<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
COMPASS KNOWLEDGE HOLDINGS, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
COMPASS KNOWLEDGE HOLDINGS, INC.
2710 REW CIRCLE, SUITE 100
OCOEE, FL 34761
November 14, 2000
Dear Stockholder:
You are cordially invited to attend the 2000 Annual Meeting of
Stockholders of Compass Knowledge Holdings Inc., to be held on Tuesday, December
12, 2000 at 10:00 a.m., local time, at the Company's offices located at 2710 Rew
Circle, Suite 100, Ocoee, FL 34761.
The matters to be acted upon at the Annual Meeting, as well as other
important information, are set forth in the accompanying Notice of Annual
Meeting and Proxy Statement which you are urged to review carefully.
Regardless of your plans for attending in person, it is important that
your shares be represented and voted at the Annual Meeting. Accordingly, you are
requested to complete, sign, date and return the enclose proxy card in the
enclosed postage paid envelope. Signing this proxy will not prevent you from
voting in person should you be able to attend the meeting, but will assure that
your vote is counted if, for any reason, you are unable to attend.
We hope that you can attend the 2000 Annual Meeting of Stockholders.
Your interest and support in the affairs of Compass Knowledge Holdings, Inc. are
appreciated.
Sincerely,
/s/ Rogers W. Kirven, Jr.
----------------------------------
Rogers W. Kirven, Jr.
Chairman of the Board of Directors
and Chief Executive Officer
<PAGE> 3
COMPASS KNOWLEDGE HOLDINGS, INC.
2710 REW CIRCLE, SUITE 100
OCOEE, FL 34761
(407) 573-2000
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD DECEMBER 12, 2000
-------------------------------------
To the Stockholders of Compass Knowledge Holdings, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Compass Knowledge Holdings, Inc., a Nevada corporation (the "Company"), will be
held at 2710 Rew Circle, Suite 100, Ocoee, FL 34761 at 10:00 a.m., local time on
December 12, 2000, for the following purposes:
1. To elect five directors to each serve until the next annual meeting of
Stockholders of the Company and until their successors have been duly
elected and qualified;
2. To consider and act upon a proposal to ratify and approve the Company's
2000 Stock Option Plan.
3. To ratify the appointment of Arthur Andersen as the Company's
independent certified accountants.
4. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Only stockholders of record at the close of business on November 7,
2000, are entitled to notice of and to vote at the meeting, or any adjournment
thereof. A complete list of such stockholders will be available for examination
at the offices of the Company in Ocoee, Florida for ten business days prior to
the meeting.
Stockholders unable to attend the Annual Meeting in person are
requested to read the enclosed Proxy Statement and then complete and deposit the
Proxy with the Company's transfer agent, Interwest Transfer Co., Inc., 1981 East
4800 South, Suite 100, Salt Lake City, UT 84117 before the time of the Annual
Meeting or adjournment thereof or with the chairman of the Annual Meeting, 2710
Rew Circle, Suite 100, Ocoee, FL 34761, prior to the commencement thereof.
Unregistered Stockholders who received the Proxy through an intermediary must
deliver the Proxy in accordance with the instructions given by such
intermediary. A Proxy may be revoked by a shareholder at any time before the
effective exercise thereof.
Also enclosed are copies of the Company's 2000 Stock Option Plan which was filed
with the Securities and Exchange Commission (SEC) on February 18, 2000 as
Exhibit 4.6 to our Form 10SB/A filed with the SEC on May 12, 2000, Form 10SB,
without exhibits, Form 8-K/A filed with the SEC on October 26, 2000 and our most
recent Quarterly Report on Form 10-QSB for the quarter ended September 30, 2000.
BY ORDER OF THE BOARD OF DIRECTORS
Ocoee, Florida /s/ Rogers W. Kirven, Jr.
November 14, 2000 --------------------------------------------
Rogers W. Kirven, Jr., Chairman of the Board
of Directors and Chief Executive Officer
THE PROXY STATEMENT WHICH ACCOMPANIES THIS NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS CONTAINS MATERIAL INFORMATION CONCERNING THE MATTERS TO BE
CONSIDERED AT THE MEETING, AND SHOULD BE READ IN CONJUNCTION WITH THIS NOTICE.
<PAGE> 4
COMPASS KNOWLEDGE HOLDINGS, INC.
2710 REW CIRCLE, SUITE 100
OCOEE, FLORIDA 34761
(407) 573-2000
PROXY STATEMENT FOR
2000 ANNUAL MEETING OF STOCKHOLDERS
-------------------
ANNUAL MEETING. This Proxy Statement is furnished in connection with
the solicitation of proxies by the Board of Directors of Compass Knowledge
Holdings, Inc., a Nevada corporation (the "Company") for use at the Annual
Meeting of Stockholders (the "Annual Meeting") to be held at 2710 Rew Circle,
Suite 100, Ocoee, FL 34761, at 10:00 a.m., local time, on December 12, 2000, and
at any adjournments thereof for the purpose of considering and voting upon the
matters set forth in the accompanying Notice of Annual Meeting of Stockholders
(the "Notice"). This Proxy Statement and the accompanying form of proxy are
first being mailed to stockholders of the Company (the "Stockholders") on or
about November 14, 2000. All costs of soliciting proxies will be borne by the
Company.
PROXY CARD. A Proxy Card is enclosed for use at the Annual Meeting.
Proxies that are properly competed, signed and received prior to the Annual
Meeting will be voted in accordance with the instructions of the persons
executing the same. Unless instructed to the contrary, the proxies will be voted
FOR Proposals 1, 2 and 3 set forth in the Notice of the Annual Meeting. If any
other matters are properly presented to the Annual Meeting for action, it is
intended that the persons named in the enclosed Proxy Card and acting thereunder
will vote in accordance with their best judgment on such matters. A proxy may be
revoked by a shareholder at any time before the effective exercise thereof by
submitting a subsequently dated proxy or by appearing in person and voting at
the Annual Meeting.
RECORD DATES. With respect to all proposals, the close of business on
November 7, 2000 has been fixed as the record date ("Record Date") for the
determination of Stockholders entitled to notice of and to vote at the Annual
Meeting and any adjournment thereof. As of the Record Date, there were
14,875,000 shares of common stock, $.001 par value, issued and outstanding of
which 14,875,000 shares are entitled to vote and 2,000 shares of Series A
Convertible Preferred Stock issued and outstanding which are entitled to place
437.5 votes per share, or 875,000 votes in the aggregate, with our common
stockholders as a single class.
QUORUM. The presence, in person or by proxy, of a majority of the
outstanding shares of common stock on the Record Date, is necessary to
constitute a quorum at the Annual Meeting. Abstentions and broker non-votes will
be counted towards a quorum. If a quorum is not present or represented by proxy
at the Annual Meeting, the Stockholders present or represented by proxy at the
Annual Meeting have the power to adjourn the Annual Meeting from time to time,
without notice other then an announcement at the Annual Meeting, until a quorum
is present or represented by proxy. At any such adjourned Annual Meeting at
which a quorum is present or represented by proxy, any business may be
transacted that might have been transacted at the original Annual Meeting.
VOTING REQUIREMENTS. With respect to the election of directors, votes
may be cast in favor of or withheld. Directors are elected by a plurality of the
votes cast at the Annual Meeting, and votes that are withheld will be excluded
entirely from the vote and will have no effect. Any other matter that may be
submitted to a vote of the Stockholders will be approved if the number of shares
of common stock voted in favor of the matter exceeds the number of shares voted
against the matter, unless the matter is one for which a greater vote is
required by law or the Company's Articles of Incorporation or Bylaws.
ABSTENTIONS AND BROKER NON-VOTES. Abstentions will be considered as
shares present and entitled to vote at the Annual Meeting and will be counted as
votes cast at the Annual Meeting, but will not be counted as votes cast for or
against any given matter. Shares referred to as "broker or nominee non-votes"
(shares held by brokers or nominees as to which instructions have not been
received from the beneficial owners or persons entitled to vote and the broker
or nominee does not have discretionary voting power on a particular matter) will
2
<PAGE> 5
be treated as shares that are present and entitled to vote for purposes of
determining the presence of a quorum. For purposes of determining the outcome of
any matter as to which the proxies reflect broker or nominee non-votes, shares
represented by such proxies will be treated as not present and not entitled to
vote on that subject matter and therefore will not be considered when counting
votes cast on the matter (even though those shares are considered entitled to
vote for quorum purposes and may be entitled to vote on other matters).
Accordingly, abstentions and broker or nominee non-votes will not have the same
effect as a vote against the election of any director.
DEFAULT VOTING. All shares represented by properly executed proxies,
unless such proxies have been previously revoked, will be voted at the Annual
Meeting in accordance with the directions set forth on such proxies. If no
direction is indicated, the shares will be voted (i) FOR THE ELECTION OF THE
NOMINEES NAMED HEREIN AS DIRECTORS, (ii) FOR THE RATIFICATION AND APPROVAL OF
THE COMPANY'S 2000 STOCK OPTION PLAN, AND (iii) FOR RATIFICATION OF ARTHUR
ANDERSEN AS THE COMPANY'S ACCOUNTANTS. IF ANY OTHER BUSINESS COMES BEFORE THE
STOCKHOLDERS FOR A VOTE AT THE MEETING, THE SHARES WILL BE VOTED IN ACCORDANCE
WITH THE DISCRETION OF THE HOLDERS OF THE PROXY.
TABULATION OF VOTES. All votes will be tabulated by the inspector of
elections (the "Inspector") appointed for the Annual Meeting who will, for each
proposal to be voted on, determine the number of shares outstanding, the number
of shares entitled to vote, the number of shares represented at the Annual
Meeting, the existence of a quorum, and the authenticity, validity and effect of
all proxies received by the Company. The Inspector will also separately tabulate
affirmative and negative votes and broker "non-votes", and determine the result
for each proposal.
REVOCATION OF PROXY. The enclosed proxy, even though executed and
returned, may be revoked at any time prior to the voting of the proxy by (a) the
execution and submission of a revised proxy, (b) written notice to the Secretary
of the Company or (c) voting in person at the Annual Meeting.
ADDITIONAL MATERIALS
A copy of the Company's 2000 Stock Option Plan which was filed with the
Securities and Exchange Commission ("SEC") on February 18, 2000 as Exhibit 4.6
to our Form 10SB is being mailed with this Proxy Statement as well as Form 10
SB/A, without exhibits, filed with the SEC on May 12, 2000, the Company's Form
8-K/A filed with the SEC on October 26, 2000 and our most recent Quarterly
Report on Form 10-QSB for the quarter ended September 30, 2000. Except for the
Company's 2000 Stock Option Plan, these documents do not form any part of the
material for solicitation of proxies.
The Company will provide, without charge, a copy of the exhibits to its
Form 10-SB/A, upon written request to Rogers W. Kirven, Jr., Chairman of the
Board of Directors and Chief Executive Officer of the Company, at 2710 Rew
Circle, Suite 100, Ocoee, FL 34761; fax number (407) 656-7585.
PROPOSAL 1
ELECTION OF DIRECTORS
DIRECTOR NOMINEES.
The Company's Board of Directors currently consists of four members.
The directors are elected annually by the Stockholders of the Company. The
Bylaws of the Company provide that the Board of Directors will determine the
number of directors. The Stockholders will elect five directors for the coming
year. All of the nominees, except for Mr. Crane, presently serve as directors of
the Company. Should any nominee become unable or unwilling to accept nomination
or election, the Board of Directors will either select a substitute nominee or
will reduce the size of the Board. If you have submitted a proxy and a
substitute nominee is selected, the holders of the proxy will vote your shares
FOR the election of the substitute nominee. The Board of Directors has no reason
to believe that any nominee will be unable or unwilling to serve if elected.
3
<PAGE> 6
THE BOARD OF DIRECTORS HAS NOMINATED THE ABOVE-REFERENCED DIRECTORS FOR ELECTION
BY THE STOCKHOLDERS AND UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF EACH
OF THE NOMINEES LISTED ABOVE. THE ELECTION OF THESE DIRECTORS REQUIRES A
PLURALITY OF THE VOTES CAST BY THE HOLDERS OF THE SHARES OF COMMON STOCK PRESENT
OR REPRESENTED BY PROXY AT THE ANNUAL MEETING AND ENTITLED TO VOTE IN THE
ELECTION OF DIRECTORS.
Except for Mr. Crane, the individuals listed below as nominees for the
Board of Directors were directors of the Company during 1999.
The name and age of each nominee, his principal occupation, and the
period during which such person has served as a director is set forth below:
<TABLE>
<CAPTION>
FIRST BECAME A
NAME OF NOMINEE AGE DIRECTOR OF THE COMPANY POSITION
--------------- --- ----------------------- --------
<S> <C> <C> <C>
Rogers W. Kirven, Jr.(1) (2) 47 1999 Chairman of the Board Chief Executive Officer
Daniel J. Devine (1)(2) 39 1999 President and Director
Dr. Robert Frank (2) 48 1999 Director
Dr. Paul Lerman 59 1999 Director
Thomas J. Crane 43 n/a Director
</TABLE>
-------------------
(1) Member of Audit Committee.
(2) Member of Compensation Committee.
ROGERS W. KIRVEN, JR., Co-founder of the Company, Chairman of the Board
and Chief Executive Officer, Secretary and Treasurer. Mr. Kirven has served as
one of our Directors and Chief Executive Officer since 1999. Since 1991, Mr.
Kirven served as Managing Partner of the Kirven Group, Inc., located in Ocoee,
Florida, a private investment firm that specializes in investments in healthcare
and education. Mr. Kirven holds a Bachelor of Arts degree from Clemson
University and is a graduate of the Executive Program for Small Companies',
Stanford University.
DANIEL J. DEVINE, Co-founder of the Company, Director and President.
Mr. Devine is responsible for the overall management of our business, including
all operations and research and development of new programs. He has served as
our President and Chief Operating Officer since 1999. From 1993 to 1995, he was
a partner with The Kirven Group, Inc located in Ocoee, Florida. Prior to joining
the Kirven Group, Mr. Devine was manager of business development for the Global
Messaging Group of the Harris Corporation, located in Melbourne, Florida, which
focused on the commercial electronic messaging marketplace. Mr. Devine has a
Bachelor of Science degree in Electrical Engineering from the University of
Florida and completed the Stanford University Executive Program for Growing
Companies in the Spring, 1999.
DR. PAUL LERMAN. Dr. Lerman became a Director of the Company in
November 1999. Since April 1990, Dr. Lerman has served as Dean and Professor of
the College of Business Administration for Fairleigh Dickinson University. Dr.
Lerman also provides consulting services to a number of major corporations
including, the BASF Corporation and the AT&T Corporation. Dr. Lerman received
his Ph.D. in Operations Research from New York University, a Master's degree in
Mechanical Engineering from New York University, a Bachelor of Arts degree in
Mathematics and Economics and a B.M.E. in Mechanical Engineering from the New
York University.
DR. ROBERT G. FRANK. Dr. Frank became a Director of the Company in
November 1999. Dr. Frank has dedicated his entire career to education and
research in the areas of Clinical and Health Psychology. Dr. Frank has served
since February of 1995 and continues to serve as the Dean of the College of
Health Professions at the University of Florida and Vice President for
Rehabilitation and Behavioral Health at Shands Healthcare, both located in
Gainesville, Florida. Prior to that time, Dr. Frank served as the Director of
Clinical Health Psychology and Neuropsychology at the University of Missouri
School of Medicine. Dr. Frank received his Ph.D. from the University of New
Mexico in Clinical Psychology.
4
<PAGE> 7
THOMAS J. CRANE, ESQ. is the Managing Director of Cloverleaf Capital
International, LLC (Cloverleaf), a Miami, Florida based investment company
established in July, 2000. Cloverleaf, an entrepreneurial based boutique
investment banking firm, counsels clients in the areas of mergers &
acquisitions, equity markets, debt financing, international strategies and
information technology issues. Since January 1991, Mr. Crane has owned and
operated a law practice from his Miami, Florida office. In January 1990, Mr.
Crane founded and became President/CEO of Southwestern Broadcasting Corporation
(SBC), based in Naples, Florida. In August of 1998, SBC sold its assets to
Broadcast Entertainment Corporation (BEC), an affiliated company operating radio
stations in Texas, New Mexico, and California. Mr. Crane was, at the time of the
sale, and remains a principal shareholder and Chairman of the Board of Directors
of BEC, with its principal offices located in Clovis, New Mexico. Mr. Crane also
sits on the Boards of Cerebus Consulting based in Albuquerque, New Mexico and
Xtel Networks based in Miami, Florida. Mr. Crane holds a Juris Doctor degree
from the University of Miami School of Law, Miami, Florida, a Bachelor of Arts
degree from Florida State University, Tallahassee, Florida and a Certificate of
Languages from the University of Paris (Sorbonne), Paris, France. Mr. Crane is
licensed to practice law in the States of Florida and Texas.
NON-DIRECTOR EXECUTIVE OFFICERS
The principal occupations and other biographical information of the
Company's non-director executive officers are as follows:
RAMSEY HASHEM. Mr. Hashem became a Vice President of the Company in May
2000. Beginning in January 1998 until May 2000, Mr. Hashem was Vice President of
Sales and Marketing of the European Division of GE Harris Railway Electronics.
GE Harris is a joint venture between General Electric Company and the Harris
Corporation formed in July 1995. As an original member of GE Harris, Mr. Hashem
served as Director of Sales and Marketing from July 1995 until January 1997 and
was instrumental in transforming a "start-up" joint venture into a global leader
in railway electronics. From January 1997 through December 1997, Mr. Hashem
served as Vice President of Sales and Marketing for Harris Computer Systems
located in Ottawa, Canada. Prior to joining Harris Computer Systems, Mr. Hashem
was Director of Business Development for Harris Corporation, located in
Melbourne, Florida. Mr. Hashem received his BS in Electrical Engineering from
the University of Ottawa in Canada and has completed several GE management and
leadership training programs.
ANTHONY R. RUBEN. In May 2000, Mr. Ruben became the Company's Chief
Financial Officer and Treasurer. Prior to joining Compass, Mr. Ruben was the
Vice President of Corporate Development and Treasurer for Industar Digital PCS,
a start-up wireless telecommunications company located in Milwaukee, Wisconsin.
From 1997 to 1999, Mr. Ruben served as Investment Banker for Tucker Anthony
Cleary Gull, located in Milwaukee, Wisconsin. From 1994 to 1997, Mr. Ruben
served as Corporate Development Manager for Tenneco's packaging subsidiary,
Tenneco Packing, located in Evanston, Illinois. Mr. Ruben received his
undergraduate degree from the University of Illinois, his MBA from the
University of Michigan and is a CPA.
COMMITTEES AND MEETINGS. The Board of Directors held three (3) meetings
in 1999 and each director of the Board attended. In November 1999, the Board
established an Audit Committee and a Compensation Committee. The Audit Committee
recommends to the Board of Directors an accounting firm to serve as the
Company's independent accountants, reviews the scope and results of the annual
audit of the Company's consolidated financial statements, reviews nonaudit
services provided to the Company by the Company's independent accountants and
monitors transactions among the Company and its affiliates, if any. The Audit
Committee currently consists of Mr. Kirven, who is the Chairman, and Mr. Devine.
The Compensation Committee is responsible for supervising the Company's
compensation policies, administering the employee incentive plans, reviewing
officers' salaries and bonuses, approving significant changes in employee
benefits and recommending to the Board such other forms of remuneration as it
deems appropriate. The Compensation Committee currently consists of Mr. Kirven,
who is the Chairman, Mr. Devine and Dr. Frank, who is independent.
DIRECTORS' COMPENSATION. Outside directors have yet to receive any
Director fees, but they are entitled to reimbursement for reasonable travel
expenses incurred in attending board meetings. Each of the outside directors are
granted stock options in the Company as awarded in the discretion of the
5
<PAGE> 8
Compensation Committee. Other than Mr. Crane, who was not a director at that
time, each outside director was granted 5,000 options in December 1999
exercisable anytime at $4.00 per share within three years of the grant date.
Each non-employee Director is entitled to participate in the Company's Stock
Option Plans.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than 10% of
the Company's common stock, to file with the Securities and Exchange Commission
initial reports of ownerships and reports of changes in ownership, and to
furnish the Company with copies of all Section 16(a) reports they file. To the
Company's knowledge, based solely on review of the copies of such reports
furnished to the Company, all Section 16(a) filing requirements applicable to
its officers, directors were complied with during the year.
EXECUTIVE COMPENSATION
The following table sets forth the information with respect to each
person who served in the capacity of chief executive officer during l999, and
other officers of the Company whose total annual salary and bonus for the fiscal
year ended December 31, 1999 exceeded $100,000 (collectively, the "Named
Executive Officers"). These Named Executive Officers receive other personal
benefits in amounts less than 10% of their total annual salary and bonus.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
-------------------------------------------------
Annual Awards Payouts
----------------------------------------- ----------------------------------- -------------
Awards Payouts
Name & Principal Salary($) Bonus($) Other Annual Restricted ----------------- -------------
Position Compensation Stock Award(s) Securities LTIP
($) Underlying Payout($)
Options (#)(3)
------------------------- ---------- ------------- ---------------- ----------------- ----------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Rogers W. Kirven, Jr., $ 80,167 $36,000 $-0- $-0- 381,118 $-0-
CEO (1)
Daniel J. Devine(2) $106,633 $59,256 $-0- $-0- 275,982 $-0-
</TABLE>
-----------
(1) Rogers W. Kirven, Jr. has served as our Director and the Chief Executive
Officer since our organization on February 9, 1999. Pursuant to an
employment agreement entered into in November 1999, Mr. Kirven receives
annual salary payments equal to $175,000. See "Certain Employment
Agreements."
(2) Daniel J. Devine has served as a Director and President since our
organization on February 9, 1999. Pursuant to an employment agreement
entered into in November 1999, Mr. Devine receives annual salary payments
equal to $140,000. See "Certain Employment Agreements."
(3) Options were granted on February 9, 1999 under the Company's 1999 Stock
Option Plan. No options were exercised during fiscal 1999.
STOCK OPTION GRANTS
The following table sets forth information regarding grants of stock
options during fiscal year 1999 made to the Named Executive Officers who have
received Company option grants.
6
<PAGE> 9
STOCK OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Percent of Total
Number of Securities Stock Options
Underlying Stock Options Granted to Employees Exercise or Base Expiration
Name Granted (#)(1) in Fiscal Year 1999 Price ($/Sh) Date
--------------------- --------------------------- ---------------------- ------------------ ------------
<S> <C> <C> <C> <C> <C>
Rogers W. Kirven, 381,118 25.40786 .75 02/09/04
Jr.
--------------------- --------------------------- ---------------------- ------------------ ------------
Daniel J. Devine 275,982 18.3988 .75 02/09/04
--------------------- --------------------------- ---------------------- ------------------ ------------
</TABLE>
--------------
(1) The stock options granted to Mr. Kirven and Mr. Devine during the last
fiscal year were incentive stock options granted pursuant to the Company's
1999 Stock Option Plan. While neither Mr. Kirven or Mr. Devine have
exercised any of these options, all are immediately exercisable. See "Stock
Option Plans."
EMPLOYMENT AGREEMENTS.
The Company entered into an employment agreement with Rogers W. Kirven, Jr., to
serve as our Chief Executive Officer, in November 1999 for an initial term of
four years. The principal terms of Mr. Kirven's employment agreement are as
follows:
o an annual salary of $175,000, which may be increased from time to time
at the discretion of our Board of Directors;
o stock options which may be issued from time to time at the discretion
of our Board of Directors and by the Trustees of the Compass Knowledge
Group Management Trust;
o a "change of control" provision which allows Mr. Kirven, upon a change
of control of the Company, to terminate his employment agreement and
received 2.9 times his annual base salary;
o a provision for term life insurance;
o automobile allowance;
o discretionary bonuses; and
o standard benefits.
The Company entered into an employment agreement with Daniel J. Devine, to serve
as our President, in November 1999 for an initial term of four years. The
principal terms of Mr. Devine's employment agreement are as follows:
o an annual salary of $140,000, which may be increased from time to time
at the discretion of our Board of Directors;
o stock options which may be issued from time to time at the discretion
of our Board of Directors and by the Trustees of the Compass Knowledge
Group Management Trust;
o a "change of control" provision which allows Mr. Devine, upon a change
of control of the Company, to terminate his employment agreement and
received 2.9 times his annual base salary;
o provisions for a term life insurance;
o automobile allowance;
o discretionary bonuses; and
o standard benefits.
The Company entered into an employment agreement in May 2000 with Anthony R.
Ruben, to serve as our Chief Financial Officer and Treasurer, for an initial
term of three years. The principal terms of Mr. Ruben's employment agreement are
as follows:
o an annual salary of $130,000, which may be increased from time to time
at the discretion of our Board of Directors;
o Mr. Ruben was granted options to purchase 300,000 common shares of the
Company at an exercise price of $2.00 per share;
o a provision which provides for the Company to pay Mr. Ruben up to
200,000 shares of its common stock if (i) there is a merger or
consolidation in which a change of control is effectuated or a sale of
all or substantially all of the Company's assets; and (ii) if the fair
market value of Mr. Ruben's options are $5.50 or less;
o automobile allowance;
o discretionary bonuses; and
o standard benefits.
7
<PAGE> 10
The Company entered into an employment agreement with Ramsey Hashem, to serve as
our Vice President, in May 2000 for an initial term of three years. The
principal terms of Mr. Hashem's employment agreement are as follows:
o an annual salary of $130,000, which may be increased from time to time
at the discretion of our Board of Directors;
o Mr. Hashem was granted options to purchase 400,000 common shares of the
Company at an exercise price of $2.00 per share;
o discretionary bonuses;
o automobile allowance; and
o standard benefits.
PROPOSAL 2
COMPASS KNOWLEDGE HOLDINGS, INC.
2000 STOCK OPTION PLAN
The Company's 2000 Stock Option Plan (the "2000 Plan") was adopted by the
Board of Directors of the Company effective January 1, 2000, subject to
stockholder approval at the Annual Meeting, to provide for the grant of options
to purchase shares of common stock to executives and other employees as an
inducement to enter into employment arrangements with the Company, and to
outside members of the Board, in lieu of cash consideration, as an incentive for
their service on the Board.
The Board believes that stock options are important to promote the interest
of the Company and its stockholders by strengthening the Company's ability to
attract and retain competent executives and other employees, to make service on
the Company's Board of Directors more attractive to present and prospective
non-employee directors and to provide a way to encourage stock ownership and
proprietary interest in the Company by non-employee directors and valued
executives and other employees upon whose judgment, initiative and efforts the
financial success and growth of the Company largely depend. The Board believes
that its stock option plans are an essential component of the Company's
compensation package which enables the Company to attract and retain qualified
management in order to maintain and strengthen the Company's competitive
position in an industry that is highly fragmented, rapidly consolidating and
characterized by intense competition.
The adoption of the 2000 Plan is subject to stockholder approval at the
Annual Meeting. Stockholder approval will allow the Company to obtain a tax
deduction for the full amount allowable with respect to the exercise of options
granted under the Plan and will provide the Company with the flexibility to
grant options qualifying as incentive stock options for tax purposes ("incentive
options").
The principal provisions of the 2000 Plan are summarized below. Such
summary does not, however, purport to be complete and is qualified in its
entirety by the terms of the 2000 Plan. A copy of the 2000 Plan is enclosed with
this Proxy and was filed with the SEC on February 18, 2000 as Exhibit 4.6 to the
Company's Form 10SB.
DESCRIPTION OF THE PLAN
The 2000 Plan provides that options may be granted to executives and other
employees of the Company or any of its subsidiaries, to non-employee members of
the Company's Board of Directors and to outside consultants and service
providers. A total of 1.0 million shares of common stock were reserved for
issuance under the 2000 Plan.
The 2000 Plan shall be administered by a committee (the "Committee")
appointed by the Board and consisting of not less than two (2) director(s)
appointed by the Board. The Committee selects the persons to whom options will
be granted.
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<PAGE> 11
The exercise price of options granted under the 2000 Plan shall be as
determined by the Committee, provided, however, that the exercise price may not
be less than 85% of the fair market value of the Common Stock on the date of the
grant (and provided that in the case of an incentive stock option granted to an
optionee beneficially owning more than 10% of the outstanding Common Stock, the
exercise price may not be less than 100% of the fair market value of the Common
Stock). The maximum option term is 7 years (or five years in the case of an
incentive stock option granted to an optionee beneficially owning more than 10%
of the outstanding Common Stock) from the date the option is granted. Options
vest and become exercisable at such time or times and during such period as
determined by the Committee as provided in the particular option agreement.
Upon the occurrence of a Change in Control, the Committee (as
constituted immediately prior to the Change in Control) shall determine, in its
absolute discretion, whether each Option granted under the Plan and outstanding
at such time shall become fully and immediately exercisable and shall remain
exercisable until its expiration, termination or cancellation pursuant to the
terms of the Plan or whether each such Option shall continue to vest according
to its terms. Under the 2000 Plan, a Change in Control is defined, in general,
as the occurrence of any of the following: (i) any Person becomes, after the
effective date of this Plan, the "beneficial owner" (as defined in Rule 13d-3
promulgated under the Exchange Act), directly or indirectly, of securities of
the Company representing 30% or more of the combined voting power of the
Company's then outstanding securities, unless the Board (as constituted
immediately prior to such Change In Control) determines in its sole absolute
discretion that no Change in Control has occurred; (ii)individuals who
constitute the Board on the effective date of the Plan cease, for any reason, to
constitute at least a majority of the Board of Directors, PROVIDED, HOWEVER,
that any person becoming a director subsequent to the effective date of the Plan
who was nominated for election by at least 66 2/3% of the Board as constituted
on the effective date of the Plan (other than the nomination of an individual
whose initial assumption of office is in connection with an actual or threatened
election contest, relating to the election of the Board of Directors, as such
terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act) shall be, for purposes of this Plan, considered a member of the Board as
constituted on the effective date of the Plan; or (iii) the Board of Directors
determines in its sole and absolute discretion that there has been a Change in
Control of the Company.
If any grantee's employment with the Company or a subsidiary terminates by
reason of death or permanent disability, options held by such grantee which are
then exercisable may be exercised for a period of three months from the date
such grantee ceases to perform services for the Company (but not later than the
date the option would otherwise expire). If any grantee's employment by the
Company or a subsidiary is terminated by the Company for cause or because the
grantee is in breach of any employment agreement or if the grantee resigns,
options held by such grantee shall terminate on the date the grantee ceases to
perform services for the Company. If any grantee's employment with the Company
or subsidiary terminates for any other reason, options held by such grantee
which are then exercisable may be exercised for a period of three months after
the date of such termination (but not later than the date the option would
otherwise expire). Notwithstanding the foregoing or any provision in the 2000
Plan or individual option agreement to the contrary, the Committee may provide,
in its discretion, that a grantee may exercise an option, in whole or in part,
at any time subsequent to grantee's termination of employment or service with
the Company and prior to the expiration of the option in accordance with its
terms, either subject to or without regard to any vesting or other limitation on
exercise imposed under the 2000 Plan. Payment for shares of Common Stock
purchased under options granted pursuant to the 2000 Plan may generally be made
in cash or in shares of Common Stock.
If the outstanding shares of Common Stock are changed into or exchanged for
a different number or kind of shares or securities of the Company or another
corporation by reason of reorganization, merger, consolidation,
recapitalization, reclassification, stock split-up, combination of shares, or
stock dividend payable in capital stock, appropriate adjustment will be made in
the number and kinds of shares subject to the 2000 Plan, and in the number,
kinds and per share exercise price of shares subject to outstanding options
granted under the 2000 Plan. Any such adjustment in an outstanding option,
however, will be made without a change in the total price applicable to the
unexercised portion of the option, and with a corresponding adjustment in the
exercise price per share.
The Board may at any time terminate or make such modification of the 2000
Plan as it deems advisable, provided, however, that (i) the Board may not,
without approval by a majority vote of the stockholders of the Company, increase
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<PAGE> 12
the maximum number of shares for which options may be granted or change the
designation of the class of persons eligible to receive options under the 2000
Plan, and (ii) any modification or amendment of the 2000 Plan shall be subject
to the approval of the Company's stockholders if such approval is necessary to
comply with federal or state law (including without limitation Rule 162(m) of
the Code and Rule 16b-3 of the Securities Exchange Act of 1934, as amended) or
applicable stock exchange or automated quotation system on which the Common
Stock may then be listed. Except as otherwise provided in the 2000 Plan, no
termination, modification or amendment of the 2000 Plan may, without the consent
of the person to whom an option has been granted, adversely affect the rights of
the holder of the option.
OPTIONS GRANTED UNDER THE PLAN
As of the date of this Proxy Statement, the Company has granted 980,000
options under the 2000 Plan. All of such options have an exercise price of
$2.00.
VOTE REQUIRED AND BOARD RECOMMENDATION
Assuming the presence of a quorum at the Annual Meeting, the affirmative
vote of the holders of a majority of the total shares of Common Stock present at
the Annual Meeting, in person or by proxy, and entitled to vote at the Annual
Meeting is required to approve and adopt the 2000 Plan.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE COMPANY'S 2000
STOCK OPTION PLAN AND UNAMIONSLY RECOMMENDS A VOTE FOR THE APPROVAL OF THE PLAN
BY THE COMPANY'S SHAREHOLDERS.
PROPOSAL 3
RATIFICATION OF ARTHUR ANDERSEN AS OUR AUDITORS
Arthur Andersen LLP was engaged in November, 1999 as the Company's
independent certified public accountants. On October 16, 2000, the Board of
Directors approved the continued appointment of Arthur Andersen LLP as its
auditors for the fiscal year ended December 31, 2000.
Audit services of Arthur Andersen LLP during 1999 included the
examination of the consolidated financial statements of the Company and services
related to filings with the Securities and Exchange Commission.
The Audit Committee of the Company has and intends to meet with Arthur
Andersen LLP in 2000 on a quarterly or more frequent basis. At such times, the
Audit Committee will review the services performed by Arthur Andersen LLP, as
well as the fees charged for such services.
A representative of Arthur Andersen LLP is expected to be present at
the 2000 Annual Meeting and will have an opportunity to make a statement if he
or she so desires. The representative also is expected to be available to
respond to appropriate questions from stockholders.
In the event the appointment of Arthur Andersen as the Company's
independent public accountants for the fiscal year ended 2000 is not ratified by
the Stockholders, the adverse vote will be considered as a direction to the
Board of Directors to reconsider its selection.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED ARUTHUR ANDERSEN AS ITS
ACCOUTING FIRM AND RECOMMENDS A VOTE FOR THE RATIFICATION OF ARTHUR ANDERSEN AS
OUR AUDITORS.
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<PAGE> 13
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth data as of November 7, 2000 concerning the
beneficial ownership of common shares by (i) the persons known to the Company to
beneficially own more than 5% of the outstanding common shares, (ii) all
directors and nominees and each Named Executive Officer (as defined under
"Executive Compensation" below) and (iii) all directors and executive officers
as a group.
<TABLE>
<CAPTION>
Options for
Name and Address of Shares of Common Common Percentage
Beneficial Owner Stock Owned Stock Owned (5) Total Shares Owned
---------------- ----------------- ---------------- ------------- -----------
<S> <C> <C> <C> <C>
Rogers W. Kirven, Jr. (1) 4,606,289 381,118 4,987,407 28.77%
2710 Rew Circle, Suite 100
Ocoee, FL 34761
Daniel J. Devine (1) 3,335,587 275,982 3,611,569 20.83%
2710 Rew Circle, Suite 100
Ocoee, FL 34761
Dr. Paul Lerman (2) -0- 5,000 5,000 *
Farleigh Dickenson University
1000 River Road
H325A
Teaneck, NJ 07666
Dr. Robert G. Frank (2) -0- 5,000 5,000 *
College of Health Professions
University of Florida
P.O. Box 100185
Gainesville, FL 32610
Ramsey Hashem (3) -0- 150,000 150,000 *
2710 Rew Circle, Suite 100
Ocoee, FL 34761
Anthony R. Ruben (3) -0- 100,000 100,000 *
2710 Rew Circle, Suite 100
Ocoee, FL 34761
Pioneer Ventures Ltd. Partnership (4) 875,000 -0- 875,000 5.05%
651 Day Hill Road
Windsor, CT 06095-0040
Thomas J. Crane (6) 73,393 -0- 73,393 *
5780 Grande Reserve Way
#1410
Naples, FL 34110
All officers and directors 8,015,269 917,100 8,932,369 56.58%
as a group
</TABLE>
11
<PAGE> 14
-----------------
* INDICATES LESS THAN ONE PERCENT.
(1) Individuals who are both officers and directors.
(2) Individuals who are directors only.
(3) Individuals who are officers only.
(4) Pioneer Ventures owns 2,000 shares of our convertible Series A Preferred
Stock which may be converted by Pioneer at anytime into 875,000 shares of
our common stock.
(5) Reflects options granted under our option plans which may be exercised
within the next 60 days. Based upon 17,334,575 issued and outstanding
shares including all options and other convertible instruments that may be
either exercised or converted into common stock within the next 60 days.
(6) Mr. Crane is not presently an officer, director or 5% or greater
shareholder, but has been nominated as a director of the Company. As of
this date, Mr. Crane has purchased 70,000 shares of our common stock in the
open market at an average price per share of approximately $2.03.
COST OF SOLICITATION
Company will bear the cost of the solicitation of proxies from its
Stockholders. In addition to the use of mail, proxies may be solicited by
directors, officers and regular employees of the Company in person or by
telephone or other means of communication. The directors, officers and employees
of the Company will not be compensated additionally for the solicitation, but
may be reimbursed for out-of-pocket expenses in connection with this
solicitation. Arrangements are also being made with brokerage houses and any
other custodians, nominees and fiduciaries for the forwarding of solicitation
material to the beneficial owners of the Company, and the Company will reimburse
such brokers, custodians, nominees and fiduciaries for their reasonable
out-of-pocket expenses.
DEADLINE FOR FUTURE PROPOSALS OF STOCKHOLDERS
Proposals of Stockholders of the Company which are intended to be
presented by such Stockholders at the 2001 Annual Meeting must be received by
the Company no later than March 1, 2001 in order to have them included in the
proxy statement and form of proxy relating to that meeting.
The Company's by-laws require a Stockholder to give advance notice of
any business, including the nomination of candidates for the Board of directors,
that the Stockholder wishes to bring before a meeting of the Stockholders of the
Company. In general, for business to be brought before an annual meeting by a
Stockholder, written notice of the Stockholder proposal or nomination must be
received by the secretary of the Company not less than 90 days nor more than 120
days before the meeting, or if the Company gives less than 40 days, notice of
the meeting date , written notice of the stockholder proposal or nomination must
be received within ten days after the meeting date is announced. With respect to
Stockholder proposals, the Stockholder's notice to the secretary must contain a
brief description of the business to be brought before the meeting and the
reasons for conducting such business at the meeting, as well as such other
information set forth in the Company's by-laws or required by law. With respect
to the nomination of a candidate for the Board of Directors by a stockholder,
the stockholder's notice to the secretary of the Company must contain certain
information set forth in the Company's by-laws about both the nominee and the
Stockholder making the nominations.
If a Stockholder desires to have a proposal included in the Company's
proxy materials for the 2001 Annual Meeting of Stockholders and desires to have
such proposal brought before the same Annual Meeting, the Stockholder must
comply with the both sets of procedures described in the two immediately
preceding paragraphs. Any required notices should be sent to Compass Knowledge
Holdings, Inc. 2710 Rew Circle, Suite 100, Ocoee, FL 34761, Attention Secretary.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Effective December 1, 1999, the Company issued 465,000 shares of its
common stock at a fair value of $930,000, plus acquisition costs of $16,500, to
The University of Florida Foundation in exchange for its 35.5% minority interest
in Intelicus, LLC. Goodwill of $681,555 was recorded as a result of this
acquisition. In addition, the Company issued 35,000 shares at a fair value of
12
<PAGE> 15
$70,000 as consideration for The University of Florida Foundation to extend a
contract agreement for a degree program. In December, 1999, the Company gifted
$300,000 to The University of Florida Foundation for the purpose of establishing
an endowment for health professionals.
Net student fee revenue from The University of Florida was $1,877,567
and $684,802 for the years ended December 31, 1999 and 1998, respectively.
Accounts receivable from this partner totaled $484,961, as of December 31, 1999.
During 1999, the Company issued 30,000 stock options and paid
approximately $38,445 in cash to a stockholder for the retirement of a $45,040
note payable.
Also during 1999, the Company forgave loans of $204,648 from various
stockholders. These amounts were reclassed to additional paid-in capital.
On November 15, 1999, one of the Company's wholly owned subsidiaries,
Rehabilitation Training Institute, Inc., paid notes aggregating $800,000 due the
Company's Chief Executive Officer, Rogers W. Kirven, Jr., and President, Daniel
J. Devine. These notes originated from a redemption of 18,257 shares of their
common stock in Rehabilitation Training Institute on January 1, 1999. The notes
were payable upon demand and were repaid from the cash proceeds the Company
received from the sale of its common stock in connection with its
recapitalization on November 15, 1999.
From January 1, 1999 through October 31, 1999, and for the year ended
December 31, 1998, Intelicus, our operating subsidiary, paid management fees in
the amounts of $382,628 and $228,280, respectively, to The Kirven Group, Inc.,
an entity controlled by our Chief Executive Officer, Rogers W. Kirven, Jr. In
turn, The Kirven Group, Inc. employed Rogers W. Kirven, Dan Devine and Steve
Wells. Pursuant to such agreement, The Kirven Group, Inc., through these
individuals and other subcontractors, acted as executive advisors to Intelicus
and were responsible for the day-to-day operation and management of its business
as well as program analysis, acquisitions, due diligence, accounting, financial
and other administrative services. There is no ongoing arrangement for these
services.
The Company entered into a commercial lease agreement with our Chief
Executive Officer, Rogers W. Kirven, Jr., on January 1, 2000 for approximately
2,450 square feet of office space located at 2710 Rew Circle, Suite 100, Ocoee,
Florida. The lease base rent is $2,588 per month which is computed at a base
rental rate of $12.676 per square per annum. In addition to the base rent, the
Company is responsible for the payment of all sales tax and other charges and
impositions imposed upon the premises as well as $620 per month as additional
rent for our share of common area maintenance and operating expenses. The lease
expires on September 30, 2002.
Except as described above, the Company currently have no transactions
nor are there any proposed with our officers, directors, 5% or greater
shareholders, and affiliates. Conflicts of interest could arise in the
negotiation of the terms of any transaction between the Company and our
shareholders, officers, directors or affiliates. The Company has no plans or
arrangements, including the hiring of an independent third party, for the
resolution of disputes between the Company and such persons, if they arise. The
Company's business and financial condition could be adversely affected should
such individuals choose to place their own interests before ours. No assurance
can be given that conflicts of interest will not cause us to lose potential
opportunities, profits, or management attention. Our Board of Directors has
adopted a policy regarding transactions between the Company and any of its
officers, directors, or affiliates, including loan transactions, requiring that
all such transactions be approved by a majority of the independent and
disinterested members of our Board of Directors and that all such transactions
be for a bona fide business purpose and be entered into on terms at least as
favorable to the Company as could be obtained from unaffiliated independent
third parties.
OTHER MATTERS
Management is not aware of any other matters to be presented for action
at the meeting. However, if any other matter is properly presented, it is the
intention of the persons named in the enclosed proxy to vote in accordance with
their best judgment on such matters.
13
<PAGE> 16
BY ORDER OF THE BOARD OF DIRECTORS
November 14, 2000
Ocoee, Florida
14
<PAGE> 17
DEFINITIVE PROXY
COMPASS KNOWLEDGE HOLDINGS, INC.
ANNUAL MEETING OF STOCKHOLDERS
DECEMBER 12, 2000
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF COMPASS KNOWLEDGE HOLDINGS, INC. THE SHARES REPRESENTED BY
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE CHOICES SPECIFIED BELOW.
The undersigned stockholder of Compass Knowledge Holdings, Inc. (the "Company") hereby appoints Rogers W. Kirven, Jr., the
true and lawful attorney, agent and proxy of the undersigned with full power of substitution for and in the name of the
undersigned, to vote all the shares of common stock of the Company at the Annual Meeting of Stockholders of the Company to be
held at 2710 Rew Circle, Suite 100, Ocoee, FL 34761 on December 12, 2000 at 10:00 a.m., and any and all adjournments thereof,
with all of the powers which the undersigned would possess if personally present, for the following purposes:
1. To elect five Directors.
For Withhold
Rogers W. Kirven, Jr. [ ] [ ]
Daniel J. Devine [ ] [ ]
Dr. Robert Frank [ ] [ ]
Dr. Paul Lerman [ ] [ ]
Thomas J. Crane [ ] [ ]
For Against Abstain
2. To consider and act upon a proposal to ratify and approve the Company's 2000
Stock Option Plan. [ ] [ ] [ ]
3. To ratify the appointment of Arthur Andersen as the Company's independent
certified accountants [ ] [ ] [ ]
4. To transact such other business as may properly come before the meeting or any
Adjournment thereof. [ ] [ ] [ ]
This Proxy will be voted for the choices specified. If no choice is specified for Items 1 through 3, this Proxy
will be voted FOR those items.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting and Proxy Statement dated
November 14, 2000.
PLEASE MARK, SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE.
DATED:
-------------------------- -----------------------------------------------
[Signature]
-----------------------------------------------
[Signature if jointly held]
-----------------------------------------------
[Printed Name]
Please sign exactly as name appears on stock
certificate(s). Joint owners should each sign. Trustees
and others acting in a representative capacity should
indicate the capacity in which they sign.
</TABLE>
