SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark one)
| x | ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2002
OR
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number 0-14625
TECH DATA CORPORATION
401(K) SAVINGS PLAN
(Full title of the plan and the address of the plan if different
from that of the issuer named below)
TECH DATA CORPORATION
5350 Tech Data Drive
Clearwater, Florida 33760
(Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office)
| 1 | ||
| 2 | ||
| 3 | ||
| 4-8 | ||
| 9 | ||
| 10 | ||
To the Plan Administrator
Tech Data Corporation 401(k) Savings Plan
We have audited the accompanying statement of net assets available for benefits of Tech Data Corporation 401(k) Savings Plan as of December 31, 2002 and 2001, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. 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 net assets available for benefits of the Plan as of December 31, 2002 and 2001, and the changes in net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America.
Our audit was performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
| /S/ SPENCE, MARSTON, BUNCH, MORRIS & CO. |
| Spence, Marston, Bunch, Morris & Co. Certified Public Accountants |
June 19, 2003
1
401(k) SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
| December 31, | ||||||
| 2002 |
2001 | |||||
| Investments at fair value: |
||||||
| Money market fund |
$ | 6,083,059 | $ | 4,006,200 | ||
| Mutual funds |
36,746,855 | 40,162,760 | ||||
| Tech Data Corporation common stock |
14,701,114 | 28,684,327 | ||||
| Participant loans |
2,389,812 | 2,136,122 | ||||
| Total investments |
59,920,840 | 74,989,409 | ||||
| Receivables: |
||||||
| Employee contributions |
245,237 | 170,851 | ||||
| Employer contributions |
— | 69,675 | ||||
| Total receivables |
245,237 | 240,526 | ||||
| Net assets available for benefits |
$ | 60,166,077 | $ | 75,229,935 | ||
See accompanying notes to financial statements
2
401(k) SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
| For the years ended December 31, |
||||||||
| 2002 |
2001 |
|||||||
| (Deductions from) additions to net assets attributable to: |
||||||||
| Net depreciation in fair value of mutual funds |
$ | (9,471,646 | ) | $ | (8,075,434 | ) | ||
| Net (depreciation) appreciation in fair value of Tech Data Corporation common stock |
(8,815,669 | ) | 12,479,152 | |||||
| Interest and dividends |
899,444 | 660,746 | ||||||
| Investment (Loss) income |
(17,387,871 | ) | 5,064,464 | |||||
| Employer contributions |
461,154 | 2,115,416 | ||||||
| Employee contributions |
7,810,336 | 9,093,420 | ||||||
| 8,271,490 | 11,208,836 | |||||||
| Total (deductions) additions |
(9,116,381 | ) | 16,273,300 | |||||
| Deductions from net assets attributable to: |
||||||||
| Participant fees |
12,731 | 15,469 | ||||||
| Distributions to participants |
5,934,746 | 5,338,051 | ||||||
| Total deductions |
5,947,477 | 5,353,520 | ||||||
| Net (decrease) increase |
(15,063,858 | ) | 10,919,780 | |||||
| Net assets available for benefits: |
||||||||
| Balance, beginning of year |
75,229,935 | 64,310,155 | ||||||
| Balance, end of year |
$ | 60,166,077 | $ | 75,229,935 | ||||
See accompanying notes to financial statements
3
401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(1) DESCRIPTION OF PLAN
The following description of the Tech Data Corporation 401(k) Savings Plan (the Plan), provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan’s provisions.
General – The Plan, a defined contribution plan adopted January 1, 2000, is a result of the merger of the Tech Data Corporation Retirement Savings Plan and the Tech Data Corporation Employee Stock Ownership Plan, both defined contribution plans. Since its inception, the Plan has been amended regarding eligibility, maximum deferral rate, the definitions of “year of service”, “compensation” and other terms, and discrimination testing. The Plan covers all employees of Tech Data Corporation and affiliated companies based in the United States (“the Company”) who have completed 30 days of employment and are age eighteen or older with respect to elective contributions. Eligibility for participation with respect to employer contributions is upon completion of one year of service and age eighteen or older as defined in the Plan documents. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
The trustees of the Plan executed a trust agreement and contract for administration of Plan assets and recordkeeping with Scudder Trust Company (“Scudder”) on June 29, 1999. Participants’ investment vehicle options are twelve mutual funds, a money market fund and common stock of Tech Data Corporation. Participants have the ability to direct the investment of their account balances among various combinations of these options. Each mutual fund account has unique and varied investment objectives including, but not limited to, corporate stock and debt instruments and money market instruments.
Contributions – Participants contribute to the Plan based on the amount they have specified in a salary deferral agreement. The Plan was amended effective January 1, 2002 to increase the maximum amount of annual compensation a participant can defer from 17% to 90% (subject to regulatory limitations). Contributions made by the Company are at the discretion of its Board of Directors and may consist of direct employer contributions and matching contributions. For the year ended December 31, 2001 and until April 2002, the Company matched 50% of salary deferrals up to 6% with Tech Data Corporation common stock. In March 2002, the Board of Directors of the Company approved the suspension of the Company matching contribution effective for the pay period beginning April 6, 2002.
Expenses of the Plan – All direct expenses incurred in the administration of the Plan are paid by the Company. Fees paid directly by participants are shown as a deduction from net assets in the Statement of Changes in Net Assets Available for Benefits.
Participant accounts – Earnings are allocated in proportion to the account values of the participant’s account which is invested in the investment facilities from which the earnings arise.
Loans – The Plan allows participants to borrow from the Plan for any purpose. Participants may borrow up to 50% of their vested account balance provided the loan does not exceed $50,000. Loans must be a minimum of $1,000 and are collateralized by the participant’s account.
Vesting – Participants are immediately vested in their voluntary deferral contributions, Company contributions to the Retirement Savings Plan prior to December 31, 1999 merged into the Plan, and earnings thereon. Vesting in the remainder of their accounts is based on years of continuous service. A participant is 100% vested after seven years of service for their ESOP merger account, and after four years of service for Company contributions and earnings thereon after January 1, 2000.
4
TECH DATA CORPORATION
401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(1) DESCRIPTION OF PLAN, CONTINUED
Forfeitures – Contributions forfeited by terminated participants are used to reduce Company contributions. Forfeitures of $336,596 and $794,820 were used during 2002 and 2001, respectively, to reduce the Company’s matching contribution. Forfeitures and related earnings of approximately $113,000 and $205,000 were available to reduce Company contributions as of December 31, 2002 and 2001, respectively.
Payment of benefits – Participants are eligible to receive benefits (1) upon reaching retirement age, (2) upon the disability of the participant, or (3) upon termination of service. Distributions are normally paid in a lump-sum amount; however, participants may elect to have their ESOP merger account balances paid in annual installments. The amount of assets that have been allocated to participants who have withdrawn from the Plan as of December 31, 2002 and 2001, but for whom distribution of those funds from the Plan had not yet been made were $14,274,706 and $17,090,336, respectively.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of accounting – The accounts of the Plan are maintained on the accrual basis.
Valuation of investments and income recognition – Investments in mutual funds, the money market fund, and Tech Data Corporation common stock are valued at the last reported sales price on the last business day of the Plan year. Net appreciation (depreciation) in the fair value of investments for the year is reflected in the Statement of Changes in Net Assets Available for Benefits. Purchases and sales of securities are recorded on a trade-date basis. Dividends are recorded on the ex-dividend date.
(3) PARTICIPANT DIRECTED INVESTMENTS
The Plan’s participant directed investment funds at fair value as determined by quoted market price as of December 31, 2002 are summarized as follows:
| December 31, 2002 | |||||
| Shares |
Fair Value | ||||
| Money market fund: |
|||||
| Scudder Cash Investment Trust |
6,083,059 | $ | 6,083,059 | ||
| Mutual funds: |
|||||
| Scudder High Income Fund |
116,889 | 554,055 | |||
| Strong Government Securities Fund |
699,129 | 7,788,294 | |||
| Scudder Balanced Fund |
181,094 | 2,627,675 | |||
| Scudder Pathway Series: Conservative |
20,063 | 203,635 | |||
| Scudder Pathway Series: Moderate |
18,213 | 166,465 | |||
5
TECH DATA CORPORATION
401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(3) PARTICIPANT DIRECTED INVESTMENTS, CONTINUED
Investments at fair value as determined by quoted market price, continued:
| Shares |
Fair Value | ||||
| Scudder Pathway Series: Growth |
62,139 | 607,100 | |||
| Scudder Growth and Income Fund |
203,659 | 3,254,474 | |||
| Scudder Large Company Growth Fund |
456,361 | 8,219,064 | |||
| Scudder International Fund |
80,593 | 2,446,795 | |||
| INVESCO Dynamics Fund |
359,041 | 3,827,376 | |||
| Managers Special Equity Fund |
67,409 | 3,712,862 | |||
| Vanguard 500 Index Fund |
41,147 | 3,339,060 | |||
| Total mutual funds |
36,746,855 | ||||
| Tech Data Corporation common stock |
540,639 | 14,701,114 | |||
| Participant loans |
2,389,812 | ||||
| Total investments at fair value |
$ | 59,920,840 | |||
Nonparticipant-directed investments of $82,043 and $31,156 are included in Tech Data Corporation common stock and Scudder Cash Investment Trust, respectively, at December 31, 2002.
The Plan’s participant directed investment funds at fair value as determined by quoted market price as of December 31, 2001 are summarized as follows:
| December 31, 2001 | |||||
| Number of Shares |
Fair Value | ||||
| Money market fund: |
|||||
| Scudder Cash Investment Trust |
4,006,200 | $ | 4,006,200 | ||
| Mutual funds: |
|||||
| Scudder High Income Fund |
65,409 | 347,976 | |||
| Strong Government Securities Fund |
445,893 | 4,811,184 | |||
| Scudder Balanced Fund |
167,230 | 2,923,172 | |||
| Scudder Pathway Series: Conservative |
10,438 | 116,388 | |||
| Scudder Pathway Series: Moderate |
13,593 | 144,771 | |||
| Scudder Pathway Series: Growth |
32,833 | 401,544 | |||
| Scudder Growth and Income Fund |
203,966 | 4,295,522 | |||
| Scudder Large Company Growth Fund |
453,845 | 11,622,971 | |||
| Scudder International Fund |
76,408 | 2,801,119 | |||
| INVESCO Dynamics Fund |
344,462 | 5,487,284 | |||
| Managers Special Equity Fund |
60,050 | 4,239,558 | |||
| Vanguard 500 Index Fund |
28,060 | 2,971,271 | |||
| Total mutual funds |
40,162,760 | ||||
| Tech Data Corporation common stock |
661,653 | 28,684,327 | |||
| Participant loans |
2,136,122 | ||||
| Total investments at fair value |
$ | 74,989,409 | |||
6
TECH DATA CORPORATION
401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(3) PARTICIPANT DIRECTED INVESTMENTS, CONTINUED
Nonparticipant-directed investments of $199,344 and $5,723 were included in Tech Data Corporation common stock and Scudder Cash Investment Trust, respectively, at December 31, 2001.
The Plan’s investments, including investments bought, sold and held during the year, (depreciated) appreciated in value by $(18,287,315) and $4,403,718 during the years ended December 31, 2002 and 2001, respectively, as follows:
| December 31, |
||||||||
| 2002 |
2001 |
|||||||
| Scudder High Income Fund |
$ | (68,791 | ) | $ | (41,280 | ) | ||
| Strong Government Securities Fund |
177,762 | (65,834 | ) | |||||
| Scudder Balanced Fund |
(527,195 | ) | (245,042 | ) | ||||
| Scudder Pathway Series: Conservative |
(15,307 | ) | (8,849 | ) | ||||
| Scudder Pathway Series: Moderate |
(24,264 | ) | (9,729 | ) | ||||
| Scudder Pathway Series: Growth |
(134,025 | ) | (49,246 | ) | ||||
| Scudder Growth and Income Fund |
(1,048,236 | ) | (572,976 | ) | ||||
| Scudder Large Company Growth Fund |
(3,484,142 | ) | (3,295,054 | ) | ||||
| Scudder International Fund |
(503,988 | ) | (990,066 | ) | ||||
| INVESCO Dynamics Fund |
(1,898,349 | ) | (2,220,499 | ) | ||||
| Managers Special Equity Fund |
(1,050,037 | ) | (301,392 | ) | ||||
| Vanguard 500 Index Fund |
(895,074 | ) | (275,467 | ) | ||||
| Tech Data Corporation common stock |
(8,815,669 | ) | 12,479,152 | |||||
| Net (depreciation) appreciation fair value of investments |
$ | (18,287,315 | ) | $ | 4,403,718 | |||
(4) NONPARTICIPANT DIRECTED INVESTMENTS
Information about the net assets and the significant components of the changes in net assets relating to the nonparticipant-directed investments is as follows:
| December 31, |
||||||||
| 2002 |
2001 |
|||||||
| Net assets: |
||||||||
| Tech Data Corporation common stock |
$ | 82,043 | $ | 199,344 | ||||
| Scudder Cash Investment Trust |
31,156 | 5,723 | ||||||
| $ | 113,199 | $ | 205,067 | |||||
| Changes in net assets: |
||||||||
| Forfeited balances from participant directed funds |
$ | 271,040 | $ | 400,163 | ||||
| Forfeitures used for Company match |
(336,596 | ) | (794,820 | ) | ||||
| Earnings and (depreciation) appreciation |
(26,312 | ) | 201,969 | |||||
| Net decrease in nonparticipant-directed investments |
$ | (91,868 | ) | $ | (192,688 | ) | ||
7
TECH DATA CORPORATION
401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(5) PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. See further discussion of employer contributions in Note (1) and Note (8).
(6) INCOME TAX STATUS
The Plan obtained its latest determination letter on January 29, 2002, in which the Internal Revenue Service stated that the Plan, as then designed, was in compliance with the applicable requirements of the Internal Revenue Code. The Plan has been amended since receiving the determination letter. However, the plan administrator and the plan’s tax counsel believe that the Plan is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code. Therefore, no provision for income taxes has been included in the Plan’s financial statements. An application for a new determination letter was filed on June 9, 2003 and is pending as of the date of this report.
(7) EXCESS CONTRIBUTIONS
Contributions received from participants for 2001 and employee contributions receivable at December 31, 2001, have been reduced for payments of $96,893, net of unrealized depreciation, made in March 2002 to certain participants to return excess deferral contributions as required to satisfy the relevant nondiscrimination provisions of the Plan.
The Employer contributions for 2001 and employer contributions receivable at December 31, 2001 have also been reduced for payments of $22,303, including earnings, made in March 2002 to certain participants to return excess matching contributions as required to satisfy the relevant nondiscrimination provisions of the Plan.
There were no excess contributions for the year ended December 31, 2002.
(8) SUBSEQUENT EVENTS
Effective January 1, 2003, the Plan was amended to permit an additional type of employer discretionary matching contribution, called an “incentive matching contribution.” The Company intends to make incentive matching contributions only if certain financial performance goals are met by the Company.
Effective August 1, 2003, the Company intends to transfer the Plan assets and recordkeeping and administrative services to Fidelity Investments.
8
401(k) SAVING PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 2002
Schedule H, line 4i
Employer identification number: 59-1578329
Plan number: 003
| (a) |
(b) Identity of issuer, |
(c) Description of investment including maturity date, rate of interest, collateral, par or maturity value |
(d) Cost |
(e) Current value | ||||||
| PARTICIPANT-DIRECTED INVESTMENTS |
||||||||||
| * |
Scudder Funds |
6,051,903 shares, Scudder Cash Investment Trust |
** | $ | 6,051,903 | |||||
| * |
Scudder Funds |
116,889 shares, Scudder High Income Fund |
** | 554,055 | ||||||
| Strong Funds |
699,129 shares, Strong Government Securities Fund |
** | 7,788,294 | |||||||
| * |
Scudder Funds |
181,094 shares, Scudder Balanced Fund |
** | 2,627,675 | ||||||
| * |
Scudder Funds |
20,063 shares, Scudder Pathway Series: Conservative |
** | 203,635 | ||||||
| * |
Scudder Funds |
18,213 shares, Scudder Pathway Series: Moderate |
** | 166,465 | ||||||
| * |
Scudder Funds |
62,139 shares, Scudder Pathway Series: Growth |
** | 607,100 | ||||||
| * |
Scudder Funds |
203,659 shares, Scudder Growth and Income Fund |
** | 3,254,474 | ||||||
| * |
Scudder Funds |
456,361 shares, Scudder Large Company Growth Fund |
** | 8,219,064 | ||||||
| * |
Scudder Funds |
80,593 shares, Scudder International Fund |
** | 2,446,795 | ||||||
| INVESCO |
359,041 shares, INVESCO Dynamics Fund |
** | 3,827,376 | |||||||
| Managers Funds |
67,409 shares, Managers Special Equity Fund |
** | 3,712,862 | |||||||
| Vanguard Group |
41,147 shares, Vanguard 500 Index Fund |
** | 3,339,060 | |||||||
| * |
Tech Data Corporation |
537,596 shares, Tech Data Corporation common stock |
** | 14,619,070 | ||||||
| Participant loans |
5.25%–10.5% principal and interest payable monthly; secured by participants vested accrued benefits. |
** | 2,389,812 | |||||||
| NONPARTICIPANT-DIRECTED INVESTMENTS |
||||||||||
| * |
Scudder Funds |
31,156 shares, Scudder Cash Investment Trust |
$ | 31,156 | 31,156 | |||||
| * |
Tech Data Corporation |
3,043 shares, Tech Data Corporation common stock |
126,741 | 82,044 | ||||||
| $ | 59,920,840 | |||||||||
| * | Denotes exempt party-in-interest. |
| ** | Information not required. |
See accompanying independent auditor’s report on page 1
9
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE TRUSTEES (OR OTHER PERSONS WHO ADMINISTER THE EMPLOYEE BENEFIT PLAN) HAVE DULY CAUSED THIS ANNUAL REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED HEREUNTO DULY AUTHORIZED.
| TECH DATA CORPORATION 401(K) SAVINGS PLAN | ||
| DATE: |
June 30, 2003 | |
| By: |
/s/ CHARLES V. DANNEWITZ | |
| Name: |
Charles V. Dannewitz Senior Vice President of Taxes and Treasurer | |
10
EXHIBIT INDEX
| EXHIBIT NUMBER |
DESCRIPTION | |
| 23.1 |
Consent of Independent Accountants | |
| 99.1 |
Certification pursuant to 18 USC Sec. 1350 |