<PAGE>   1

                     US SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-K

[x]  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
     OF 1934 [FEE REQUIRED]

For the fiscal year ended: December 31, 1996

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 [NO FEE REQUIRED]

Commission file number: 0-16284

                            National TechTeam, Inc.     
                        -------------------------------
                        (Name of issuer in its charter)

           Delaware                                    38-2774613
-------------------------------          ------------------------------------ 
(State or other jurisdiction of          (I.R.S. Employer Identification No.)
incorporation or organization)

            835 Mason, Suite 200, Dearborn, MI                48124   
          ---------------------------------------           ----------
          (Address of principal executive offices)          (Zip Code)

Issuer's telephone number: (313) 277-2277

Securities registered under Section 12(b)                      None
of the Securities Exchange Act:


Securities registered under Section 12(g)         Common Stock, $.01 par value
                                                  ----------------------------
of the Securities Exchange Act:                         (Title of Class)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act during the past 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.
[x]  Yes     [ ]  No

Indicate by check mark if the 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 incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [x]

The aggregate market value of the voting stock held by non-affiliates of the
registrant as of March 10, 1997 was approximately $311,330,000.

Revenues for issuer's most recent fiscal year ended December 31, 1996 were
$69,150,996.

The number of outstanding shares of the issuer's common stock as of March 10,
1997 was 14,859,867.


                      DOCUMENTS INCORPORATED BY REFERENCE

National TechTeam, Inc.'s definitive Proxy Statement to be filed no later than
120 days after the end of the year covered by this report is incorporated by
reference into Part III.
<PAGE>   2
                                     PART I

ITEM 1. BUSINESS

GENERAL

     National TechTeam, Inc. ("National TechTeam," "TechTeam" or "Company") is a
leading provider of information technology outsourcing support services to large
national and multi-national corporations, government agencies and service
organizations. The Company offers its services through two global business
units: (i) Call Center Services, which provides its clients with inbound
telephone support for their computer product end-users and (ii) Corporate
Computer Services, which provides corporations with technical staffing
(principally on-site help desk support), systems integration and instructor-led,
computer-based training. TechTeam's client base includes Hewlett-Packard, Ford,
Chrysler, First Chicago NBD, United Parcel Service, Owens-Corning, Novell and
Sun Microsystems. Many of TechTeam's clients utilize services offered by both of
TechTeam's business units. The Company has experienced rapid growth as the trend
toward outsourcing has increased. Between 1992 and 1996, revenues increased from
$10.9 million to $69.2 million and net income increased from $766,000 to $4.8
million. This represents compounded annual growth rates of 58.7% and 58.0% in
revenues and net income, respectively.

INDUSTRY BACKGROUND

     The IT services market is large and growing rapidly as corporations
continue to focus on their core business and seek to outsource technical support
to third-party providers. In addition, the availability, complexity and number
of end-users of computer processing systems have increased, further spurring the
demand for IT support services. Dataquest estimates that from 1995 to 1999, the
overall IT services market will grow from $50.7 billion to $79.0 billion;
technical support services provided in-house and by third parties, such as those
provided by call centers and on-site help desks, are expected to increase from
$20.6 billion to $31.5 billion; and technical support services outsourced to
third-party vendors are expected to increase from $2.6 billion to $7.2 billion.
This represents compound annual growth rates of 11.7%, 11.2% and 29.0%,
respectively. In addition, the Gartner Group estimates that by 1998 over 40% of
companies will outsource corporate help desk services, a part of technical
support services, compared to only 15% today.

     TechTeam's growth has been driven by several major business trends
affecting the IT services market. Continued rapid technological change, more
frequent upgrade cycles, the increased need for specialized knowledge to plan
and implement IT strategies, the large capital expenditures necessary to
maintain an IT infrastructure and the desire to convert fixed employee costs to
variable costs are all factors which have led businesses to outsource an
increasing portion of their computer and IT functions. The Company anticipates
the outsourcing trend to continue as corporations reduce resources dedicated to
non-core activities.

SERVICES

     The Company originally commenced operations as a value added reseller of
computer hardware and software that also provided training for its computer
products. During the late 1980's the Company added IT staffing and systems
integration services as a complement to its existing training business. In 1993,
as a result of the Company's growing expertise in providing IT staffing of
on-site help desks, TechTeam entered the call center industry. Today, the
Company's IT outsourcing services are intended to cover a broad range of IT,
including planning, design, implementation and support. Although the Company's
services are complementary, TechTeam has divided its service offerings into two
divisions (i) Call Center Services and (ii) Corporate Computer Services
(technical staffing, systems integration and training), which are described in
more detail as follows:

          CALL CENTER SERVICES

          The Company is currently one of the largest international suppliers of
     call center services. TechTeam focuses on two types of customers: (i)
     manufacturers of hardware and software products, such as Hewlett-Packard,
     contract TechTeam to resolve their customers' inbound technical support
     calls regarding use of features, troubleshooting, problem diagnosis, and
     operating assistance; and (ii) major corporations, such as Chrysler, have
     selected TechTeam to provide off-site telephone-based support for their
     employees and/or customers on a national and international basis. TechTeam
     also provides services to support its clients throughout their sales cycle,
     including such services as market research, lead generation, new product
     launch support, pre-sales support, order fulfillment and entitlement. The
     following chart illustrates a representative sales cycle for a typical
     technology vendor:



                                       2
<PAGE>   3

                             [SALES CYCLE GRAPHIC]


     TechTeam's four domestic call centers, located in the metropolitan areas of
Detroit (2), Chicago, and Dallas, and its Pan-European center in Brussels,
Belgium, provide live agent and interactive voice response services. Currently,
TechTeam has over 792 workstations available for three shifts, 24 hours a day, 7
days a week, 365 days per year and is able to provide services in 18 different
languages. Call Center Services is currently staffed by 815 trained and
experienced technical professionals who support over 500 software applications,
hardware components, Internet sites and proprietary systems. The Company's
state-of-the-art call centers are equipped with sophisticated telephony
infrastructure, efficient networks, call distribution software, and productivity
management tools which aid in increasing efficiency and utilization.

     CORPORATE COMPUTER SERVICES

     Technical Staffing. This largest component of TechTeam's Corporate Computer
Services unit consists principally of on-site help desk personnel which are
provided to clients almost exclusively on long-term assignments. For
multi-national clients such as Ford and Chrysler, TechTeam establishes full
service multi-product, multi-platform help desks that are resident on the
clients' sites and are fully integrated with their operations. Clients'
employees contact the help desks for assistance with product usage, network
administration, product acquisition, and corporate computing standards. These
productivity centers provide over-the-phone and deskside assistance for
employees at all levels. Because of TechTeam's proximity to the client's
technology and business practices, the Company is often asked to provide
peripheral staffing services for contract programming, database design, graphics
development and network management. Through its on-site help desk services,
TechTeam develops a proprietary awareness of its clients' technology
requirements and can provide creative solutions through the implementation of
customized training programs.

     Systems Integration. Through systems integration services, TechTeam works
closely with its clients in the design and integration of advanced technology
systems. These systems, which are the IT foundation for many corporations today,
require significant planning to assure that the various hardware and software
components are compatible and will work together to achieve fast and reliable
communications. Key services provided by TechTeam include: LAN/WAN design,
installation, administration and support; World Wide Web development and a
complete package of Internet services; Novell, NT Server and Lotus Notes
implementation; QS 9000 and ISO 9000 software; hardware and software sales,
installation, troubleshooting and maintenance.


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<PAGE>   4
          Training. Over the past several years, TechTeam has grown into a
     leading provider of customized corporate computer training in North America
     with training offerings ranging from general end-user modules to complex
     technical courses for IT professionals. The Company is a
     manufacturer-authorized training provider for many products produced by
     Novell, Microsoft, IBM, Lotus, SABRE and Sun Microsystems and is a Sylvan
     Prometric Testing Center in order to provide clients with certification
     access. Offerings include a wide array of applications within the office
     automation, network and client server marketplace.  Although most training
     is delivered on client sites, TechTeam operates six training facilities
     located in Michigan (3), Massachusetts, Indiana and Illinois. Clients are
     offered a full range of delivery capabilities including course catalogs,
     registration, equipment, networks, course materials, certified trainers,
     evaluation options, desk-side tutorials, testing, feedback to help desks
     and reporting. TechTeam's documentation department works with clients to
     provide professional, customized reference materials including
     comprehensive systems manuals, newsletters, training materials, translation
     services, quick reference cards and product information flyers.

COMPETITIVE STRENGTHS

     TechTeam possesses several key competitive strengths that it believes will
enable it to continue to expand its business by further penetrating existing
client relationships and by attracting new clients. These strengths, which have
contributed to TechTeam's rapid growth, are as follows:

     Internationally Recognized Client Base. National TechTeam provides its
services to large national and multi-national clients who have a reputation for
excellence in their market segments. These industry leaders impose high
standards of performance on TechTeam, often requiring the Company to adopt
best-in-class business practices. TechTeam has gained expertise in such
best-in-class practices as customer service, end-user productivity, client
server technology, computer integration, project management, and the formation
of Intranet and World Wide Web sites across automotive, financial,
manufacturing, computer, health care and consumer service industries. As
TechTeam has met these standards of performance, it has received additional
opportunities to expand its service offerings with clients such as Ford,
Chrysler, First Chicago NBD, Hewlett-Packard, Novell, Sun Microsystems and
others. The Company believes its established relationships and performance
record with its demanding clients provide TechTeam with significant credibility
and referral potential with new clients.

     Multiple Service Offerings. The demand for IT outsourcing support services
is accelerating as more businesses seek outside expertise as a cost effective
alternative to managing their increasingly complex technological requirements.
TechTeam's broad array of service offerings evolved by reacting to its clients'
needs and developing outsourcing support services designed to improve their
productivity. The Company's largest clients utilize multiple elements of
TechTeam's call center, technical staffing, systems integration and training
service offerings. Rather than purchase services from a variety of vendors who
specialize in a single offering, many clients seek to reduce their purchasing
costs and create greater vendor accountability by using a select group of
business partners for a broad range of IT needs. As TechTeam penetrates each
account and becomes an integral long-term partner, it is able to reduce sales
cost per customer, and is well positioned to retain its incumbent role as the
preferred IT services provider.

     Technically Proficient Employee Base. As an established growth
organization, TechTeam has been successful in recruiting and retaining a
technically proficient employee base who seek both advancement opportunities and
stability through a managed career path. TechTeam has a rigorous and continuing
in-house training program that is designed to keep its professionals proficient
with respect to the latest technologies and business methods. As the Company has
grown, it has increased the number of employees from 136 in January 1992 to
1,294 in December 1996.  While service-based companies are supported by
technology, they are ultimately defined by the quality of their professional
staff. In order to develop and retain high quality professionals, the Company
applies comprehensive employee care practices, which include stringent
recruiting requirements, ongoing training for improved performance and career
advancement, periodic individual expectation and goal setting, employee
recognition programs and competitive benefits and compensation.

     Recognition for Delivery of Quality Services. TechTeam is firmly committed
to providing its clients with the highest quality of call center and corporate
computer services, and has tailored its quality programs to address directly
individual client requirements. TechTeam believes that consistent, high quality,
cost-effective service delivery is the product of standardized business
practices coupled with advanced technology and performance tracking. The
Company's aggressive focus since mid-1993 on quality certification is the result
of two key drivers: (i) rapid growth with strong profit margins is sustainable
only through high client satisfaction, and (ii) many major corporations are now
requiring, or will soon require, formal third-party quality certification of
their business partners. TechTeam has been recognized for its delivery of
quality services by being awarded ISO 9001 certification, an international
standard for quality assurance and operating consistency. Within its call
centers, TechTeam employs a comprehensive performance tracking system that
measures


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<PAGE>   5

objective and subjective attributes of service delivery. These quality criteria
are customized for each project to reflect accurately the service delivery as
perceived by the caller and with respect to the broader goals of the client.
The Company believes that its delivery of high quality services results from
close supervision and management. When combined with its clients' performance
evaluations, these operational practices provide a strategic advantage in
competing for additional business. National TechTeam encourages and assists
clients with direct connections to TechTeam's systems from their sites for real
time access to operational statistics and performance. This sharing of key
management information is intended to position National TechTeam as a business
partner rather than a discrete third-party service provider.

     Advanced Technology Infrastructure. The Company believes that its
technology enables it to maintain a leading position as a provider of IT support
services, particularly in call center services. As such, National TechTeam's
relationship with some of the world's leading companies has meant that TechTeam
often receives challenging assignments requiring the use of advanced technology
and methodologies. To meet these challenges, the Company continually trains its
employees and clients in the latest product and service innovations. In
addition, National TechTeam has built four new call centers in the last 18
months, investing substantial capital to build a technology infrastructure that
features state-of-the-art call centers with sophisticated telephony, efficient
networks, call distribution software and productivity management tools.

GROWTH STRATEGY

     The Company intends to increase revenues and to continue to grow its
operations through the following growth strategy:

     Further Penetrate Existing Clients, Attract New Clients and Extend Service
Lines. National TechTeam intends to market its call center and corporate support
services aggressively through further penetration within existing accounts,
pursuing new clients and through the addition of new service offerings.
Historically, many of TechTeam's clients initially have engaged the Company to
provide a specific service to a single division or business unit. National
TechTeam believes that the provision of additional services to its existing
client base represents a significant growth opportunity and that the access,
contacts and goodwill provided by its existing client relationships afford it
significant advantages in marketing additional services. The Company also
intends to target new clients by continuing to leverage the credibility of its
blue chip client list, its outstanding service delivery record and broad service
offerings. In addition, TechTeam plans to extend its service line to meet its
client's needs. Offerings have recently been added throughout a client's sales
cycle such as pre-launch support, pre-sales support and order fulfillment, among
others to complement the Company's strong post-sales support service.

     Leverage Technology and Training for Higher Margins. As part of the
Company's expansion program, it built four state-of-the-art call centers and
made other enhancements to its technological infrastructure. The investment for
high-capacity advanced-function PBX phone switches, interactive voice response
technology, automated call distributors, disaster recovery, back-up generators,
technician training programs and facilities are fixed costs that can be spread
across a larger revenue base. TechTeam's call centers operate 7 days a week, 24
hours a day, 365 days per year. National TechTeam also attempts to improve its
margins by generating off-peak call center traffic to create a balance at each
call center to supplement peak utilization between 7 a.m. and 9 p.m. EST. The
Company is able to maintain activity at its call centers during off-peak hours
by providing its services to Internet end-users and by providing international
support, such as direct T1 access to service contracts from Australia, Europe,
and the Pacific Rim.

     National TechTeam's roots in corporate training have greatly impacted the
development of all of the Company's service lines and continue to play a key
role in service evolution. With a professional staff of over 50 certified
trainers and a large team of degreed instructional designers, TechTeam is
afforded a unique opportunity to make use of extensive training resources,
course materials, infrastructure, equipment, labs, and facilities across all
aspects of the business. The Company believes that these training assets provide
three distinct benefits to National TechTeam, each of which improve employee
productivity and reduce operating costs: (i) staff retention is improved by
continuing to challenge employees and preparing them for advancement; (ii)
cross-trained employees can be moved between projects to meet client needs and
to increase utilization; and (iii) professional training is an affordable way to
keep employees current on emerging technologies and business practices.

     TechTeam has added four new call centers and two new training facilities in
the period between January 1, 1995 and December 31, 1996. The Company has the
capacity to nearly double both its present call volumes and training volumes
without incurring additional material facility and operating infrastructure
expenses.



                                       5
<PAGE>   6

     Expand Globally. National TechTeam's business development and expansion
strategy is based on a combination of anticipating and responding to client
needs and selective acquisitions. As major corporations redefine themselves to
compete in the global marketplace, TechTeam is responding by delivering services
on a multi-national basis to many of its largest clients. In particular, the
Company opened its 75%-owned, joint-venture operated call center in Brussels,
Belgium in May 1996 in order to provide its U.S.-based clients with Pan-European
call center services. During 1996, TechTeam has also opened facilities in Troy,
Michigan; Harper Woods, Michigan; and Indianapolis, Indiana. TechTeam services
many of its clients' international requirements by operating its domestic call
centers on a 24-hour basis and offering its services in 18 foreign languages.
The Company believes that its record of responding to its clients' geographic
demands has greatly strengthened its relationship and opportunities with its
clients. National TechTeam continually monitors and evaluates additional
expansion opportunities and is prepared to act when justified by client demand.

     Pursue Selective Acquisitions, Joint Ventures and Alliances. Many industry
analysts believe that the IT industry, which has been proliferating, is likely
to enter a consolidation phase within the next several years. National TechTeam
continually monitors the marketplace for appropriate opportunities and intends
to maintain flexibility in finding ways to increase TechTeam's resources and
capabilities. The Company also seeks joint venture partners when it determines
that a partnership arrangement will be beneficial when offering a new line of
business or entering a new marketplace. In opening its Brussels call center,
TechTeam entered into a joint venture with Paratel N.V., a Pan-European provider
of call center services.

     National TechTeam believes that its services are enhanced by establishing
mutually beneficial partnerships with computer industry leaders, niche players,
and other key suppliers of software, hardware and services. Alliances have
resulted in contracts directly with manufacturers such as Sun Microsystems,
Novell, Palindrome, Shiva and Hewlett-Packard for product training, network
implementation and technical support.

     Continue a Strong Commitment to Quality Service. TechTeam's commitment to
quality service and its continued efforts to obtain additional certification and
recognition for its quality methodologies forms the basis of the Company's
ongoing strategy. This strategy is essential to TechTeam's ability to generate
new business because many companies already require their suppliers to adopt the
QS and ISO quality systems and the Company believes many more will require
compliance in the near future. National TechTeam has received ISO 9001
certification and the Ford Q1 quality award. As a remarketer of System 9000
software and a training provider for this enterprise-wide quality management
tool, TechTeam assists other companies in obtaining QS and ISO certification and
in implementing quality control systems. Other elements of the Company's quality
program which are key to its overall strategy are the recruitment, training and
retention of a highly qualified and dedicated work force.

TECHNOLOGY

     As an IT outsourcing company, National TechTeam relies upon technology to
offer its clients efficient, high quality call center services.  TechTeam has
invested in high performance, scalable, manageable telecommunications and data
networks and infrastructure. TechTeam's call centers are equipped with Aspect
ACD's, Dialogic IVR's, and other leading call processing technologies including
all of the latest enhancements to allow the most innovative and cost effective
advanced call center and call processing capabilities in the industry.
TechTeam's call center agents are equipped with state-of-the-industry PC's from
leading manufacturers, and its world wide data communication network allows the
Company to manage its networks in the most cost effective manner, and with the
highest availability, possible. National TechTeam's call centers are equipped
with fault tolerant fiber-based telecommunication equipment and networks from
leading carriers allowing TechTeam to assure its clients the most reliable call
center services available. All of these investments allow the Company to lower
start up cost for its clients and to offer one of the lowest total cost
structures in the industry without sacrificing quality of service.

     National TechTeam has also built a "Foundation Platform" using technology
developed by Webcentric Communications, Inc. The Foundation Platform is a set of
industry standard technologies and systems combined into a unique and powerful
vehicle to enable TechTeam to connect its clients and its clients' customers
with an expert in nearly any language and in virtually any location. This
technology platform will enable TechTeam to maximize utilization of its human
resources dedicated to Call Center Services.


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<PAGE>   7

     National TechTeam's strategy is to use technology to create competitive
advantage. TechTeam will continue to pursue this strategy  by creating
innovative applications that allow its clients and its clients' customers to
improve their own operational efficiencies. All of the features of the
Foundation Platform can be deployed within the Company's corporate accounts as
well as its OEM and ISV customers. By leveraging this platform, National
TechTeam expects its cost of service to be reduced through the use of "Virtual
Agents". Virtual Agents are agents which can be deployed through the Foundation
Platform anywhere in the world where agents have access to a Netscape browser
and a simple telephone and analog line. This innovative application allows
TechTeam to lower infrastructure costs, maintain operational controls and
address the challenge of recruiting qualified professional support agents.

MARKETING, SALES AND CLIENTS

     The Company's sales and marketing strategy is to generate new business
opportunities and to develop stronger relationship with existing customers. To
implement this strategy, National TechTeam currently employs 33 sales
professionals, a three-fold increase in sales professionals since 1995. In
addition, the Company has put in place an organizational structure consisting of
three focused teams: (i) Central Support Services, dedicated specifically to
call center outsourcing opportunities; (ii) Corporate Computer Services, which
is divided into a major accounts group and national accounts group and (iii)
European Operations. The principal objective of this structure is to assign
marketing representatives with a thorough knowledge of the clients' needs and
the requisite sales experience to afford the maximum opportunity for cross-
selling TechTeam's services and leveraging the Company's experience with major
clients into new client relationships. Marketing efforts include direct
solicitations, attendance at industry and trade shows, and invitations for
clients to visit the Company's business offices and three types of delivery
venues: National TechTeam's call centers, help desks located on client
facilities, and in-progress training sessions.

     TechTeam's client base is comprised principally of large national and
multi-national corporations, service organizations and governmental units. The
automobile industry accounts for a major portion of the Company's revenues,
although the percentage of revenues represented by clients in other industries
has been steadily increasing. Combined sales to National TechTeam's five largest
clients in 1996 accounted for 67.7% of total revenues. In 1996, the combined
revenues from Ford Motor Company and Chrysler Corporation totaled 31.5% of the
Company's revenues. Although TechTeam has historically been and continues to be
dependent upon Ford for a significant portion of its total revenues,
Hewlett-Packard became the Company's largest client in 1996. The percentage of
total revenues derived from Ford declined to 23.6% in 1996 from 37.4% in 1995
and from 47.1% in 1994 even while revenues from Ford increased 14.9% during that
same period. Total revenues from non-Ford clients increased at a 82.0% compound
annual growth rate from 1994 to 1996. Although TechTeam's management recognizes,
and has acted upon, the need to diversify its client base, National TechTeam
continues to seek additional business from its largest clients and those clients
will continue to constitute a high percentage of TechTeam's total revenues in
the foreseeable future. The Company does not have exclusive arrangements with
any clients, and most contracts are cancelable by either party on short notice.
In addition, most clients may reduce the use of TechTeam's services unilaterally
without penalty or with the payment of certain start up costs if canceled early.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Impact of Business With Major Clients."

The following is a selected list of TechTeam's clients:
   Automobile Club of Michigan                        Meijers
   Blue Cross/Blue Shield of Michigan                 Micrografx
   Chrysler Corporation                               Novell
   Comdisco Inc.                                      Owens-Corning
   Concentric Network Corporation                     Rockwell International
   First Chicago NBD                                  Sun Microsystems
   Ford Motor Company                                 United Parcel Service
   Hewlett-Packard                                    Wayne County Government
   Intelliquest





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<PAGE>   8

INTELLECTUAL PROPERTY RIGHTS

     National TechTeam's success is dependent upon certain methodologies it
utilizes in designing and delivering Corporate Computer Services and Call Center
Services. TechTeam's  business includes the development of custom software in
connection with specific client engagements.  Ownership of such software is
generally assigned to the client. The Company also develops certain foundation
and application software products, or software "tools," which remain the
property of the Company.

     National TechTeam relies upon a combination of nondisclosure and other
contractual arrangements and trade secret, copyright and trademark laws to
protect its proprietary rights and the proprietary rights of third parties from
whom TechTeam licenses intellectual property. The Company enters into
confidentiality agreements with its employees and limits distribution of
proprietary information. There can be no assurance that the steps taken by
National TechTeam in this regard will be adequate to deter misappropriation of
proprietary information or that TechTeam will be able to detect unauthorized use
and take appropriate steps to enforce its intellectual property rights.

     Although the Company believes that its services do not infringe on the
intellectual property rights of others and that it has all rights necessary to
utilize the intellectual property employed in its business, National TechTeam is
subject to the risk of litigation alleging infringement of third-party
intellectual property rights. Any such claims could require the Company to spend
significant sums in litigation, pay damages, develop non-infringing intellectual
property or acquire licenses of the intellectual property which is the subject
of asserted infringement.

     TechTeam(R) and Support Central(R) are servicemarks that are registered
with the United States Patent and Trademark Office. Federal servicemark
registrations may be renewed indefinitely as long as the underlying servicemark
remains in use. Aside from the foregoing, the Company holds no other trademarks,
servicemarks or patents.

COMPETITION

     National TechTeam faces intense competition in the markets served by both
its Call Center and Corporate Computer Services divisions. In the call center
market, TechTeam competes with other call center companies, some of which have
substantially greater resources including more call center locations, greater
financial resources, a larger client base and more name recognition. In the
corporate computer services markets, the Company competes with many entities
including systems integration firms, application software firms, staffing firms,
"Big Six" accounting firms, facilities management firms and computer consulting
firms. Many of these firms have far greater resources, clients and name
recognition than National TechTeam. TechTeam also faces significant competition
in both markets from its own clients and potential clients whose internal
resources represent a fixed cost to the client. Such competition may impose
additional pricing pressures on the Company. National TechTeam competes
principally on the basis of quality of customer service, being able to provide a
broad range of IT services, price, experience and reputation in the industry,
technological capabilities, quality practices, rapid response to client needs
and referrals from existing clients.

HUMAN RESOURCES

     At December 31, 1996, TechTeam had a total of 1,294 employees of which 132
were part-time. The functional responsibilities of these employees are as
follows: 751 client support agents and related employees in Call Center
Services; 247 professionals in technical staffing; 113 professionals in systems
integration; 86 instructors and related employees in training; 34 employees in
sales and marketing; and 63 employees in management and administration. National
TechTeam believes its relationship with its employees is excellent.





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<PAGE>   9

ITEM 2. PROPERTIES

The following table sets forth the primary real properties which TechTeam
leases and occupies:

<TABLE>
<CAPTION>
                                                          LEASE TERM
                                                         BEGINNING AND         SQUARE
  LOCATION                          FUNCTION               EXPIRING           FOOTAGE
-------------------------------------------------------------------------------------
 <S>                        <C>                       <C>                     <C>
Dearborn, MI . . . . . . .  World Headquarters and    01/01/97 - 12/31/05     54,859
                            North American Training
                            Center Headquarters
Southfield, MI . . . . . .  World Call Center         11/01/93 - 12/31/00     57,403
                            Headquarters and
                            Training Center
Dallas, TX . . . . . . . .  Regional Office and       10/01/95 - 09/30/00     34,061
                            Call Center
Harper Woods, MI . . . . .  Call Center               06/15/96 - 06/14/97     17,775
Chicago, IL  . . . . . . .  Regional Office, Call      3/1/94 - 2/28/00       13,195
                            Center and Training
                            Center
Boston, MA . . . . . . . .  Training Center            9/5/96 - 9/30/97        5,214
Troy, MI . . . . . . . . .  Training Center           01/01/96 - 12/31/98      2,345
Omaha, NB  . . . . . . . .  WebCentric Operations      1/1/97 - 12/31/02       2,174

Indianapolis, IN . . . . .  Training Center           01/01/96 - 12/31/00      1,881
Brussels, Belgium  . . . .  Call Center                        *               1,356
----------                                                                                               
</TABLE>

* As part of its joint-venture with Paratel N.V., TechTeam has the right to
occupy space which is cancellable on 180 days notice. Although the Company does
not foresee the loss of this right in the near future, the Company believes
that suitable replacement facilities are readily available.

     TechTeam believes that the facilities it occupies are well maintained and
in good operating condition. These facilities include general office space and
22 well-equipped computer training classrooms. Because some TechTeam services
are performed at client sites, the cost of maintaining multiple offices is
minimized. In addition to the properties listed in the above table, TechTeam
employs personnel and performs ongoing business in California, New Jersey and
the United Kingdom.

ITEM 3. LEGAL PROCEEDINGS

     TechTeam is not aware of any material legal proceedings against it.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     No matters were submitted to a vote of security holders during the fourth
quarter of 1996.





                                       9
<PAGE>   10

                                    PART II

ITEM 5. MARKET FOR REGISTRANT'S SECURITIES AND RELATED STOCKHOLDER MATTERS

     The following table sets forth the reported high and low sales prices of
the Company's common stock for the quarters indicated as reported on the Nasdaq
National Market. The Company's common stock trades on the Nasdaq National Market
tier of the Nasdaq Stock Market under the symbol "TEAM."


<TABLE>
<CAPTION>
                                                                       
                                                                      HIGH       LOW
                                                                     -------   ------
   <S>                                                               <C>       <C>
   1995
     First Quarter . . . . . . . . . . . . . . . . . . . . . . .     $ 5.250   $ 3.500
     Second Quarter  . . . . . . . . . . . . . . . . . . . . . .     $ 6.875   $ 3.875
     Third Quarter . . . . . . . . . . . . . . . . . . . . . . .     $ 7.500   $ 5.250
     Fourth Quarter  . . . . . . . . . . . . . . . . . . . . . .     $ 6.125   $ 4.875

   1996
     First Quarter . . . . . . . . . . . . . . . . . . . . . . .     $ 6.250   $ 4.750
     Second Quarter  . . . . . . . . . . . . . . . . . . . . . .     $17.875   $ 5.063
     Third Quarter . . . . . . . . . . . . . . . . . . . . . . .     $27.500   $ 7.500
     Fourth Quarter  . . . . . . . . . . . . . . . . . . . . . .     $30.125   $19.875
</TABLE>

     The Company has never paid any dividends on its common stock and expects
for the foreseeable future to retain all of its earnings from operations for use
in expanding and developing its business. Any future decision as to payment of
dividends will be at the discretion of the Company's Board of Directors and will
depend upon the Company's earnings, financial position, capital requirements and
such other factors as the Board of Directors deems relevant.

     TechTeam had 757 shareholders of record as of March 10, 1997.





                                       10

<PAGE>   11
ITEM 6.  SELECTED CONSOLIDATED FINANCIAL DATA

     The following table sets forth certain selected consolidated financial data
and is qualified by the more detailed Consolidated Financial Statements and
notes thereto included in Item 8 in this Form 10-K Report. The Statement of
Financial Position Data as of December 31, 1992, 1993, 1994, 1995, and 1996, and
the Statement of Operations Data for each of the five years in the period ended
December 31, 1996 have been derived from the Company's consolidated financial
statements for such years, which have been audited by Ernst & Young LLP,
independent auditors.

<TABLE>
<CAPTION>
                                                                   YEAR ENDED DECEMBER 31, 
                                                     ------------------------------------------------------ 
                                                       1996       1995       1994       1993         1992  
                                                     -------    -------    -------     -------     --------  
                                                              (IN THOUSANDS, EXCEPT PER SHARE DATA) 
STATEMENT OF OPERATIONS DATA:                                                                           
<S>                                                 <C>        <C>        <C>         <C>          <C>
Revenues                                                                                
   Call Center Services . . . . . . . . . . . . . .  $33,697    $15,123    $ 7,173     $ 2,326      $     -
   Corporate Computer Services                       -------    -------    -------     -------      -------    
      Technical staffing  . . . . . . . . . . . . .   15,608     14,732     12,837      10,085        6,052   
      Systems integration . . . . . . . . . . . . .   12,819      7,840      5,530       2,647        1,079   
      Training programs   . . . . . . . . . . . . .    7,027      4,018      4,613       5,386        3,771
                                                     -------    -------    -------     -------      -------
   Total Corporate Computer Services  . . . . . . .   35,454     26,590     22,980      18,118       10,902
                                                     -------    -------    -------     -------      -------
Total revenues  . . . . . . . . . . . . . . . . . .   69,151     41,713     30,153      20,444       10,902  
Cost of services delivered  . . . . . . . . . . . .   52,600     32,337     23,099      15,821        8,459   
                                                     -------    -------    -------     -------      -------
Gross profit  . . . . . . . . . . . . . . . . . . .   16,551      9,376      7,054       4,623        2,443    
                                                     -------    -------    -------     -------      -------

Other expenses/(income)                                                                         
   Selling, general and administrative  . . . . . .    9,341      5,349      3,872       1,787        1,359   
   Interest expense . . . . . . . . . . . . . . . .      128         24         34          67           53     
   Interest income  . . . . . . . . . . . . . . . .     (937)       (74)       (71)          -            -    
   Gain on sale of investment . . . . . . . . . . .        -          -       (152)          -            -
                                                     -------    -------    -------     -------      -------
                                                       8,532      5,299      3,683       1,854        1,412 
                                                     -------    -------    -------     -------      -------
Income before tax provisions  . . . . . . . . . . .    8,019      4,077      3,371       2,769        1,031   
Tax provisions  . . . . . . . . . . . . . . . . . .    3,245      1,678      1,400       1,097          265     
                                                     -------    -------    -------     -------      -------
Net income  . . . . . . . . . . . . . . . . . . . .  $ 4,774    $ 2,399    $ 1,971     $ 1,672      $   766
                                                     =======    =======    =======     =======      =======
Primary and fully diluted earnings per share  . . .  $  0.38    $  0.21    $  0.18     $  0.18      $  0.09    
                                                     =======    =======    =======     =======      =======
Weighted average number of common shares and             
common share equivalents outstanding                                                                     
   Primary    . . . . . . . . . . . . . . . . . . .   12,520     11,361     10,891       9,306        8,422   
   Fully diluted  . . . . . . . . . . . . . . . . .   12,544     11,361     11,079       9,523        8,733   

<CAPTION>
                                                                         DECEMBER 31, 
                                                     ------------------------------------------------------ 
                                                       1996       1995       1994       1993         1992  
                                                     -------    -------    -------     -------     --------  
                                                                        (IN THOUSANDS) 
STATEMENT OF FINANCIAL POSITION DATA:                                                                           
<S>                                                 <C>        <C>        <C>         <C>          <C>
Current assets  . . . . . . . . . . . . . . . . . .  $ 98,900    $16,191    $12,890     $ 6,173      $ 3,085  
Current liabilities . . . . . . . . . . . . . . . .     8,341      3,839      1,173       2,006        2,037   
Total assets  . . . . . . . . . . . . . . . . . . .   111,962     22,286     17,149      10,300        4,130   
Long-term liabilities . . . . . . . . . . . . . . .       162        555        146         214          104     
Total shareholders' equity  . . . . . . . . . . . .   103,459     17,892     15,829       8,080        1,989   

</TABLE>



                                      11

<PAGE>   12
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

RESULTS OF OPERATIONS

Overview

     The Company originally commenced operations as a value added reseller of
computer hardware and software that also provided training for its computer
products. During the late 1980's the Company added IT staffing and systems
integration services as a complement to its existing training business. In 1993,
as a result of the Company's growing expertise in providing IT staffing of
on-site help desks, TechTeam entered the call center industry. Today, the
Company's IT outsourcing services cover a broad range of IT, including planning,
design, implementation and support. Although the Company's services are
complementary, TechTeam has divided its service offerings into two divisions,
Call Center Services and Corporate Computer Services (technical staffing,
systems integration and training programs). Revenues from all service offerings
are recognized as services are performed.

     Call Center Services consist of international telephone support for
end-users of computer hardware, software products and services.  Call Center
Services are billed on a fee per call, fee per time spent on calls or per agent
basis, each as negotiated with clients. Under the terms of certain Call Center
Services contracts, clients are required to pay certain amounts at the
commencement of the contract, which payments are non-refundable and as to which
the Company has no further service obligation. Amounts billed under this
provision of such contracts aggregated $618,100 in 1996; $1,655,700 in 1995; and
$19,600 in 1994. National TechTeam has recognized these amounts as revenues when
they were billed. Absent unusual circumstances, in the future the Company
expects to negotiate these contracts so that the revenues are recognized over
the life of the contract.

     Technical staffing includes a variety of technical services, including the
placement of computer personnel at client sites to support end-user applications
through on-site help desks, as well as selected programming and consulting
services. Systems integration consists of database design, computer product
sales and networking services. Contracts for technical staffing and systems
integration are generally negotiated on an hourly rate basis or are priced on a
project basis. Training programs consist of instructor-led, computer-based
training for word processing, spreadsheets, graphics, data bases, desktop
publishing, operating systems, and systems administration for NetWare, JAVA, NT,
Windows, OS/2 and UNIX and mainframe operating systems. For training programs,
clients pay a fee per student trained or a fee for classes offered, in some
cases with an advance payment for the cost of the necessary training materials.

     Cost of services delivered consists of direct personnel compensation,
statutory and other benefits associated with such personnel, facility and
computer equipment costs, and other direct costs associated with providing
services to clients. Selling, general and administrative costs consist of sales,
marketing and administrative personnel compensation, statutory and other
benefits associated with such personnel, facility and equipment costs and other
indirect costs associated with the sales, marketing and administrative functions
of the Company.



                                       12
<PAGE>   13
     The following table sets forth the percentage relationship to revenues of
certain items in the Company's Consolidated Statements of Operations:


<TABLE>
<CAPTION>
                                                    YEAR ENDED DECEMBER 31,
                                               ---------------------------------
                                                1996          1995          1994
                                                ----          ----          ----
<S>                                            <C>           <C>           <C>
Revenues
    Call Center Services . . . . . . . . . .    48.7%         36.3%         23.8%
                                               -----         -----         -----
    Corporate Computer Services  . . . . . .
       Technical staffing  . . . . . . . . .    22.6          35.3          42.6
       Systems integration . . . . . . . . .    18.5          18.8          18.3
       Training programs . . . . . . . . . .    10.2           9.6          15.3
                                               -----         -----         -----
    Total Corporate Computer Services  . . .    51.3          63.7          76.2
                                               -----         -----         -----
Total revenues   . . . . . . . . . . . . . .   100.0         100.0         100.0
Cost of services delivered . . . . . . . . .    76.1          77.5          76.6
                                               -----         -----         -----
Gross profit . . . . . . . . . . . . . . . .    23.9          22.5          23.4
                                               -----         -----         -----
Other expenses/(income)
    Selling, general and administrative  . .    13.5          12.8          12.8
    Interest expense . . . . . . . . . . . .     0.2           0.1           0.1
    Interest income  . . . . . . . . . . . .    (1.4)         (0.2)         (0.2)
    Gain on sale of investment . . . . . . .      --            --          (0.5)
                                               -----         -----         -----
                                                12.3          12.7          12.2
                                               -----         -----         -----
Income before tax provisions   . . . . . . .    11.6           9.8          11.2
Tax provisions . . . . . . . . . . . . . . .     4.7           4.0           4.7
                                               -----         -----         -----
Net income   . . . . . . . . . . . . . . . .     6.9%          5.8%          6.5%
                                               =====         =====         =====

</TABLE>


     Between 1994 and 1996, TechTeam's revenues increased at a compound annual
rate of 51.4%. The Company believes that its growth has benefited from the trend
among large corporations to outsource much of their information technology needs
and TechTeam's ability to provide services that address a broad range of those
needs. The Company believes that the outsourcing trend will continue and will
provide continuing opportunities for both of its service lines. TechTeam further
believes that its service offerings are influenced substantially by its clients'
desires to focus on their core businesses and to leave information technology
needs to the Company for which information technology is its core business.
TechTeam's training programs have encountered cyclical enrollment trends,
influenced by the timing and extent to which clients are upgrading desk top
software.

     National TechTeam's business is based on client relationships with major
corporations. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Impact of Business with Major Clients."

     Comparative Performance -- 1996 versus 1995

     National TechTeam earned net income of $4,773,632, or $0.38 per share, for
1996 as compared to a net income of $2,399,067 or $0.21 per share, for 1995.

     Revenues -- National TechTeam's total revenues increased by $27,437,364 in
1996 to $69,150,996, a 65.8% increase over revenues in 1995.  Changes in
revenues resulted from the following:

          Call Center Services -- Revenues from Call Center Services increased
     by $18,574,150 in 1996. This was a 122.8% increase over Call Center
     Services revenues in 1995. The increase was due to an increase to 36
     contracts in place at December 31, 1996 compared to the 18 contracts at
     December 31, 1995, increased business with existing customers, primarily
     Hewlett-Packard, and fees of $2.1 million related to licensing of its
     Foundation Platform software to others.



                                       13
<PAGE>   14
          Technical staffing -- Revenues from technical staffing increased by
     $876,187 in 1996. This was a 5.9% increase over technical staffing revenues
     in 1995. The increase was due to continued client demand for TechTeam's
     help desk and computer services personnel at Ford and other major accounts.

          Systems integration -- Revenues from systems integration increased by
     $4,977,961 in 1996. This was a 63.5% increase over systems integration
     revenues in 1995. The increase was due principally to a growing demand by
     existing clients for TechTeam's networking services.

          Training programs -- Revenues from training programs increased by
     $3,009,066 in 1996. This was a 74.9% increase over training revenues in
     1995. The increase was due to increased enrollments in the Company's
     training programs and the sale of $350,000 of computer-based training
     materials to a new client.

     Cost of services delivered -- The cost of services delivered increased by
$20,262,802 in 1996. This was a 62.7% increase over the cost of services
delivered in 1995. The increase was due principally to compensation costs for an
increased number of technical personnel, statutory and other benefits associated
with such personnel, facility and computer equipment costs, and other direct
costs associated with providing an increased volume of services to clients.
These costs were 76.1% and 77.5% of revenues in 1996 and 1995, respectively.

     Selling, general and administrative -- Selling, general and administrative
expenses increased by $3,991,834 in 1996. This was a 74.6% increase over
selling, general and administrative expenses in 1995. The increase was due
principally to compensation costs for an increased number of sales and
administrative personnel, statutory and other benefits associated with such
personnel, facility and equipment costs, and other indirect costs needed to
support the growth of the Company. These expenses were 13.5% of revenues in 1996
compared with 12.8% of revenues in 1995. This increase was due primarily to
expansion of National TechTeam's sales and internal management information
systems staffs to support the growth of the Company.

     Interest income -- Commencing in October 1996, National TechTeam began
earning significant amounts of interest income on cash generated by the 1996
public stock offering.

     Tax provisions -- TechTeam recognized $2,536,699 of Federal income tax in
1996, resulting in an effective tax rate of 34.7% compared to an effective tax
rate of  34.6% for 1995. The Michigan Single Business Tax in 1996 was $709,000,
with an effective tax rate of 8.8% compared to an effective tax rate of 10.1% in
1995, the reduction reflecting tax credits generated by the creation of new jobs
in Michigan.

     Comparative Performance -- 1995 versus 1994

     National TechTeam earned net income of $2,399,067, or $0.21 per share, for
1995 as compared to a net income of $1,971,049, or $0.18 per share, for 1994.

     Revenues -- The Company's total revenues increased by $11,560,661 in 1995
to $41,713,632, a 38.3% increase over 1994 revenues. Changes in revenues
resulted from the following:

          Call Center Services -- Revenues from Call Center Services increased
     by $7,950,297 in 1995. This was a 110.8% increase over Call Center Services
     revenues in 1994. The increase was due to an increase to 18 contracts in
     place at December 31, 1995 compared to the seven contracts at December 31,
     1994.

          Technical staffing -- Revenues from technical staffing increased by
     $1,895,098 in 1995. This was a 14.8% increase over technical staffing
     revenues in 1994. The increase was due to continued client demand for
     TechTeam's help desk and computer services personnel at Ford and other
     major accounts.

          Systems integration -- Revenues from systems integration increased by
     $2,310,827 in 1995. This was a 41.8% increase over systems integration
     revenues in 1994. The increase was due principally to a growing demand by
     existing clients for TechTeam's networking and applications development
     services.



                                       14
<PAGE>   15

          Training programs -- Revenues from training programs decreased by
     $595,561 in 1995. This was a 12.9% decrease from training revenues in 1994.
     The decrease was due to a reduced scope of training services for a major
     client.

     Cost of services delivered -- The cost of services delivered increased by
$9,238,101 in 1995. This was a 40.0% increase over the cost of services
delivered in 1994. The increase was due principally to compensation costs for an
increased number of technical personnel, statutory and other benefits associated
with such personnel, facility and computer equipment costs, and other direct
costs associated with providing an increased volume of services to clients.
These costs were 77.5% and 76.4% of revenues in 1995 and 1994, respectively.

     Selling, general and administrative -- Selling, general and administrative
expenses increased by $1,476,875 in 1995. This was a 38.1% increase over
selling, general and administrative expenses in 1994. The increase was due
principally to compensation costs for an increased number of sales and
administrative personnel, statutory and other benefits associated with such
personnel, facility and equipment costs, and other indirect costs needed to
support the growth of the Company. These expenses were 12.8% of revenues in both
1995 and 1994.

     Tax provisions -- National TechTeam recognized $1,268,236 of Federal income
tax in 1995, resulting in an effective tax rate of 34.6% for 1995 compared to an
effective tax rate of 35.7% for 1994. In 1995, TechTeam reversed $25,000 of
Federal income tax reserve, resulting in the reduced effective tax rate. The
Michigan Single Business Tax in 1995 was $410,000, with an effective tax rate of
10.1% compared to an effective tax rate of 9.1% for 1994.

     Impact of Business with Major Clients

     Historically, National TechTeam has been heavily dependent upon Ford for a
major portion of its revenues. Management recognizes the need to diversify its
client base from both a client and industry perspective. The Company has had
some success in this regard as Hewlett-Packard became TechTeam's largest client
in 1996. However, the Company continues to seek additional business from its
largest clients and those clients will continue to constitute a high percentage
of National TechTeam's total revenues for the foreseeable future. TechTeam's
services are not specific to any single industry and can be beneficial to most
large corporations. National TechTeam's technical staffing and training programs
cover most of the popular software applications and can be customized to improve
the productivity of microcomputer users in most companies.  Continuing efforts
to increase sales outside of Ford have produced positive results, as total
revenues from non-Ford clients were $52,839,227 in 1996, $26,128,668 in 1995,
and $15,957,118 in 1994, a compound annual growth rate of 82.0%.



                                       15
<PAGE>   16
     Impact of Business with Major Clients -- continued


<TABLE>
<CAPTION>
                                                                             YEAR ENDED DECEMBER 31,
                                                                 -------------------------------------------------
                                                                   1996               1995                1994
                                                                   ----               ----                ----
<S>                                                             <C>               <C>                  <C>
Hewlett-Packard Company 
    Revenues for the period   . . . . . . . . . . . . . . .      $19,266,318       $ 7,269,445          $       --
    Percentage increase from prior period   . . . . . . . .            165.0%              --_*                 -- %
    Percentage of total revenues  . . . . . . . . . . . . .             27.9%             17.4%                 -- %
Ford Motor Company  
    Revenues for the period   . . . . . . . . . . . . . . .      $16,311,769       $15,584,964          $14,195,853
    Percentage increase from prior period   . . . . . . . .              4.7%              9.8%                 3.6%
    Percentage of total revenues  . . . . . . . . . . . . .             23.6%             37.4%                47.1%
Chrysler Corporation 
    Revenues for the period   . . . . . . . . . . . . . . .      $ 5,485,038       $ 4,162,419          $ 3,294,788
    Percentage increase from prior period . . . . . . . . .             31.8%             26.3%               160.2%
    Percentage of total revenues  . . . . . . . . . . . . .              7.9%             10.0%                10.9% 
Corel Corporation 
    Revenues for the period   . . . . . . . . . . . . . . .      $   268,459       $ 2,737,601          $ 3,687,298
    Percentage increase/(decrease) from prior period  . . .            (90.2)%           (25.8)%              789.4%
    Percentage of total revenues  . . . . . . . . . . . . .              0.4 %             6.6 %               12.2%
Novell, Inc.  
    Revenues for the period   . . . . . . . . . . . . . . .      $        --       $   522,973          $ 2,260,203
    Percentage increase/(decrease) from prior period  . . .           (100.0)%           (76.7)%               31.6%
    Percentage of total revenues  . . . . . . . . . . . . .               --               1.3 %                7.5%

</TABLE>

------------

* First year of business relationship

     Services provided to Ford and Chrysler consist of contract computer
end-user support including on-site help desks and call center services,
programming services, documentation services, and classroom training programs.
TechTeam provides these services to virtually all Ford divisions and two
finance-related Ford subsidiaries. Services provided to Hewlett-Packard, Corel
and Novell consist of technical product post-sales support provided from
TechTeam call center sites.

     Revenues from Hewlett-Packard first commenced in mid-1995 with the award of
the first contract for call center services. 1996 was the first full year of
services under that contract. Additional contracts have been awarded in 1996.

     Revenues from Corel first commenced in late 1993 and continued into early
1996 at which time Corel made a strategic decision to bring its call center
outsourcing service back in-house. The Company believes Corel's decision is
unrelated to the Company's performance.

     Revenues from Novell (product support related to WordPerfect application
software) first commenced in mid-1993 and continued until late 1995 at which
time Novell discontinued outsourced telephone support for its customers. The
Company believes Novell's decision is unrelated to the Company's performance
and, shortly after discontinuation of service, the WordPerfect business unit was
sold to Corel Corporation.



                                       16
<PAGE>   17
LIQUIDITY AND CAPITAL RESOURCES

     Over the three year period commencing January 1, 1994, the Company's
business has been financed by cash provided by operations and the issuance of
common stock, primarily $5,020,834 of private placements in 1994, shares issued
throughout the period under stock option plans and $77,851,500 from a public
offering in 1996. Indicators of the Company's financial strength are summarized
below:


<TABLE>
<CAPTION>
                                                                           DECEMBER 31,
                                                         -------------------------------------------------
                                                            1996               1995              1994
                                                            ----               ----              ----
<S>                                                     <C>                <C>                <C>
Working capital . . . . . . . . . . . . . . . . . .      $ 90,559,459       $12,352,915        $11,716,501
Current ratio . . . . . . . . . . . . . . . . . . .              11.9               4.2               11.0
Debt as a percentage of total capitalization  . . .               0.0%              2.4%               0.0%
Shareholders' equity  . . . . . . . . . . . . . . .      $103,458,639       $17,891,966        $15,829,026

</TABLE>

     The Company's working capital was $90,559,459  at December 31, 1996, an
increase of 633.1% from December 31, 1995. This increase was due primarily to
funds provided by the public stock offering in 1996 and 1996 operating results
(reflected primarily in higher accounts receivable balances due to increased
sales).

     TechTeam has a line-of-credit agreement with NBD Bank which provides for
short-term borrowings of up to $6,000,000; the credit is unsecured.  The line of
credit is at the prime rate. There were no borrowings under the credit agreement
at December 31, 1996.

     In 1995, National TechTeam invested $1,057,000 in telecommunications
hardware and software which was financed through a five year bank term note.
Management believes sufficient cash resources exist to support its current
growth strategies through currently available cash, future operations, and the
Company's existing bank credit arrangement.



                                       17
<PAGE>   18
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The following consolidated financial statements of National TechTeam, Inc.
and Subsidiaries are included in Item 8:


<TABLE>
<CAPTION>
                                                                                        PAGE
<S>                                                                                     <C>
Report of Ernst & Young LLP, Independent Auditors . . . . . . . . . . . . . . . . . . .  20

Consolidated Statements of Operations -- Years Ended December 31, 1996, 
1995 and 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  21

Consolidated Statements of Financial Position -- December 31, 1996
and December 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  22-23

Consolidated Statements of Shareholders' Equity -- Years Ended December 31, 1996, 
1995 and 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  24

Consolidated Statements of Cash Flows -- Years Ended December 31, 1996, 
1995 and 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  25

Notes to the Consolidated Financial Statements. . . . . . . . . . . . . . . . . . . . .  26-34
</TABLE>

     The following financial statement schedules of National TechTeam, Inc. and
Subsidiaries are included pursuant to the requirements of Item 14(d): None.

     All schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission are not required under the
related instructions or are not applicable and, therefore, have been omitted.





                                       18
<PAGE>   19





                       This Page Intentionally Left Blank




                                       19
<PAGE>   20

REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

BOARD OF DIRECTORS
NATIONAL TECHTEAM, INC.

     We have audited the accompanying consolidated statements of financial
position of National TechTeam, Inc. and subsidiaries as of December 31, 1996 and
1995 and the related consolidated statements of operations, shareholders'
equity, and cash flows for each of the three years in the period ended December
31, 1996. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on those financial
statements based on our audits.

     We conducted our audits in accordance with general accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of National
TechTeam, Inc. and subsidiaries at December 31, 1996 and 1995, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1996, in conformity with generally
accepted accounting principles.


                                               ERNST & YOUNG LLP

February 26, 1997
Detroit, Michigan




                                       20
<PAGE>   21
                    NATIONAL TECHTEAM, INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                   YEAR ENDED DECEMBER 31,
                                                       -------------------------------------------------
                                                          1996              1995                1994
                                                          ----              ----                ----
<S>                                                   <C>               <C>                 <C>
REVENUES - NOTE B
   Call Center Services  . . . . . . . . . . . . .     $33,697,444       $15,123,294         $ 7,172,997
                                                       -----------       -----------         -----------
   Corporate Computer Services
      Technical staffing . . . . . . . . . . . . .      15,608,237        14,732,050          12,836,952 
      Systems integration  . . . . . . . . . . . .      12,818,545         7,840,584           5,529,757
      Training programs  . . . . . . . . . . . . .       7,026,770         4,017,704           4,613,265
                                                       -----------       -----------         -----------
   Total Corporate Computer Services . . . . . . .      35,453,552        26,590,338          22,979,974
                                                       -----------       -----------         -----------
TOTAL REVENUES . . . . . . . . . . . . . . . . . .      69,150,996        41,713,632          30,152,971
COST OF SERVICES DELIVERED . . . . . . . . . . . .      52,599,818        32,337,016          23,098,915
                                                       -----------       -----------         -----------
GROSS PROFIT . . . . . . . . . . . . . . . . . . .      16,551,178         9,376,616           7,054,056
                                                       -----------       -----------         -----------
OTHER EXPENSES/(INCOME)
   Selling, general and administrative . . . . . .       9,340,868         5,349,034           3,872,159
   Interest expense  . . . . . . . . . . . . . . .         128,213            24,109              33,911
   Interest income . . . . . . . . . . . . . . . .        (937,234)          (73,830)            (71,467)
   Gain on sale of investment  . . . . . . . . . .              --                --            (152,471)
                                                       -----------       -----------         -----------
                                                         8,531,847         5,299,313           3,682,132
                                                       -----------       -----------         -----------
INCOME BEFORE TAX PROVISION  . . . . . . . . . . .       8,019,331         4,077,303           3,371,924
TAX PROVISIONS - NOTE F  . . . . . . . . . . . . .       3,245,699         1,678,236           1,400,875
                                                       -----------       -----------         -----------
NET INCOME . . . . . . . . . . . . . . . . . . . .     $ 4,773,632       $ 2,399,067         $ 1,971,049
                                                       ===========       ===========         ===========
PRIMARY AND FULLY DILUTED EARNINGS PER SHARE . . .     $      0.38       $      0.21         $      0.18
                                                       ===========       ===========         ===========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES AND   
COMMON SHARE EQUIVALENTS OUTSTANDING
   Primary . . . . . . . . . . . . . . . . . . . .      12,520,424        11,360,768          10,981,183
   Fully diluted . . . . . . . . . . . . . . . . .      12,543,878        11,360,768          11,079,136
</TABLE>


                            See accompanying notes.


                                      21
<PAGE>   22
                   NATIONAL TECHTEAM, INC. AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

<TABLE>
<CAPTION>
                                                                                  DECEMBER 31,  
                                                                      -----------------------------------
                     ASSETS                                                1996                  1995   
                                                                           ----                  ----
<S>                                                                  <C>                    <C>
CURRENT ASSETS                          
    Cash and cash equivalents . . . . . . . . . . . . . . . . . . .   $ 46,771,797            $ 1,717,543 
    Securities available-for-sale . . . . . . . . . . . . . . . . .     27,169,703                     -- 
    Accounts receivable  Note B   . . . . . . . . . . . . . . . . .     22,482,927             13,269,272 
    Note receivable - current portion . . . . . . . . . . . . . . .            --                  53,333 
    Refundable income tax . . . . . . . . . . . . . . . . . . . . .      1,205,561                     -- 
    Inventories . . . . . . . . . . . . . . . . . . . . . . . . . .        647,565                769,545 
    Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        622,865                381,751 
                                                                      ------------            -----------
                                                                        98,900,418             16,191,444 
                                                                      ------------            -----------
                                                                                                          
PROPERTY, EQUIPMENT AND PURCHASED SOFTWARE                                                                
    Office furniture and equipment  . . . . . . . . . . . . . . . .     12,214,673              6,622,953 
    Purchased software  . . . . . . . . . . . . . . . . . . . . . .      1,742,007                     -- 
    Leasehold improvements  . . . . . . . . . . . . . . . . . . . .      1,380,140                681,223 
    Transportation equipment . . . . . . . . . . . . . . . . . . . .        192,907                154,395 
                                                                      ------------            -----------
                                                                        15,529,727              7,458,571 
    Less - Accumulated depreciation and amortization  . . . . . . .      5,101,211              2,898,257 
                                                                      ------------            -----------
                                                                        10,428,516              4,560,314 
                                                                      ------------            -----------
                                
OTHER ASSETS                                            
    Goodwill (less accumulated amortization of $551,081 at         
       December 31, 1996 and $345,512 at December 31, 1995) . . . .      1,509,437              1,252,585       
    Investment in WebCentric - Note H   . . . . . . . . . . . . . .        804,516                     --
    Note receivable - long term   . . . . . . . . . . . . . . . . .             --                102,222       
    Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        319,171                178,958       
                                                                      ------------            -----------
                                                                         2,633,124              1,533,765       
                                                                      ------------            -----------
TOTAL ASSETS  . . . . . . . . . . . . . . . . . . . . . . . . . . .   $111,962,058            $22,285,523       
                                                                      ============            ===========

</TABLE>

                            See accompanying notes.


                                       22
<PAGE>   23
                    NATIONAL TECHTEAM, INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

<TABLE>
<CAPTION>

                                                                              DECEMBER 31,
                                                                 ------------------------------------ 
             LIABILITIES AND SHAREHOLDERS' EQUITY                     1996                     1995
                                                                      ----                     ----
<S>                                                             <C>                      <C> 
CURRENT LIABILITIES    
    Current portion of long-term debt . . . . . . . . . . . . .  $         --             $    96,884
    Accounts payable  . . . . . . . . . . . . . . . . . . . . .     3,574,363                 893,965 
    Accrued payroll, related taxes and withholdings . . . . . .     3,382,612               2,037,446 
    Deferred income tax - Note F  . . . . . . . . . . . . . . .       112,643                  89,839 
    Federal income tax payable    . . . . . . . . . . . . . . .            --                 160,116 
    Deferred revenues and unapplied receipts  . . . . . . . . .       255,940                 431,967 
    Accrued expenses and taxes  . . . . . . . . . . . . . . . .       874,329                 106,042 
    Other . . . . . . . . . . . . . . . . . . . . . . . . . . .       141,072                  22,270 
                                                                 ------------             -----------
                                                                    8,340,959               3,838,529 
                                                                 ------------             -----------
LONG-TERM LIABILITIES      
    Deferred income tax - Note F  . . . . . . . . . . . . . . .        87,813                 116,066 
    Long-term debt, less current portion - Note D . . . . . . .            --                 438,962 
    Minority interest . . . . . . . . . . . . . . . . . . . . .        74,647                      --
                                                                 ------------             -----------
                                                                      162,460                 555,028
                                                                 ------------             -----------
SHAREHOLDERS' EQUITY - - NOTES E, G, J AND K    
    Preferred stock, par value $.01    
        Authorized  5,000,000 shares    
        None issued    
    Common stock, par value $.01    
        Authorized  45,000,000 shares    
        Issued:    
           15,008,291 shares at December 31, 1996 . . . . . . .       150,083    
           11,407,666 shares at December 31, 1995 . . . . . . .                               114,077 
    Additional paid-in capital  . . . . . . . . . . . . . . . .    93,189,700              12,601,925 
    Retained earnings   . . . . . . . . . . . . . . . . . . . .    10,856,604               6,082,972 
                                                                 ------------             -----------
    Total . . . . . . . . . . . . . . . . . . . . . . . . . . .   104,196,387              18,798,974 
    Less - - Treasury stock (161,983 shares at 
    December 31, 1996 and 200,000 shares at 
    December 31, 1995). . . . . . . . . . . . . . . . . . . . .       737,748                 907,008 
                                                                 ------------             -----------
    Total shareholders' equity. . . . . . . . . . . . . . . . .   103,458,639              17,891,966 
                                                                 ------------             -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY  . . . . . . . . . .  $111,962,058             $22,285,523 
                                                                 ============             ===========

</TABLE>

                           See accompanying notes.



                                      23
<PAGE>   24
                    NATIONAL TECHTEAM, INC. AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY


<TABLE>
<CAPTION>
                                                                            ADDITIONAL 
                                                              COMMON          PAID-IN      RETAINED     TREASURY
                                                               STOCK          CAPITAL      EARNINGS       STOCK
                                                              --------      -----------   -----------    --------
<S>                                                          <C>           <C>           <C>            <C>
Balance at January 1, 1994 . . . . . . . . . . . . . . . .    $ 96,198      $ 6,270,498  $  1,712,856  $       --   
   Proceeds from issuance of 1,060,731 shares of                                                                    
      Common stock - Note G  . . . . . . . . . . . . . . .      10,607        5,010,227            --          --   
   Proceeds from issuance of 308,625 shares under                                                                   
      stock option plans - Note J  . . . . . . . . . . . .       3,087          574,123            --          --   
   Tax benefit from exercise of employee stock options                                                              
      and other  . . . . . . . . . . . . . . . . . . . . .          --          180,381            --          --   
   Net income for 1994 . . . . . . . . . . . . . . . . . .          --               --     1,971,049          --   
                                                              --------      -----------  ------------  ----------   
Balance at December 31, 1994 . . . . . . . . . . . . . . .     109,892       12,035,229     3,683,905          --   
   Proceeds from issuance of 418,500 shares under                                                                   
      stock option plans - Note J  . . . . . . . . . . . .       4,185          256,475            --          --   
   Tax benefit from exercise of employee stock options                                                              
      and other  . . . . . . . . . . . . . . . . . . . . .          --          310,221            --          --   
   Purchase of common stock - Note K . . . . . . . . . . .          --               --            --    (907,008)  
   Net income for 1995 . . . . . . . . . . . . . . . . . .          --               --     2,399,067          --   
                                                              --------      -----------  ------------  ----------   
Balance at December 31, 1995 . . . . . . . . . . . . . . .     114,077       12,601,925     6,082,972    (907,008)  
   Proceeds from issuance of 3,225,000 shares of                                                                    
      common stock - Note G  . . . . . . . . . . . . . . .      32,250       77,819,250            --          --   
   Proceeds from issuance of 289,100 shares under                                                                   
      stock option plans - Note J  . . . . . . . . . . . .       2,891          778,469            --          --   
   Shares issued to acquire Coup, Inc. . . . . . . . . . .         800          259,200            --          --   
   Shares issued to acquire U.S.A. Computer Training                                                                
      Centers, Inc.  . . . . . . . . . . . . . . . . . . .          65           76,277            --          --   
   Tax benefit from exercise of employee stock options                                                              
      and other  . . . . . . . . . . . . . . . . . . . . .          --        1,654,579            --          --   
   Contributions to 401(k) plan and other  . . . . . . . .          --               --            --     169,260   
   Net income for 1996 . . . . . . . . . . . . . . . . . .          --               --     4,773,632          --   
                                                              --------      -----------  ------------  ----------   
   Balance at December 31, 1996  . . . . . . . . . . . . .    $150,083      $93,189,700  $ 10,856,604  $ (737,748)  
                                                              ========      ===========  ============  ==========   

</TABLE>


                           See accompanying notes.



                                      24
<PAGE>   25
                   NATIONAL TECHTEAM, INC. AND SUBSIDIARIES

                    CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                         YEAR ENDED DECEMBER 31,                
                                                                               -------------------------------------------      
                                                                                   1996            1995           1994          
                                                                                   ----            ----           ----          
<S>                                                                            <C>             <C>              <C>               
OPERATING ACTIVITIES                                                                                                            
    Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       $ 4,773,632     $ 2,399,067      $ 1,971,049     
    Adjustments to reconcile net income to net cash provided by/                                                                
    (used in) operating activities:                                                                                             
        Depreciation and amortization  . . . . . . . . . . . . . . . . .         2,645,544       1,594,250        1,037,279     
        Provision for uncollectible accounts receivable  . . . . . . . .            25,000         123,143           30,308     
        Treasury stock contributed to 401(k) plan  . . . . . . . . . . .           169,260              --               --     
        Provision for deferred income tax  . . . . . . . . . . . . . . .           (60,924)        (89,631)         138,310     
        (Gain) on sale of investment . . . . . . . . . . . . . . . . . .                --              --         (152,471)    
        (Gain)/loss on sales of equipment and other  . . . . . . . . . .           (17,860)         55,209           (3,878)    
        Changes in current assets and liabilities:         
           Accounts receivable . . . . . . . . . . . . . . . . . . . . .        (9,238,655)     (5,640,614)      (2,725,807)    
           Inventories . . . . . . . . . . . . . . . . . . . . . . . . .           121,980        (269,797)        (130,574)    
           Other current assets  . . . . . . . . . . . . . . . . . . . .          (241,114)        (40,420)        (168,268)    
           Accounts payable  . . . . . . . . . . . . . . . . . . . . . .         2,680,398         606,562         (173,373)    
           Accrued payroll, related taxes and withholdings . . . . . . .         1,345,166       1,543,265          128,159     
           Federal income tax  . . . . . . . . . . . . . . . . . . . . .        (1,365,677)        544,374         (892,231)    
           Deferred revenues and unapplied receipts  . . . . . . . . . .          (176,027)        384,427          (99,091)    
           Accrued expenses and taxes  . . . . . . . . . . . . . . . . .           768,287         106,042               --     
           Other current liabilities . . . . . . . . . . . . . . . . . .           118,802        (115,852)        (182,233)    
                                                                               -----------     -----------      -----------     
        Net cash provided by/(used in) operating activities  . . . . . .         1,547,812       1,200,025       (1,222,821)    
                                                                               -----------     -----------      -----------     
INVESTING ACTIVITIES                                                                                                            
    Purchases of property, equipment and software  . . . . . . . . . . .        (8,156,819)     (3,187,027)        (864,798)    
    Development of training manuals  . . . . . . . . . . . . . . . . . .          (211,027)       (117,970)        (116,722)    
    Purchases of securities available-for-sale . . . . . . . . . . . . .       (27,169,703)       (100,000)     (12,388,000)    
    Proceeds from sale of temporary investments  . . . . . . . . . . . .                --       3,600,000        8,888,000     
    Proceeds from sale of investment . . . . . . . . . . . . . . . . . .                --              --          160,000     
    Investment in WebCentric . . . . . . . . . . . . . . . . . . . . . .          (804,516)             --               --     
    Collection/(issuance) of note receivable . . . . . . . . . . . . . .           155,555        (160,000)              --     
    Proceeds from sales of property and equipment and other assets . . .            11,000          22,630           23,227     
    Other assets - net . . . . . . . . . . . . . . . . . . . . . . . . .           (69,641)        (12,293)          13,082     
                                                                               -----------     -----------      -----------     
        Net cash provided by/(used in) investing activities  . . . . . .       (36,245,151)         45,340       (4,285,211)    
                                                                               -----------     -----------      -----------     
FINANCING ACTIVITIES                                                                                                            
    Proceeds from short-term borrowings  . . . . . . . . . . . . . . . .         8,116,575              --               --     
    Proceeds from long-term borrowings   . . . . . . . . . . . . . . . .           480,212         565,998               --     
    Proceeds from issuance of common stock . . . . . . . . . . . . . . .        78,632,860         260,660        5,598,044     
    Tax benefit from exercise of employee stock options  . . . . . . . .         1,654,579         310,221          180,381     
    Purchase of Company common stock . . . . . . . . . . . . . . . . . .                --        (907,008)              --     
    Payments on short-term borrowings  . . . . . . . . . . . . . . . . .        (8,213,459)             --               --     
    Payments on long-term borrowings . . . . . . . . . . . . . . . . . .          (919,174)       (170,252)        (432,471)    
                                                                               -----------     -----------      -----------     
        Net cash provided by financing activities  . . . . . . . . . . .        79,751,593          59,619        5,345,954     
                                                                               -----------     -----------      -----------     
        Increase/(decrease) in cash and cash equivalents . . . . . . . .        45,054,254       1,304,984         (162,078)    
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR . . . . . . . . . . . . .         1,717,543         412,559          574,637     
                                                                               -----------     -----------      -----------     
CASH AND CASH EQUIVALENTS AT END OF YEAR . . . . . . . . . . . . . . . .       $46,771,797     $ 1,717,543      $   412,559     
                                                                               ===========     ===========      ===========     
                                                                                                                                
</TABLE>


                           See accompanying notes.



                                      25
<PAGE>   26
                    NATIONAL TECHTEAM, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
     Basis of presentation: The consolidated financial statements include the
accounts of National TechTeam, Inc., its wholly-owned subsidiaries TechTeam
Europe, Ltd. and National TechTeam of Illinois, Inc., formerly Micro Systems
Group, Inc. ("MSG") and the Company's 75% interest in National TechTeam Europe,
N.V., a joint venture. Collectively, these companies are referred to as the
"Company" or "TechTeam." Intercompany accounts and transactions have been
eliminated as appropriate. Certain reclassifications have been made to the 1995
and 1994 financial statements in order to conform to the 1996 financial
statement presentation.

     Cash and cash equivalents: Cash includes both interest bearing and
non-interest bearing deposits which are available on demand. Cash equivalents
include all liquid investments with a maturity of three months or less when
purchased, including money market funds held at banks.

     Securities available-for-sale: The Company's management determines the
appropriate classification of securities at the time of purchase and
re-evaluates such designation as of each balance sheet date. The December 31,
1996 securities available-for-sale are stated at market value which approximates
cost. Securities available-for-sale are invested primarily in obligations of
states and other political subdivisions.

     Inventories: Inventories are stated at the lower of cost (determined by the
first-in, first-out method) or market and consist principally of computer
equipment and software.

     Property, equipment and purchased software: Property, equipment and
purchased software are stated at cost. Property and equipment are depreciated on
the straight-line method over their estimated useful lives, ranging from 3 to 10
years. Leasehold improvements are amortized on a straight-line basis over the
lesser of the lease term or the estimated useful lives of the improvements.
Purchased software is amortized over 3 years.

     Goodwill: Represents the excess cost over the fair value of net assets
acquired in the acquisition of MSG, Coup, Inc., U.S.A. Computer Training
Centers, Inc. and others and is amortized on a straight-line basis over 10
years. The carrying value of goodwill will be reviewed if the facts and
circumstances suggest that it may be impaired.

     Revenue recognition: Revenues from Call Center Services and Corporate
Computer Services are recognized as services are performed. Revenues from
product sales are recognized when title is transferred to the client. Under the
terms of certain Call Center Services contracts, clients are required to pay
certain amounts at the commencement of the contract, which payments are
non-refundable and as to which the Company has no further service obligation.
Amounts billed under this provision of such contracts aggregated $618,100 in
1996; $1,655,700 in 1995; and $19,600 in 1994.  All such amounts were recognized
as revenues when billed.

     Deferred revenue: TechTeam receives advance payments from clients under
certain lease and maintenance agreements. These payments are recognized as
revenues when earned. All deferred revenue recorded at December 31 is expected
to be earned in the subsequent year.

     Deferred income taxes: Deferred tax assets and liabilities are determined
based on differences between financial reporting and tax bases of assets and
liabilities and are measured using the enacted tax rates and laws that will be
in effect when the differences are expected to reverse.



                                       26
<PAGE>   27
                    NATIONAL TECHTEAM, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

     Stock options: TechTeam accounts for employee stock options under
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees" and related Interpretations.

     Earnings per share: Earnings per share is computed using the weighted
average number of common shares and common share equivalents outstanding during
each year presented. Common share equivalents consist of stock options and
warrants and are calculated using the treasury stock method.

     Use of estimates: Preparation of financial statements in conformity with
generally accepted accounting principles requires the Company's management to
make estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from the
estimates and assumptions made.

NOTE B - DESCRIPTION OF THE BUSINESS

     The Company provides call center services and corporate computer services
for major companies on an international scale. Revenues and accounts receivable
from major clients are summarized as follows.

<TABLE>
<CAPTION>
                                                                YEAR ENDED DECEMBER 31, 
                                                  ------------------------------------------------
                                                     1996              1995              1994 
                                                     ----              ----              ----
<S>                                               <C>                <C>               <C>
Hewlett Packard Company      
   Revenues for the period . . . . . . . . . . .  $19,266,318        $7,269,445        $        --
   Accounts receivable at end of period  . . . .    3,104,422         2,923,934                 --     
Ford Motor Company        
   Revenues for the period . . . . . . . . . . .   16,311,769        15,584,964         14,195,853 
   Accounts receivable at end of period  . . . .    5,052,263         4,863,948          2,487,263 
Chrysler Corporation . . . . . . . . . . . . . .
   Revenues for the period . . . . . . . . . . .    5,485,038         4,162,419          3,294,788 
   Accounts receivable at end of period  . . . .    1,843,888         1,221,121          1,457,237 
Corel Corporation         
   Revenues for the period . . . . . . . . . . .      268,459         2,737,601          3,687,298 
   Accounts receivable at end of period  . . . .           --           268,550            537,972 
Novell, Inc.        
   Revenues for the period   . . . . . . . . . .           --           522,973          2,260,203 
   Accounts receivable at end of period  . . . .       11,220           193,682            508,736 
</TABLE>


     Allowances for potentially uncollectible accounts receivable were as
follows: December 31, 1996 - $225,000; December 31, 1995 - $200,000.  The
Company generally does not require collateral from its clients. Credit losses
experienced have been consistent with the Company's management's expectations.



                                       27
<PAGE>   28
                    NATIONAL TECHTEAM, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

NOTE C - LEASES

     The Company leases its call center facilities, corporate and other offices
and certain office equipment under noncancelable operating leases. These leases
are renewable with various options and terms. Total rental expense was
$1,939,611 in 1996, $1,344,574 in 1995, and $1,000,992 in 1994.

     Minimum future payments under noncancelable operating leases with initial
terms of one year or more were:

                                           DECEMBER 31,
                             YEAR              1996
                      -------------------   ---------- 
                      1997 . . . . . . . . $ 2,260,775
                      1998 . . . . . . . .   2,358,089
                      1999 . . . . . . . .   2,350,547
                      2000 . . . . . . . .   2,090,168
                      2001 . . . . . . . .     887,671

NOTE D - FINANCING ARRANGEMENTS AND LONG-TERM DEBT
 
     TechTeam has an agreement with NBD Bank which provides for short-term
borrowings of up to $6,000,000; the credit is unsecured. Borrowings are at the
prime rate. There were no borrowings under the agreement at December 31, 1996.

     The following amounts relate to short-term borrowings:

                              MAXIMUM AMOUNT    AVERAGE DAILY    AVERAGE COST OF
        PERIOD                   BORROWED      AMOUNT BORROWED      BORROWINGS
-----------------------       --------------   ---------------   ---------------
Year ended December 31,                 
  1996 . . . . . . . . . . .  $ 6,000,000         $535,792          8.25%
  1995 . . . . . . . . . . .           --               --            --      
  1994 . . . . . . . . . . .    1,220,000          114,767          5.30    


  
     Long-term debt consists of the following:
  
                                                 DECEMBER 31,
                                          ----------------------------
                                            1996               1995
                                            ----               ----
Total amounts due under term notes . . .  $      --          $ 535,846
Less current portion . . . . . . . . . .         --             96,884
                                          ---------          ---------
                                          $      --          $ 438,962
                                          =========          =========

     Interest paid was $128,213 in 1996, $24,109 in 1995, and $33,911 in 1994.
 
  

                                       28
<PAGE>   29
                    NATIONAL TECHTEAM, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

NOTE E - EMPLOYEE RETIREMENT PLAN
 
     The Company has a 401(k) Retirement Savings Plan which covers substantially
all employees. Under the provisions of the Plan, the Company will match employee
contributions in amounts up to 3% of gross compensation; contributions were
$350,425 in 1996,  $247,181 in 1995, and $163,087 in 1994. The Company's policy
is to fund employee contributions and the Company's matching contributions each
pay period. Contributions are deposited with the trustee, NBD Bank, and then
invested in six funds at the direction of the participants. Effective in 1996,
the Company's matching contributions are credited only to the National TechTeam
Stock Fund for the benefit of each participant.

NOTE F - TAX PROVISIONS
 
     Tax provisions are as follows:

<TABLE>
<CAPTION>
  
                                                  YEAR ENDED DECEMBER 31,
                                       ---------------------------------------------
                                         1996             1995              1994
                                         ----             ----              ----
<S>                                    <C>              <C>              <C>
Federal income tax:                                             
    Currently payable . . . . . . .    $2,597,623       $1,357,867        $  956,690 
    Deferred (credit) . . . . . . .       (60,924)         (89,631)          138,310 
                                       ----------       ----------        ---------- 
    Total . . . . . . . . . . . . .     2,536,699        1,268,236         1,095,000 
Michigan single business tax  . . .       709,000          410,000           305,875 
                                       ----------       ----------        ---------- 
                                       $3,245,699       $1,678,236        $1,400,875 
                                       ==========       ==========        ========== 
Tax payments  . . . . . . . . . . .    $2,310,000       $  905,000        $2,022,000 
                                       ==========       ==========        ========== 
                                                                                
</TABLE>
     A reconciliation of the Federal income tax provision and the amount
computed by applying the Federal statutory income tax rate to income before
Federal income tax follows:

<TABLE>
<CAPTION>
                                                                        YEAR ENDED DECEMBER 31,
                                                              ---------------------------------------------
                                                                 1996             1995              1994
                                                                 ----             ----              ----
<S>                                                           <C>             <C>               <C>
Income tax at Federal statutory rate of 34% . . . . . . . .   $2,485,513      $1,246,883        $1,042,457       
Goodwill, intangibles and other permanent differences . . .       75,376          46,353            52,543  
Tax reserve reversed  . . . . . . . . . . . . . . . . . . .      (24,190)        (25,000)               --
                                                              ----------      ----------        ----------        
                                                              $2,536,699      $1,268,236        $1,095,000       
                                                              ==========      ==========        ==========
</TABLE>


                                       29
<PAGE>   30
                    NATIONAL TECHTEAM, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

 
NOTE F - TAX PROVISIONS - Continued

     The principal components of deferred Federal income tax balances, and the
classification thereof in the Consolidated Statements of Financial Position, are
as follows:

<TABLE>
<CAPTION>
                                                             DECEMBER 31,
                                         ------------------------------------------------------    
                                                   1996                        1995
                                         -------------------------    -------------------------    
                                          ASSETS       LIABILITIES     ASSETS       LIABILITIES
                                         --------      -----------    --------      -----------
<S>                                     <C>            <C>           <C>            <C>     
Allowance for uncollectible 
   accounts receivable . . . . . .       $ 76,500       $     --      $ 68,000        $     --                
Other  . . . . . . . . . . . . . .         62,200             --        15,226              --            
Prepaid expenses . . . . . . . . .             --        112,643            --          89,839  
Accelerated tax depreciation . . .             --         87,813            --         116,066
                                         --------       --------      --------        --------
                                         $138,700       $200,456      $ 83,226        $205,905 
                                         ========       ========      ========        ========
</TABLE>





                                       30
<PAGE>   31
                   NATIONAL TECHTEAM, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

NOTE G - STOCK TRANSACTIONS
 
     A summary of stock transactions other than those discussed in Notes H and J
for the three years ended December 31, 1996 is as follows:

<TABLE>
<CAPTION>
                                                                 SHARES              PROCEEDS
                                                               ---------           -----------
<S>                                                           <C>                 <C>
                      1994                    
Warrants issued in 1990 and 1991 and exercised in 1994 . . .      41,667           $    45,834
Private placement of common shares at                   
        $5.00 per share  . . . . . . . . . . . . . . . . . .     618,000             3,090,000
        $4.70 per share  . . . . . . . . . . . . . . . . . .     401,064             1,885,000
                                                               ---------           ----------- 
                                                               1,060,731           $ 5,020,834
                                                               =========           ===========

                      1995                    
None . . . . . . . . . . . . . . . . . . . . . . . . . . . .      
                     
                      1996                    
Public offering of shares @ $24.14, net of underwriters  
        discount . . . . . . . . . . . . . . . . . . . . . .   3,225,000           $77,851,500
                                                               =========           ===========
</TABLE>
 
NOTE H - ACQUISITION AND SUBSEQUENT EVENT
 
     TechTeam acquired 15% of the shares of WebCentric Communications, Inc.
("WebCentric") in September 1996 and the remaining 85% of the shares in January
1997.  The transaction was structured as a cash and stock-for-stock exchange.
Cash totalling $2,330,449  and 270,848  shares (valued at $3,995,183) of
TechTeam's unrestricted and restricted common stock were issued. The purchase
method of accounting was used to record the acquisition and $6,408,081 was
recorded as goodwill.

NOTE I - RELATED PARTY TRANSACTIONS
 
     TechTeam was involved in the following related party transactions:

     a)   Paid legal fees of $306,641 in 1996, $119,876 in 1995, and $73,591 in
          1994 to law firms whose members included directors, officers or
          shareholders of TechTeam.

     b)   Paid $480,488 in 1996, $39,587 in 1995, and $42,444 in 1994 for
          employee travel expenses to a travel agency which is 50%-owned by a
          TechTeam director.

     c)   Advanced $243,800 to Executive Officers in 1995, which was repaid in
          1995.

     d)   Advanced $107,000 to an insurance company in 1995 that carries an
          insurance policy on the life of an Executive Officer.

     e)   Loaned $160,000 to an Executive Officer in 1995 which was repaid in
          1996.

     f)   Paid $59,626 in 1996 for rental expense for an office building leased
          from an Executive Officer.

     g)   Guaranteed a loan of $375,000 to an Executive Officer in 1996.
 


                                       31
<PAGE>   32
                    NATIONAL TECHTEAM, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

NOTE J - STOCK OPTIONS
 
     The Company has elected to follow Accounting Principles Board Opinion No.
25, "Accounting for Stock Issued to Employees" (APB 25) and related
Interpretations in accounting for its employee stock options because, as
discussed below, the alternative fair value accounting provided for under FASB
Statement No. 123, "Accounting for Stock-Based Compensation," requires use of
option valuation models that were not developed for use in valuing employee
stock options. Under APB 25, because the exercise price of the Company's
employee stock options equals or exceeds the market price of the underlying
stock on the date of grant, no compensation expense is recognized.

     The Company's 1990 Nonqualified Stock Option Plan has authorized the grant
of options to management personnel and others for up to 3,800,000 shares of the
Company's common stock. Generally, options granted have 6 year terms and vest
and become exercisable ratably over the first five years of their term.

     Pro forma information regarding net income and earnings per share is
required by Statement 123, and has been determined as if the Company had
accounted for its employee stock options under the fair value method of that
Statement. The fair value for these options was estimated at the date of grant
using a Black-Scholes option pricing model with the following weighted-average
assumptions for 1995 and 1996: a range of risk-free interest rates of 5.38% to
7.08% based on the expected life of the options; a volatility factor of the
expected market price of the Company's common stock of .786; and a
weighted-average expected life of the option of 3 years.

     The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options which have no vesting restrictions
and are fully transferable. In addition, option valuation models require the
input of highly subjective assumptions including the expected stock price
volatility. Because the Company's employee stock options have characteristics
significantly different from those of traded options, and because changes in the
subjective input assumptions can materially affect the fair value estimate, in
management's opinion, the existing models do not necessarily provide a reliable
single measure of the fair value of its employee stock options.

     For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting period. The Company's
pro forma information follows:

                                             1996            1995
                                             ----            ----
Pro forma net income . . . . . . . . . .  $4,060,702      $2,237,901
Pro forma primary and fully diluted  . .
     earnings per share  . . . . . . . .  $     0.32      $     0.20



                                       32
<PAGE>   33
                    NATIONAL TECHTEAM, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

NOTE J - STOCK OPTIONS - Continued

     A summary of the Company's stock option activity, and related information,
follows:

<TABLE>
<CAPTION>
                                                    EMPLOYEES                      DIRECTORS                    OTHERS
                                             -------------------------        ----------------------      ----------------------
                             TOTAL 
                             SHARES          SHARES            PRICE          SHARES         PRICE        SHARES         PRICE
                             -------         -------         ---------        -------      ---------      -------      ---------
<S>                         <C>             <C>             <C>             <C>           <C>           <C>          <C>
Outstanding                                                                                                     
  January 1, 1994 . . . .    953,250         563,250         0.59-4.82        235,000      0.59-4.82      155,000      0.59-3.00
  Granted . . . . . . . .    335,500         235,500         5.00-6.38        100,000           7.00           --                 
  Exercised . . . . . . .   (308,625)       (153,625)        0.59-2.88             --                    (155,000)     0.59-3.00
  Cancelled . . . . . . .    (22,500)        (22,500)        3.81-6.38             --                          --                
                             -------         -------        ----------        -------                     -------      
Outstanding                                                                                                     
  December 31, 1994 . . .    957,625         622,625         0.59-6.38        335,000      0.59-7.00           --             -- 
  Granted   . . . . . . .    338,000         338,000 (1)     4.50-5.31             --             --           --             -- 
  Exercised . . . . . . .   (418,500)       (233,500)        0.59-2.88       (185,000)          0.59           --             --    
  Cancelled . . . . . . .   (208,000)       (208,000)(1)     4.50-6.38             --             --           --             -- 
                             -------         -------        ----------        -------                     -------
Outstanding                                                                                                     
  December 31, 1995 . . .    669,125         519,125         1.20-6.38        150,000      4.82-7.00           --             --    
  Granted   . . . . . . .    657,000         522,000        5.00-25.75        135,000     5.00-25.75           --             -- 
  Exercised . . . . . . .   (289,100)       (259,100)        1.20-7.00        (30,000)     4.82-7.00           --             -- 
  Cancelled . . . . . . .   (117,500)        (57,500)       4.50-25.75        (60,000)          5.00           --             --    
                             -------         -------        ----------         ------     ----------      -------
Outstanding                                                                                                     
  December 31, 1996          919,525(2)      724,525        2.00-25.75        195,000     4.82-25.75           --             -- 
                             =======         =======                          =======                     =======
</TABLE>

------------

(1)  In February 1995, the Company cancelled 183,000 options at prices ranging
     from $5.00 to $6.38 and regranted them  at $4.50.
  
(2)  Of the 919,525 options outstanding at December 31, 1996
     
     a)   59,625 are currently exercisable through the fourth quarter 1998;
        
     b)   115,000 are currently exercisable through the fourth quarter 1999;

     c)   232,900 are currently exercisable through the fourth quarter 2006; and

     d)   512,000 will be exercisable in the first quarter 1997 through the
          third quarter 2002.
  


                                       33
<PAGE>   34

                    NATIONAL TECHTEAM, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

NOTE K - STOCK BUY-BACK PROGRAM
 
     In February, 1995, the Board of Directors of the Company authorized a stock
buy-back program. The program provided for the open market purchase of up to
$4,000,000 of the Company's common stock. The repurchase program terminated July
31, 1995 with 200,000 shares repurchased at a total cost of $907,008.

NOTE L - SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
 
     Quarterly consolidated results of operations are summarized as follows:

<TABLE>
<CAPTION>
                                                                    QUARTER ENDED                              
                                            ------------------------------------------------------------------ 
                                              MARCH 31,        JUNE 30,       SEPTEMBER 30,        DECEMBER 31,
                                              --------         -------        ------------         ----------- 
<S>                                         <C>             <C>               <C>                 <C>          
1994                                                                                                           
Revenues . . . . . . . . . . . . . . . . .  $ 6,826,655      $ 7,630,114       $ 8,027,097         $ 7,669,105 
Income before tax provisions . . . . . . .      462,465        1,199,772         1,099,303             610,384 
Net income   . . . . . . . . . . . . . . .      273,599          720,606           621,538             355,306 
Earnings per share . . . . . . . . . . . .         0.03             0.07              0.06                0.03 
                                                                                                               
1995                                                                                                           
Revenues . . . . . . . . . . . . . . . . .  $ 8,427,595      $ 9,588,283       $10,555,833         $13,141,921 
Income before tax provisions . . . . . . .      908,662        1,264,894           676,675           1,227,072 
Net income . . . . . . . . . . . . . . . .      539,227          775,109           346,540             738,191 
Earnings per share . . . . . . . . . . . .         0.05             0.07              0.03                0.07 
                                                                                                               
1996                                                                                                           
Revenues . . . . . . . . . . . . . . . . .  $14,407,611      $15,831,227       $18,390,472         $20,521,686 
Income before tax provisions . . . . . . .    1,491,731        1,772,156         1,666,692           3,088,752 
Net income   . . . . . . . . . . . . . . .      865,731        1,044,156           962,692           1,901,053 
Earnings per share . . . . . . . . . . . .         0.08             0.09              0.08                0.13 
</TABLE>



     Quarterly earnings per share may not add to annual earnings per share
because of rounding and new shares issued during the year.
 


                                       34
<PAGE>   35
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURES

     There were no changes in accountants, disagreements, or other events
requiring reporting under this Item.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT 

     Information required is set forth under the caption "Election of Directors
and Management Information" in the Proxy Statement relating to the 1997 Annual
Meeting of Shareholders to be held on May 14, 1997, which is incorporated herein
by reference.

     Information required pertaining to compliance with Section 16(a) of the
Securities and Exchange Act of 1934 is set forth under the caption "Section
16(a) Beneficial Ownership Reporting Compliance" in the Proxy Statement relating
to the 1997 Annual Meeting of Shareholders to be held on May 14, 1997, which is
incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION

     Information required is set forth under the caption "Executive
Compensation" in the Proxy Statement relating to the 1997 Annual Meeting of
Shareholders to be held on May 14, 1997, which is incorporated herein by
reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 

     Information required is set forth under the caption "Election of Directors
and Management Information - Information Regarding Beneficial Ownership of
Principal Shareholders, Directors and Executive Officers" in the Proxy Statement
relating to the 1997 Annual Meeting of Shareholders to be held on May 14, 1997,
which is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 

     Information required is set forth under the caption "Executive Compensation
- Certain Relationships and Related Transactions" in the Proxy Statement
relating to the 1997 Annual Meeting of Shareholders to be held on May 14, 1997,
which is incorporated herein by reference.

                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

     (a)  Certain documents filed as part of the Form 10-K 
          See Item 8. Financial Statements and Supplementary Data and (d) below.
                
     (b)  Reports on Form 8-K
          Reports on Form 8-K filed by the Company during the last quarter of
          the year ended December 31, 1996:  None

     (c)  Exhibits required by Item 601 of Regulation S-K
          The response to this portion of Item 14 is submitted as a separate
          section of this Report under the caption, Index of Exhibits
        
     (d)  Financial statements schedules required by Regulation S-X
          The response to this portion of Item 14 is submitted as a separate
          section of this Report under the caption, Item 8. Financial Statements
          and Supplementary Data.




                                       35
<PAGE>   36
                                   SIGNATURES


     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                            NATIONAL TECHTEAM, INC.


Date:  March 17, 1997    By: /s/Lawrence A. Mills     Lawrence A. Mills
       --------------        --------------------     Senior Vice President,
                                                      Chief Financial Officer
                                                      and Treasurer 
 
     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons in the capacities indicated on
March 17, 1997.


   /s/William F. Coyro, Jr.                    Director, Chairman of the Board,
-------------------------------------          Chief Executive Officer
      William F. Coyro, Jr.                  

   /s/Kim A. Cooper                            Director
-------------------------------------
Kim A. Cooper

   /s/Wallace D. Riley                         Director
-------------------------------------
Wallace D. Riley

  /s/Richard G. Somerlott                      Director
-------------------------------------
Richard G. Somerlott

  /s/LeRoy H. Wulfmeier III                    Director
-------------------------------------
LeRoy H. Wulfmeier III

  /s/Karen J. Matheny                          Controller
-------------------------------------
Karen J. Matheny (Chief Accounting Officer)



                                       36
<PAGE>   37
                               INDEX OF EXHIBITS

     All exhibits listed below that include a * indicate exhibits that are
incorporated by reference. See the footnotes following the list of exhibits to
locate those exhibits. All other exhibits are filed as part of this Form 10-K
Report.
 
EXHIBIT                                                                  PAGE
NUMBER     EXHIBIT                                                       NUMBER
-------    -------                                                       ------
10.1       Purchase Order dated August 4, 1988 by and between the          *1
           Company as Vendor and Ford Motor Company as Vendee for End
           User Computer Training Classes and User Assistance Services

10.2       Purchase Order dated January 1, 1992 by and between the         *3
           Company as Vendor and Ford Motor Company as Vendee for
           Agency Programmer Services

10.3       Lease Agreement for office space in Southfield, Michigan        *4
           known as Suite 171, 17197 N. Laurel Park Drive between the
           Company and Eleven Inkster Associates dated September 29,
           1993

10.4       Lease Amendment for office space in Southfield, Michigan        *4 
           known as Suite 171, 17197 N. Laurel Park Drive between the
           Company and Eleven Inkster Associates dated December 7, 1993

10.5       Purchase Order dated November 6, 1986 by and between the        *5 
           Company as Vendor and Ford Motor Company as Vendee for
           Support Services, together with currently effective
           Amendment dated August 23, 1993.

10.6       Lease Amendment for office space in Southfield, Michigan        *5
           known as Suite 171, 17197 N. Laurel Park Drive between the
           Company and Eleven Inkster Associates dated January 23, 1995

10.7       Supplier Contract dated July 1, 1994 by and between the         *5
           Company as Vendor and Geometric Results Incorporated (doing
           business as "PeopleNet") as Vendee for Personnel Services,
           together with currently effective Amendment dated February
           6, 1995

10.8       Purchase Order dated March 23, 1995 by and between the          *6
           Company as Vendor and Ford Motor Company as Vendee for
           Support for Ford 2000, together with currently effective
           amendment dated February 23, 1996

10.9       Agreement dated June 21, 1995 between the Company and           *6
           Hewlett-Packard Company for Technical Support Assistance

10.10      Lease for office space in Dallas, Texas known as Lyndon         *6
           Plaza between the Company and Dallas Lyndon Corporation
           dated August 17, 1995

10.11      Agreement dated September 15, 1995 between the Company and      *6
           NBD Bank for End User Computer Training

10.12      Lease for office space in Troy, Michigan known as Troy          *6
           Officenter B between the Company and WRC Properties, Inc.
           dated November 16, 1995

10.13      Office Space Lease for office space in Indianapolis, Indiana    *6
           known as Market Square Center Building between the Company
           and MET Life International Real Estate Partners Limited
           Partnership dated November 27, 1995


                                       37
<PAGE>   38
EXHIBIT                                                                   PAGE
NUMBER     EXHIBIT                                                       NUMBER
-------    -------                                                       ------
10.14      Currently effective Purchase Order Amendment dated January      *6
           6, 1996 by and between the Company as Vendor and Ford Motor
           Company as Vendee for End User Computer Training Classes and
           User Assistance Services

10.15      Currently effective Purchase Order Amendment dated February     *6
           21, 1996 by and between the Company as Vendor and Ford Motor
           Company as Vendee for Programming Services

10.16      1990 Nonqualified Stock Option Plan                             *2

10.17      Form of Stock Option Agreement used for grant of options to     *3
           employees under the 1990 Nonqualified Stock Option Plan

10.18      1996 Nonemployee Directors Stock Plan                           *7 

10.19      Third Amendment Lease Agreement dated March 29,1996 for         *7
           office space in Southfield, Michigan between Eleven Inkster
           Associates and the Company

10.20      Agreement dated May 30, 1996 between the Company and Hewlett    *7
           Packard Company for technical phone support for H-P
           Advantage Center

10.21      Purchase Order dated April 4, 1996 from Chrysler Corporation    *7
           to the Company for dealer support in France, Germany and
           Italy

10.22      Agreement dated May 9, 1996 between United Parcel Service       *7
           and the Company for technical help desk support

10.23      Agreement dated December 15, 1995 between Owens-Corning         *7
           Fiberglass Corporation and the Company for technical support

10.24      Agreement dated March 5, 1996 between Price Waterhouse LLP      *7
           and the Company for help desk support

10.25      Joint Venture Agreement dated July 26, 1996 between Paratel     *7
           N.V. and the Company

10.26      Master Demand Business Loan Note in the principal amount of     *7
           $6,000,000 between the Company and NBD Bank dated June 17,
           1996

10.27      Lease for office space in Dearborn, Michigan between the        41-74
           Company and Dearborn Atrium Associates Limited Partnership
           dated November 18, 1996

10.28      Agreement and Plan of Merger dated December 23, 1996 between     *8
           National TechTeam, Inc., TechTeam Training Inc., WebCentric
           Communications, Inc. and Daniel L. Kemp

11.        Statement re: Computation of per share earnings                  40

27.        Financial Data Schedule

------------

*1      Incorporated by reference to the Company's Registration Statement on
        Form S-4 (Registration No. 33-26689). 

*2      Incorporated by reference to the Company's Annual Report on Form 10-K
        for the year ended December 31, 1990.

*3      Incorporated by reference to the Company's Registration Statement on
        Form S-2 (Registration No. 33-67904).

*4      Incorporated by reference to the Company's Annual Report on Form 10-KSB
        for the year ended December 31, 1993.

*5      Incorporated by reference to the Company's Annual Report on Form 10-K
        for the year ended December 31, 1994.


                                       38
<PAGE>   39
*6      Incorporated by reference to the Company's Annual Report on Form 10-K
        for the year ended December 31, 1995.

*7      Incorporated by reference to the Company's Registration Statement on
        Form S-3 (Registration No. 333-10687).

*8      Incorporated by reference to the Company's Form 8-K Report dated January
        3, 1997.



                                       39