10-K/A 1 d05285a1e10vkza.txt AMENDMENT NO. 1 TO FORM 10-K ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------- 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 DECEMBER 31, 2002 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.) 4343 SOUTH 118TH EAST AVENUE, TULSA, OKLAHOMA 74146 (Address of principal executive offices and zip code) Registrant's telephone number, including area code (918) 877-6774 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 31, 2002 was approximately $143,000. The number of shares outstanding of the registrant's common stock was 2,911,781 shares of $0.05 Par Value Common Stock as of December 31, 2002. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT (a) and (b) Identification of directors and officers. The directors and executive officers of the Company are as follows:

(1) Member of the Compensation Committee (2) Member of the Audit Committee Effective October 15, 2002, Dr. David L. Huff resigned from the Company's Board of Directors after twenty years of service. Dr. Huff recently retired as a professor from the University of Texas and chose to pursue other business opportunities. His resignation is not the result of any disagreement with the Company or its management. (c) Identification of certain significant employees. Not applicable. (d) Family relationships. Not applicable. (e) Business experience. Mr. Harper, who founded the Company in 1970, has served as its President, Chairman of the Board and Chief Executive Officer since inception. Mr. Porto was appointed Group Vice President of Regional Sales for the developing markets in 2002. He previously served as Group Vice President of Operations and Leveraged Diversification, Executive Vice President of MPSI's Petroleum Service Division and as Sr. Vice President - Retail Petroleum. He has served in marketing and network planning positions since joining MPSI in the Rio de Janeiro office in 1985. Mr. Porto was named to MPSI's Board of Directors in June 1998. Dr. Gross was appointed Group 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. 2 Mr. Abrams was appointed Group Vice President, Regional Sales in 2001. Prior to joining MPSI in 2000 as Managing Director of Europe and Africa, he served in various executive positions with Caltex Corporation around the world. Mr. Abrams currently resides in Bristol, England. Mr. Auten was appointed Vice President and Chief Financial Officer in 1996. Mr. Auten joined MPSI in 1984 as Corporate Controller and held such position until December 1992 when he was appointed Principal Accounting Officer. Prior to joining MPSI, Mr. Auten was with KPMG Peat Marwick accounting firm. 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. Mr. Bumgarner recently retired from Williams Communications where he served as Chief Operating Officer. Prior to that, he served as Sr. Vice President of Corporate Development and Planning for The Williams Companies and President of Williams International. He is also a director of Energy Partners, Ltd. and James River Coal Company. He has served on MPSI's Board since 1982. Mr. McNay has been the President, Director and Chairman of the Board of Essex Investment Management Company, Inc., a company engaged in investment and advisory services, since 1976. Mr. McNay is also a director of Softech, Inc. and Alpha 1 Biomedical, Inc., which are publicly held companies. He has served on MPSI's Board since 1982. 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. He has served on MPSI's Board since 1982. (f) Involvement in certain legal proceedings. Not applicable. (g) Promoters and control persons. Not applicable. (h) Compliance with Section 16(a) of the Exchange Act. Based upon a review of Forms 3, 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. 3 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 December 31, 2002: SUMMARY COMPENSATION TABLE

(1) Represents automobile lease paid/auto allowance. (2) The components of "All Other Compensation" for the fiscal years ended December 31, 2002, September 30, 2001, and September 30, 2000 include (a) Company matching contributions to the Company's 401(k) defined contribution plan (Mr. Harper--$5,100, $5,000, and $0; Mr. Porto -- $4,400, $4,698, and $0; Mr. Auten--$1,588, $1,753, and $0; and Dr. Gross--$4,816, $3,219, and $0 in 2002, 2001, and 2000, respectively); and (b) supplemental life insurance premiums paid by the Company for each of the reported fiscal years (Mr. Harper--$6, 218; Mr. Porto--$1,021; Mr. Auten--$1,021); Dr. Gross received $1,021, $1,021, and $898 in 2002, 2001, and 2000, respectively). Mr. Abrams is a citizen of the United Kingdom and participates in comparable plans --Company match for the pension plan was $9,360 in 2002 and $4,329 in 2001. Supplemental life insurance premiums paid by the Company were $4,501 in 2002, $1,580 in 2001 and $2,099 in 2000. 4 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 together with information concerning unexercised options held by the named executive officers:

*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 $120,000 at December 31, 2002. Subsequently, however, in March 2003, the Company revised its severance policy for all employees. As a result of that revision, no employee is entitled to severance in excess of $100,000. 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. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth information as of March 31, 2003, 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 individuals. 5

* Less than 1%. (1) Includes 138,137 shares of Common Stock held in trust for the benefit of Mr. Harper's family and 479,209 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. Mr. Harper's immediate family own 257,140 shares. Mr. Harper disclaims beneficial ownership of these trust and family-held 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 the RS Value Group, RSIM, LP, the RS Orphan Fund, LP and the RS Orphan Offshore Fund 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. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS In February 1999, the Company obtained an exclusive license to incorporate in a new suite of products a software modeling engine, Huff 2000, developed by Dr. David L. Huff, a member of the Company's Board of Directors since 1982. Upon Dr. Huff's resignation from the Board effective October 2002, this agreement was cancelled. 6 ITEM 14. CONTROLS AND PROCEDURES Within the 90 days prior to the date of this report, we carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive officer and the Company's Chief Financial Officer, of the effectiveness of our disclosure controls and procedures, as such term is defined in Rules 13a-14 and 15d-14 promulgated under the Securities and Exchange Act of 1934, as amended. Based upon the evaluation, the Company's Chief Executive Officer and the Company's Chief Financial Officer concluded that our disclosure controls and procedures are effective in timely alerting them to material information relating to the Company (including its consolidated subsidiaries) that is required to be included in our periodic SEC filings. There have been no significant changes in our internal controls or in other factors that could significantly affect those controls subsequent to the date of such evaluation. There were no significant deficiencies or material weaknesses identified in the evaluation and therefore, no corrective actions were taken. 7 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 29th day of April 2003. MPSI SYSTEMS INC. By /s/ Ronald G. Harper ------------------------------ 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. /s/ Ronald G. Harper Chairman of the Board, April 29, 2003 ------------------------------ President and Chief Ronald G. Harper Executive Officer /s/ James C. Auten Vice President and Chief-- April 29, 2003 ------------------------------ Financial Officer James C. Auten /s/ John C. Bumgarner, Jr. Director April 29, 2003 ------------------------------ John C. Bumgarner, Jr. /s/ Joseph C. McNay Director April 29, 2003 ------------------------------ Joseph C. McNay /s/ John J. McQueen Director April 29, 2003 ------------------------------ John J. McQueen /s/ Bryan D. Porto Director April 29, 2003 ------------------------------ Bryan D. Porto

The Company's proxy statement for the Annual Meeting of Stockholders to be held later this year has not yet been sent to stockholders of record. Copies of such materials will be furnished to the Commission at such time as they are sent to stockholders. 8 CERTIFICATIONS I, Ronald G. Harper, President and Chief Executive Officer, certify that: 1. I have reviewed this annual report on Form 10-K as amended of MPSI Systems Inc.; 2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; 3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: April 29, 2003 /s/ Ronald G. Harper -------------------------- Ronald G. Harper Chief Executive Officer 9 I, James C. Auten, Chief Financial Officer, certify that: 1. I have reviewed this annual report on Form 10-K as amended of MPSI Systems Inc.; 2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; 3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: April 29, 2003 /s/ James C. Auten -------------------------- James C. Auten, Chief Financial Officer 10 INDEX TO EXHIBITS

MPSI SYSTEMS INC 10-K/A