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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Act of 1934
(Amendment No. ___)*
Compass International Services Corporation
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(Name of Issuer)
Common Stock, $.01 par value per share
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(Title of Class of Securities)
20450K108
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(CUSIP Number)
Steven L. Winokur
NCO Group, Inc.
515 Pennsylvania Avenue
Fort Washington, PA 19034
(215) 793-9300
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
Copies to:
Francis E. Dehel, Esquire
Blank Rome Comisky & McCauley LLP
One Logan Square
Philadelphia, Pennsylvania 19103
Telephone: (215) 569-5500
Facsimile: (215) 569-5555
May 12, 1999
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of ss.ss. 240.13d-1(e) or 240 13d-1(g), check the following
box. / /
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See ss. 240.13d-7(b) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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CUSIP NO. 20450K108 13D NCO Group, Inc.
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1 NAME OF REPORTING PERSONS. I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(Entities Only)
NCO Group, Inc.
IRS Identification No. 23-2858652
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See (a) / /
Instructions) (b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS (See Instructions) 00
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5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Commonwealth of Pennsylvania
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7 SOLE VOTING POWER
-0-
NUMBER OF -----------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 6,066,931
EACH -----------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH - 0 -
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10 SHARED DISPOSITIVE POWER
-0-
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,066,931
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12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See
Instructions)
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
42.11
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14 TYPE OF REPORTING PERSON(See Instructions)
CO
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Neither the filing of this statement on Schedule 13D nor any of its
contents shall be deemed to constitute an admission by NCO Group, Inc. that it
is the beneficial owner of any of the Common Stock referred to herein for
purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, or
for any other purpose, and such beneficial ownership is expressly disclaimed.
Item 1. Security and Issuer.
This statement on Schedule 13D relates to the Common Stock, $.01 par
value (the " Common Stock") of Compass International Services Corporation, a
Delaware corporation ("Compass"). The principal executive offices of Compass are
located at One Penn Plaza, Suite 4430, New York, New York 10119.
Item 2. Identity and Background.
(a) The name of the person filing this statement is NCO Group, Inc., a
Pennsylvania corporation ("NCO"). NCO provides account receivables management
and other outsourced services.
(b) The address of the principal office of NCO is 515 Pennsylvania
Avenue, Fort Washington, PA 19034.
(c) Set forth in Schedule I to this Schedule 13D is the name and
present principal occupation or employment of each of NCO's executive officers
and directors and the name, principal business and address of any corporation or
other organization in which such employment is conducted.
(d) During the past five years, neither NCO nor, to NCO's knowledge,
any person named in Schedule I to this Schedule 13D, has been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) During the past five years, neither NCO nor, to NCO's knowledge,
any person named in Schedule I to this Schedule 13D was a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction as a
result of which such person was or is subject to a judgment, decree or final
order enjoining future violations of or prohibiting or mandating activity
subject to federal or state securities laws or finding any violation with
respect to such laws.
(f) To NCO's knowledge, all of the directors and executive officers of
NCO named in Schedule I to this Schedule 13D are citizens of the United States.
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Item 3. Source and Amounts of Funds or Other Consideration.
To facilitate the consummation of the Merger (as defined in Item 4
below), certain stockholders of Compass have entered into a Voting Agreement
with NCO as described in Item 4.
Item 4. Purpose of Transaction.
(a) - (b) Pursuant to an Agreement and Plan of Merger dated May 12,1999
(the "Merger Agreement"), among NCO, Cardinal Acquisition Corporation, a
Delaware corporation and wholly-owned subsidiary of NCO ("Cardinal"), and
Compass, and subject to the conditions set forth in the Agreement (including the
expiration or early termination of the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, the approval
of the Merger by the stockholders of Compass, the condition that the arithmetic
per share average of the last reported sales price of one share of NCO Common
Stock, as reported on the NASDAQ National Market during the five trading days
ending on and including the trading day one day before the Compass Stockholder
meeting is more than $27.50 (such amount to be proportionately adjusted in the
event NCO Common Stock is subdivided), and the completion of the sale of
Compass' Print and Mail Business (as defined below)), Cardinal will be merged
with and into Compass (the "Merger"), Compass will become a wholly-owned
subsidiary of NCO and each share of Compass Common Stock will be converted into
the right to receive 0.23739 of a share of Common Stock, $.01 par value per
share (the "NCO Common Stock") of NCO, based upon the arithmetic average of the
last reported sale prices of one share of NCO Common Stock as reported on the
Nasdaq Stock Exchange over the 20 trading days ending on and including the
trading day two days prior to the effective date of the Merger (the "Average
Stock Price").
In addition, NCO will assume outstanding options exercisable for
Compass Common Stock on the terms set forth in Section 2.6 of the Merger
Agreement.
The consummation of the Merger is subject to the satisfaction or waiver
of closing conditions for the benefit of all parties, closing conditions for the
benefit of NCO and closing conditions for the benefit of Compass, as set forth
in Sections 7.1, 7.2 and 7.3 of the Merger Agreement, respectively. The
description contained in this Item 4 of the transactions contemplated by the
Merger Agreement is qualified in its entirety by reference to the full text of
the Merger Agreement, a copy of which is filed as Exhibit 99.1 to this Schedule
13D.
As an inducement to NCO to enter into the Merger Agreement, each of
Richard Bainter, Michael Cunningham, David DuCoin, Edward DuCoin, John Erickson,
Leeds Hackett, Mahmud Haq, Earl Johnson, Robert Jones, Les Kirschbaum, Scott
Lang, Maurice Maher, David P. McCormick Trust, Mark E. McCormick Trust, Steven
B. McCormick Trust, Robert Meador, Robert Meador, Trustee, Kenneth W. Murphy
Children Trust, Kenneth W. Murphy, Billy Ray Pitcher, and James Summers
(individually, a "Voting Agreement Stockholder" and, collectively, the "Voting
Agreement Stockholders") has entered into a Voting Agreement dated May 12, 1999
(the "Voting Agreement") with NCO. The number of shares of Compass Common Stock
beneficially owned by each of the Voting Agreement Stockholders, based on
information supplied by them in the Voting Agreement, is set forth on Schedule
II to this Schedule 13D. Pursuant to Section 3(a) of the Voting Agreement, the
Voting Agreement Stockholders have agreed to vote the shares of Compass Common
Stock owned by them in favor of the Merger, the execution and delivery by
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Compass of the Merger Agreement and the adoption and approval of the terms
thereof, and in favor of each of the other actions contemplated by the Merger
Agreement and any action required in furtherance thereof.
Pursuant to Section 3(b) of the Voting Agreement, the Voting Agreement
Stockholders have also executed and delivered to NCO irrevocable proxies
granting NCO the authority to vote the shares of Compass Common Stock owned by
the Voting Agreement Stockholders with respect to the matters described above.
NCO did not pay any additional consideration to any Voting Agreement Stockholder
in connection with the execution and delivery of the Voting Agreement or his,
her or its irrevocable proxy. The Voting Agreement Stockholders retain the right
to vote their Compass Common Stock in their discretion with respect to matters
other than those identified in the Voting Agreement. The description contained
in this Item 4 of the transactions contemplated by the Voting Agreement is
qualified in its entirety by reference to the full text of the Voting Agreement,
a copy of which is filed as Exhibit 99.2 to this Schedule 13D.
(b) - (c) Concurrently with the execution of the Merger Agreement,
Compass entered into a Stock Purchase Agreement by and between Compass and
Swiss-Irish Enterprises, Inc., a Texas corporation, dated as of May 12, 1999
pursuant to which, and subject to the conditions set forth in the Print and Mail
Agreement, Compass agreed to sell the stock of all of its subsidiaries engaged
in the print and mail business (the "Print and Mail Business"). A copy of the
Stock Purchase Agreement is filed as Exhibit 99.3 to this Schedule 13D.
(d) If the Merger is consummated, Compass will become a wholly-owned
subsidiary of NCO and NCO will subsequently determine the size and membership of
the Board of Directors of Compass and the officers of Compass.
(e) None, other than a change in the number of outstanding shares of
Compass Common Stock as contemplated by the Merger Agreement.
(f) Upon consummation of the Merger, Compass will become a wholly-owned
subsidiary of NCO.
(g) Following consummation of the Merger, the Certificate of
Incorporation and Bylaws of Compass may be amended and restated in a form
satisfactory to NCO.
(h) Upon consummation of the Merger, the Compass Common Stock will
cease to be quoted on any quotation system or exchange.
(i) Upon consummation of the Merger, the Compass Common Stock will
become eligible for termination of registration pursuant to Section 12(g)(4) of
the Exchange Act.
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(j) Other than as described above, NCO currently has no plan or
proposal which relates to, or may result in, any of the matters listed in Items
4(a) - (i) of Schedule 13D (although NCO reserves the right to develop such
plans).
Item 5. Interest in Securities of the Issuer.
(a) - (b) As a result of the Voting Agreement, NCO has shared power to
vote an aggregate of 6,066,931 shares of Compass Common Stock, or for the
limited purposes described in Item 4 above. Such shares constitute approximately
42.11% of the issued and outstanding shares of Compass Common Stock as of May
12, 1999.
To NCO's knowledge, no shares of Compass Common Stock are beneficially
owned by any of the persons named in Schedule I to this Schedule 13D, except for
such beneficial ownership, if any, arising solely from the Voting Agreement.
As described in Item 4(a)-(b), NCO shares the power to vote or to
direct the vote or to dispose or direct the disposition of Compass Common Stock
with each person named in Schedule II. Except to the extent that the SEC filings
of Compass disclose the present principal occupation or employment of the
persons set forth in Schedule II, NCO has no knowledge of such persons'
principal, occupation or employment.
During the past five years, to NCO's knowledge, no person named in
Schedule II to this Schedule 13D has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors).
During the past five years, to NCO's knowledge, no person named in
Schedule II to this Schedule 13D was a party to a civil proceeding of a judicial
or administrative body of competent jurisdiction as a result of which such
person was or is subject to a judgment, decree or final order enjoining future
violations of or prohibiting or mandating activity subject to federal or state
securities laws or finding any violation with respect to such laws.
To NCO's knowledge, all persons named in Schedule II to this Schedule
13D are citizens of the United States.
(c) Neither NCO, nor, to NCO's knowledge, any person named in Schedule
II to this Schedule 13D, has effected any transaction in Compass Common Stock
during the past 60 days, except as disclosed herein.
(d) Not applicable.
(e) Not applicable.
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Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to
Securities of the Issuer.
Other than as described in Item 4 above, to NCO's knowledge, there are
no contracts, arrangements, understandings or relationships (legal or otherwise)
among the persons named in Item 2 and between such persons and any person with
respect to any securities of Compass, including but not limited to transfer or
voting of any of the securities, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits, division of profits or loss,
or the giving or withholding of proxies.
Item 7. Material to be Filed as Exhibits:
*Exhibit 99.1 - Agreement and Plan of Merger dated May 12, 1999, by and
among NCO Group, Inc., a Pennsylvania corporation,
Cardinal Acquisition Corporation, a Delaware corporation
and wholly-owned subsidiary of NCO Group, Inc., and
Compass International Services Corporation, a Delaware
corporation.
*Exhibit 99.2 - Voting Agreement dated May 12, 1999, by and among NCO
Group, Inc., a Pennsylvania corporation, and each of
Richard Bainter, Michael Cunningham, David DuCoin,
Edward DuCoin, John Erickson, Leeds Hackett, Mahmud Haq,
Earl Johnson, Robert Jones, Les Kirschbaum, Scott Lang,
Maurice Maher, David P. McCormick Trust, Mark E.
McCormick Trust, Steven B. McCormick Trust, Robert
Meador, Robert Meador, Trustee, Kenneth W. Murphy
Children Trust, Kenneth W. Murphy, Billy Ray Pitcher,
and James Summers.
*Exhibit 99.3 - Stock Purchase Agreement by and between Compass
International Services Corporation, a Delaware
corporation and Swiss-Irish Enterprises, Inc., a Texas
corporation, dated as of May 12, 1999.
*Incorporated by reference from the Exhibits to the Quarterly Report on Form
10-Q for the quarter ended March 31, 1999 of Compass (File No. 000-23217) filed
with the SEC on May 17, 1999 as follows: Exhibit 99.1 is filed as Exhibit 2.1 to
the Form 10-Q, Exhibit 99.2 is Annex II to Exhibit 2.1 to the Form 10-Q, and
Exhibit 99.3 is filed as Exhibit 2.2 to the Form 10-Q.
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Signatures:
After reasonable inquiry and to the best of the undersigned's knowledge
and belief, I believe that the information set forth in this statement is true,
complete and correct.
NCO GROUP, INC.
By: /s/ Steven L. Winokur
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Steven L. Winokur
Executive Vice President, Finance;
Chief Financial Officer; and Treasurer
Dated: May 21, 1999
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SCHEDULE I
EXECUTIVE OFFICERS AND EMPLOYEE DIRECTORS OF NCO
Name Principal Occupation or Employment
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Michael J. Barrist Chairman of the Board, President and
Chief Executive Officer
Charles C. Piola, Jr. Executive Vice President, Business
Development and Director
Steven L. Winokur Executive Vice President, Finance;
Chief Financial Officer; and Treasurer
David E. D'Anna Executive Vice President and Divisional
Chief Executive Officer, Technology-based
Outsourcing Services, and Director
Joseph C. McGowan Executive Vice President and
Divisional Chief Executive Officer,
Accounts Receivable Management Services
Stephen W. Elliott Executive Vice President, Information
Technology and Chief Information Officer
Robert Di Sante Executive Vice President and
Divisional Chief Executive Officer,
International Operations
Joshua Gindin, Esq. Executive Vice President and General
Counsel
Paul E. Weitzel Jr Executive Vice President, Corporate
Development
Bernard R. Miller Executive Vice President and Divisional
Chief Executive Officer, Healthcare
Services and Director
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All individuals named in the above table are employed by NCO Group,
Inc. The address of NCO's principal executive office is 515 Pennsylvania Avenue,
Fort Washington, PA 19034.
NON-EMPLOYEE DIRECTORS OF NCO
<TABLE>
<CAPTION>
Principal Occupation Name And Address of Corporation or
Name Or Employment Other Organization in Which Employed
- ---- ------------- ------------------------------------
<S> <C> <C>
Eric S. Siegel President of Management Siegel Management Company
Consulting Firm 937 Haverford Avenue
Suite 301
Bryn Mawr, PA 19010
Allen F. Wise Chief Executive Officer of Coventry Corporation
Managed Care Company 6705 Rockledge Drive
Suite 100
Bethesda, MD 20817
Stuart Wolf Chief Executive Officer of Reimbursement Technologies, Inc.
(nominee Corporation that provides 37043 Walton Road
for director) billing services for Blue Bell, PA 19422
emergency room
physicians
</TABLE>
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SCHEDULE II
<TABLE>
<CAPTION>
Number of Shares of Compass Percentage of Outstanding
Voting Agreement Common Stock Beneficially Shares of Compass Common
Stockholder Owned Stock as of May 12, 1999
- ---------------- --------------------------- -------------------------
<S> <C> <C>
Richard Bainter 226,986 1.58
Michael Cunningham 252,415 1.75
David DuCoin 194,562 1.35
Edward DuCoin 194,562 1.35
John Erickson 167,990 1.17
Leeds Hackett 393,329 2.73
Mahmud Haq 196,323 1.36
Earl Johnson 43,997 0.31
Robert Jones 275,000 1.91
Les Kirschbaum 467,127 3.24
Scott Lang 152,420 1.06
Maurice Maher 284,112 1.97
David P. McCormick Trust 324,974 2.26
Mark E. McCormick Trust 324,974 2.26
Steven B. McCormick Trust 324,974 2.26
Robert Meador 173,979 1.21
Robert Meador, Trustee 170,000 1.18
Kenneth W. Murphy Children Trust 510,000 3.54
Kenneth W. Murphy 1,076,911 7.48
Billy Ray Pitcher 37,296 0.26
James Summers 275,000 1.91
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6,066,931 42.11
</TABLE>
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