<PAGE>
As filed with the Securities and Exchange Commission on September 22, 1999
Registration No. 333-85521
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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Amendment No. 1
to
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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TELESPECTRUM WORLDWIDE INC.
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
Delaware 7389 23-2845501
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification No.)
incorporation or organization) Classification No.)
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443 S. GULPH ROAD
KING OF PRUSSIA, PA 19406
(610) 878-7400
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
---------------------------------
KEITH E. ALESSI
President & Chief Executive Officer
TeleSpectrum Worldwide Inc.
443 S. Gulph Road
King of Prussia, PA 19406
(610) 878-7400
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copies of all communications to:
STEPHEN S. GOODMAN, ESQ.
Morgan, Lewis & Bockius LLP
1701 Market Street
Philadelphia, PA 19103
(215) 963-5000
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box.[ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
---------------------------------
<PAGE>
(PROSPECTUS)
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275,153 SHARES
TELESPECTRUM WORLDWIDE INC.
COMMON STOCK
-------------------------------
This prospectus relates to the offer by the selling stockholders of an
aggregate of 275,153 shares of our common stock.
Our common stock is quoted on the Nasdaq National Market under the symbol
"TLSP." On September 21, 1999 the last reported closing price of our common
stock was $5.75 per share.
You should read the prospectus carefully before you invest. See Risk
Factors beginning on page 3 of this prospectus for a discussion of the material
risks involved in investing in the shares.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is accurate or complete. Any representation to the contrary
is a criminal offense.
The information in this prospectus is not complete and may change. We
may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
--------------------------------------------------
The date of this Prospectus is September 22, 1999
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TABLE OF CONTENTS
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Page
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TeleSpectrum Worldwide Inc......................... 3
Risk Factors....................................... 4
Selling Stockholders............................... 12
Plan of Distribution for the Resale of the Shares.. 13
About this Prospectus.............................. 14
Where You Can Find More Information................ 14
Forward-Looking Statements......................... 15
Legal Opinion...................................... 16
Experts............................................ 16
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TELESPECTRUM WORLDWIDE
TeleSpectrum Worldwide Inc. ("TeleSpectrum"), headquartered in King of
Prussia, Pennsylvania, is a teleservices firm that operates in two business
segments, telemarketing and customer care. TeleSpectrum provides inbound and
outbound telemarketing, inbound customer service, interactive customer service,
voice response, customer care consulting, and call center management services.
Teleservices are services that are provided through the use of telephone
and other mediums, such as electronic connections. Telemarketing services, or
outbound telemarketing, involve the placing of telephone calls on behalf of
clients, normally as part of clients' effort to sell their products or services,
or to obtain new customers. Customer care services, or inbound telemarketing,
are provided on behalf of clients' customer services activities. Interactive
voice response systems involve responding to incoming customer calls via
automated systems. Consulting services involve conducting research surveys that
assess the effectiveness of a clients' customer service efforts. Call center
management services involve running most aspects of a clients' call center,
including recruiting and staffing customer service representatives, managing the
operations and providing reports that analyze the performance of the client's
call center.
TeleSpectrum primarily services Fortune 500 companies in a wide range of
industries, including financial services, telecommunications, high tech,
insurance, utilities, consumer products, health care/pharmaceutical and
government.
On January 14, 1999, TeleSpectrum entered into a merger agreement with
International Data Response Corporation ("IDRC") and its majority stockholders.
Under the terms of the agreement, as amended and consummated on June 30, 1999,
the holders of outstanding shares of IDRC common stock, options and warrants
received their pro rata portion of an aggregate 9.2 million shares of
TeleSpectrum common stock and warrants exercisable for 2.5 million shares of
TeleSpectrum common stock. Of the 9.2 million shares of TeleSpectrum common
stock issuable to the holders of IDRC common stock, options and warrants, an
aggregate 1,730,928 shares and options were placed in escrow, as required by the
merger agreement, to secure the indemnification obligations of the IDRC security
holders to TeleSpectrum. The term of the escrow is fifteen months and is
governed by an indemnity escrow agreement. On July 19, 1999, a claim by certain
former IDRC shareholders was settled for $1,907,000 resulting in 275,153 shares
being released from the escrow to satisfy this claim. The 275,153 shares to be
sold in accordance with this Prospectus were previously held in escrow on behalf
of the IDRC shareholders.
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RISK FACTORS
Risk Relating to the IDRC Merger
Integration of Operations - We may be unable to integrate our operations in a
prompt and effective manner.
The integration of TeleSpectrum and IDRC will present significant
challenges. TeleSpectrum intends to integrate all significant business
functions of the two companies, including:
. administration;
. operations;
. finance;
. sales and marketing; and
. information technology.
These integration activities will result in changes affecting most
employees of the two companies. TeleSpectrum must integrate the two companies
in a prompt and effective manner with minimal customer service interruption. If
TeleSpectrum is unable to successfully integrate the companies in this manner,
it will be materially adversely affected.
Increased Debt - We may be unable to meet our greater debt service requirements.
TeleSpectrum has assumed approximately $104 million of senior debt as a
result of the IDRC merger under its new $135 million credit facilities. At June
30, 1999, TeleSpectrum had $118.6 million in debt outstanding under the debt
facilities. As a result, TeleSpectrum has a significantly greater ratio of debt
to equity and much higher debt service requirements. TeleSpectrum will be
required to make minimum principal payments under the credit facilities of $2.6
million in 1999, $8.7 million in 2000, $39.3 million in 2001, $20.2 million in
2002 and up to $48.0 million in 2003. TeleSpectrum's credit agreement with its
lenders also imposes numerous financial covenants that TeleSpectrum will need to
meet in order to avoid a default under this agreement. These covenants include:
. maintaining a minimum level of earnings as its relates to interest and
other charges;
. not exceeding a ratio of debt to total assets;
. limiting capital expenditures; and
. limiting dividends.
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If TeleSpectrum is unable to service its debt or meet its other contractual
obligations, its lenders may take certain actions that could limit
TeleSpectrum's operations and require immediate repayment. TeleSpectrum's
internally generated cash flow or other available financing might not be
sufficient to sustain operations if this were to occur. If this occurs,
TeleSpectrum will be materially adversely affected.
Limitations on Other Business Objectives - Our increased debt may restrict our
ability to obtain financing or pursue other business objectives.
TeleSpectrum's increased debt may also restrict or impede its ability to
obtain other financing and pursue other business objectives. This will be
magnified if TeleSpectrum's general credit rating deteriorates. TeleSpectrum
may find it more difficult to:
. obtain additional financing in addition to its $135 million credit
facility;
. make acquisitions;
. enter into strategic relationships;
. make capital expenditures;
. respond to business opportunities;
. address competitive pressures or adverse industry developments; and
. withstand economic downturns.
TeleSpectrum will be materially adversely affected if it is unable to
obtain financing and pursue its business objectives.
New Business Strategy - We may not be able to develop or implement a successful
new business strategy.
TeleSpectrum must develop and implement a new business strategy that builds
on the combined strengths of the companies. If TeleSpectrum is unable to
successfully develop and implement a new business strategy, it will be
materially adversely affected.
Unknown Liabilities - We may be materially adversely affected by any unknown or
hidden liabilities of IDRC.
Because IDRC was acquired by TeleSpectrum in a merger, TeleSpectrum is now
liable for all IDRC liabilities. This is true whether the liabilities were
known or unknown at the time of the IDRC merger. TeleSpectrum conducted a due
diligence review of IDRC prior to signing the IDRC merger agreement to
investigate matters relating to the IDRC business, including its liabilities.
TeleSpectrum has rights under an indemnity escrow agreement if it discovers any
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undisclosed IDRC liability that would give rise to a claim under the IDRC merger
agreement. This indemnity escrow agreement will only continue for unknown
liabilities that are discovered within fifteen (15) months of June 30, 1999, and
may not be sufficient to offset all of the damages incurred by TeleSpectrum as a
result of any unknown liabilities. TeleSpectrum may be materially adversely
affected if any unknown material liabilities arise relating to the IDRC merger.
Risks Relating to the CRW Merger
Unknown Liabilities - We may be materially adversely affected by any unknown or
hidden liabilities of CRW.
CRW was acquired by TeleSpectrum in a merger, and became a subsidiary of
TeleSpectrum as a result of the merger. CRW, as a subsidiary of TeleSpectrum,
remains liable for its liabilities following the merger. TeleSpectrum may also
become liable for liabilities of CRW depending on the facts and circumstances
surrounding a liability. TeleSpectrum conducted a due diligence review of CRW
prior to signing the CRW merger agreement to investigate matters relating to the
CRW business, including its liabilities. TeleSpectrum may be materially
adversely affected if any unknown material liabilities arise relating to the CRW
merger.
Risks Relating to TeleSpectrum
Operating Losses-We have been unprofitable.
TeleSpectrum had net losses of $940,000 for the quarter ended June 30, 1999
and $6.9 million for the year ended December 31, 1998. On a pro forma basis,
TeleSpectrum had a net loss of $23.1 million for the six months ended June 30,
1999. TeleSpectrum must maintain a sufficient level of capacity utilization at
acceptable rates to achieve profitability. During the past two years,
TeleSpectrum has periodically not achieved consistent levels of profitability,
particularly in its telemarketing segment. Revenues from the telemarketing
segment represented 73% of TeleSpectrum's total revenues for the six months
ended June 30, 1999 and for the year ended December 3l, 1998.
Telemarketing agreements generally do not assure specific levels of revenue
and are often terminable by clients on short notice. The amount of revenue
TeleSpectrum generates from a particular client is dependent upon a number of
factors, including, TeleSpectrum's ability to achieve marketing and sales
results required by the client and the results we achieve as compared to both
the clients' in-house operations and other telemarketing providers. In addition
to these factors, many client agreements are based on actual sales achieved.
Accordingly, TeleSpectrum's ability to achieve its desired results of operations
is dependent upon TeleSpectrum's representatives being able to effectively and
efficiently market the clients' products and the quality of the lists of
prospective customers provided by TeleSpectrum's clients. TeleSpectrum's
telemarketing segment is also affected by seasonal trends that mirror its
client's marketing plans. These trends include reduced activities during the
months of August and December. If TeleSpectrum is unable to maintain a
sufficient level of capacity utilization at acceptable rates, it will be
materially and adversely affected.
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Reliance on Major Clients-Our profitability is sometimes dependent on one or
more significant clients.
Approximately 14% of TeleSpectrum revenues for the six months ended June
30, 1999 were generated from one client in the telecommunications industry.
Approximately 10% of TeleSpectrum's revenues in 1998 were generated from one
client in the telecommunications industry. In 1997, approximately 19% of
TeleSpectrum's revenues were generated from one financial services industry
company. The significant reduction in the amount of business provided by this
financial services industry company was a significant factor in TeleSpectrum's
lower capacity utilization and operating performance during the last two fiscal
quarters in 1997. TeleSpectrum may in the future develop relationships with
clients that represent a large concentration of revenues. Since most client
contracts can generally be canceled by the client upon relatively short notice,
TeleSpectrum may be materially adversely affected by any unexpected termination
or non-renewal of such a relationship.
Capacity Utilization--Our profitability will be adversely affected if we do not
maintain sufficient capacity utilization.
TeleSpectrum's profitability is substantially dependent upon its ability to
use its call center capacity at efficient levels. A call center is a facility
that is equipped with workstations from which TeleSpectrum's employees perform
services on behalf of its customers. As of June 30, 1999, TeleSpectrum operated
or managed a total of 35 call centers that had between 20 and 516 workstations.
Capacity utilization is a term that identifies how much of a call center's
workstations are being used to perform services. Low capacity utilization at a
call center reduces profitability. This occurs because costs are being incurred
for employees and other overhead costs at a time when revenue is not being
produced by these employees and workstations. TeleSpectrum has in the past
experienced periods of low capacity utilization and has sometimes accepted less
profitable client engagements to fill this capacity. TeleSpectrum has also
experienced, and may experience in the future, at least short-term, excess
capacity when it opens a new call center or terminates or completes a large
client program. If TeleSpectrum does not maintain sufficient levels of capacity
utilization at acceptable rates, it will be materially adversely affected.
Future Growth-We may not be able to grow our business.
TeleSpectrum has experienced growth over the past several years, although
this growth did not continue in 1998. TeleSpectrum may not be able to achieve
future growth if it does not:
. initiate, develop and maintain new client relationships and expand its
existing client programs;
. recruit, motivate and retain qualified management and hourly personnel;
. identify, acquire and open call center facilities on an efficient basis; and
. maintain high quality of services and products to clients.
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Reliance on Technology-We will be adversely affected if we do not obtain and
implement new or enhanced technology.
TeleSpectrum has made significant investments in technology and anticipates
that it will need to continue making significant additional technology
investments to remain competitive. TeleSpectrum relies on technology for most
aspects of its business. This includes operating its call centers, placing and
receiving telephone calls and electronically providing and sharing data with
clients and vendors. TeleSpectrum may not be successful in anticipating
continuing technological changes or in implementing new or enhanced technology.
If TeleSpectrum is unable to do so, it will become more difficult to compete and
maintain favorable client and vendor relationships. If this were to occur,
TeleSpectrum will be materially adversely affected.
Dependence on our Labor Force-Our profitability will be adversely affected if we
do not avoid high personnel turnover.
TeleSpectrum's industry is very labor intensive and has experienced high
personnel turnover. Many of TeleSpectrum's employees receive modest hourly
wages. A higher turnover rate among TeleSpectrum's employees would increase its
recruiting and training costs and decrease its productivity. TeleSpectrum's
insurance product sales and technology-based inbound customer service require
specifically trained employees. TeleSpectrum may not be able to continue to
hire, train and retain a sufficient labor force of qualified employees.
Dependence on Telecommunications Providers-We rely heavily on telecommunications
companies and our business will be adversely affected if our telecommunications
costs increase or our service is interrupted.
TeleSpectrum's business is heavily dependent on service provided by various
local and long distance telephone companies. Telecommunications costs are
TeleSpectrum's most significant expense. As a result, TeleSpectrum would be
materially adversely affected by a significant increase in the cost of telephone
services that is not recoverable through an increase in the price of its
services, or any significant interruption in telephone services.
We May Be Affected by Year 2000 Problems.
The Year 2000 issue results from the writing of computer programs using two
digits rather than four to define the applicable year. Because of this
programming convention, computer software, hardware or firmware may recognize a
date using "00" as the year 1900 rather than the year 2000. This could result
in system failures, miscalculations or errors causing disruptions of operations
or other business problems, including, among others, a temporary inability to
process transactions or engage in other normal business activities.
State of Readiness. TeleSpectrum has undertaken a comprehensive program,
including the hiring of an outside consulting firm, to address the Year 2000
issue with respect to the following:
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. TeleSpectrum's information technology and operating systems, which include
call processing, network, server, security and application systems;
. TeleSpectrum's non-information technology systems that may contain embedded
microchip technology, which include buildings, plant, equipment and other
infrastructure systems; and
. the systems of TeleSpectrum's major clients, vendors and telecommunication
service providers insofar as they relate to TeleSpectrum's business.
TeleSpectrum's core business systems are in the process of receiving Year
2000 compliant upgrades furnished by its vendors, being replaced by its
TeleSpectrum Enterprise System Solution (TESS), or being rewritten to be Year
2000 compliant. TeleSpectrum is developing TESS to replace many of its current
data processing systems. TeleSpectrum believes that the TESS product will be
Year 2000 compliant by the fourth quarter of 1999 and that its core business
systems will be ready to successfully recognize years beginning with 2000.
Although TeleSpectrum has received compliance information from many suppliers,
TeleSpectrum is unable to predict the extent to which its suppliers will be
affected by Year 2000 issue. TeleSpectrum is also unable to predict the extent
to which it may be vulnerable to a supplier's inability to remedy any issues in
a timely manner. This matter is most prevalent with its telecommunications
service suppliers.
Costs to Address the Year 2000 Issue. TeleSpectrum's current cost estimate
to become Year 2000 compliant is $2,000,000 in 1999, of which approximately 40%
will be for outside consultants and 60% will be for internal resources which
have been or will be reallocated from other projects. Many of TeleSpectrum's
systems that require Year 2000 remediation or replacement were also
simultaneously receiving performance upgrades or feature enhancements as the
decision to upgrade or enhance these systems was not based on Year 2000
compliance and the timing of these upgrades and enhancements has not been
accelerated as a result of becoming Year 2000 compliant. TeleSpectrum's policy
is to expense the costs incurred to become Year 2000 compliant in accordance
with EITF 96-14. TeleSpectrum's current cost estimate does not include costs
related to these upgrades or enhancements. To date, the financial impact of
remediation expenses has not been material, and TeleSpectrum does not expect
future remediation costs to be material to its consolidated financial position
or results of operations.
Risks Presented by Year 2000 Problems. TeleSpectrum's reasonably
anticipated worst case scenario involves Year 2000 problems experienced by its
suppliers. If its telecommunications vendors do not appropriately address their
Year 2000 issues and alternative telecommunications providers are not able to
provide TeleSpectrum with adequate telecommunications services, it will not be
able to provide its services to its clients. If there is widespread and
continued shortage in telecommunications services available from
telecommunications vendors, TeleSpectrum will be materially adversely affected.
In addition, its computer systems are linked to many of its clients' computer
systems. Through these links, clients furnish TeleSpectrum with information
that is necessary for TeleSpectrum to provide its services and TeleSpectrum
provides its clients with feedback regarding their services. While
TeleSpectrum has made inquiries regarding their state of readiness for the Year
2000, TeleSpectrum may not be able to accurately predict whether its clients'
systems will be Year
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2000 compliant. TeleSpectrum will likely experience service disruptions and may
be materially adversely affected if its clients' systems are not Year 2000
compliant.
Contingency Plans. TeleSpectrum's Year 2000 plan calls for the development
of contingency plans for areas of its business that are susceptible to a
substantive risk of a disruption resulting from a Year 2000 related event. For
TeleSpectrum's internal systems, it is developing remediation plans for its
existing systems, including as a contingency the timely implementation of TESS.
For vendor supplied services, TeleSpectrum is evaluating alternative vendors for
backup services. However, TeleSpectrum may not be able to obtain backup
services if there is a widespread and continued shortage in telecommunications
services available from telecommunications vendors. For client computer links,
TeleSpectrum will seek to exchange information on a manual basis until such time
as the necessary corrections have been made. Consistent with TeleSpectrum's
Year 2000 plan, it will develop specific Year 2000 contingency plans for any
other areas of its business as the need is identified.
Fluctuation in Quarterly Operating Results--Our Quarterly operating results will
fluctuate and will cause our stock price to change.
TeleSpectrum expects that its quarterly operating results will fluctuate
due to many factors, a number of which are beyond its control. TeleSpectrum
believes that period-to-period comparisons of its historical results may not be
meaningful, You should not rely on these historical results as an indication of
TeleSpectrum's future results. TeleSpectrum's results of operations in future
periods may not meet the expectations of analysts and investors, in which case
the price of TeleSpectrum's common stock would likely be materially adversely
affected.
Factors which may also have an impact on TeleSpectrum's operating results
include:
. TeleSpectrum's ability to retain existing clients and attract new clients;
. the timing of TeleSpectrum's clients' marketing campaigns and customer
service programs;
. the timing of additional selling, general and administrative expenses
incurred to acquire and support such new business;
. changes in TeleSpectrum's revenue mix among our various service offerings;
. the introduction of new or enhanced services and products;
. price competition;
. TeleSpectrum's ability to upgrade and develop its information technology
systems;
. technical difficulties, system downtime or internet brownouts;
. government regulation;
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. general economic conditions and economic conditions specific to the
teleservices industry; and
. seasonality in TeleSpectrum's business, particularly during the months of
August and December.
Volatility of Stock Prices--Events directly or indirectly relating to
Telespectrum will cause its stock price to be volatile.
The market prices of TeleSpectrum's common stock have been highly volatile.
This volatility may adversely affect the price of TeleSpectrum's common stock in
the future. Factors that could cause such volatility include:
. the volume of trading in TeleSpectrum's stock;
. TeleSpectrum's quarterly operating results;
. deviations in operating results of operations from analyst estimates;
. changes in general conditions in the economy;
. developments within the teleservices industry; and
. other developments affecting TeleSpectrum or its competitors.
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SELLING STOCKHOLDERS
On July 19, 1999 we became obligated to issue 275,153 shares of our common
stock to five of our stockholders in settlement of litigation relating to IDRC.
These shares are being issued from the 1,730,928 shares and options that were
placed in escrow as required by the TeleSpectrum-IDRC Merger Agreement. The
selling stockholders may offer or sell the shares received from time to time in
the manner contemplated under APlan of Distribution."
The following table sets forth certain information regarding the beneficial
ownership of our common stock by the selling stockholders, and the maximum
number of shares each may offer.
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Maximum Beneficial Ownership
Number of Number of After Resale of Shares
Shares Shares ----------------------------
Name of Beneficially Being Number of
Selling Stockholder Owned(1) Offered Shares Percent
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Mary L. Heistand-Bro 32,234 (2) 17,742 14,492 .04%
Bradley D. Mellott 225,758 (3) 124,253 101,505 .30%
The Southeastern Kansas
Telephone Company, Inc. 80,645 (4) 44,386 36,259 .11%
Southeast Nebraska Telephone
Company, Inc. 80,645 (4) 44,386 36,259 .11%
Edwin S. Towle, III 80,645 (4) 44,386 36,259 .11%
_____________
275,153
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(1) Beneficial ownership is determined in accordance with the rules of the SEC
and generally includes voting or investment power with respect to
securities. The shares of common stock subject to options or warrants
currently exercisable or exercisable within 60 days of August 18, 1999 are
deemed outstanding and to be beneficially owned by the selling stockholders
holding such options or warrants.
(2) This total represents 12,129 non-escrowed shares received pursuant to the
TeleSpectrum-IDRC Merger Agreement, 2,363 escrowed shares received pursuant
to the TeleSpectrum-IDRC Merger Agreement adjusted for the shares removed
from escrow in connection with the settlement of the litigation in relation
to IDRC, and 17,742 shares received pursuant to the settlement of the
litigation in relation to IDRC.
(3) This total represents 84,948 non-escrowed shares received pursuant to the
TeleSpectrum-IDRC Merger Agreement, 16,557 escrowed shares received
pursuant to the TeleSpectrum-IDRC Merger Agreement adjusted for the shares
removed from escrow in connection with the settlement of the litigation in
relation to IDRC, and 124,253 shares received pursuant to the settlement of
the litigation in relation to IDRC.
(4) This total represents 30,345 non-escrowed shares received pursuant to the
TeleSpectrum-IDRC Merger Agreement, 5,914 escrowed shares received pursuant
to the TeleSpectrum-IDRC Merger Agreement adjusted for the shares removed
from escrow in connection with the settlement of the litigation in relation
to IDRC, and 44,386 shares received pursuant to the settlement of the
litigation in relation to IDRC.
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PLAN OF DISTRIBUTION FOR THE RESALE OF THE SHARES
A selling stockholder may from time to time, in one or more transactions, sell
all or a portion of the common shares in negotiated transactions, in
underwritten transactions or otherwise, at prices then prevailing or related to
the then current market price or at negotiated prices. The shares may be sold
directly or through broker-dealers acting as principal or agent. The methods by
which the shares may be sold include:
. a block trade in which the broker-dealer so engaged will attempt to sell the
shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction;
. purchases by a broker-dealer as principal and resale by such broker-dealer for
its account pursuant to this prospectus;
. ordinary brokerage transactions and transactions in which the broker solicits
purchasers; and
. privately negotiated transactions.
In effecting sales, brokers or dealers engaged by a selling stockholder may
arrange for other brokers or dealers to participate. These brokers or dealers
may receive commissions or discounts from a selling stockholder in amounts to be
negotiated immediately prior to the sale. A selling stockholder, any
underwriters, dealers or agents participating in the distribution of the shares
may be deemed to be "underwriters" within the meaning of the Securities Act, and
any profit on the sale of the shares by a selling stockholder and any
commissions received by any broker-dealers may be deemed to be underwriting
commissions under the Securities Act. In addition, any shares covered by this
prospectus that qualify for sale pursuant to Rule 144 might be sold under Rule
144 rather than pursuant to this prospectus.
Additionally, in connection with the sale of the shares, a selling stockholder
may enter into hedging transactions with broker-dealers and the broker-dealers
may engage in short sales of the shares in the course of hedging the positions
they assume with the selling stockholder. A selling stockholder may also enter
into option or other transactions with broker-dealers that involve the delivery
of the shares to the broker-dealers, who may then resell or otherwise transfer
the shares. A selling stockholder may also loan or pledge the shares to a
broker-dealer and the broker-dealer may sell the shares so loaned or upon a
default may sell or otherwise transfer the pledged shares.
When a selling stockholder elects to make a particular offer of common shares,
we will distribute a prospectus supplement, if required, that will identify any
underwriters, dealers or agents and any discounts, commissions and other terms
constituting compensation from a selling stockholder and any other required
information.
In order to comply with the securities laws of certain states, if applicable,
the shares may be sold only through registered or licensed brokers or dealers.
In addition, in certain states, the shares may not be sold unless they have been
registered or qualified for sale in such state or an exemption from such
registration or qualification requirement is available and is complied with.
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We also have agreed to indemnify the selling stockholders in certain
circumstances, against certain liabilities arising under the Securities Act.
Each selling stockholder has agreed to indemnify us and our directors and
officers who sign the registration statement against certain liabilities,
including liabilities arising under the Securities Act.
We have agreed to pay all costs and expenses relating to the registration of
the shares (other than fees and expenses, if any, of counsel or other advisors
to the selling stockholders). Any commissions, discounts or other fees payable
to broker-dealers in connection with any sale of the shares will be borne by the
selling stockholder selling such shares.
All references to selling stockholders in this Section shall also be deemed to
include any transferees, assignees and pledgees of the selling stockholder.
To the extent that J.P. Morgan may be deemed an "underwriter" within the
meaning of the Securities Act with respect to any sales of the common shares, we
have agreed to indemnify J.P. Morgan against certain liabilities arising under
the federal securities laws.
ABOUT THIS PROSPECTUS
You should only rely on the information contained in this prospectus. We have
not authorized anyone to provide you with information different from that
contained in this prospectus. The information contained in this prospectus is
accurate only as of the date of this prospectus, regardless of the time of
delivery of this prospectus or of any sale of common stock.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
any reports, statements or other information we file at the SEC's public
reference rooms located at Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, IL
60661 and 7 World Trade Center, Suite 1300, New York, NY 10048. Please call the
SEC at 1-800-SEC-0330 for further information on the public reference rooms. Our
SEC filings are also available to the public from commercial document retrieval
services and at the web site maintained by the SEC at "http://www.sec.gov."
We have filed a Registration Statement on Form S-3, of which this prospectus
forms a part, to register the resale of the shares with the SEC. As allowed by
SEC rules, this prospectus does not contain all the information you can find in
the Registration Statement or the exhibits to the Registration Statement.
The SEC allows us to "incorporate by reference" information into this
prospectus, which means that we can disclose important information to you by
referring you to another document filed separately with the SEC. The information
incorporated by reference is deemed to be part of this prospectus, except for
any information superseded by information in this prospectus. This prospectus
incorporates by reference the documents set forth below that we have previously
filed with the SEC. These documents contain important information about us, our
business and our finances.
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<PAGE>
The documents that we are incorporating by reference are:
. Our Annual Report on Form 10-K for the year ended December 31, 1998;
. Our Quarterly Report on Form 10-Q for the quarter ended March 31, 1999;
. Our Quarterly Report on Form 10-Q for the quarter ended June 30, 1999;
. Our Definitive Proxy Statement dated June 8, 1999; and
. The description of our common stock that is contained in our Form 8-A
Registration Statement filed with the SEC on July 30, 1996, including any
amendments or reports filed for the purpose of updating such description.
Any documents which we file pursuant to Sections 13(a), 13(c), 14 or 15(d) of
the Exchange Act after the date of this prospectus but before the end of any
offering of securities made under this prospectus will also be considered to be
incorporated by reference.
If you request, either orally or in writing, we will provide you with a copy
of any or all documents which are incorporated by reference. We will provide
such documents to you free of charge, but will not include any exhibits, unless
those exhibits are incorporated by reference into the document. You should
address written requests for documents to Francis Pennella, Executive Vice
President and Secretary, TeleSpectrum Worldwide Inc., 443 S. Gulph Road, King of
Prussia, PA 19406, (610) 878-7400.
FORWARD-LOOKING STATEMENTS
We have made forward-looking statements in this document including the
information concerning possible or assumed future results of operations of
TeleSpectrum set forth in this registration statement/prospectus and those
preceded by, followed by, or that include the words "anticipates", "believes",
"expects", "intends", or "similar expressions. For those statements, we claim
the protection of the safe harbor of forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995. You should understand that
the following important factors, in addition to those discussed elsewhere in
this document could affect future results of TeleSpectrum and could cause those
results to differ materially from those expressed in our forward-looking
statements:
. competitive factors;
. projected capital expenditures;
. projections of future revenues, operating income or EBITDA;
. liquidity;
. possible business relationships;
. dependence on key personnel;
. exposure to Year 2000 issues; and
. cost savings, efficiencies and growth in future periods.
Actual future results may differ materially from those expressed on our
forward-looking statements for a number of reasons, including the inability to:
. integrate the operations of TeleSpectrum and IDRC in a prompt and efficient
manner;
. meet greater debt service requirements under the new $135 million credit
facilities;
. obtain financing or pursue other business objectives due to the mentioned
assumed debt;
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<PAGE>
. develop or implement a successful new business strategy for the combined
company;
. manage the combined company effectively and implement its business strategy;
. avoid unknown material CRW liabilities as a result of the CRW merger;
. avoid Year 2000 issues;
. avoid losing customers as a result of our mergers; and
. maintain sufficient call center utilization at favorable rates.
LEGAL OPINION
Morgan, Lewis & Bockius LLP, Philadelphia, Pennsylvania, have passed on the
validity of the shares.
EXPERTS
The audited financial statements incorporated by reference in this prospectus
and elsewhere in the registration statement from the annual report on Form 10-K
for the year ended December 31, 1998 have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto, and are incorporated by reference herein in reliance upon the authority
of said firm as experts in giving said reports.
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<PAGE>
===============================================================================
275,153 Shares
TeleSpectrum Worldwide Inc.
Common Stock
_______________
PROSPECTUS
_______________
September 21, 1999
===============================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table shows the estimated expenses of the issuance and
distribution of the securities offered hereby.
<TABLE>
<S> <C>
Commission fee...................................................... $ 463.74
Nasdaq listing fee.................................................. $ 5,503.06
Legal fees, accounting fees and expenses............................ $ 25,000.00
Total..................................................... $30,966.80
==========
</TABLE>
All of the amounts shown are estimates except for the fees payable to the
Securities and Exchange Commission and the National Association of
Securities Dealers.
Item 15. Indemnification of Directors and Officers
Section 102(b)(7) of the Delaware General Corporations Law (DGCL)
permits a corporation, in its certificate of incorporation, to limit or
eliminate, subject to certain statutory limitations, the liability of
directors and/or its shareholders for monetary damages for breaches of
their fiduciary duty. Liability, however, may not be limited (a) for any
breach of the director's duty of loyalty to the corporation or its
shareholders, (b) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (c) under Section 174
of the DGCL's provisions for director liability in the case of an unlawful
payment of dividends or the unlawful purchase or redemption of stock, and
(d) for any transaction from which the director derived an improper
benefit. Article VII of TeleSpectrum's Certificate of Incorporation
provides that the personal liability of directors of the registrant is
eliminated to the fullest extent permitted by Section 102(b)(7) of the
DGCL.
Section 145 of the DGCL permits indemnification of directors,
officers, agents and controlling persons of a corporation under certain
conditions and subject to certain limitations. Under this Section, a
corporation may indemnify any of its directors or officers who were or are
a party, or are threatened to be made a party to any third party proceeding
by reason of the fact that such person is or was a director or officer of
the corporation, against expenses (including attorney's fees), judgements,
fines and amounts paid in settlement, which are actually and reasonably
incurred by such person in connection with such action, suit or proceeding,
if such person acted in good faith and in a manner such person reasonably
believed to be in, or not opposed to, the best interests of the
corporation. With respect to any criminal action or proceeding,
indemnification is permitted only in cases where there is no reason to
believe that such person's conduct was unlawful. In a derivative action,
i.e., one by or in the right of the corporation, the corporation is
permitted to indemnify directors and officers against expenses (including
attorneys' fees) which are actually and reasonably incurred by them in
connection with the defense or settlement of an action or suit if they
acted in good faith and in a manner that they reasonably believed to be in,
or not opposed to, the best interest of the corporation. No
indemnification shall be made, however, if such person has been adjudged
liable to the corporation, unless and only to the extent that the court in
which the action or suit was brought shall determine, upon application,
that the defendant directors or officers are fairly and reasonably entitled
to indemnity for their expenses despite such adjudication of liability.
Article VII of TeleSpectrum's Restated Certificate of Incorporation and
Bylaws provides that the company will, upon a finding by the company that
the person has met the applicable standards of conduct set forth in the
Certificate of Incorporation, indemnify any person who was or is an
authorized representative of the corporation, and who was or is a party, or
is threatened to be made a party to any third party proceeding, by reason
of the fact that such person was or is an authorized representative of
<PAGE>
the company to the extent permitted under the DGCL. In addition, this Article
makes indemnification mandatory to the extent that an authorized representative
or other employee or agent of the corporation has been successful on the merits
or otherwise in defense of any third party or corporate proceeding or in defense
of any claim, issue or matter therein, such person shall be indemnified against
expenses actually and reasonably incurred by such person in connection
therewith.
II-2
<PAGE>
Item 16. List of Exhibits
The exhibits filed as part of this registration statement are as follows:
Exhibit
Number Description
- ------ -----------
1.0** Form of Indemnification Agreement
5.1** Opinion of Morgan, Lewis & Bockius LLP regarding legality of
securities being registered.
23.1** Consent of Morgan, Lewis & Bockius LLP (included in its
opinion filed as Exhibit 5.1 hereto).
23.2* Consent of Arthur Andersen LLP
__________
* Filed herewith.
** Previously filed.
Item 17. Undertakings
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to its Restated Certificates of Incorporation, its By-laws,
or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against a public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
II-3
<PAGE>
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
Provided, however, that paragraph (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to section 13 or section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned thereunto duly authorized, in King of Prussia, Pennsylvania, on this
21st day of September, 1999.
TELESPECTRUM WORLDWIDE INC.
By:/s/ Keith E. Alessi
---------------------------------------
Keith E. Alessi
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<S> <C> <C>
By: /s/ Keith E. Alessi President and Chief Executive September 22, 1999
------------------------------------ Officer (Principal executive
Keith E. Alessi officer)
By: /s/ Paul J. Grinberg Executive Vice President and September 22, 1999
------------------------------------ Chief Financial Officer
Paul J. Grinberg (Principal financial and
accounting officer)
By: /s/ Jeffrey E. Stiefler Chairman, Director September 22, 1999
------------------------------------
Jeffrey E. Stiefler
By: /s/ Joseph V. DelRaso Director September 22, 1999
------------------------------------
Joseph V. DelRaso
By: /s/ Robert B. Hellman, Jr. Director September 22, 1999
------------------------------------
Robert B. Hellman, Jr.
By: /s/ Michael E. Julian Director September 22, 1999
------------------------------------
Michael E. Julian
By: /s/ David R. Kriegel Director September 22, 1999
------------------------------------
David R. Kriegel
By: /s/ J. Brian O'Neill Director September 22, 1999
------------------------------------
J. Brian O'Neill
By: /s/ Richard W. Virtue Director September 22, 1999
------------------------------------
Richard W. Virtue
</TABLE>
<PAGE>
TELESPECTRUM WORLDWIDE INC.
REGISTRATION STATEMENT ON FORM S-3
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Exhibit Page
Number Document Number
------ -------------------------------------------------------------------- ------
<S> <C> <C>
1.0** Form of Indemnification Agreement
5.1* Opinion of Morgan, Lewis & Bockius LLP
23.1** Consent of Morgan, Lewis & Bockius LLP (included in its opinion as
Exhibit 5.1 hereto)
23.2* Consent of Arthur Andersen LLP
</TABLE>
_______________
* Filed herewith
** Previously filed
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement (File Number 333-85521) of our reports
dated February 5, 1999 (except with respect to the NTC matter discussed in Note
9, as to which the date is February 26, 1999) included in TeleSpectrum Worldwide
Inc.'s Form 10-K for the year ended December 31, 1998 and to all references to
our Firm included in this registration statement.
/s/ Arthur Andersen LLP
Philadelphia, PA
September 21, 1999
