UNITED STATES
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 fiscal year ended December 31, 2002.
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934 for the transition period from to .
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Commission File Number (File Number)
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
TECHTEAM GLOBAL, INC. 401 (k) RETIREMENT SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
TechTeam Global, Inc.
27335 W. 11 Mile Road
Southfield, MI 48034
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
TechTeam Global, Inc. 401(k) Retirement Savings Plan
December 31, 2002 and 2001 and
Year ended December 31, 2002
with Report of Independent Auditors
TechTeam Global, Inc. 401(k) Retirement Savings Plan
Financial Statements and Supplemental Schedule
December 31, 2002 and 2001 and
Year ended December 31, 2002
CONTENTS
Report of Independent Auditors............................................... 1
Financial Statements
Statements of Assets Available For Benefits.................................. 2
Statement of Changes in Assets Available For Benefits........................ 3
Notes to Financial Statements................................................ 4
Supplemental Schedule
Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year).............. 9
Other Information:
Signatures...................................................................10
Exhibit 23.1 Certification...................................................11
Exhibit 23.2 Consent of Independent Auditors.................................12
Report of Independent Auditors
Plan Administrator
TechTeam Global, Inc. 401(k) Retirement Savings Plan
We have audited the accompanying statements of assets available for benefits of
the TechTeam Global, Inc. 401(k) Retirement Savings Plan as of December 31, 2002
and 2001 and the related statement of changes in assets available for benefits
for the year ended December 31, 2002. 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, information regarding the Plan's assets available for
benefits at December 31, 2002 and 2001 and the changes in its assets available
for benefits for the year ended December 31, 2002, 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 at end of year) as of December 31, 2002 is presented for purposes of
additional analysis and is not a required part of the financial statements but
is 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. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in our audits of the financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ Ernst & Young, LLP
Detroit, MI
June 6, 2003
1
TechTeam Global, Inc. 401(k) Retirement Savings Plan
Statements of Net Assets Available for Benefits
DECEMBER 31
2002 2001
---------------------------------------------
ASSETS
Investments:
Mutual funds $ 5,886,345 $ 6,460,752
TechTeam Global, Inc. common stock 4,312,386 1,771,665
Participant loans 197,587 183,743
Cash 63,082 149,006
---------------------------------------------
10,459,400 8,565,166
Contributions receivables:
Participants 52,151 53,544
Employer 10,825 11,096
---------------------------------------------
Total receivables 62,976 64,640
---------------------------------------------
Assets available for benefits $ 10,522,376 $ 8,629,806
=============================================
See accompanying notes.
2
TechTeam Global, Inc. 401(k) Retirement Savings Plan
Statement of Changes in Assets Available for Benefits
Year ended December 31, 2002
ADDITIONS
Investment Income:
Dividend and interest $ 68,791
Net appreciation in fair value of investments 1,421,811
----------------------
1,490,602
Contributions:
Participants 1,480,464
Employer 318,257
----------------------
1,798,721
----------------------
Total additions 3,289,323
DEDUCTIONS
Benefits paid to participants 1,341,673
Administrative fees 55,080
----------------------
Total deductions 1,396,753
----------------------
Net increase 1,892,570
Net assets available for benefits at beginning of year 8,629,806
----------------------
Net assets available for benefits at end of year $ 10,522,376
======================
See accompanying notes.
3
TechTeam Global, Inc. 401(k) Retirement Savings Plan
Notes to the Financial Statements
December 31, 2002
1. DESCRIPTION OF THE PLAN
The following description of TechTeam Global, Inc. (the Company) 401(k)
Retirement Savings Plan (the Plan) provides only general information.
Participants should refer to the Plan agreement for a complete description of
the Plan's provisions.
GENERAL
The Plan is a defined contribution plan covering all eligible full-time
employees of the Company and its domestic subsidiaries. The Plan is subject to
the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
CONTRIBUTIONS
Participants may contribute up to 50% of pretax annual compensation, as defined
in the Plan document, subject to the legislated limitations. Participants may
also contribute amounts representing distributions from other qualified plans.
The Company matches 35% of the first 4% of base compensation. Company
contributions are made in the form of Company stock and cannot be redirected to
other fund options.
A participant may direct their contributions to any of the Plan's fund options.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contributions and
allocations of the Company's contributions and Plan earnings. Allocations are
based on participant earnings or account balances, as defined. The benefit to
which a participant is entitled is the benefit that can be provided from the
vested value of the participant's account.
VESTING
Participants are immediately vested in their contributions. Participants become
fully vested in Company contributions upon completion of one year of service.
Full vesting also occurs upon death, disability, or retirement at designated
ages.
4
TechTeam Global, Inc. 401(k) Retirement Savings Plan
Notes to the Financial Statements
1. DESCRIPTION OF THE PLAN (CONTINUED)
FORFEITURES
During 2002, no forfeitures were used to reduce the Company's contribution to
the Plan. At December 31, 2002 and 2001, forfeited account balances totaled
$66,724 and $20,035, respectively.
LOANS TO PARTICIPANTS
Participants may borrow from their fund accounts a minimum of $1,000 up to a
maximum of the lesser of $50,000 or 50% of their vested account balance. Loan
transactions are treated as a transfer from (to) the investment funds to (from)
the loan fund. Loan terms range from 1-5 years or up to 25 years for the
purchase of a primary residence. The loans are secured by the balance in the
participant's account and bear interest at a rate commensurate with local
prevailing rates as determined quarterly by the Plan administrator. Principal
and interest are paid ratably through monthly payroll deductions.
PAYMENT OF BENEFITS
On termination of service, a participant may receive a lump-sum amount equal to
the value of his or her account, or upon death, disability or retirement, elect
to receive annual installments over a ten-year period. The benefit to which a
participant is entitled is the benefit that can be provided from the vested
value of the participant's account.
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 termination, the amount
in each participant's account would become 100% vested and be distributed to
each participant in accordance with distribution policies set forth in the Plan.
FEES AND EXPENSES
Administration fees are paid by the Plan.
5
TechTeam Global, Inc. 401(k) Retirement Savings Plan
Notes to the Financial Statements
2. SUMMARY OF ACCOUNTING POLICIES
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 and disclosed in the financial statements and
accompanying notes. Actual results could differ from those estimates.
INVESTMENTS
Investments (including mutual funds, TechTeam Global, Inc. common stock and
cash) are stated at fair value based on quoted market prices as of the close of
business on the last day of the Plan year. Participant loans are valued at their
outstanding balances, which approximate fair value.
Purchases and sales of securities are recorded on a trade-date basis. Interest
and dividend income are recorded on the accrual basis. Dividends are recorded on
the ex-dividend date.
3. INVESTMENTS
Investments that represent 5% or more of fair value of the Plan's assets
available for benefits are as follows:
DECEMBER 31,
2002 2001
----------------------------------
CCTC Stable Value Pension Fund $ 1,461,729 $ 1,256,866
Fidelity Spartan US Equity Index 598,278 848,725
Fundamental Investors Fund 823,186 1,174,299
Strong Opportunity Fund 875,177 1,277,785
TechTeam Global, Inc. Stock Fund * 4,312,386 1,771,665
*Denotes non-participant directed investment.
6
TechTeam Global, Inc. 401(k) Retirement Savings Plan
Notes to the Financial Statements
During 2002, the Plan's investments appreciated (depreciated) in fair value as
determined by quoted market prices:
Mutual funds $(1,167,634)
TechTeam Global, Inc. Stock Fund 2,589,445
---------------
$ 1,421,811
===============
4. NONPARTICIPANT-DIRECTED INVESTMENT
Information about the significant components of changes in assets relating to
the nonparticipant-directed investment is as follows:
2002
-----------------
Employer contributions $ 318,257
Participant contributions 92,349
Net appreciation in fair value 2,589,445
Benefits paid to participants (435,407)
Transfers Out (23,923)
5. TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated February 3, 1993, 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. The Plan has been amended subsequent to receipt of this
letter. 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, as amended, is qualified and the related
trust is tax exempt.
7
Supplemental Schedule
8
TechTeam Global, Inc. 401(k) Retirement Savings Plan
EIN 38-2774613 Plan-001
Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year)
December 31, 2002
IDENTITY OF ISSUE, BORROWER DESCRIPTION OF INVESTMENT INCLUDING MATURITY DATE, CURRENT
OR SIMILAR PARTY RATE OF INTEREST, COLLATERAL, PAR OR MATURITY VALUE COST VALUE
-----------------------------------------------------------------------------------------------------------------------------------
American Funds American Balanced Fund $ 110,785
American Europacific Growth Fund 97,494
Investment Company of America 54,052
American Funds--New Perspective Fund 102,131
Calvert Funds Calvert Income Fund Class A 237,137
* Circle Trust Company Funds CCTC Stable Value Pension Fund 1,461,729
Fidelity Funds Fidelity Blue Chip Growth Fund 255,685
Fidelity Growth Company 354,624
Fidelity Overseas Fund 54,982
Fidelity Spartan US Equity Index 598,278
Fundamental Investors Fund 823,186
Invesco Funds Invesco High Yield Fund 59,293
Janus Funds Janus Enterprise Fund 220,699
Janus Investment Fund 264,827
Legg Mason Funds Legg Mason Value Fund 125,374
Strong Funds Strong Opportunity Fund 875,177
Van Kampen Funds Van Kampen Emerging Growth A Fund 190,892
* Participants Loans to participants at interest rates
ranging from 8% to 11%, various maturity dates 197,587
Cash 63,082
** TechTeamtGlobal, Inc. TechTeam Global Stock Fund 1,985,284.00 4,312,386
----------------
Total $ 10,459,400
================
* Party-in-interest.
** Party-in-interest, non-participant directed funds.
There were no investment assets reportable as both acquired and disposed of
within the plan year.
9
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange
Act of 1934, the Trustee of the TechTeam Global, Inc. 401(k)
Retirement Savings Plan has duly caused this annual Report to
be signed on its behalf by the undersigned hereunto duly
authorized, in the City of Southfield and the State of
Michigan, this 25th day of June 2003.
TECHTEAM GLOBAL, INC.
By: /s/ Heidi K. Hagle
---------------------------------------
Vice President, Human Resources
Typed Name: Heidi K. Hagle
Title: Vice President, Human Resources
10
Exhibit Index
Number Description
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23.1 Certification
23.2 Consent of Independent Auditors