 1982 79
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.
Bryan D. Porto .......................................................................... 1998 51
Mr. Porto was appointed Executive Vice President of MPSI's Petroleum Services
Division in 1998. He previously served as Sr. Vice President - Retail Petroleum and has
served in marketing and network planning positions since joining MPSI in the Rio
de Janeiro office in 1985.
</TABLE>
----------
(1) The individual identified is a member of the Compensation Committee.
(2) The individual identified is a member of the Audit Committee.
MEETINGS OF THE BOARD AND COMMITTEES OF THE BOARD
During the fiscal year ended September 30, 1999, the Board of Directors
held two regular meetings and two special meetings. All of the directors
attended at least 75% of the meetings of the Board, including meetings of
Committees of the Board on which they served. To assist it in carrying out its
duties, the Board of Directors has standing Compensation and Audit 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, 1999, 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 two meetings during the fiscal year ended September 30, 1999. See
also "Board Compensation Committee Report on Executive Compensation" below.
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 62
Mr. Harper, who founded the Company in 1970, has served as its President, Chairman
of the Board and Chief Executive Officer since inception.
Bryan D. Porto ......................................................................... 1998 51
Mr. Porto was appointed Executive Vice President of MPSI's Petroleum Services
Division in 1998. He previously served as Sr. Vice President, Retail Petroleum and has
served in marketing and network planning positions since joining MPSI in the Rio
de Janeiro office in 1985.
James C. Auten ......................................................................... 1996 52
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.
Roger A. Finn .......................................................................... 1999 63
Mr. Finn was appointed President of DataMetrix Inc. in 1999. He was previously Vice
President, Pricing Division. Mr. Finn joined MPSI in 1982 as Director of Network
Planning and has served in various marketing and network planning positions since
that time.
William H. Webb ........................................................................ 1996 60
Mr. Webb joined MPSI as General Manager, Corporate Human Resources on April 8,
1996. Previously, Mr. Webb spent 14 years with Amerada Hess Corporation as
Manager of Personnel Administration.
Bryan D. Gross ......................................................................... 2000 43
Dr. Gross was appointed Vice President of Technology in November 1999. Prior
to this position, he led the Core Product Re-engineering effort and Corporate
Research activities. Dr. Gross joined MPSI in 1984 as Project Supervisor in
Network Planning. He joined QuikTrip Corporation in 1991 as Manager of
Statistical Research and Site Selection, returning to MPSI in 1997 as General
Manager of Corporate Technology.
J. Scott Smathers ...................................................................... 2000 39
Mr. Smathers is currently serving in the position of Assistant to the President and is
responsible for implementing MPSI's Internet initiative and the Systems Department.
He joined MPSI in 1984 and has served on several international assignments, including
Australia and England. Prior to his current position, Mr. Smathers was Vice President
of Operations and Software Development.
</TABLE>
4
<PAGE> 8
STOCK OWNERSHIP
The following table sets forth information as of August 18, 2000, 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
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. 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 owners.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
OF COMMON STOCK
----------------------------
NUMBER PERCENT
NAME OF COMMON STOCKHOLDER OF SHARES OF CLASS
-------------------------- --------- --------
<S> <C> <C>
Ronald G. Harper(2) ................................... 1,192,036(1) 41%
4343 South 118th East Avenue
Tulsa, Oklahoma 74146
John C. Bumgarner, Jr ................................. 222,322 8%
4900 Bank of Oklahoma Tower
One Williams Center
Tulsa, Oklahoma 74172
Joseph C. McNay ....................................... 242,722 8%
125 High Street, 29th Floor
Boston, Massachusetts 02110
Bank of Oklahoma, N.A ................................. 285,200 10%
P. O. Box 2300
Tulsa, Oklahoma 74192
The Robertson Stephens Orphan Fund(3) ................. 225,838 8%
555 California Street, Suite 2600
San Francisco, California 94104
Sanford Orkin ......................................... 222,222 8%
3414 Peachtree Road, N.E., Suite 236
Atlanta, Georgia 30326
James C. Auten(2) ..................................... 9,354 *
Roger A. Finn(2) ...................................... 24,397 *
Bryan D. Porto(2) ..................................... 20,736 *
J. Scott Smathers(2) .................................. 5,200 *
Bryan D. Gross(2) ..................................... 6,560 *
William H. Webb(2) .................................... 667 *
All officers and directors as a group (9 persons) ..... 1,723,992 58%
</TABLE>
----------
*Less than one percent
(1) Includes 374,910 shares of Common Stock held in trust for the benefit of
Mr. Harper's family and 434,209 shares held in trust for the benefit of
certain charities. Mr. Harper has sole voting and investment power over all
of the trust shares except for 135,637 shares over which he shares
investment or voting power and 235,773 shares over which he has no
investment or voting power. Mr. Harper disclaims beneficial ownership of
these trust shares.
(2) The indicated individuals are executive officers of the Company.
(3) As reported in the Schedule 13G filed by the named person (among others),
voting and dispositive power over the listed shares may be deemed shared
among BankAmerica Corporation, Robertson Stephens Investment Management
Co., Robertson Stephens & Company Investment Management, L.P. and the named
person by reason of corporate relationships. Each such beneficial owner has
the same address as that set forth above for the named person.
5
<PAGE> 9
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based upon a review of Forms 4 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, except for Roger A. Finn. A Form 4/5 was not filed
on a timely basis with respect to a grant of stock options to Mr. Finn.
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 $100,000 or
more during the fiscal year ended September 30, 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
---------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
--------------------------------- ---------------------------------
OTHER ALL
ANNUAL OTHER
COMPEN- RESTRICTED LTIP COMPEN-
NAME AND BONUS SATION STOCK OPTIONS/ PAYOUTS SATION
PRINCIPAL POSITION YEAR SALARY($) ($) ($)(1) AWARDS SARS (#) ($) ($)(2)
------------------ ---- --------- ----- ------- ---------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ronald G. Harper ............. 1999 252,531 -- 7,885 -- -- -- 10,682
Chairman of the Board, ....... 1998 205,863 -- 7,885 -- -- -- 10,121
President & CEO .............. 1997 194,158 -- 8,242 -- -- -- 9,657
Bryan D. Porto ............... 1999 159,390 -- -- -- -- -- 5,821
Executive Vice President, .... 1998 156,856 14,541 -- -- -- -- 4,771
Petroleum .................... 1997 125,022 -- -- -- -- -- 12,200
James C. Auten ............... 1999 117,185 -- -- -- -- -- 2,720
Vice President and ........... 1998 103,375 10,671 -- -- -- -- 2,035
Chief Financial Officer ...... 1997 92,482 -- -- -- -- -- 12,365
Roger A. Finn ................ 1999 105,919 3,094 -- -- -- -- 3,878
President, DataMetrix Inc. ... 1998 103,012 -- -- -- -- -- 3,859
1997 100,827 -- -- -- -- -- 3,609
Bryan D. Gross ............... 1999 90,848 10,000 -- -- -- -- 3,403
Vice President Technology
</TABLE>
----------
(1) Represents automobile lease paid to or on behalf of Mr. Harper.
(2) The components of "All Other Compensation" for the fiscal years ended
September 30, 1999, 1998, and 1997 include (a) Company matching
contributions to the Company's 401(k) defined contribution plan (Mr.
Harper--$4,800, $4,750, and $4,750; Mr. Porto -- $4,800, $3,961, and
$2,678; Mr. Auten--$1,699, $1,387, and $1,193; Mr. Finn--$2,857, $3,049 and
$2,937, respectively; and Dr. Gross--$2,544 in 1999), (b) supplemental life
insurance premiums paid by the Company (Mr. Harper--$5,882, $5,371, and
$4,907; Mr. Porto--$1,021, $810, and $822; Mr. Auten--$1,021, $648, and
$672; Mr. Finn--$ 1,021, $810, and $672, respectively, and Dr. Gross---$859
in 1999), and (c) deferred compensation, accrued and payable in 1997 (Mr.
Porto--$8,700, Mr. Auten--$10,500 and Mr. Finn--$10,500). 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 $6.00 per share
market price for the Company's Common Stock and upon the exercise of the
underlying options. Such payments could be made at any point after November
29, 1995, assuming stock price and other vesting requirements have been
met. The amounts reflected above vested based upon the stock price at
September 19, 1997, which triggered the Company's obligation under the
plan.
6
<PAGE> 10
OPTIONS/SAR GRANTS TABLE
The following table sets forth certain information with respect to stock
options granted to the named executive officers during the fiscal year ended
September 30, 1999:
OPTION/SAR GRANTS IN FISCAL YEAR ENDED SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
Individual Grants
---------------------------------------------------------------
Potential
Realizable Value
at Assumed Annual
% of Total Rates of Stock Price
Options/ Options/SARs Appreciation for
SARs Granted to Exercise or Option Term
Granted Employees in Base Price Expiration ---------------------
Name (#) Fiscal Year ($/Sh) Date 5%($) 10%($)
---- -------- ------------ ----------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Bryan D. Porto 10,000 8% $ 1.00 12-07-2003 2,763 6,105
Roger A. Finn 5,000 4% $ 2.19 05-04-2004 3,025 6,685
Bryan D. Gross 3,000 2% $ 1.00 12-07-2003 829 1,832
5,000 4% $ 2.44 05-06-2004 3,371 7,448
5,000 4% $ 2.50 09-29-2004 3,454 7,631
</TABLE>
Options Exercised Table. The following table sets forth information
concerning each exercise of stock options by the named executive officers during
the fiscal year ended September 30, 1999, together with information concerning
unexercised options held by the named executive officers:
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTIONS/SAR VALUES
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Shares Number of Securities Value of Unexercised
Acquired Value Underlying Unexercised In-the-Money Options/SARs
on Exercise Realized Options/SARs at FY-End (#) at FY-End ($)
Name (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable
---- ----------- -------- -------------------------- -------------------------
<S> <C> <C> <C> <C>
James C. Auten * * 10,000 / - --
Bryan D. Porto * * 28,900 / 10,000 $- / $15,000
Roger A. Finn * * 17,500 / - --
Bryan D. Gross * * 2,000 / 14,000 $- / $ 4,800
</TABLE>
*None exercised during the period.
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 Mr. Ronald G. Harper. Mr. Harper's
aggregate severance would be approximately $131,332 at September 30, 1999.
The Company has an employment agreement with Roger Finn that remains in
effect until December 31, 2000, subject to an option to renew for an additional
year. Under this agreement, Mr. Finn is to receive an annual salary of $115,050
and may also receive a performance bonus equal to 30% of his base salary for
meeting or exceeding fiscal year 2000 revenue and profitability goals. Upon
retirement, Mr. Finn's salary will continue to be paid for an additional year
and he will receive all benefits of a full-time employee during such
7
<PAGE> 11
year. The Company will pay the cost of Mr. Finn's medical insurance until he is
eligible for Medicare. If DataMetrix is sold prior to September 30, 2000, Mr.
Finn will be paid his salary through December 31, 2000, together with a 30%
bonus. If a sale occurs after October 1, 2000, he will receive his salary
through December 31, 2000, which will include a 10% increase in salary for the
period through December 31, 2000.
Dr. David L. Huff, a director of the Company, is the owner of the "Huff
2000" software which Dr. Huff has licensed to the Company under an Exclusive
License Agreement. Under the terms of the agreement, the Company must pay Dr.
Huff a royalty equal to 50% of amounts received by the Company for the software
marketed under the name Huff Market Area Planner(TM).
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.
The executive compensation program of the Company is reviewed and approved
annually by the Committee and is designed to serve the interests 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.
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 1998 Stock Option Plan, approved by the
stockholders in 1998, 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 members of the Compensation
Committee are eligible to participate in the stock option plan. At August 18,
2000, there are options representing 35,000 shares outstanding under The 1998
Stock Plan applicable to the named executive officers. A former Plan, The 1988
Stock Option Plan, expired in 1998. At August 18, 2000, there are options
representing 42,667 shares under that Plan which are applicable to the named
executive officers and remain outstanding until their expiration between
November 2000 and February 2002.
8
<PAGE> 12
Chief Executive Officer Compensation. Mr. Harper's overall compensation
package has increased by approximately 27% during the three years ended
September 30, 1999 reflecting market comparability factors and Mr. Harper's
increased sales activities.
THE COMPENSATION COMMITTEE
John C. Bumgarner, Jr., Ronald G. Harper, Dr. 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.
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.
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, 1999 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, 1994 in
the Company's Common Stock and in each of the foregoing indices and assumes
reinvestment of dividends.
[GRAPH]
<TABLE>
<CAPTION>
9/94 9/95 9/96 9/97 9/98 9/99
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
MPSI SYSTEMS INC. 100 250 32 217 38 88
PEER GROUP 100 141 179 214 253 224
NASDAQ STOCK 100 138 164 225 229 372
MARKET (U.S.)
</TABLE>
9
<PAGE> 13
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 Resources Incorporated, MARC Incorporated, Equifax
Incorporated, Dun & Bradstreet, Acxiom Corporation, Market Facts Incorporated,
SEI Corporation, and Fair Issac & Company.
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, 1999, 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 2001, 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, 2000.
OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING
The Board of Directors knows of no business that 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
September 1, 2000
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.
10
<PAGE> 14
REVOCABLE PROXY
MPSI SYSTEMS INC
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
ANNUAL MEETING OF STOCKHOLDERS
THURSDAY, SEPTEMBER 28, 2000
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 hereon, all the
shares of stock of MPSI Systems Inc. standing in the name of the undersigned
with all powers which the undersigned would possess if present at the Annual
Meeting of Stockholders of the Company to be held at Sheraton Tulsa Hotel,
10918 East 41st, Tulsa, Oklahoma 74146 on September 28, 2000, at 2:00 p.m.
Central Daylight Standard Time or any adjournment thereof:
WITH- FOR ALL
FOR HOLD EXCEPT
--- ----- --------
1. ELECTION OF DIRECTORS (except
as marked to the contrary below): [ ] [ ] [ ]
NOMINEES:
RONALD G. HARPER, JOHN C. BUMGARNER, JR., DR. DAVID L. HUFF,
JOSEPH C. MCNAY, JOHN J. MCQUEEN AND BRYAN D. PORTO
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK "FOR
ALL EXCEPT" AND WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.
--------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
--- ------- -------
2. Ratification of Ernst & Young LLP as
the independent certified public [ ] [ ] [ ]
accountants of the corporation.
In their discretion, the Proxies are authorized to vote on such other business
that may properly come before the Meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
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.
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.
Please be sure to sign and date
this Proxy in the box below. Date
---------------------------------------------------------------------
---------------------------------------------------------------------
Stockholder sign above Co-holder (if any) sign above
o DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE PAID ENVELOPE PROVIDED. o
MPSI SYSTEMS INC.
4343 SOUTH 118TH EAST AVENUE
TULSA, OKLAHOMA 74146
--------------------------------------------------------------------------------
AGENDA
o ELECTION OF DIRECTORS
o RATIFICATION OF THE APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
o REPORT ON THE PROGRESS OF THE CORPORATION
o DISCUSSION ON MATTERS OF CURRENT INTEREST
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
--------------------------------------------------------------------------------
