<PAGE> 1
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:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
NATIONAL TECHTEAM, 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)(4) 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
NATIONAL TECHTEAM, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 14, 1997
To Our Shareholders:
The Annual Meeting of Shareholders of National TechTeam, Inc., a Delaware
corporation (the "Company"), will be held on Wednesday, May 14, 1997 at
10:00 a.m. local time at the Holiday Inn, 5801 Southfield Expressway (at Ford
Road), Detroit, Michigan.
The items of business to be considered and acted upon are:
1. Election of the Company's Board of Directors (See Page 3).
2. Ratification of the selection of Ernst & Young as auditors for
the Company for the year ending December 31, 1997 (See Page 10).
3. Transaction of such other business as may properly come before
the meeting or any adjournment or adjournments thereof.
All of the above matters are more fully described in the accompanying Proxy
Statement.
Only shareholders of record at the close of business on April 2, 1997, the
record date, will be entitled to vote at the meeting and at any adjournment
thereof. A list of all shareholders of record April 2, 1997 will be open for
inspection by all shareholders at the place of and during the Annual Meeting.
By Order of the Board of Directors,
Robert A. Hudson
Robert A. Hudson, Secretary
April 9, 1997
THE BOARD OF DIRECTORS OF THE COMPANY HOPES THAT YOU WILL FIND IT CONVENIENT
TO ATTEND THE MEETING IN PERSON. IN ANY EVENT, IN ORDER THAT YOUR SHARES MAY BE
REPRESENTED AT THIS MEETING AND TO ASSURE A QUORUM, PLEASE COMPLETE, DATE, SIGN
AND MAIL THE ENCLOSED PROXY PROMPTLY. NO POSTAGE IS REQUIRED IF MAILED IN THE
UNITED STATES IN THE ACCOMPANYING ENVELOPE. IF YOU ATTEND THE MEETING, YOU MAY
REVOKE YOUR PROXY BY SO NOTIFYING THE SECRETARY AT THE ANNUAL MEETING AND
VOTE YOUR STOCK PERSONALLY. PROXIES CAN ALSO BE REVOKED BY SUBMITTING TO THE
COMPANY A PROXY WITH A LATER DATE AND BY DELIVERY TO THE SECRETARY OF THE
COMPANY OF WRITTEN INSTRUCTIONS WHICH BY THEIR TERMS REVOKE THE PROXY.
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS ON THE PROXY. WHEN SIGNING AS
ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE YOUR FULL
TITLE AS SUCH. A PROXY EXECUTED BY A CORPORATION SHOULD BE SIGNED IN ITS
CORPORATE NAME BY AN AUTHORIZED OFFICER.
<PAGE> 3
PROXY STATEMENT
The enclosed Proxy is solicited by the Board of Directors of National
TechTeam, Inc., a Delaware corporation (the "Company"), for the purposes set
forth in the accompanying Notice of Annual Meeting of Shareholders. The
solicitation is being made by mail and the Company may also use its officers and
regular employees to solicit Proxies from shareholders either in person or by
telephone, telegraph or letter without additional compensation. The Company
may also use the services of independent Proxy soliciting agents to solicit
Proxies from shareholders. The entire cost of solicitation, which represents
the amount normally expended for a solicitation relating to an uncontested
election of directors, will be borne by the Company. Those costs include
charges by brokers and other custodians, nominees and fiduciaries for forwarding
Proxies and other Proxy materials to the beneficial owners of Common Stock.
The Annual Report of the Company on Form 10-K for the year ended December
31, 1996 (without exhibits) as filed with the Securities and Exchange Commission
accompanies this Proxy Statement. The Annual Report on Form 10-K is
incorporated in this Proxy Statement by reference and is deemed a part of the
Proxy soliciting material.
The Common Stock of the Company is its only outstanding class of voting
securities. Each shareholder of record at the close of business on April 2,
1997 (the "record date") is entitled to vote at the meeting. As of the close of
business on the record date, the Company had 14,902,827 shares outstanding.
Each share is entitled to one vote on each of the matters to come before the
meeting and is not entitled to cumulative voting rights. A majority of the
outstanding shares of Common Stock will constitute a quorum for the meeting.
The five nominees for election as a director receiving the highest number of
votes will be elected as directors of the Company. The favorable vote of the
holders of a majority of the shares of the Company's Common Stock that are
present, either in person or by Proxy, at the Annual Meeting will be required to
ratify the selection of Ernst & Young as the Company's auditors for the year
ending December 31, 1997.
When Proxies are returned properly executed, the shares represented thereby
will be voted in accordance with the shareholder's instructions. Shareholders
are urged to specify their choices by marking the enclosed Proxy. Any Proxy
which is not revoked and which does not otherwise indicate a preference will be
voted in favor of (i) the nominees for director set forth herein, (ii) the
ratification of the selection of Ernst & Young as the Company's auditors for the
year ending December 31, 1997 and (iii) in accordance with the judgment of the
person or persons voting the Proxies on any other matter that may properly be
brought before the meeting. Means have been provided whereby a shareholder may
withhold his vote for any director and may abstain from voting on any matter
other than the election of directors. The Proxies also confer discretionary
authority to vote the shares represented thereby on any matter which was not
known on the date of this Proxy Statement but may properly be presented for
action at the meeting.
Participants in the National TechTeam, Inc. 401(k)/Profit-Sharing Plan
and Trust have the right to instruct the trustee of such Plan as to how to vote
shares of stock allocated to their Directed Investment accounts. The Plan also
provides that the trustee shall vote any shares held by Directed Investment
accounts as to which instructions have not been received in the same ratio as
voted by all voting Participants of all Directed Investment accounts.
The execution of a Proxy will in no way affect a shareholder's right to
attend the Annual Meeting and to vote in person. Any shareholder giving a Proxy
has the power to revoke that Proxy at any time before it is voted by giving
written notice of revocation to the Company's Secretary at the principal
executive office of the Company or at the Annual Meeting.
The mailing address of the Company's principal executive office is 835
Mason Avenue, Dearborn, Michigan 48124 and its telephone number at that address
is (313) 277-2277. The approximate date on which this Proxy Statement and the
enclosed Proxy are first being mailed to shareholders is April 9, 1997.
VOTING TABULATION
Vote Required: Under provisions of the Delaware General Corporation Law,
the election of the Company's Directors requires a plurality of the votes
represented in person or by Proxy at the meeting and the selection of the
Company's auditors for the year ended December 31, 1997 will require the
favorable vote of the holders of a majority of the shares of the Company's
common stock that are present, either in person or by Proxy, at the annual
meeting.
Effect of Abstention: A shareholder who abstains from voting on any or
all proposals will be included in the number of shareholders present at the
meeting for the purpose of determining whether a quorum exists for the conduct
of business, However, an abstention with respect to the election of the
Company's directors will not be counted either in favor of or against the
election of the nominees. In the case of the proposal for ratification of the
selection of Ernst & Young as independent auditors, an abstention will
effectively count as a vote Against such proposals.
2
<PAGE> 4
VOTING TABULATION - CONTINUED
Effect of Broker Non-Vote: Brokers holding shares for the account of their
clients may vote such shares either in the manner directed by their clients or
in their own discretion if permitted by the exchange or other organization of
which they are members. Members of the New York Stock Exchange are permitted to
vote their clients' Proxies in their own discretion as to each of the Company's
proposals. Proxies which are voted by brokers on at least one but not all of
the proposals are referred to as "broker non-votes." Broker non-votes will
be included in determining the presence of a quorum. However, a broker non-vote
is not treated as present and entitled to vote and will have the effect of
neither a vote in favor of or against the proposal.
ELECTION OF DIRECTORS
AND MANAGEMENT INFORMATION
The Company's By-laws provide that until the Board of Directors shall
otherwise determine, the number of director positions in the Board shall be
seven. The Board currently consists of five directors. All of those directors
were elected at the 1996 Annual Meeting of Shareholders. Valerie J. Niemiec
was elected as a director at the 1996 Annual Meeting of Shareholders. She
resigned as a director effective December 1, 1996. All current directors have
been nominated for re-election to the Board of Directors at the 1997 Annual
Meeting of shareholders. As a result of Ms. Niemiec's resignation, the Board
of Directors has determined that the size of the Board will be reduced from six
to five members. After the Annual Meeting, the Board intends to seek qualified
persons to appoint to the Board to expand the size of the Board back to seven
persons but has not yet identified any additional person to be added to the
Board. When such persons have been identified and qualified, the Board intends
to increase the size of the Board to six or seven persons, based upon the
availability of such qualified persons, and approve such person(s) to fill
the vacancies. Shareholders will not have an opportunity to approve any such
persons prior to their appointments as directors. Shareholders will be
afforded the opportunity at the Annual Meeting to make nominations which, if
seconded, will be voted upon.
Five directors are to be elected to hold office until the next Annual Meeting
of Shareholders is held and their successors are elected and qualified or until
they resign or are removed by the Board of Directors. Similarly, in the event
the Board increases the size of the Board to seven persons and fills the
resulting vacancy after the Annual Meeting, that director will hold office until
the next Annual Meeting of Shareholders is held and that director's successor is
elected and qualified or until that director resigns or is removed by the Board
of Directors. Aside from the possibility of adding a sixth and a seventh
director, the Board has no present intention of expanding the size of the Board
of Directors or nominating any further directors.
THE BOARD OF DIRECTORS AND MANAGEMENT RECOMMEND A VOTE "FOR" THE ELECTION OF
KIM A. COOPER, WILLIAM F. COYRO JR., WALLACE D. RILEY, RICHARD G. SOMERLOTT AND
LEROY H. WULFMEIER, III AS DIRECTORS OF THE COMPANY. PROXIES SOLICITED BY
MANAGEMENT WILL BE SO VOTED UNLESS SHAREHOLDERS SPECIFY OTHERWISE IN THEIR
PROXIES.
Unless specifically instructed to the contrary, all Proxies will be voted
for the election of Kim A. Cooper, William F. Coyro Jr., Wallace D. Riley,
Richard G. Somerlott and LeRoy H. Wulfmeier, III as directors of the Company.
Those persons have agreed to serve if elected, and the Company does not know of
any reason why any of those nominees may not be able to serve as directors if
elected. In the event that any of those nominees are unable to serve for
good cause, or will not serve as director of the Company, and such fact is known
by the Company at the Annual Meeting, all Proxies may be voted at the Annual
Meeting for any other person duly nominated for the position created by that
inability or unwillingness to serve.
NOMINEES
The following is a description of the background of the persons who are
being nominated for election as directors of the Company.
KIM A. COOPER, 38, became a director in March 1996. Between 1984 and 1994,
Mr. Cooper was employed by WordPerfect Corporation in sales and as its Vice
President, Worldwide Customer Services. Between 1994 and 1996, he was employed
by Novell, Inc. as its Vice President, Worldwide Marketing and Business
Development. In January 1996 he founded and became the Chairman and Chief
Executive Officer of Digital Harbor, L.C., a component software company
developing Internet applications. Mr. Cooper is a member of the Board's Audit
Committee.
WILLIAM F. COYRO JR., 53, was the founder, President and Chief Executive
Officer of Computer Trade Development ("CTD") the predecessor of the Company
from 1979 until 1987. Dr. Coyro has since continued as Chief Executive Officer
and Chairman of the Board of the Company through the date hereof. From 1974 to
1979 Dr. Coyro practiced full time as a dentist.
3
<PAGE> 5
NOMINEES - CONTINUED
WALLACE D. RILEY, 69, is an attorney at law and since 1968 has been a
partner with the firm of Riley & Roumell. Mr. Riley previously served as a
director of the Company from 1987 to 1988 and was reelected as a director at the
Company's 1993 Annual Meeting. He is the past president of the State Bar of
Michigan as well as past president of the American Bar Association. He was a
member of the Board of Governors of the American Bar Association from 1977-1980,
and trustee of the Federal Bar Foundation since 1968. He has been a Special
Attorney General for the State of Michigan since 1969. Mr. Riley is a member of
the Board's Compensation Committee.
RICHARD G. SOMERLOTT, 55, is a dentist and a managing partner of Endodontics
Associates Professional Corporation. Dr. Somerlott has been a director and
shareholder of the Company, including its predecessor CTD, since its inception.
Dr. Somerlott is a member of the Board's Audit Committee.
LEROY H. WULFMEIER, III, 51, is an attorney at law and since 1970 has been
a partner with the firm of Schureman, Frakes, Glass & Wulfmeier. Mr. Wulfmeier
has been a director and shareholder of the Company, including its predecessor
CTD, since its inception. Mr. Wulfmeier is a member of the Board's Compensation
Committee.
INFORMATION REGARDING BOARD OF DIRECTORS MEETINGS AND COMMITTEES
The Board of Directors has established two standing committees (Audit and
Compensation), the current members of which are identified above. These
committees act in an advisory capacity to the full Board of Directors. All
committees report to the full Board of Directors with respect to matters
considered at each committee meeting held.
The principal functions of the Audit Committee are to review the scope of
the annual audit and the annual audit report of the independent accountants,
recommend the firm of independent accountants to perform such audits, consider
non-audit functions proposed to be performed by the independent accountants,
ascertain whether the recommendations of auditors are satisfactorily implemented
and recommend such special studies or actions which the Committee deems
desirable. During 1996, three meetings of the Audit Committee were held.
The Compensation Committee reviews the compensation practices followed,
makes all decisions involving the compensation of executive officers of the
Company and reviews Management's salary recommendations for each other person at
or above the level of Vice President. In addition, the Committee reviews stock
option grant recommendations pursuant to the Company's 1990 Nonqualified
Employee Stock Option Plan. During 1996, six meetings of the Compensation
Committee were held.
During the year ended December 31, 1996, the Board of Directors held 11
meetings. All directors attended at least 75% of the meetings that were held
during the year.
INFORMATION REGARDING EXECUTIVE MANAGEMENT
All executive officers serve at the pleasure of the Board of Directors.
There are no family relationships among any of the directors or executive
officers of the Company. The following is a description of the background of
the Company's executive officers not otherwise described above.
PRESENT POSITION
NAME AGE WITH THE COMPANY
- ---- --- ----------------
Jonathan D. Ahlbrand 35 Senior Vice President
L. Kevin Dohrmann 38 Vice President of Operations
and Chief Technology Officer
Lawrence A. Mills 52 Senior Vice President,
Chief Financial Officer
and Treasurer
JONATHAN D. AHLBRAND. Mr Ahlbrand joined the Company in December 1995 as
its Vice President responsible for call center sales. In March 1996, he was
appointed Senior Vice President of Call Center Services. Previously, Mr.
Ahlbrand was President of World Data Delivery Systems, a provider of electronic
information processing from 1991 through mid-1994. From mid-1994 to November
1995, he was employed by West interactive Corporation where he was responsible
for national account sales for interactive and live agent customer services.
4
<PAGE> 6
INFORMATION REGARDING EXECUTIVE MANAGEMENT - CONTINUED
L. KEVIN DOHRMANN. Mr. Dohrmann joined TechTeam in April 1996 and is
the Company's Vice President of Operations and Chief Technology Officer.
Between 1987 and 1996, Mr. Dohrmann was employed by Inacom Corporation as a
support engineer and from 1993 until early 1996, as Vice President and Chief
Technology Officer.
LAWRENCE A. MILLS. Mr. Mills joined the Company in December 1993 as
its Chief Financial Officer. In June 1994 he was appointed Treasurer. In
February 1995 he was appointed Chief Operating Officer, a position which he
held until March 1996. In March 1996, he was appointed Senior Vice President.
Previously, Mr. Mills was employed by the Michigan Gas Utilities Division of
UtiliCorp United Inc. as its Vice President - Administration and Strategic
Development from 1989 through 1993.
INFORMATION REGARDING BENEFICIAL OWNERSHIP OF PRINCIPAL SHAREHOLDERS,
DIRECTORS AND EXECUTIVE OFFICERS
Only shareholders of record as of the close of business on April 2, 1997 will
be entitled to vote at the Annual Meeting and any adjournment thereof. The
following table sets forth as of April 2, 1997 the shares of Common Stock
beneficially owned by: (i) each director of the Company; (ii) each executive
officer of the Company; and (iii) all current directors and executive officers
of the Company as a group. All persons listed below have sole voting and
investment power with respect to their shares of stock unless otherwise
indicated.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE OF
NAME AND ADDRESS BENEFICIALLY OUTSTANDING
OF BENEFICIAL OWNER OWNED (1) COMMON STOCK (1)
------------------- ----------------- ----------------
<S> <C> <C>
William F. Coyro Jr. (2)* 450,819 (3)(4) 3.03%
LeRoy H. Wulfmeier, III (2)* 213,319 (5)(6) 1.43
Richard G. Somerlott (2)* 212,919 (5) 1.43
Wallace D. Riley (2)* 110,600 (7) **
Kim A. Cooper (2)* 45,725 (8) **
Lawrence A. Mills (2) 19,000 (9) **
Jonathan D. Ahlbrand (2) 5,000 (10) **
L. Kevin Dohrmann (2) 5,000 (11) **
Current Directors and Executive 1,062,382 (12) 7.13
Officers as a Group (eight persons)
</TABLE>
* A director of the Company.
** Less than 1%.
(1) For purposes of this table, shares indicated as being owned beneficially
include shares not presently outstanding but which are subject to
exercise within 60 days through options, warrants, rights or conversion
privileges. For the purpose of computing the percentage of the
outstanding shares owned by a shareholder, shares subject to such
exercise are deemed to be outstanding securities of the class owned by
that stockholder but are not deemed to be outstanding for the purpose
of computing the percentage by any other person.
(2) A director and/or executive officer of the Company. The address of all
directors and executive officers of the Company is c/o the Company, 835
Mason Avenue, Dearborn, Michigan 48124.
(3) Includes 8,600 shares of Common Stock owned by certain members of the
family of William F. Coyro, Jr., the beneficial ownership of which he
disclaims.
5
<PAGE> 7
Directors and Executive Officers - continued
(4) Includes options to purchase 12,000 shares of Common Stock at $4.82
per share and 10,000 shares of Common Stock at $4.50 per share. Does
not include options to purchase 8,000 shares of Common Stock at $4.82
and 15,000 shares of Common Stock at $4.50 per share which are not
exercisable until November 1997 or later and options to purchase 90,000
shares of Common Stock at $25.75 which are not exercisable until August
1997 or later.
(5) Includes options to purchase 10,000 shares of Common Stock at $4.82
per share, 10,000 shares of Common Stock at $7.00 per share, 10,000
shares of Common Stock at $25.75 and 10,000 shares of Common Stock at
$23.00.
(6) Includes 18,700 shares of Common Stock owned by LeRoy H. Wulfmeier, III,
as custodian for his minor child, the beneficial ownership of which he
disclaims.
(7) Includes options to purchase 40,000 shares of Common Stock at $7.00 per
share, 10,000 shares of Common Stock at $25.75 and 10,000 shares of
Common Stock at $23.00.
(8) Includes options to purchase 35,000 shares of Common Stock at $5.00 per
share and 10,000 shares of Common Stock at $23.00.
(9) Includes options to purchase 12,000 shares of Common Stock at $5.69
per share and 5,000 shares of Common Stock at $4.50 per share. Does
not include options to purchase 8,000 shares of Common Stock at $5.69
per share and 15,000 shares of Common Stock at $4.50 which are not
exercisable until January 1 998 or later and options to purchase 25,000
shares of Common Stock at $25.75 which are not exercisable until August
1997 or later.
(10) Includes options to purchase 5,000 shares of Common Stock at $5.31 per
share. Does not include options to purchase 20,000 shares of Common
Stock at $5.31 per share which are not exercisable until November 1997
or later and options to purchase 55,000 shares of Common Stock at $25.75
which are not exercisable until August 1997 or later.
(11) Includes options to purchase 5,000 shares of Common Stock at $5.00 per
share. Does not include options to purchase 20,000 shares of Common
Stock at $5.00 per share which are not exercisable until March 1998 or
later and options to purchase 25,000 shares of Common Stock at $25.75
which are not exercisable until August 1997 or later.
(12) Includes the shares and options in footnotes (3) through (11) above.
Principal Share Owners
As of December 31, 1996, the Company's records and information provided
to the Company indicated that the following persons were the beneficial
owners of more than five percent of the Company's issued and outstanding
stock:
<TABLE>
<CAPTION>
Number of Shares Percentage
Name and Address Beneficially Owned of Class
---------------- ------------------ ----------
<S> <C> <C>
Putnam Investments, Inc. 1,722,847 11.56%
One Post Office Square
Boston, MA 02109
The TCW Group, Inc. 1,439,300 9.66
965 South Fegueroa Street
Los Angeles, CA 90017
American Century Companies, Inc. 880,000 5.90
4500 Main Street
P.O. Box 41821 0
Kansas City, MO 64141-9210
</TABLE>
6
<PAGE> 8
SECTION 16 (a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than ten
percent of a registered class of the Company's equity securities, to file with
the Securities and Exchange Commission initial reports of ownership and reports
of changes in ownership of Common Stock and other equity securities of the
Company. Such officers, directors and greater than ten-percent shareholders
are required by SEC regulation to furnish the Company with copies of all
Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of
such reports furnished to the Company and written representations that no other
reports were required, during the two fiscal years ended December 31, 1996 all
Section 16(a) filing requirements applicable to its executive officers,
directors and greater than ten-percent beneficial owners were complied with.
DIRECTOR COMPENSATION
All directors and officers are reimbursed for out-of-pocket expenses
incurred in connection with the Company's business. In addition, Board members
who are not employees of the Company are paid 100 shares of Company common
stock per meeting for their attendance at Board Meetings. The Company has, in
previous fiscal years, issued options to purchase common stock to its
directors.
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (comprised of two
nonemployee directors) makes all decisions involving the compensation of
Executive Officers of the Company.
The Company's executive compensation philosophy is to pay for performance. The
objectives of the Company's executive compensation program are to: (1) Provide
compensation that enables the Company to attract and retain key executives; (2)
Create incentives in the form of bonuses for contributions to superior earnings
by the Company-, and (3) Align the Company's executives' interest with its
shareholders' desire for superior returns through long-term stock ownership
opportunities.
The Company's executive compensation program provides a compensation
opportunity that the Committee believes, in its judgment and experience, is
competitive with other companies of comparable size and complexity. Actual
compensation levels may be greater or less than compensation levels at other
companies based upon annual and long-term Company performance and individual
performance. The Compensation Committee uses its discretion to establish
executive compensation at levels in its judgment warranted by external or
internal factors and an executive's individual circumstances.
EXECUTIVE COMPENSATION PROGRAM COMPONENTS. The Company's executive
compensation program consists of base salary, cash incentives and long-term
incentives. BASE SALARY. The Compensation Committee decides the base pay
levels for executives according to the impact of the individual on the Company
and its performance, the skills and experiences required by the position,
salaries paid by other companies for comparable positions, and the performance
of the Company. Base salaries for executives are maintained at levels that the
Compensation Committee believes, based on its own judgment and experience, are
competitive with other companies of comparable size and complexity. CASH
INCENTIVES. Cash incentives for Executive Officers other than the Chairman and
CEO were provided in 1996 by way of an annual bonus plan. The Chairman and
CEO's bonus was at the discretion of the Compensation Committee. The Committee
and the Board of Directors believe that an executive's desire to achieve
continually improving results of operations is enhanced it that performance is
rewarded by way of cash bonuses. Accordingly, for 1996, the Compensation
Committee approved a bonus plan designed to focus the attention of the
Company's executives on achieving superior operating results. The 1996 plan
was designed to reward performance only if annual operating results exceeded
certain target levels which the Compensation Committee deemed to meet
shareholders' earnings expectations. LONG-TERM INCENTIVES. Long-term
incentives are provided by way of stock options. The Committee and Board of
Directors believe that management's ownership of a significant equity interest
in the Company is a major incentive in building shareholder wealth and aligning
the long-term interests of management and shareholders. Stock options,
therefore, are granted at the market value of the Common Stock on the date of
grant and typically vest in installments of 20% per year beginning one year
after the date of the grant. The value received by the executive from an
option is dependent upon increases in the price of the Company's Common Stock
over the market price on the date of the grant. Consequently, the value of the
compensation is aligned directly with increases in shareholder value. Grants
of stock options are made by the Board of Directors based upon the executive's
contribution toward Company performance and expected contribution toward
meeting the Company's goals.
<PAGE> 9
EXECUTIVE COMPENSATION - CONTINUED
1996 CHIEF EXECUTIVE COMPENSATION. The Compensation annually reviews and
approves the compensation of Dr. William F. Coyro Jr., the Chief Executive
Officer. Officer. Dr. Coyro's base salary for 1996 represented an increase
over Dr. Coyro's 1995 base salary and was based upon a number of factors,
including: (1) the Compensation Committee's assessment of the 1995 performance
of the Company and Dr. Coyro; (2) Expectations for the Company's 1996
performance; and (3) the Committees assessment of market compensation for
comparable positions.
COMPENSATION NOT QUALIFYING FOR TAX DEDUCTIBILITY. Section 162(m) of the
Revenue Code, adopted in 1994, provides in general that compensation to certain
individual executive officers during any year in excess of $1 million is not
deductible by a public company. The Committee believes that, given the range
of salaries and number of stock options of executive officers of the Company,
the $1 million threshold of Section 162(m) will not be reached by an executive
officer of the Company in the near future. Accordingly, the Committee has not
considered what its policy regarding compensation not qualifying for federal
tax deductibility might be; however, it intends to do so at such time that the
threshold is within range of any executive officer.
Wallance D. Riley
LeRoy H. Wulfmeier
The following table sets forth a summary for the last three (3) fiscal
years of the cash and non-cash compensation awarded to, earned by, or paid to,
the Chief Executive Officer of the Company and each of the executive officers
of the Company whose individual remuneration exceeded $100,000 for year ended
December 31, 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION CURRENT ANNUAL
ANNUAL COMPENSATION AWARDS SALARY
NAME AND ----------------------------------------------------- -------------- ------------
PRINCIPAL POSITION YEAR SALARY BONUS OTHER (2) OPTIONS (1)
- ------------------ ----- -------- ------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
William F. Coyro Jr. 1996 $209,230 $ -0- $4,567 100,000 (3) $250,000
Chairman and Chief 1995 177,547 6,300 4,620 (4) 25,000
Executive Officer 1994 168,000 -0- 3,228 10,000
Jonathan D. Ahlbrand 1996 132,788 -0- -0- (6) 55,000 160,000
Senior Vice President 1995 4,808 (5) -0- -0- (6) 25,000
L. Kevin Dohrmann 1996 106,730 (7) -0- -0- 50,000 140,000
Vice President of
Operations and Chief
Technology Officer
Lawrence A. Mills 1996 124,423 -0- 3,600 25,000 140,000
Senior Vice President, 1995 107,909 3,600 3,345 (8) 25,000
Chief Financial Officer 1994 92,500 -0- -0- 20,000
and Treasurer
</TABLE>
(1) Includes Stock Options granted under the Company's 1990 Nonqualified Stock
Option Plan. The Company has not awarded SAR's.
(2) Amount disclosed in this column consist of the Company's matching
contribution under the Company's 401(k) Retirement Savings Plan.
(3) Of these, 10,000 options were declined.
8
<PAGE> 10
EXECUTIVE COMPENSATION - CONTINUED
(4) In 1995 the Company advanced $126,800 to William F. Coyro Jr. The advance
represented Federal, State, and Social Security taxes due on taxable
income resulting from the exercise of stock options. The amounts were
remitted to the appropriate taxing entity. The advances were repaid to
the Company prior to December 31, 1995.
(5) Mr. Ahlbrand joined the Company in December 1995.
(6) During 1995, the Company loaned $160.000 to Mr. Ahlbrand. The loan was
repaid in 1996. The loan was payable in monthly installments of principal
and interest at 2% over the prime rate. The loan was evidenced by a note
and secured by an assignment of a land contract and of rentals on a
building owned by an affiliate of Mr. Ahlbrand, a portion of which is
leased by the Company. During 1996, the Company guaranteed a loan in the
amount of $375,000 for the benefit of Mr. Ahlbrand. The guarantee is
secured by a mortgage on and an assignment of the land contract
purchaser's interest in the building and by indemnification agreements
from the affiliate, and its principals, including Mr. Ahlbrand.
(7) Mr. Dohrmann joined the Company in April 1996.
(8) During 1995, the Company advanced $107,000 to an insurance company that
carries an insurance policy on the life of Mr. Mills. The advance is
collateralized by the cash value of the underlying life policy. The
advance is to be repaid by Mr. Mills in future years.
The following tables set forth information with respect to options granted
in 1996, the value realized upon the exercise in 1 996 of previously
granted options and the value of unexercised options.
<TABLE>
<CAPTION>
OPTION GRANTS IN 1996 (1)
-------------------------
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES
OF STOCK PRICE
PERCENT OF TOTAL APPRECIATION FOR
OPTIONS OPTIONS GRANTED IN EXERCISE OPTION TERM
NAME GRANTED YEAR PRICE 5% 10%
---- ------- ----------------- -------- -- ---
<S> <C> <C> <C> <C> <C>
William F. Coyro Jr. 10,000 (2) 1.5% $ 5.00 $ -- $ --
90,000 13.7 25.75 788,200 1,788,100
Jonathan D. Ahlbrand 55,000 8.4 25.75 481,700 1,092,700
L. Kevin Dohrmann 25,000 3.8 5.00 42,500 96,400
25,000 3.8 25.75 218,900 496,700
Lawrence A. Mills 25,000 3.8 25.75 218,900 496,700
</TABLE>
(1) All stock options were granted under the Company's 1990 Nonqualified Stock
Option Plan. The Company has not awarded SAR's. Option exercise prices
are at or above the market price on the date of grant. Options have a five
year term and vest over five years. The exercise price and Federal tax
withholdings may be paid in cash or with shares of TechTeam stock.
(2) Declined
9
<PAGE> 11
EXECUTIVE COMPENSATION - CONTINUED
<TABLE>
<CAPTION>
OPTION EXERCISES IN 1996 AND DECEMBER 31, 1996 VALUE TABLE
----------------------------------------------------------
NUMBER OF
UNEXERCISED VALUE OF UNEXERCISED IN-
NAME SHARES ACQUIRED VALUE OPTIONS AT THE-MONEY OPTIONS AT
---- ON EXERCISE REALIZED DECEMBER 31, 1996 DECEMBER 31,1996 (1)
----------- -------- ----------------- --------------------
<S> <C> <C> <C> <C> <C>
William F. Coyro Jr. -0- -0- 155,000 (2) $ 618,960
Jonathan D. Ahlbrand -0- -0- 80,000 (3) 73,438
L. Kevin Dohrmann -0- -0- 50,000 (4) 5,000
Lawrence A. Mills 5,000 $ 98,200 65,000 (5) 249,220
</TABLE>
(1) Represents the difference between the exercise price of in-the-money
options exercisable within 60 days of the date hereof and the closing
price of the Company's common stock on December 31, 1996 multiplied by the
number of exercisable options.
(2) Of this amount, 113,000 options are not exercisable until August 1997 or
later.
(3) Of this amount, 75,000 options are not exercisable until August 1997 or
later.
(4) Of this amount, 45,000 options are not exercisable until August 1997 or
later.
(5) Of this amount, 48,000 options are not exercisable until August 1997 or
later.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the past fiscal year, there were no transactions between the
Company and management or other related parties which were material to the
Company except as set forth herein.
The law firm of Berry, Moorman, King & Hudson, P.C. of which Mr. Hudson,
Secretary of the Company, is a member, performed certain legal services on
behalf of the Company during the past year and received payment for those
services.
The law firm of Riley & Roumell, of which Mr. Riley, Director of the
Company, is a member, performed certain legal services on behalf of the Company
during the past year and received payment for those services.
PROPOSAL TO RATIFY SELECTION OF
INDEPENDENT ACCOUNTANTS
The Board of directors proposes and recommends that the shareholders ratify
the Board's selection of Ernst & Young as independent auditors to make an
examination of the Company's financial statements for its current year ending
December 31, 1997. Ernst & Young and its predecessor, Ernst & Whinney, have
been auditing a the Company's financial statements for the last ten (10) years.
All professional services rendered by Ernst & Young during a the year were
furnished at customary rates. The performance of professional services, other
than audit services, is reviewed and approved, including a review for
independence, by the Audit Committee of the Board of Directors only if the
services to be rendered are considered to be material or unusual in nature. In
all other cases, authorization for the services is made by the Management of the
Company. The performance of audit services is approved on an annual basis by
the Board of Directors.
A representative of Ernst & Young will be present at a the Annual Meeting
with the opportunity to make a statement if he or she decides to do so and will
be available to respond to appropriate questions.
THE BOARD OF DIRECTORS AND MANAGEMENT RECOMMEND A VOTE "FOR" RATIFICATION
OF THE SELECTION OF ERNST & YOUNG AS AUDITORS FOR THE COMPANY. PROXIES
SOLICITED BY MANAGEMENT WILL BE SO VOTED UNLESS SHAREHOLDERS SPECIFY OTHERWISE
IN THEIR PROXIES.
10
<PAGE> 12
The graph displayed below is accordance with Securities and Exchange
Commission requirements. Stockholders are cautioned against drawing any
conclusions from the data contained therein, as past results are not
necessarily indicative of future performance. This graph in no way reflects
the Company's forecast of future financial performance.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
[LINE GRAPH]
<TABLE>
<CAPTION>
TOTAL RETURN INDEX
DEC 91 DEC 92 DEC 93 DEC 94 DEC 95 DEC 96
<S> <C> <C> <C> <C> <C> <C>
NASDAQ US 100 116 134 131 185 227
NASDAQ COMPUTER 100 108 114 138 211 260
NATIONAL TECHTEAM 100 200 336 382 409 1455
</TABLE>
11
<PAGE> 13
MISCELLANEOUS MATTERS
At the Annual Meeting of Shareholders, in addition to the matters
described above, there will be an address by the Chairman of the Board of the
Company and a general discussion period during which shareholders will have an
opportunity to ask questions about the business and operations of the Company.
As of the date of this Proxy Statement the Board of Directors knows of
no other matters which may properly be, or are likely to be, brought before the
meeting. However, if any proper matters are brought before the meeting, the
person named in the enclosed Proxy will vote them as the Board of Directors may
recommend.
SHAREHOLDER PROPOSALS
If a shareholder desires to submit a proposal for consideration at the
next Annual Shareholders Meeting and to have that proposal submitted on the
Company's Proxy statement and form of Proxy, pursuant to the rules of the
Securities and Exchange Commission, that proposal must be received by the
Company no later than February 1, 1998 or 90 days before the Company's next
Annual Shareholders Meeting, whichever is earlier.
ANNUAL REPORT
All shareholders of record on April 2, 1997 have been sent. or are
currently being sent, a copy of the Company's 1996 Annual Report, which contains
audited financial statements of the Company for the year ended December 31,
1996. Shareholders not receiving such Annual Report may obtain one by sending a
written request to the Company's Secretary, Robert A. Hudson, at the Company's
office located at 835 Mason Avenue, Dearborn, Michigan 48124.
By order of the Board of Directors
ROBERT A. HUDSON, SECRETARY
-------------------------------
Robert A. Hudson, Secretary
Dated: April 9, 1997
12
<PAGE> 14
NATIONAL TECHTEAM, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS MAY 14, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
NATIONAL TECH TEAM, INC. AND WILL BE VOTED.
The undersigned hereby appoints William F. Coyro, Jr. and Robert A. Hudson
or any one or more of them acting in the absence of the others, as attorneys and
proxies of the undersigned, with full power of substitution, for and in the mane
of the undersigned, to represent the undersigned at the Annual Meeting of the
Shareholders of National Tech Team Inc., a Delaware corporation (the "Company")
to be held in the Holiday Inn, 5801 Southfield Expressway (at Ford Road),
Detroit, Michigan at 10:00 a.m. local time, May 14, 1997, and any adjournment or
adjournments thereof, and to vote all shares of stock of the Company standing in
the name of the undersigned, with all the powers the undersigned would possess
if personally present at such meeting:
1. Election of directors of the Company:
Nominees: Kim A. Cooper, William F. Coyro, Jr., Wallace D. Riley, Richard
G. Somerlott, and LeRoy H. Wulfmeier III
/ / FOR all nominees listed above, except vote withheld from the following
nominees (if any)
/ / WITHHOLD AUTHORITY to vote for all nominees listed above.
2. Ratification of the selection of Ernst & Young as the Company's auditors
for the current year.
/ / FOR / / AGAINST / / ABSTAIN
3. In their discretion on such other matters as may properly come before the
meeting.
MANAGEMENT AND THE BOARD OF DIRECTORS RECOMMEND A VOTE FOR ELECTION OF THE
DIRECTORS SET FORTH ABOVE AND FOR RATIFICATION OF THE SELECTION OF THE
COMPANY'S AUDITORS.
(Continue and to be signed on the reverse side.)
<PAGE> 15
This proxy will be voted as directed but, where no direction is given, it
will be voted FOR approval of all of the foregoing nominees and FOR
ratification of the selection of the Company's auditors.
Copies of the Notice of the Meeting dated April 9, 1997 and of the Proxy
Statement dated April 9, 1997 have been received by the undersigned.
PLEASE DATE AND SIGN HERE
Dated:
------------------------------
Name:
------------------------------
PLEASE DATE, SIGN, AND RETURN THIS PROXY IN THE ENCLOSED ENVELOPE PROMPTLY.
/ / PLEASE CHECK HERE IF YOU PLAN TO ATTEND THIS MEETING.
