UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
TELESPECTRUM WORLDWIDE INC.
(Name of Issuer)
COMMON STOCK, PAR VALUE $.O1 PER SHARE
(Title of Class of Securities)
87951U 10 9
(CUSIP Number)
Bryan Overcash
Vice President of Finance
SOMAR, Inc.
118 South Main Street
Salisbury, North Carolina 28144
(704) 647-6065
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
AUGUST 13, 1996
(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 Rule
13d-1(b)(3) or (4), check the following box: [ ].
Check the following box if a fee is being paid with the
statement: [X]. (A fee is not required only if the reporting
person: (1) has a previous statement on file reporting beneficial
ownership of more than five percent of the class of securities
described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of
such class.)
The information required on 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 (the "Act") or otherwise
subject to the liabilities of that section of the Act but shall
be subject to all other provisions of the Act.
The total number of shares reported herein is 2,007,340
shares, which constitutes approximately 8.7% of the total number
of shares outstanding. All ownership percentages set forth
herein assume that at August 13, 1996 there were 23,200,000
shares outstanding.
(Continued on following pages)
CUSIP No. 87951U 10 9
_______________________________________________________________
1) Names of Reporting Persons/S. S. or I. R. S. Identifi-
cation Nos. of Above Persons:
SOMAR, Inc.
56-1535497
_______________________________________________________________
2) Check the Appropriate Box if a Member of a Group
(See Instructions):
(a) [ ]
(b) [ ]
_______________________________________________________________
3) SEC Use Only:
_______________________________________________________________
4) SOURCE OF FUNDS*
00
_______________________________________________________________
5) Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
_______________________________________________________________
6) Citizenship or Place of Organization:
North Carolina
_______________________________________________________________
Number of (7) Sole Voting Power: 2,007,340
Shares Bene-
ficially (8) Shared Voting Power: 0
Owned by
Each Report- (9) Sole Dispositive Power: 2,007,340
ing Person
With (10) Shared Dispositive Power: 0
_______________________________________________________________
11) Aggregate Amount Beneficially Owned by Each Reporting
Person:
2,007,340
_______________________________________________________________
12) Check if the Aggregate Amount in Row (11) Excludes
Certain Shares (See Instructions): [ ]
_______________________________________________________________
13) Percent of Class Represented by Amount in Row 11:
8.7%
_______________________________________________________________
14) Type of Reporting Person (See Instructions):
CO
_______________________________________________________________
Pursuant to Rule 13d-1 of Regulation 13D-G of the General
Rules and Regulations under the Securities Exchange Act of 1934,
as amended (the "Act"), the undersigned hereby files this
Schedule 13D Statement dated August 23, 1996, relating to the
Common Stock, par value $.01 per share, of TeleSpectrum Worldwide
Inc.
Item 1. SECURITY AND ISSUER.
Title of class of securities: common stock, $.01 par value,
per share, of TeleSpectrum Worldwide Inc. ("TeleSpectrum Common
Stock")
Name and address of principal executive offices of Issuer:
TeleSpectrum Worldwide Inc., 443 South Gulph Road, King of
Prussia, Pennsylvania 19406 ("TeleSpectrum")
Item 2. IDENTITY AND BACKGROUND.
The name of the Reporting Person is SOMAR, Inc. ("SOMAR"), a
North Carolina corporation. The address of SOMAR, Inc.'s
principal business and principal office is: 118 South Main
Street, Salisbury, North Carolina 28144. SOMAR's principal
business has been telemarketing. As described in Item 3,
substantially all of the assets and liabilities of SOMAR were
acquired by TeleSpectrum in the Acquisition (as defined in Item
3) pursuant to which SOMAR received the shares of TeleSpectrum
Common Stock to which this Schedule 13D relates. Accordingly,
SOMAR no longer has telemarketing operations. SOMAR has not,
during the last five years, been convicted in a criminal
proceeding. SOMAR has not, during the last five years, been a
party to a civil proceeding of a judicial or administrative body
of competent jurisdiction and is not and has not been subject to
a judgment, decree or final order enjoining future violations of,
or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to
such laws.
Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
On August 13, 1996, and pursuant to an Asset Purchase
Agreement (the "Asset Purchase Agreement") by and among SOMAR,
Richard W. Virtue, CRW Financial, Inc. and TeleSpectrum, dated as
of April 26, 1996, as amended and restated as of May 21, 1996,
TeleSpectrum acquired (the "Acquisition") substantially all of
the assets (and assumed substantially all of the liabilities) of
SOMAR for $25.0 million in cash, 2,207,340 shares of TeleSpectrum
Common Stock (valued at $21.5 million), contingent payments, the
grant of warrants (valued at $0.7 million) and the payment of
certain of SOMAR's expenses. Of the 2,207,340 shares of
TeleSpectrum Common Stock, 2,007,340 shares were issued to SOMAR
and 200,000 shares were issued to Mr. Richard Virtue, SOMAR's
Chairman and a principal shareholder of SOMAR.
The contingent payment, if any, for 1996 (the "1996
Contingent Payment") is equal to 50% of the amount by which the
earnings before interest and taxes ("EBIT") of TeleSpectrum's
SOMAR division for 1996 exceed $4.3 million and is payable in
cash. SOMAR's 1995 EBIT was $1.7 million. The contingent
payment, if any, for 1997 (the "1997 Contingent Payment") is
equal to the amount by which 1997 EBIT of TeleSpectrum's SOMAR
division exceeds $17.3 million, multiplied by 5, less the bonus
payment discussed below, not to exceed $45.0 million. The 1997
Contingent Payment is payable in TeleSpectrum Common Stock
registrable upon demand by SOMAR. The number of shares to be
issued in satisfaction of the 1997 Contingent Payment will be
calculated by reference to the trading price of TeleSpectrum
Common Stock at the time of the determination of the 1997 EBIT.
In addition, TeleSpectrum will make a bonus payment to
TeleSpectrum's SOMAR division, in an amount equal to 50% of the
amount by which the 1997 EBIT exceeds $17.3 million, not to
exceed $5.0 million. The bonus payment is payable in cash to the
SOMAR division for the purpose of granting bonuses to employees
of the SOMAR division (many of whom may be former employees of
SOMAR), at the discretion of Mr. Gregory Alcorn, President of
SOMAR who will become Chief Executive Officer of TeleSpectrum's
SOMAR division.
Also on August 13, 1996, TeleSpectrum completed an initial
public offering (the "Initial Public Offering") of 10,620,000
shares of TeleSpectrum Common Stock pursuant to a Registration
Statement (the "Registration Statement") on Form S-1
(Registration No. 333-04349) filed with the Securities and
Exchange Commission on August 7, 1996, proceeds of which were
used in part to fund the Acquisition and the acquisition of other
businesses by TeleSpectrum which also were consummated on August
13, 1996.
The warrants are exercisable for an aggregate of 210,000
shares of TeleSpectrum Common Stock and were granted to the
following individuals: Mr. Alcorn (31,500 shares), Mr. Richard W.
Virtue, Chairman and a principal shareholder of SOMAR (129,500
shares), Mr. James Carroll, Executive Vice President of SOMAR
(17,500 shares), Mr. Kenneth Wiles, Chief Financial Officer of
SOMAR (3,500 shares) and Mr. William B. Edge, a shareholder of
SOMAR (28,000 shares). The warrants have an exercise price per
share equal to the Initial Public Offering price. The warrants
are immediately exercisable and will expire ten years from
issuance. On August 13, 1996 TeleSpectrum also granted options
under its 1996 Stock Incentive Plan to purchase an aggregate of
90,000 shares of TeleSpectrum Common Stock to certain employees
of SOMAR, not including Messrs. Alcorn and Virtue, at an exercise
price per share equal to the Initial Public Offering price, which
options are subject to a three-year vesting period.
TeleSpectrum has also reimbursed (or will reimburse) SOMAR
for the fees and expenses incurred in connection with the audit
of its financial statements for the years ended December 31, 1993
and 1994; one-half of the fee paid by SOMAR to The Robinson-
Humphrey Company, Inc., not to exceed $400,000; one-half of all
accounting fees, excluding those fees described above, incurred
by SOMAR in connection with the Acquisition and the Initial
Public Offering; and one-half of the legal fees incurred by SOMAR
in connection with the Acquisition and the Initial Public
Offering.
As part of the Acquisition, all agreements, understandings
and arrangements with certain entities which are under common
control and ownership with SOMAR were amended so that all
continuing obligations of TeleSpectrum's SOMAR division
thereunder are no greater than they would be under agreements
with unaffiliated third parties.
Upon consummation of the Acquisition, Mr. Virtue entered
into a consulting agreement with TeleSpectrum which provides for
payments to Mr. Virtue of $150,000 per year during its three year
term, and Mr. Alcorn entered into a four year employment
agreement with TeleSpectrum at an annual salary of $195,000
plus an annual performance bonus of up to $195,000 based on the
operating performance of the TeleSpectrum SOMAR division.
Item 4. PURPOSE OF THE TRANSACTION.
SOMAR acquired all of its shares of TeleSpectrum Common Stock
in payment for the transfer of substantially all of its assets to
TeleSpectrum in the Acquisition. While Mr. Richard W. Virtue,
SOMAR's Chairman and a principal shareholder of SOMAR will be
nominated to the Board of Director's of TeleSpectrum, and many of
SOMAR's employees have been employed by TeleSpectrum, including
Mr. Alcorn, SOMAR has no present plan or proposal with respect to
the business, operations or capitalization of TeleSpectrum. SOMAR
has no present plan or intention to acquire additional securities
of TeleSpectrum (except as may be obtained under the 1997
Contingent Payment as described in Item 3) or to dispose of any
shares of TeleSpectrum Common Stock, except that SOMAR may
distribute some or all of the TeleSpectrum Common Stock to its
shareholders.
Item 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) SOMAR beneficially owns 2,007,340 shares of
TeleSpectrum Common Stock, or 8.7% of the number of shares
outstanding on August 13, 1996 based upon the Registration
Statement.
(b) SOMAR has sole power to vote and sole power to dispose
of all 2,007,340 shares of TeleSpectrum Common Stock beneficially
owned by it.
(c) SOMAR's only transaction in Telespectrum Common Stock
during the 60 days preceding the filing of this Schedule 13D was
the acquisition of 2,007,304 shares in the consummation of the
Acquisition as described in Item 3.
(d) No other person has the right to receive or the power
to direct the receipt of dividends from, or the proceeds from the
sale of, the shares of TeleSpectrum Common Stock to which this
Schedule 13D relates.
Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR
RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE
ISSUER.
Under the Asset Purchase Agreement, SOMAR and its
shareholders were granted piggyback registration rights and,
under certain circumstances, demand registration rights with
respect to the shares of TeleSpectrum Common Stock which SOMAR
received in the Acquisition. Also in the Asset Purchase
Agreement, SOMAR and shareholders of SOMAR, agreed that for a
period of 360 days after the date of effectiveness (the
"Effective Date") of the Registration Statement, not to (i)
offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase or otherwise
transfer or dispose of, any shares of TeleSpectrum Common Stock
or any securities convertible into or exercisable or exchangeable
for shares of TeleSpectrum Common Stock, or (ii) enter into any
swap or other agreement that transfers, in whole or in part, any
of the economic consequences of ownership of the TeleSpectrum
Common Stock without the prior written consent of J.P. Morgan
Securities Inc. SOMAR and such SOMAR shareholders also agreed
not to exercise any registration rights within such 360 day
period except for limited piggyback registration rights.
Under the Asset Purchase Agreement, under certain
circumstances, SOMAR also has a right to certain profits of
TeleSpectrum in the form of the 1996 Contingent Payment and the
1997 Contingent Payment, as described in Item 3.
Item 7. MATERIAL TO BE FILED AS EXHIBITS.
Asset Purchase Agreement by and among SOMAR, Inc., Richard
W. Virtue, CRW Financial, Inc. and TeleSpectrum Worldwide Inc.,
dated as of April 26, 1996 as amended and restated as of May 21,
1996, incorporated herein by reference to Exhibit 10.04 to
TeleSpectrum Worldwide Inc.'s Registration Statement on Form S-1
(Reg. No. 333-04349)
<PAGE>
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this
statement is true, complete and correct.
August 23, 1996
-s- KENNETH W. WILES
(signature)
CFO-Secretary
(name/title)
