RULE 14F-1
REPORT OF CHANGE IN MAJORITY OF DIRECTORS
INFORMATION PURSUANT TO SECTION 14(f) OF THE
SECURITIES EXCHANGE ACT OF 1934
CONTEX ENTERPRISE GROUP, INC.
1629 York Street
Denver, CO 80206
REPORT OF CHANGE IN MAJORITY OF DIRECTORS
October 6, 2000
This report is furnished by the Board of Directors of Contex Enterprise Group,
Inc., a Colorado corporation ("Contex"), to the holders of Common Stock, no par
value per share, of Contex (the "Common Stock"). Contex has entered into an
agreement with the shareholders of Transportation Logistics Int'l, Inc. ("TLI"),
pursuant to which Contex will issue 17,760,000 shares of common stock in
exchange for all of the capital stock of TLI (the "Reorganization"). As a
condition to closing of the Reorganization, the individuals who are presently
the Board of Directors of TLI will be appointed to the Contex Board of
Directors, and the present members of the Contex Board of Directors will resign.
The new Contex Board of Directors will consist of Michael Margolies, Jim Thorpe,
and Robert I. Blackman.
This information is provided for information purposes only. We are not
soliciting proxies in connection with the items described herein. You are not
required to respond to this report.
This report is first being mailed to shareholders on or about October 6, 2000.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
There are at present 2,240,000 shares of Common Stock of Contex outstanding and
entitled to vote. Upon closng of the Reorganization, there will be a total of
20,360,000 shares outstanding..
The following table lists, as of October 6, 2000, the security ownership of (i)
all persons known by Contex to own beneficially 5% or more of the Common Stock;
(ii) all directors and executive officers as a group; and (iii) each director of
Contex.
Amount and
Title of Name and Address Nature of Percent
Class of Beneficial Owner Beneficial Ownership(2) of Class
-------- ------------------- ----------------------- --------
Common Gary G. Clark(1) 60,000 2.7%
1530 S. Eudora St.
Denver, CO 80222
Common Gerald Trumbule(1) 60,000 2.7%
1629 York, St.
Denver, CO 80206
Common Eastbury Consultants Ltd. 200,000 8.9%
54-58 Athol St., 4th FL
Douglas, Isle of Man IMI IJD
British Isle
Common All Officers and 120,000 5.4%
Directors as a
Group (2 persons)
-----------------------
(1) Current officer and director of Contex.
(2) Ownership is of record unless otherwise indicated.
<PAGE>
TLI has provided the following information to Contex. The table lists, as of the
closing of the Reorganization, the security ownership of (i) all persons who
will after the Reorganization own beneficially 5% or more of the Common Stock;
(ii) all persons who will be executive officers of Contex as a group; and (iii)
each person who will be a director of Contex.
Amount and
Title of Name and Address Nature of Percent
Class of Beneficial Owner(1) Beneficial Ownership(2) of Class
-------- ---------------------- ----------------------- --------
Common Michael Margolies 11,834,939(3) 58.1%
Common James Thorpe 1,440,093(4) 7.1%
Common Robert I. Blackman 1,256,808(5) 6.2%
Common All Officers and Directors
As a Group (6 persons) 14,531,840 71.4%
Common Rewico Investment Limited 2,487,432 12.2%
City House
9, Cranbrook Road
Ilford, Essex UK IG14EA
------------------
(1) Except as noted, the address of all shareholders is c/o Transportation
Logistics Int'l, Inc., 136 Freeway Drive, East Orange, NJ 07018
(2) All shares are owned of record unless otherwise indicated
(3) Includes 2,618,350 shares to be issued to the Margolies Family Trust.
The Trustee of the Margolies Family Trust is Mr. Margolies' spouse, and
the beneficiaries of the Trust are Mr. Margolies' spouse and children.
(4) Includes 125,691 shares to be issued to Mr. Thorpe's spouse.
(5) Represents shares owned by Mr. Blackman's spouse.
DIRECTORS AND OFFICERS
PRESENT OFFICERS AND DIRECTORS. None of Contex's current officers and directors
receives any compensation for their services. The Board of Directors has not
established any standing committees or subcommittees. In the past fiscal year,
the Board of Directors held eleven (11) meetings. All of the current directors
were directors as of the close of the last fiscal year.
The following persons currently serve as officers and directors of Contex:
Gary G. Clarke
Gerald H. Trumbule
PERSONS TO BE APPOINTED TO THE BOARD. Upon closing of the Reorganization, the
following persons will be appointed to serve as the Board of Directors of
Contex. The appointment will be made by the present Board of Directors. Under
the Contex Bylaws, no shareholder approval is required.
<PAGE>
Michael Margolies founded Transportation Logistics in 1998. Mr.
Margolies previously served as Chief Executive Officer of U.S. Transportation
Systems, Inc. from its creation in 1975. USTS was a NASDAQ-listed holding
company involved in a diversified group of transportation-related businesses
(e.g. bus charters, freight-hauling, bus leasing, limousines, etc.). Mr.
Margolies left USTS in 1998 when it was sold to Precept Business Services, Inc.
for approximately $43 million. He then organized Transportation Logistics in
order to apply, in a non-asset-based environment, the skills in organization and
consolidation of transportation services that he developed at USTS. Mr.
Margolies is 72.
Jim Thorpe became the President of Avair in 1997, and President of
Transportation Logistics in 1999 when it purchased Avair and changed its name to
ATransportation Logistics Int=l (U.K.), Inc.@ Mr. Thorpe brings to
Transportation Logistics almost 30 years of experience in the export/import
freight business. From 1992 to 1997 Mr. Thorpe was affiliated with Avandero,
Ltd., which he helped to grow into one of the world=s 30 largest freight
forwarders. In 1986 Mr. Thorpe founded Westgate Worldwide and managed its
operations until he sold it in 1992 to Dan Transport. Previously, Mr. Thorpe had
been employed for 15 years by Air Express International, most recently as
Regional U.K. Director. Mr. Thorpe is 52.
Robert I. Blackman assisted Michael Margolies in founding
Transportation Logistics, after serving with Mr. Margolies on the Board of
Directors of U.S. Transportation Systems, Inc. from 1996 until 1998. Mr.
Blackman serves as Treasurer of Transportation Logistics on a part-time basis,
devoting the remainder of his business time to The Best of Brooklyn Properties,
Inc., a private real estate investment firm where Mr. Blackman serves as Chief
Executive Officer. Previously, Mr. Blackman practiced corporate, securities and
real estate law as a partner in Blackman, Lefrak, Galgay, Myerson & Field, and
as a Vice President of Investment Banking for Kidder Peabody & Company. Mr.
Blackman is 72.
EXECUTIVE COMPENSATION
Jim Thorpe is the only officer of TLI who has a written employment
agreement. Mr. Thorpe=s Employment Agreement with Transportation Logistics (UK)
provides that he will be employed as President of Transportation Logistics (UK)
until Marsh 31, 2004, at which time Transportation Logistics (UK) may extend the
contract for an additional five year term. The Agreement calls for an annual
salary of $130,000 with a 3% annual increase for any year in which the
operations of Transportation Logistics (UK) are profitable. Mr. Thorpe covenants
in the Agreement that he will not compete with Transportation Logistics (UK) for
two years following the termination of his employment. The Agreement originally
provided that Mr. Thorpe would be paid an annual bonus based on profitability of
Transportation Logistics (UK). In July of this year the covenant to pay a bonus
was removed and, in lieu thereof, TLI issued 200,000 of its shares to Mr.
Thorpe.
TLI has agreed to pay its officers salaries for the year 2000
at the rate listed below.
Executive Salary
--------- ------
Michael Margolies....... $ 150,000
Jim Thorpe.............. 130,000
Robert I. Blackman...... 50,000
Michael Mount........... 110,000
Dean R. Temple.......... 105,000
Michael B. Sobin........ 100,000
TRANSACTIONS WITH TLI MANAGEMENT
TLI was organized in March, 1999. At that time, TLI entered into an
agreement with Transportation Equities, Inc. ("TEI"), pursuant to which TEI
assigned to TLI, in exchange for $10, all of the capital stock of Avair Freight
Services (U.K.) Limited, CDA North America, Inc. and Pupil Transportation, Inc.
In March, 2000 TEI assigned to TLI, for nominal consideration, TEI's rights to
acquire Rewico America, Inc. Michael Margolies and members of his family were
the principal shareholders of TEI.
<PAGE>
From time to time since TLI was organized early in 1999, Mr. Margolies
has loaned money to TLI. At June 30, 2000, the balance due to Mr. Margolies by
TLI was $122,500.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires Contex's directors and executive officers, and persons
who own more than 10% of the Common Stock, to file with the Securities and
Exchange Commission (the "SEC") initial reports of beneficial ownership ("Forms
3") and reports of changes in beneficial ownership of Common Stock and other
equity securities of Contex ("Forms 4"). Officers, directors, and greater than
10% shareholders of Contex are required by SEC regulations to furnish to Contex
copies of all Section 16(a) reports that they file. To Contex's knowledge, based
solely on a review of the copies of such reports furnished to Contex, all
Section 16(a) filing requirements applicable to its officers, directors, and
greater than 10% beneficial owners were complied with for the fiscal year ended
February 29, 2000.
Contex Enterprise Group, Inc.
By Order of the Board of Directors
/s/ Gary G. Clark
President
