SNYDER COMMUNICATIONS INC, 424B1, 1996-09-25

SNYDER COMMUNICATIONS INC
424B1, 1996-09-25
BUSINESS SERVICES, NEC

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<PAGE> 1
Filed Pursuant
to Rule 424(b)(1)

PROSPECTUS

7,800,000 SHARES
[SNYDER COMMUNICATIONS, INC. LOGO]
COMMON STOCK
------------------------

Of the 7,800,000 shares of Common Stock, par value $.001 per share (the
"Common Stock"), of Snyder Communications, Inc. (together with its directly and
indirectly owned subsidiaries, the "Company" or "Snyder Communications") offered
hereby, 4,038,162 are being offered by the Company and 3,761,838 are being
offered by a stockholder of the Company (the "Selling Stockholder"). Certain
other stockholders of the Company (the "Over-Allotment Selling Stockholders"
and, together with the Selling Stockholder, the "Selling Stockholders") have
granted to the Underwriters options to cover over-allotments, if any. The
Company will not receive any proceeds from the sale of shares of Common Stock by
the Selling Stockholders.

Of the 7,800,000 shares of Common Stock offered hereby, 6,240,000 are being
offered initially in the United States and Canada by the U.S. Underwriters and
1,560,000 shares are being offered initially outside the United States and
Canada by the International Managers. The initial public offering price and the
underwriting discount per share are identical for both Offerings. See
"Underwriting."

Prior to the Offerings, there has been no public market for the Common
Stock. See "Underwriting" for a discussion of certain factors considered in
determining the initial public offering price.

Upon consummation of the Offerings, executive officers, directors and
director nominees will beneficially own 72.4% of the outstanding Common Stock of
the Company (approximately 69.0% if the Underwriters' over-allotment options are
exercised in full) and, if they act in concert, will have the ability to
exercise substantial influence by virtue of their voting power over matters
requiring stockholder action. See "Principal and Selling Stockholders."

The Common Stock has been approved for listing on the New York Stock
Exchange, subject to notice of issuance, under the trading symbol "SNC."

SEE "RISK FACTORS" BEGINNING ON PAGE 11 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE SHARES OF COMMON
STOCK OFFERED HEREBY.
------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
PRICE TO UNDERWRITING PROCEEDS TO PROCEEDS TO
PUBLIC DISCOUNT(1) COMPANY(2) SELLING STOCKHOLDER
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share...................... $17.00 $1.11 $15.89 $15.89
- ---------------------------------------------------------------------------------------------------------------------------
Total(3)....................... $132,600,000 $8,658,000 $64,166,394 $59,775,606
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) The Company, Snyder Marketing Services, Inc., Snyder Communications, L.P.
and the Selling Stockholders have agreed to indemnify the several
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See "Underwriting."

(2) Before deducting expenses of the Offerings payable by the Company, estimated
at $2,000,000.

(3) The Over-Allotment Selling Stockholders have granted to the U.S.
Underwriters and the International Managers options, exercisable within 30
days after the date of this Prospectus, to purchase up to 936,000 and
234,000 additional shares of Common Stock, respectively, solely to cover
over-allotments, if any. If such options are exercised in full, the total
Price to Public, Underwriting Discount, Proceeds to Company and Proceeds to
Selling Stockholders will be $152,490,000, $9,956,700, $64,166,394 and
$78,366,906, respectively. See "Underwriting."
------------------------

The shares of Common Stock are offered by the several Underwriters, subject
to prior sale, when, as and if issued to and accepted by them, and subject to
the approval of certain legal matters by counsel for the Underwriters and to
certain other conditions. The Underwriters reserve the right to withdraw, cancel
or modify such offer and to reject orders in whole or in part. It is expected
that delivery of the shares of Common Stock will be made in New York, New York,
on or about September 30, 1996.
------------------------

MERRILL LYNCH & CO.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
ALLEN & COMPANY
INCORPORATED
MONTGOMERY SECURITIES
------------------------

The date of this Prospectus is September 24, 1996.
<PAGE> 2

INSIDE FRONT COVER OF PROSPECTUS:

GATEFOLD

On facing page (left side): Photographs of the Company's teleservices
associates calling prospective customers, field sales representatives visiting
prospective customers and the WallBoard(R) and sampling pack programs. Centered
above the photographs is the following statement: "Providing outsourced
marketing services, primarily for Fortune 500 companies."

On Gatefold (two pages): On the left side are photographs of the Company's
teleservices associates calling prospective customers, field sales
representatives visiting prospective customers as well as examples of the
Company's different WallBoards(R). On the right side are photographs of the
Company's training facilities and information technology equipment as well as
examples of the Company's sampling pack and WallBoard(R) programs. Centered
beneath the pictures on the gatefold is the following statement: "Snyder
Communications, Inc., a national provider of outsourced marketing services,
designs and implements programs utilizing a range of complementary marketing
services, including field sales, teleservices, WallBoard(R) information
displays, and product sampling. The Company identifies and targets high value
market segments, in addition to general markets, including residential and small
business customers in multicultural markets (using 16 foreign languages); new
and working parents through maternity wards and daycare centers; patients with
heart conditions, arthritis and diabetes, through healthcare providers' offices;
and business executives through corporate aviation terminals."

IN CONNECTION WITH THE OFFERINGS, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK OF
THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

2
<PAGE> 3

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information and the financial statements
and notes thereto appearing elsewhere in this Prospectus. Unless otherwise
indicated, all information in this Prospectus (a) assumes no exercise of the
Underwriters' over-allotment options and (b) gives effect to the consummation of
the Reorganization (as defined herein) to be effective on or prior to the
effectiveness of the Offerings. As used herein, the "Company" or "Snyder
Communications" means Snyder Communications, Inc. after giving effect to the
Reorganization, including its directly and indirectly owned subsidiaries. Snyder
Communications, Inc. was formed in June 1996 to be the holding company for
Snyder Communications, L.P., a limited partnership established in 1988 (the
"Partnership") in which Snyder Marketing Services, Inc. ("SMS") is the general
partner. On or prior to the effectiveness of the Offerings, the Company will
consummate the Reorganization, pursuant to which the Company will acquire all of
the limited partnership interests of the Partnership and all of the issued and
outstanding stock of SMS. See "The Company."

THE COMPANY

Snyder Communications is a rapidly growing provider of innovative and high
value-added outsourced marketing services. The Company designs and implements
marketing programs for its clients utilizing a range of complementary marketing
resources, including field sales, teleservices, sponsored wallboard information
displays ("WallBoards(R)") and product sampling. The Company's clients are
primarily Fortune 500 companies with large annual marketing expenditures facing
significant competitive pressures to retain or expand market share. Based on
1995 revenues, the ten largest clients of the Company, listed alphabetically,
were AT&T Communications, Inc., Eastman Kodak Company, Gerber Products Company,
Kellogg U.S.A., Inc., The Proctor & Gamble Distributing Company, Lehn & Fink
Products (now a unit of Reckitt & Colman, Inc.), MCI Telecommunications
Corporation, Nestle Beverage Company, The Prudential Insurance Company of
America and Reckitt & Colman, Inc.

The Company enhances the value of its outsourced marketing services by
identifying and targeting high value market segments, in addition to general
markets, in order to increase market share for its clients. For example, the
Company's field sales representatives and teleservices associates have the
capability to market services in 16 foreign languages, in addition to English,
to reach both residential and business customers in multi-cultural markets, as
well as general markets. The Company utilizes its WallBoards(R) and sampling
packs to market products and services through targeted channels of distribution,
including the offices of cardiologists, rheumatologists and orthopedists, and
endocrinologists and diabetologists, to reach patients with heart conditions,
arthritis and diabetes; maternity wards and day care centers to reach new and
working parents; and corporate aviation terminals to reach business executives.
The Company seeks to identify and access market segments with high growth
characteristics.

As of June 30, 1996, the Company employed approximately 900 field sales
representatives operating out of 58 offices in 41 cities, and 445 teleservices
associates providing services from 326 call stations in three call centers. As
of that date, the Company had 11 different WallBoard(R) programs at over 17,000
sites. During 1995, the Company distributed over 3.8 million sampling packs
containing over 75 different product samples, coupons and pieces of literature
of 49 clients of the Company at approximately 20,000 locations.

The Company's revenues increased from $11.7 million in 1994 to $42.9
million in 1995, and from $14.0 million in the first six months of 1995 to $34.9
million in the first six months of 1996. Net income, as adjusted to reflect a
pro forma provision for income taxes, as if the Company were subject to
corporate income taxes and to eliminate certain non-recurring compensation in
1995, grew from $1.2 million in the first six months of 1995 to $2.5 million in
the first six months of 1996.

Consumer Markets

In its Consumer Markets division, established in 1993, the Company provides
outsourced marketing services to AT&T Communications, Inc. ("AT&T"). Using
face-to-face field sales, including event marketing, and teleservices, the
Company markets AT&T long-distance telecommunications services to residential
customers. The Company began marketing AT&T services using its field sales force
in February 1994. The

3
<PAGE> 4

Company expanded this relationship to add teleservices capabilities in the
second quarter of 1996. The revenues generated by AT&T have grown from $1.7
million in 1994 to $25.0 million in 1995.

The Company, jointly with AT&T, develops sales and marketing programs
designed to enroll residential long-distance telecommunications customers for
AT&T. The Company is principally responsible for implementation of substantially
all aspects of the marketing initiatives it develops with AT&T ("turn-key"
programs). The Company develops lists of potential customers to be contacted;
creates marketing materials, including customer applications; hires, trains and
supervises its sales representatives and teleservices associates to market AT&T
services; and monitors the effectiveness of its programs. The Company's turn-key
approach differentiates it from other marketing services firms, which generally
merely implement a client's marketing strategy using contact lists provided by
the client.

The Company targets multi-cultural markets as well as general consumer
markets throughout the United States, seeking in particular to secure customers
who AT&T believes would be high-value subscribers. To reach multi-cultural
markets, the Company develops demographic databases identifying potential
customers in such communities and employs field sales representatives and
teleservices associates who are capable of marketing services in a prospective
customer's native language as well as in English. The Company also develops and
distributes sales literature and collateral documents in these languages. In
addition, in marketing services to these multi-cultural communities, the Company
has developed databases of information on specialized demographic segments,
which the Company intends to use in the future to market products and services
for additional clients.

Relying primarily on its existing infrastructure and capabilities, the
Company believes that it will be able to expand the clients and industries
served by its Consumer Markets division. The Company recently entered into an
agreement to provide marketing and sales services for the online computer
service of Prodigy Services Company ("Prodigy"), using field sales, including
event marketing, and other marketing services. In August 1996, the Company
entered into two contracts with Foundation Health, a California Health Plan
("Foundation Health"), to market and sell memberships in certain managed health
care plans to residential customers in designated areas using the Company's
field sales (including event marketing), teleservices and other marketing
services.

Business Markets

In its Business Markets division, established in late 1994, the Company
provides marketing and sales services to MCI Telecommunications Corporation
("MCI"), targeting small business customers in general and multi-cultural
markets throughout the United States. Using both field sales and teleservices,
the Company seeks to enroll long-distance business customers for MCI. As in the
Consumer Markets division, the Company offers MCI turn-key marketing initiatives
and is principally responsible for the implementation of such initiatives.

The Company's Business Markets operations are separate from its Consumer
Markets operations. This separation helps to ensure confidentiality for the
Company's clients that operate in the same industry and permits the Company to
perform services targeted at different markets for different clients. The two
divisions have separate offices, separate field sales forces and teleservices
personnel, separate management (including senior management) and separate
demographic databases.

The Company believes that it will be able to market the capabilities that
it has developed in the Business Markets division to attract new clients in
other industries. In August 1996, the Company entered into a contract with
Lucent Technologies, BCS ("Lucent") to market and sell certain Lucent
telecommunications equipment, and in September 1996, the Company entered into a
contract with DHL Airways, Inc. for overnight delivery services. In both cases,
the products will be marketed to business customers throughout the United States
using the Company's field sales, inbound and outbound teleservices and other
marketing services.

4
<PAGE> 5

Marketing Services

The Marketing Services division, established in 1988, specializes in two
services that provide the Company's clients with targeted channels of
distribution: the WallBoard(R) and sampling pack programs. The Company's
WallBoard(R) or "magazine-on-the-wall" is a sponsored information center encased
in a 42X30 or 57X30 oak or mahogany frame which highlights an exclusive sponsor
and provides educational, editorial and product information addressed
specifically to the needs of the target audience. As of June 30, 1996, the
Company had 11 different WallBoard(R) programs at over 17,000 sites, in which 44
clients of the Company participate. Each sponsor pays the Company an annual
amount for participation in the service. Locations displaying WallBoards(R)
generally do so under two- or three-year exclusive agreements with the Company,
with automatic renewal provisions. Participation in the WallBoard(R) program is
provided free of charge to the doctors' offices, child care centers, hospitals
and other locations at which the WallBoards(R) are displayed. The Company
identifies locations for its WallBoards(R) that will reach specific high-value
audiences targeted by the WallBoard(R) programs' sponsors. For example, at June
30, 1996 the Company had WallBoards(R) in the offices of approximately 1,200
cardiologists, 700 rheumatologists and orthopedists, and 600 endocrinologists
and diabetologists, which are utilized by drug companies, medical product
companies and other sponsors interested in reaching the patients of such
doctors. Similarly, at June 30, 1996 the Company had WallBoards(R) in
approximately 12,000 child care centers, which are utilized by sponsors seeking
to reach new parents and dual-income families.

The Company also designs, develops and delivers sampling packs, to provide
targeted distribution of sponsors' product samples, coupons and literature to
potentially high-value customers. These programs differ from mass sampling
programs which distribute large numbers of samples into the general market. The
Company designs colorful boxes containing a variety of nationally recognized
product samples, coupons and literature of particular relevance to the target
audiences at a time when the audiences are most likely to use the items included
in the pack. At June 30, 1996, the Company offered six exclusive programs. Based
on contracts with locations in effect at that date the Company expects to
distribute in 1996: (1) the Your Kids Parents Pack(TM), to parents through day
care providers at approximately 16,600 child care centers; (2) the Diabetes
Pack(TM), to patients through approximately 2,700 endocrinologists and
diabetologists; (3) the Heart Pack(TM), to patients through approximately 2,000
cardiologists; (4) the Arthritis Pack(TM), to patients through approximately
1,700 rheumatologists and orthopedists; (5) the New Member Kit for Men(TM); and
(6) the New Member Kit for Women(TM), together with the New Member Kit for
Men(TM), to new members at approximately 1,000 health and fitness clubs. The
Company implements most of its sampling programs in cooperation with a leading
association in the targeted channel of distribution, specifically, the National
Child Care Association, the American Heart Association, the Arthritis Foundation
and the American Diabetes Association. The Company has two- and three-year
exclusive contracts to be the sole provider of sampling packs to locations
(i.e., child care centers, doctors' offices and health and fitness clubs)
through which the sampling packs are distributed.

The Company retains The Gallup Organization, Market Facts and Audits &
Surveys to provide research to assess the impact of participation in the
WallBoard(R) and sampling pack programs. The research organizations determine
for sponsors the extent to which their products and literature reach the target
audience and conduct studies designed to help measure the efficacy of the
programs.

RISK FACTORS

There are important risks associated with the Company's business, financial
results and ability to implement its growth strategy. These risks include (i)
the Company's current reliance on AT&T, which accounted for 59% of its 1995
revenues, and on other major clients; (ii) the Company's ability to sustain and
manage future growth; (iii) the Company's dependence on industry trends toward
outsourcing of marketing services; (iv) risks associated with the Company's
contracts; (v) the dependence of the Company's success on its executive officers
and other key employees, in particular Daniel M. Snyder, its President, Chief
Executive Officer and Chairman of the Board of Directors; and (vi) the possible
impact of certain government regulations on the Company's operations. Before
purchasing shares of Common Stock offered hereby,

5
<PAGE> 6

prospective investors should consider carefully all of the information set forth
in this Prospectus including, in particular, the information set forth under
"Risk Factors."

OUTSOURCING AND DEMOGRAPHIC TRENDS

The market for the field sales and telephone-based marketing services
provided by the Company has grown principally as a result of the increased
outsourcing of such services by large organizations in order to supplement their
internal marketing capabilities. Outsourcers can provide several advantages over
a company acting alone, including the ability to reach special, hard-to-locate
audiences; the ability to augment internal sales forces to gain market share
more quickly; the avoidance of infrastructure costs, such as opening new sales
offices; the opportunity to act quickly by utilizing the outsourcers' marketing
channels that could take months or years to develop internally; and the
opportunity to pay only for quantifiable results. The Company believes that
sellers of products and services will increasingly integrate outsourcers, such
as the Company, into their overall marketing strategies.

The Company seeks to identify and access markets with high growth
characteristics. The Company expects that the multi-cultural communities which
it targets primarily through its Consumer Markets and Business Markets divisions
will grow significantly in the coming years. For example, in February 1996, the
U.S. Bureau of the Census (the "Census Bureau") projected, based in part on 1990
census data, that the Hispanic and Asian/Pacific Islander communities in the
United States were comprised in 1995 of approximately 26.9 million and
approximately 9.4 million people, respectively, and would grow approximately 53%
and approximately 63%, respectively, by 2010. In contrast, the Census Bureau
projected at that time, based in part on 1990 census data that the general
population in the United States would grow approximately 13% by 2010. Similarly,
at that time, the Census Bureau projected, based in part on 1990 census data,
that the 50 years or older population in the United States was comprised of
approximately 68.3 million people in 1995, and would grow approximately 41% by
2010. The Company believes that many of its programs in its Marketing Services
division are in locations that are often used by people who are 50 years or
older.

GROWTH STRATEGY

The Company recently has experienced significant growth. The Company
increased the number of its field sales offices from 25 offices located in 23
cities at the end of 1994, the first year in which the Company conducted field
sales operations in both its Consumer Markets and Business Markets divisions, to
58 offices located in 41 cities at June 30, 1996. The Company also increased the
number of teleservices personnel from 177 persons working from one call center
at the end of 1995, to 445 persons working from three call centers at June 30,
1996. In its Marketing Services division, the Company increased its WallBoard(R)
programs from six different programs highlighting 11 clients at December 31,
1993, to 11 different programs highlighting 44 clients at June 30, 1996. The
Company also increased its sampling pack programs from two sampling pack
programs with 16 sponsors distributed through over 13,000 locations at the end
of 1993, to six sampling pack programs with 37 sponsors expected by the Company
to be distributed to approximately 24,000 locations in 1996 based on contracts
with locations in effect at June 30, 1996.

The Company believes that its targeted marketing strategy and
multi-cultural capabilities are adaptable to serve additional needs of existing
clients and the needs of new clients in other industries. The Company
anticipates that its existing infrastructure of offices, management, supervisory
and training personnel, and teleservices capabilities can accommodate additional
clients in each operating division.

The Company's commitment to continued growth through internal expansion and
complementary acquisitions is evidenced by the following:

Consumer Markets

- The Company is adding approximately 80 call stations, which it expects
will be operating by late 1996, to its existing 300 call stations in
this division.

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<PAGE> 7

- In June 1996, the Company expanded its relationship with AT&T by
entering into a new agreement with AT&T Communications (U.K.) Ltd.
("AT&T (U.K.)"), to market long-distance telecommunications services to
residential customers based in the United Kingdom. As part of this
expansion, the Company intends to add one call center and one or more
field sales offices in the United Kingdom in 1997.

- The Company entered into a contract with Prodigy in June 1996, to
provide marketing and sales services for Prodigy's online service to
residential customers, using the Company's field sales, including event
marketing, and other marketing services.

- In August 1996, the Company entered into two contracts with Foundation
Health to market and sell memberships in certain managed health care
plans to residential customers in designated areas using the Company's
field sales (including event marketing), teleservices and other
marketing services.

Business Markets

- In August 1996, the Company entered into an agreement with Lucent to
market and sell certain Lucent telecommunications equipment, and in
September 1996, the Company entered into a contract with DHL Airways,
Inc. for overnight delivery services. In both cases, the products will
be marketed to business customers throughout the United States using the
Company's field sales, inbound and outbound teleservices and other
marketing services.

- The Company also seeks to add additional inbound telephone-based sales
in its Business Markets division.

Marketing Services

- The Company increased the number of sales managers and executives in
this division from five as of December 31, 1993 to approximately 20 as
of June 30, 1996, to take advantage of opportunities to expand the
services offered to existing clients and to develop new lines of
business.

- The Company has recently developed, in conjunction with Hoechst Marion
Roussel, Inc. (formerly Marion Merrill Dow) ("Hoechst Marion Roussel"),
its Allergy Health WallBoard,(R) of which Hoechst Marion Roussel is the
exclusive client sponsor under a three-year contract with the Company.
The Company currently has contracts with approximately 600 allergists'
and otolaryngologists' offices in which the Allergy Health WallBoard(R)
will be located beginning in the fourth quarter of 1996.

- Since January 1996, the Company has developed three additional new
WallBoard(R) programs: the Women's Wellness WallBoard(R), which will be
located in obstetrics' and gynecologists' offices; the Caring
WallBoard(R), which will be located in oncologists' offices and oncology
treatment centers; and the New Home WallBoard(R), which will be located
in real estate offices throughout the United States. The Company
anticipates that it will begin distributing WallBoards(R) through these
new programs by January 1997. The Company does not currently have any
contractual commitments with locations in which these new WallBoard(R)
programs will be located and there can be no assurance that it will be
successful in its efforts to secure such contracts.

- In May 1996, the Company acquired from RD Publications, Inc., an
affiliate of Readers Digest Association Incorporated, a "new member"
health club sampling pack program through which it expects to distribute
approximately 735,000 health club member kits to new members at
approximately 1,000 health and fitness clubs during the second half of
1996.

The Company also intends to pursue strategic acquisitions of companies that
offer complementary services or expand the geographic markets served by the
Company. Although the Company has no agreements, understandings or arrangements
with respect to any particular acquisition opportunities, it believes that the
fragmentation in the marketing services industry will result in consolidation,
providing opportunities for the Company to pursue selectively domestic and
international complementary acquisitions.

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<PAGE> 8

BACKGROUND OF THE COMPANY

Snyder Communications, Inc. was formed in June 1996 to be the holding
company for Snyder Communications, L.P., a limited partnership established in
1988, in which SMS is the corporate general partner. On or prior to the
effectiveness of the Offerings, the Company will consummate the Reorganization,
pursuant to which the Company will acquire all of the limited partnership
interests of the Partnership and all of the issued and outstanding stock of SMS.
Each 1% interest in the Partnership will be exchanged, directly by the limited
partners of the Partnership or indirectly by the stockholders of SMS, for
294,584 shares of the Company's Common Stock resulting in 29,458,400 aggregate
shares issued in exchange for 100% of the Partnership.

Prior to the Reorganization, the Partnership intends to distribute to its
partners, including SMS, its then cash balance in one or more distributions
(collectively, the "Distribution"), and SMS intends to distribute to its
stockholders its then cash balance in one or more distributions. The amount of
the Distribution by the Partnership between July 1, 1996 and the date of the
Offerings is not expected to exceed $10.0 million. The Partnership distributed
approximately $3.9 million in the aggregate to its limited partners and, through
SMS, to the SMS stockholders in 1995 and approximately $8.6 million in the
aggregate to date in 1996 (of which approximately $2.7 million was a non-cash
distribution), as a return on their respective investments and to allow them to
pay their income tax liability. See "Certain Transactions." The Partnership's
partners and the SMS stockholders are liable for the income tax payable with
respect to the Company's operations for periods through the date of the
Reorganization. See "The Company."

THE OFFERINGS

Of the 7,800,000 shares of Common Stock, par value $.001 per share, offered
hereby, 6,240,000 shares of the Common Stock are being offered initially in the
United States and Canada (the "U.S. Offering") and 1,560,000 shares of the
Common Stock are being offered initially outside the United States and Canada
(the "International Offering"). The U.S. Offering and the International Offering
are collectively referred to herein as the "Offerings."

Common Stock offered by:

<TABLE>
<S> <C>
The Company................................... 4,038,162 shares
The Selling Stockholder....................... 3,761,838 shares
Common Stock to be outstanding after the
Offerings(a)..................................... 33,496,562 shares
Use of Proceeds.................................... The estimated net proceeds to be
received by the Company of
approximately $62.2 million will be
used to repay certain indebtedness,
provide working capital and for
general corporate purposes, which
may include expansion of its
facilities, hiring additional sales
and marketing personnel, capital
expenditures and acquisitions. See
"Use of Proceeds."
New York Stock Exchange symbol..................... SNC
</TABLE>

- ---------------
(a) Does not include (i) approximately 3.0 million shares of Common Stock
reserved for issuance upon exercise of outstanding options which are
exercisable at the initial public offering price per share, and (ii)
approximately 2.0 million shares of Common Stock available for future
issuance under the Company's Stock Option Plan. See "Management -- Stock
Option Plan."

8
<PAGE> 9

SUMMARY FINANCIAL AND OPERATING DATA
(IN THOUSANDS, EXCEPT PER SHARE AND OPERATING DATA)

<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED JUNE 30,
---------------------------------------------------------- -------------------------
1991 1992 1993 1994 1995 1995 1996
----------- ----------- ------ ------- ----------- ----------- -----------
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues.................. $ 2,747 $ 4,056 $9,043 $11,740 $ 42,892 $ 13,981 $ 34,861
Operating expenses
(excluding compensation
to SMS
stockholders)(a)........ 2,564 3,424 8,458 9,989 34,694 11,816 30,205
Compensation to SMS
stockholders(a)......... -- -- -- -- 4,424 -- --
------- ------- ------ ------- ----------- ----------- -----------
Income from operations.... 183 632 585 1,751 3,774 2,165 4,656
Interest
expense--substantially
all to related
parties................. (330) (407) (314) (296) (784) (215) (552)
Interest income........... 5 5 7 20 198 12 97
------- ------- ------ ------- ----------- ----------- -----------
Income (loss) before
taxes................... (142) 230 278 1,475 3,188 1,962 4,201
SMS income tax provision
(benefit)............... -- -- 15 85 (245) 383 58
------- ------- ------ ------- ----------- ----------- -----------
Net income (loss)......... $ (142) $ 230 $ 263 $ 1,390 $ 3,433 $ 1,579 $ 4,143
======= ======= ====== ======= =========== =========== ===========
Pro forma income data
(unaudited):
Historical income before
income taxes as
reported................ $ 3,188 $ 1,962 $ 4,201
Pro forma adjustment for
compensation to SMS
stockholders(a)......... 4,424 -- --
----------- ----------- -----------
Pro forma income before
income taxes............ $ 7,612 $ 1,962 $ 4,201
=========== =========== ===========
Pro forma income tax
provision(b)............ 3,021 779 1,681
----------- ----------- -----------
Pro forma net
income(a)(b)............ $ 4,591 $ 1,183 $ 2,520
=========== =========== ===========
Pro forma net income
per share(c)............ $ 0.15 $ 0.04 $ 0.08
=========== =========== ===========
Pro forma weighted average
number of shares
outstanding(c).......... 30,118,980 30,118,980 30,118,980
<CAPTION>
PRO FORMA, AS ADJUSTED, INCOME STATEMENT DATA (UNAUDITED):
<S> <C> <C> <C>
Interest expense(d)..................................................... $ 41 $ 15 $ 29
Net income(e)........................................................... 5,038 1,304 2,834
Net income per share(e)(f).............................................. 0.15 0.04 0.08
Weighted average shares outstanding(f).................................. 33,496,562 33,496,562 33,496,562
</TABLE>

<TABLE>
<CAPTION>
AS OF JUNE 30, 1996
-------------------------
PRO FORMA,
ACTUAL AS ADJUSTED(g)
------- --------------
(UNAUDITED)
<S> <C> <C>
BALANCE SHEET DATA:
Working capital (deficit)..................................................... $(5,680) $ 49,151
Total assets.................................................................. 12,300 66,640
Long-term debt, less current maturities....................................... 5,906 678
Equity (deficit).............................................................. (5,537) 54,216
</TABLE>

Continued on next page

9
<PAGE> 10

<TABLE>
<CAPTION>
AS OF DECEMBER 31, AS OF
-------------------------------- JUNE 30,
1993 1994 1995 1996
------ ------ ------ --------
<S> <C> <C> <C> <C>
SELECTED OPERATING DATA (UNAUDITED):
Number of field sales offices.................. -- 25 55 58
Number of call stations........................ -- -- 90 326
Number of teleservices associates.............. -- -- 177 445
Number of WallBoard(R) programs................ 6 8 9 11
Number of sampling packs distributed (in
millions).................................... 2.6(h) 2.6(h) 3.8(h) (i)
Number of sampling pack locations (in
thousands)................................... 13.1 14.8 20.0 (i)
Number of sampling pack programs............... 2 2 4 6
Number of WallBoard(R) and sampling pack
sponsors(j).................................. 25 32 68 64
</TABLE>

- ---------------
(a) Certain employees of the Company also served as officers of SMS, the
corporate general partner of the Partnership, for which such employees
received compensation from SMS in 1995, which is treated as non-recurring.
The pro forma adjustment gives effect to the elimination in 1995 of this
non-recurring compensation based on compensation levels for the Company, as
approved by its Board of Directors. Following consummation of the
Reorganization, such officers will not be required to perform any
comparable duties or responsibilities for SMS. Further, other costs are not
likely to be incurred which would offset the impact of this pro forma
adjustment. Therefore, such compensation is treated as non-recurring. See
Note 12 to the Company's Combined Financial Statements.

(b) Prior to the Offerings, the Company's principal operations were not subject
to Federal or state corporate income taxes. The income statement data for
the year ended December 31, 1995 and the six-month periods ended June 30,
1995 and 1996 reflects a pro forma provision for income taxes as if all
operations of the Company were subject to Federal and state corporate
income taxes. The pro forma provision for income taxes represents an
effective combined Federal and state tax rate of approximately 39.7% for
the year ending December 31, 1995, and the six months ended June 30,
1995, and 40.0% for the six months ended June 30, 1996. See "The Company"
and Notes 6 and 12 to the Company's Combined Financial Statements.

(c) Prior to the Reorganization, the Partnership intends to distribute to its
partners, including SMS, its then cash balance in one or more
distributions, and SMS intends to distribute to its stockholders its then
cash balance in one or more distributions. The amount of the Distribution
by the Partnership between July 1, 1996 and the date of the Offerings is
not expected to exceed $10.0 million in the aggregate. Pro forma net income
per share information assumes that 660,580 of the shares being offered by
the Company hereby were outstanding during the periods indicated. This
represents the approximate number of shares of Common Stock that the
Company would need to issue (at the initial public offering price of $17.00
per share) to fund the payment of the distribution in excess of earnings to
the Partnership's existing partners. See "The Company" and Note 2 to the
Company's Combined Financial Statements.

(d) Adjusted to give effect to reduction of interest expense associated with
the repayment of the Company's 12.25% subordinated debentures with a
portion of the proceeds from the Offerings. See "Use of Proceeds."

(e) Pro forma, as adjusted, net income and pro forma net income per share give
effect to an adjustment to reflect the elimination of the non-recurring
compensation to certain SMS stockholders (see (a) above) and a pro forma
provision for Federal and state corporate income taxes. Pro forma, as
adjusted, net income and pro forma net income per share do not give effect
to the non-recurring prepayment penalties and other expenses expected to be
incurred upon the early retirement of the 12.25% subordinated debentures.
This charge to income is estimated to be $2.1 million ($1.3 million net of
income taxes).

(f) Pro forma, as adjusted, net income per share has been calculated based on
the weighted average number of shares of common stock outstanding during
the periods plus the shares of Common Stock issued in the Offerings.

(g) Adjusted to give effect to the distribution of the Partnership's cash
balance existing at the date of such distribution ($1.3 million at June 30,
1996) to its existing partners, the recording of a net deferred tax asset,
the sale of the shares issued by the Company in the Offerings and the
application of the estimated net proceeds therefrom as set forth under "Use
of Proceeds." See Note 12 to the Company's Combined Financial Statements.

(h) Represents sampling packs distributed during the years ended December 31,
1993, 1994 and 1995, respectively.

(i) As of June 30, 1996, the Company had contracts with clients to distribute
approximately 4.5 million sampling packs during 1996. As of the same date,
the Company had contracts with approximately 24,000 locations to distribute
such packs.

(j) A number of the Company's clients participate in both the WallBoard(R) and
sampling pack programs.

10
<PAGE> 11

RISK FACTORS

In addition to the other information set forth in this Prospectus, the
following risk factors should be considered carefully in evaluating the Company
and its business before purchasing any of the shares of Common Stock offered
hereby.

RELIANCE ON AT&T

Currently, AT&T is the Company's largest client, accounting for 17% of the
Company's revenues in 1994, 59% in 1995 and 56% in the first six months of 1996.
The contract with AT&T does not contain specific performance criteria, but
instead provides for varying payments depending on the type of customer enrolled
by the Company. In addition, under the contract, the Company is precluded from
concurrently selling similar telecommunications services for competitors of AT&T
to U.S.-based residential customers who either speak foreign languages or are
English speakers who consider foreign countries their home (the "Foreign-Origin
Consumer Market"). See "Business -- Services -- Consumer Markets."

The Company's contract with AT&T runs through December 1997, subject to
AT&T's right to seek to renew the contract upon terms mutually agreeable to AT&T
and the Company. The Company's arrangement with AT&T relating to field sales
marketing services performed by the Company for AT&T with respect to U.S.
residential customers who are not part of the Foreign-Origin Consumer Market
(the "Domestic Consumer Market") is not reflected in a formal contract. The
Company has provided such marketing services to AT&T since September 1995,
initially through a program that expired in December 1995. Since the expiration
of that program the Company has continued to provide such marketing services to
AT&T. The Company anticipates that this arrangement will continue through
December 1996. In the first six months of 1996, services performed by the
Company for AT&T in the Domestic Consumer Market accounted for approximately 21%
of the Company's total revenues.

The Company anticipates that as the expiration of the AT&T relationship
nears, it will enter into negotiations with AT&T regarding extending the
relationship. The loss of AT&T as a client, or any significant portion of the
services provided to AT&T, would have a material adverse effect on the Company.
If such negotiations were to prove unsuccessful, the Company anticipates that it
would enter into negotiations with other companies, including with other
telecommunications companies, to utilize the resources currently devoted to AT&T
(although under the terms of the AT&T contract it could not enter into such
negotiations with other telecommunications companies for services targeting the
Foreign-Origin Consumer Market until thirty days after the expiration of the
AT&T contract). The Company also anticipates that the deregulation of the U.S.
telecommunications industry by 1998, pursuant to the Telecommunications Act of
1996, and the competitive environment that will result therefrom, would provide
it with opportunities to service other telecommunications businesses. There can
be no assurance, however, that the Company would be able to find clients that
would generate the same amount of revenues or profitability of business as does
AT&T. See "Business -- Services -- Consumer Markets."

RELIANCE ON OTHER MAJOR CLIENTS

In addition to AT&T, the Company has a number of other significant clients.
Based on 1995 revenues, the nine largest clients of the Company after AT&T,
listed alphabetically, are Eastman Kodak Company, Gerber Products Company,
Kellogg U.S.A., Inc., The Proctor & Gamble Distributing Company, Lehn & Fink
Products (now a unit of Reckitt & Colman, Inc.), MCI Telecommunications
Corporation, Nestle Beverage Company, The Prudential Insurance Company of
America and Reckitt & Colman, Inc. Each of these nine clients generated revenues
ranging from approximately 1% to 8% of the Company's total revenues in 1995. In
the first six months of 1996, MCI accounted for approximately 25% of the
Company's revenues. The Company does not believe that revenues from an
individual client for a particular period are necessarily indicative of revenues
from that client for the entire year. The loss of MCI as a client would have a
material adverse effect on the Company. All of the clients named above currently
have contracts with the Company of at least one year and, in some cases,
multi-year duration, with renewal options. The contract with MCI can be
terminated by MCI upon 90 days' notice to the Company. Commencing on January 1,
1997, the Company and MCI can terminate the contract upon 30 days' notice to the
other party. Each of these contracts contains

11
<PAGE> 12

product exclusivity, which precludes the Company from providing similar services
for competing products. Accordingly, if any such client were to terminate or not
renew its contract with the Company, the Company could potentially replace its
business with that of a competitor of such client. If, however, the Company were
to lose any of these clients and be unable to replace its business with a
competitor or otherwise, it could have a material adverse effect on the Company.
See "Business -- Services."

MANAGEMENT OF GROWTH

The Company has experienced rapid growth over the past several years.
Continued growth depends in significant part on the Company's ability to
successfully utilize its existing infrastructure and databases to perform
services for other clients, as well as on the Company's ability to develop and
successfully implement new marketing methods or channels for new services for
existing and new clients. Continued growth will also depend on a number of other
factors, including the Company's ability to (i) maintain the high quality of the
services it provides to customers and to increase its penetration with existing
customers, (ii) recruit, motivate and retain qualified personnel, (iii) train
existing sales representatives or recruit new sales representatives on an
economic basis to sell different categories of services or products and (iv)
open new field sales offices and new call centers in a timely and economic
fashion. The Company's continued growth also will require the implementation of
enhanced operational and financial systems, will require additional management,
operational and financial resources and could place a strain on the Company's
operations and resources. There can be no assurance that the Company will be
able to manage its expanding operations effectively or that it will be able to
maintain its growth. If the Company is unable to manage growth effectively, its
business, results of operations or financial condition could be materially
adversely affected. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Business -- Growth Strategy."

GROWTH THROUGH ACQUISITIONS; INTERNATIONAL EXPANSION

Among other growth strategies, the Company plans to expand its business
through complementary acquisitions. There can be no assurance that the Company
will have sufficient capital resources to pursue this aspect of its growth
strategy. Additionally, there can be no assurance that the Company will
successfully identify, complete or integrate acquisitions or that any
acquisitions will perform as expected or will contribute significant revenues or
profits to the Company. The Company has also recently expanded its business to
the United Kingdom. There can be no assurance that this or any other
international expansion will generate revenues or profits for the Company. Any
new international operation, including the United Kingdom operation, would be
subject to currency fluctuations and other risks, including adverse developments
in the foreign political and economic environment, difficulties in staffing and
managing foreign operations and potentially adverse tax consequences. There can
be no assurance that one or more of these factors will not have a material
adverse effect on the Company's international operations.

DEPENDENCE ON TREND TOWARD OUTSOURCING

The Company's business and growth depend in large part on the trend toward
outsourcing of marketing services. The Company is dependent on outsourcing from
telecommunications company clients, in particular AT&T. There can be no
assurance that this trend in outsourcing will continue, as companies may elect
to perform such services internally. A significant change in the direction of
this trend, or a trend in the telecommunications industry not to use, or reduce
the use of, outsourced marketing services, such as those provided by the
Company, would have a material adverse effect on the Company. See
"Business -- Industry Overview."

RISKS ASSOCIATED WITH THE COMPANY'S CONTRACTS

Although the Company currently seeks to sign multi-year contracts with its
clients, the Company's contracts do not assure the Company a specific level of
revenues and do not designate the Company as the client's exclusive marketing
services provider. The Company believes maintaining satisfactory relationships
with its clients has a more significant impact on the Company's revenues than
the specific terms of its client contracts. In the Marketing Services division,
the majority of the Company's contracts with clients are annual

12
<PAGE> 13

contracts with terms that expire by the end of 1996. There can be no assurance
that the clients will renew or extend such contracts. In addition, the Company's
contracts with MCI and certain other significant clients are terminable by its
clients on relatively short notice, and all of the Company's significant
contracts prohibit the Company from providing services to a direct competitor of
a client that are identical or similar to the services the Company provides to
such client during the term of such contract and in some cases up to ninety days
thereafter. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations," "Business -- Growth Strategy" and "-- Services."

The Company's Marketing Services division depends significantly on its
ability to establish and maintain relationships with sponsors and affiliations
with industry associations. A significant reduction in the Company's ability to
establish relationships with additional sponsors or associations, or in renewal
rates on the Company's contracts with existing sponsors or associations, could
have a material adverse effect on the Company. See
"Business -- Services -- Marketing Services."

COMPETITIVE AND FRAGMENTED INDUSTRY; POTENTIAL CONSUMER SATURATION

The industry in which the Company competes is highly competitive and
fragmented. The Company competes with providers of other forms of advertising
and marketing media, such as direct mail, television, radio and other
advertising media. The Company also competes with the internal marketing
capabilities of clients and prospective clients. The Company's largest clients,
AT&T and MCI, have significant internal teleservices and field force marketing
capabilities and also contract for these services from competitors of the
Company. The Company competes as well with other marketing services firms,
ranging in size from very small firms offering special applications or
short-term projects to large independent firms. A number of competitors have
capabilities and resources equal to, or greater than, the Company's. There can
be no assurance that, as the Company's industry continues to evolve, additional
competitors with greater resources than the Company will not enter the industry
(or particular segments of the industry) or that the Company's clients will not
choose to conduct more of their targeted marketing services internally or
through alternative marketing media. See "Business -- Competition."

Moreover, the effectiveness of marketing by telephone could also decrease
as a result of consumer saturation and increased consumer resistance to this
marketing method. Although the Company intends to monitor industry trends and
respond accordingly, there can be no assurance that the Company will be able to
anticipate and successfully respond to such trends in a timely manner. See
"Business."

DEPENDENCE ON LABOR FORCE

The Company's industry is very labor intensive and experiences high
personnel turnover. Many of the Company's employees receive hourly wages plus
commissions, if earned. A significant number of the Company's employees,
including all of its teleservices associates, are employed on a part-time basis.
A higher turnover rate among the Company's employees would increase the
Company's recruiting and training costs and decrease operating efficiencies and
productivity. The Company's operations, particularly direct sales and
teleservices, require specially trained employees, such as those employees who
market services and products in languages other than English. Growth in the
Company's business will require it to recruit and train qualified personnel at
an accelerated rate from time to time. There can be no assurance that the
Company will be able to continue to hire, train and retain a sufficient labor
force of qualified employees, particularly bilingual employees. A significant
portion of the Company's costs consists of wages to hourly workers. In August
1996, the United States Congress passed and the President signed legislation
(H.R. 3448) which will increase the minimum wage 90 cents over two years;
beginning on October 1, 1996, the minimum wage will increase from $4.25 to $4.75
per hour and on September 1, 1997 will increase to $5.15 per hour. Although the
Company compensates most of its workforce above the minimum wage and therefore
will not be directly impacted by the legislation, the increase in the minimum
wage may have the effect of inflating wages among hourly workers generally in
the marketplace and, in turn, the prevailing wage for employees performing
services for the Company. An increase in hourly wages, costs of employee
benefits, employment taxes or commission rates could have a material adverse
effect on the Company. See "Business -- Hiring and Training" and "-- Employees."

13
<PAGE> 14

RELIANCE ON TECHNOLOGY; RISK OF BUSINESS INTERRUPTION

The Company has invested significantly in sophisticated and specialized
telecommunications and computer technology and has focused on the application of
this technology to provide customized solutions to meet many of its clients'
needs. In addition, the Company has invested significantly in sophisticated
end-user databases and software that enable it to market its clients' products
to targeted markets. The Company anticipates that it will be necessary to
continue to select, invest in and develop new and enhanced technology and
end-user databases on a timely basis in the future in order to maintain its
competitiveness. In addition, the Company's business is highly dependent on its
computer and telephone equipment and software systems, and the temporary or
permanent loss of such equipment or systems, through casualty or operating
malfunction, or a significant increase in the cost of telephone services that is
not recoverable through an increase in the price of the Company's services,
could have a material adverse effect on the Company's business. The Company's
property and business interruption insurance may not adequately compensate the
Company for all losses that it may incur in any such event.

DEPENDENCE ON KEY PERSONNEL

The success of the Company depends in large part upon the abilities and
continued service of its executive officers and other key employees,
particularly Mr. Daniel M. Snyder, President, Chief Executive Officer and
Chairman of the Board of Directors. There can be no assurance that the Company
will be able to retain the services of such officers and employees. The failure
of the Company to retain the services of Mr. Snyder and other key personnel
could have a material adverse effect on the Company. The Company has employment
agreements with certain executive officers, including Mr. Snyder, and also has
non-competition agreements with certain key personnel, including each of its
executive officers. However, courts are at times reluctant to enforce such
non-competition agreements. The Company maintains a key person insurance policy
on Mr. Snyder. In order to support its growth, the Company will be required to
recruit effectively, hire, train and retain additional qualified management
personnel. The inability of the Company to attract and retain the necessary
personnel could have a material adverse effect on the Company. See
"Management -- Employment Agreements."

GOVERNMENT REGULATION

The Company's business is subject to various Federal and state laws and
regulations. Certain portions of the Company's industry have become subject to
an increasing amount of Federal and state regulation in the past five years. The
Federal Communications Commission's (the "FCC") rules under the Federal
Telephone Consumer Protection Act of 1991 limit the hours during which
telemarketers may call consumers and prohibit the use of automated telephone
dialing equipment to call certain telephone numbers. The Federal Telemarketing
and Consumer Fraud and Abuse Prevention Act of 1994 (the "TCFAPA") broadly
authorizes the Federal Trade Commission (the "FTC") to issue regulations
prohibiting misrepresentation in telephone sales. In August 1995, the FTC issued
regulations under the TCFAPA which, among other things, require telemarketers to
make certain disclosures when soliciting sales. The Company believes its
operating procedures comply with the telephone solicitation rules of the FCC and
FTC. However, there can be no assurance that additional Federal or state
legislation, or changes in regulatory implementation, would not limit the
activities of the Company or its clients in the future or significantly increase
the cost of regulatory compliance.

A number of states have enacted or are considering enacting legislation to
regulate telephone and door-to-door solicitations. For example, telephone sales
in certain states cannot be final unless a written contract is delivered to and
signed by the buyer and may be canceled within three business days.

Several of the industries in which the Company's clients operate are
subject to varying degrees of government regulations, particularly the
telecommunications industries. Generally, compliance with these regulations is
the responsibility of the Company's clients. However, the Company could be
subject to a variety of enforcement or private actions for its failure or the
failure of its clients to comply with such regulations.

14
<PAGE> 15

One of the significant regulations of the FCC applicable to long distance
carriers, such as AT&T and MCI, prohibits the unauthorized switching of
subscribers' long distance carriers, also known in the industry as "slamming." A
fine of up to $100,000 may be imposed by the FCC for each instance of slamming.
In order to prevent unauthorized switches, federal law requires that switches
authorized over the telephone, such as through the Company's teleservices, be
verified contemporaneously by a third party. The Company believes its procedures
comply with this third-party verification requirement.

In the past, third-party verification has not been required for switches
obtained in person, such as those obtained by members of the Company's field
sales force. However, effective August 1, 1996, the Company became subject to
third-party verification procedures for switches obtained by the Company's field
sales force in its Business Markets division for MCI. The Company's training and
other procedures are designed to prevent unauthorized switching. However, as
with any field sales force, the Company cannot completely ensure that each
employee will always follow the Company's mandated procedures. Accordingly, it
is possible, and perhaps probable, that employees may in some instances engage
in unauthorized activities, including "slamming." In view of its recent rapid
growth in its field sales force, the Company in the second quarter of 1996 began
to institute additional protective safeguards against the occurrence of
unauthorized activities. Such new safeguards include the institution of an
additional level of field sales supervisors who oversee the activities of the
field sales force. This effort was led by a new director, previously employed by
AT&T for 19 years, with extensive experience in field sales, who was hired by
the Company for this purpose. During the course of her review of the field sales
force operations, the director recommended that two district managers be
terminated as well as certain of their subordinates. Such persons immediately
were terminated in March 1996. During this period, two additional district
managers and certain of their subordinates voluntarily left the employ of the
Company for unspecified reasons. The terminated district managers alleged that
persons in districts other than theirs were engaged in unauthorized activities.
The Company investigated such allegations but concluded that no other
terminations were warranted. The Company is unable to quantify what effect, if
any, any unauthorized activities, if they did occur, may have had on the
financial performance of the Company in 1995. The Company investigates customer
complaints reported to it by its telecommunications clients and reports the
results to its clients. To the Company's knowledge, no FCC complaint has been
brought against any of its clients as a result of the Company's services,
although the Company believes that the FCC is examining the sales activities of
long distance telecommunications providers, including the Company's clients and
the activities of outside vendors, such as the Company, used by such providers.
If any complaints were brought, the Company's client might assert that such
complaints constituted a breach of its agreement with the Company and, if
material, seek to terminate the contract. Any termination would be likely to
have a material adverse effect upon the Company's business. If such complaints
resulted in fines being assessed against a client of the Company, the client
could seek to recover such fines from the Company. Any amounts recovered from
the Company would reduce the Company's net income.

In addition, on June 21, 1996 MCI and the FCC entered into a consent
decree, under which MCI agreed to institute third-party verification procedures
for most small-business customer marketing not currently covered by third-party
verification, including field sales marketing of small-business customers. The
Company provides field sales marketing services to small-business customers on
behalf of MCI, and became subject to third-party verification of switches
obtained by the Company's field sales force for MCI effective August 1, 1996.
The Company expects that the implementation of such third-party verification
will increase the Company's costs to some extent, but does not expect the
implementation of such third-party verification to have a material adverse
effect on the Company's operations.

POTENTIAL FLUCTUATIONS IN QUARTERLY OPERATING RESULTS; SEASONALITY

The Company could experience quarterly variations in revenues and operating
income as a result of many factors, including the timing of clients' marketing
campaigns, the implementation of new products or services, the timing of
additional selling efforts and the general and administrative expenses to
acquire and support such new business and changes in the Company's revenue mix
among its various service offerings. In connection with certain contracts, the
Company could incur costs in periods prior to recognizing revenue under those
contracts. In addition, the Company must plan its operating expenditures based
on revenue forecasts, and a

15
<PAGE> 16

revenue shortfall below such forecast in any quarter would be likely to affect
adversely the Company's operating results for that quarter. Historically,
seasonal variations in the Company's business have been overshadowed by the
Company's growth. The Company expects that in the future its sales will reflect
seasonal effects in the first and third quarters due to weather related impact
on the field sales force and the impact on the Company's teleservices operations
of the decreased ability to reach potential customers as a result of summer
vacations. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

NO PRIOR PUBLIC MARKET; POTENTIAL VOLATILITY OF STOCK PRICE

Prior to the Offerings there has been no public market for the Common
Stock. Although the Common Stock has been approved for listing on the New York
Stock Exchange, subject to notice of issuance, there can be no assurance that an
active trading market for the Common Stock will develop or be sustained
following the Offerings. The initial public offering price of the Common Stock
offered hereby has been determined by negotiations among the Company, the
Selling Stockholder and the Representatives of the Underwriters and may bear no
relationship to the trading prices of the Common Stock after the Offerings. See
"Underwriting." The trading price of the Common Stock could be subject to
significant fluctuations in response to actual or anticipated variations in the
Company's quarterly operating results and other factors, such as the
introduction of new services or technologies by the Company or its competitors,
changes in other conditions or trends in the Company's industry or in the
industries of any of the Company's significant clients, changes in governmental
regulations, changes in securities analysts' estimates of the Company's, or its
competitors' or industry's, future performance or general market conditions. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Quarterly Results." General market price declines or market
volatility in the future, or future declines or volatility in the prices of
stocks for companies in the Company's industry or sector, could also affect the
market price of the Common Stock.

SHARES ELIGIBLE FOR FUTURE SALE; REGISTRATION RIGHTS

A substantial number of shares of Common Stock will become available for
sale in the public market at various times following the completion of the
Offerings. No prediction can be made as to the effect, if any, that market sales
or the availability of shares for future market sales will have on the market
price of the Common Stock. Sales of a substantial number of shares of Common
Stock in the public market following the Offerings could adversely affect the
market price for the Company's Common Stock and the ability of the Company to
raise additional capital through sales of additional shares of Common Stock.
Upon completion of the Offerings, the Company will have outstanding an aggregate
of 33,496,562 shares of Common Stock. The Common Stock offered hereby will be
freely tradeable (other than by an "affiliate" of the Company as such term is
defined in the Securities Act of 1933, as amended (the "Securities Act"))
without restriction or registration under the Securities Act. All remaining
shares may be sold under Rule 144 under the Securities Act, subject to the
volume, manner of sale and other restrictions of Rule 144. The Company, the
Selling Stockholder and the Company's other stockholders have agreed, subject to
exceptions for certain pledges and, in the case of the Company, the grant of
employee stock options, not to, directly or indirectly, sell, offer to sell,
grant any option for the sale of, or otherwise dispose of, any capital stock of
the Company or any security convertible or exchangeable into, or exercisable
for, such capital stock, or, in the case of the Company, file any registration
statement with respect to any of the foregoing (other than a registration
statement on Form S-8 to register shares issuable upon exercise of employee
stock options or a registration statement on Form S-4 to register shares
issuable in connection with an acquisition), for a period of 180 days after the
date of this Prospectus, without the prior written consent of Merrill Lynch &
Co. Pursuant to an agreement, Mr. Daniel M. Snyder and certain of the Company's
other stockholders are entitled to certain registration rights with respect to
their shares of Common Stock. If such stockholders, by exercising such
registration rights upon expiration of the lock-up agreement described above,
cause a large number of shares to be registered and sold in the public market,
such sales could have an adverse effect on the market price of the Common Stock.
In addition, the Company intends to file a registration statement under the
Securities Act to register initially an aggregate of five million shares of
Common Stock reserved for issuance in connection with the Company's Stock Option
Plan (as defined herein). The issuance of such shares upon exercise of any
options granted under such plan would result in the dilution of the voting power
of the Common Stock

16
<PAGE> 17

purchased in the Offerings and could have a dilutive effect on earnings per
share. See "Management -- Stock Option Plan," "Description of Capital Stock,"
"Shares Eligible for Future Sale" and "Underwriting."

CONTROL BY PRINCIPAL STOCKHOLDERS

Following completion of the Offerings, Mr. Daniel M. Snyder, the Chairman
of the Board of Directors, President and Chief Executive Officer of the Company,
and Ms. Michele D. Snyder, Vice Chairman, Chief Operating Officer, and a
director of the Company, will beneficially own approximately 32.0% and 11.2%,
respectively, of the outstanding shares of Common Stock (approximately 30.5% and
10.7% respectively, if the Underwriters' over-allotment options are exercised in
full). As a result, Mr. Snyder individually, and he and Ms. Snyder if they act
in concert, will have the ability to exercise substantial influence over the
Company's business by virtue of their voting power with respect to the election
of directors and all other matters requiring action by stockholders. Such
concentration of share ownership may have the effect of discouraging, delaying
or preventing a change in control of the Company. See "Management" and
"Principal and Selling Stockholders."

EFFECT OF CERTAIN CHARTER AND BYLAW PROVISIONS

The Company's Certificate of Incorporation and Bylaws contain certain
provisions that could discourage potential takeover attempts and make attempts
by the Company's stockholders to change management more difficult. Such
provisions include the requirement that the Company's stockholders follow an
advance notification procedure for certain shareholder nominations of candidates
for the Board of Directors and for new business to be conducted at any meeting
of the stockholders. In addition, the Certificate of Incorporation allows the
Board of Directors to issue up to five million shares of preferred stock and to
fix the rights, privileges and preferences of those shares without any further
vote or action by the stockholders. The rights of the holders of Common Stock
will be subject to, and may be adversely affected by, the rights of the holders
of any preferred shares that may be issued by the Company in the future. While
the Company has no present intention to issue any shares of preferred stock, any
such issuance could have the effect of making it more difficult for a third
party to acquire a majority of the outstanding voting stock of the Company. In
addition, the Company is subject to certain anti-takeover provisions of the
Delaware General Business Corporation Law, which could have effect of
discouraging, delaying or preventing a change of control of the Company. See
"Description of Capital Stock -- Certain Charter Provisions."

DILUTION

Investors purchasing shares of Common Stock in the Offerings will
experience immediate and substantial dilution of $15.40 in the net tangible book
value per share of Common Stock from the initial public offering price set forth
on the cover page of this Prospectus. Additional dilution may result from the
exercise of outstanding employee stock options. See "Dilution."

17
<PAGE> 18

THE COMPANY

Snyder Communications is a rapidly growing provider of innovative and high
value-added outsourced marketing services. The Company designs and implements
marketing programs for its clients utilizing a range of complementary marketing
resources, including field sales, teleservices, WallBoards(R) and product
sampling. The Company's clients are primarily Fortune 500 companies with large
annual marketing expenditures facing significant competitive pressures to retain
or expand market share. Based on 1995 revenues, the ten largest clients of the
Company, listed alphabetically, were AT&T Communications, Inc., Eastman Kodak
Company, Gerber Products Company, Kellogg U.S.A., Inc., The Proctor & Gamble
Distributing Company, Lehn & Fink Products (now a unit of Reckitt & Colman,
Inc.), MCI Telecommunications Corporation, Nestle Beverage Company, The
Prudential Insurance Company of America and Reckitt & Colman, Inc.

The Company's revenues increased from $11.7 million in 1994 to $42.9
million in 1995, and from $14.0 million in the first six months of 1995 to $34.9
million in the first six months of 1996. Net income, as adjusted to reflect a
pro forma provision for income taxes, as if the Company were subject to
corporate income taxes, and to eliminate certain non-recurring compensation in
1995, grew from $1.2 million in the first six months of 1995 to $2.5 million in
the first six months of 1996.

Snyder Communications, Inc. was formed in June 1996 to be the holding
company for Snyder Communications, L.P. The Partnership was established in 1988
as a limited partnership in which SMS, formerly known as Snyder Communications,
Inc., was the general partner, and a Delaware limited partnership beneficially
owned by Mr. Mortimer B. Zuckerman and Mr. Fred Drasner, Chairman and President,
respectively, of U.S. News & World Report, L.P., was the sole limited partner
(the "Original Limited Partner"). Prior to the consummation of the
Reorganization (as defined below), SMS will be owned by Mr. Daniel M. Snyder,
Ms. Michele D. Snyder, Mr. Gerald S. Snyder and Dr. Anthony O. Roberts. In May
1995, the Partnership completed a private placement of 12.25% subordinated
debentures (the "Debentures") and limited partnership interests to certain
investors, including Allen & Company Incorporated, certain officers and related
persons of Allen & Company Incorporated, and certain other investors
(collectively, the "1995 Investors"), through which the 1995 Investors became
additional limited partners. See "Certain Transactions" and "Principal and
Selling Stockholders."

On or prior to the effectiveness of the Offerings, the Company will
consummate a reorganization (the "Reorganization") pursuant to which the Company
will acquire all of the limited partnership interests of the Partnership and all
of the issued and outstanding stock of SMS. Each 1% interest in the Partnership
will be exchanged, directly by the limited partners of the Partnership or
indirectly by the stockholders of SMS, for 294,584 shares of the Company's
Common Stock resulting in 29,458,400 aggregate shares issued in exchange for
100% of the Partnership. Upon consummation of the Reorganization, the Company
will own all of the limited partnership interests of the Partnership and all of
the issued and outstanding stock of SMS, the corporate general partner of the
Partnership, and thus, effectively, 100% of the Partnership.

18
<PAGE> 19

Prior to the Reorganization, the Partnership intends to distribute to its
partners, including SMS, its then cash balance in one or more distributions, and
SMS intends to distribute to its stockholders its then cash balance in one or
more distributions. The amount of the Distribution by the Partnership between
July 1, 1996 and the date of the Offerings is not expected to exceed $10.0
million. The Partnership distributed approximately $3.9 million in the aggregate
to its limited partners and, through SMS, to the SMS stockholders in 1995 and
approximately $8.6 million in the aggregate to date in 1996 (of which
approximately $2.7 million was a non-cash distribution), as a return on their
respective investments and to allow them to pay their income tax liability. See
"Certain Transactions." The Partnership's partners and the SMS stockholders are
liable for the income tax payable with respect to the Company's operations for
periods through the date of the Reorganization.

The Company's principal executive office is located at Two Democracy
Center, 6903 Rockledge Drive, Fifteenth Floor, Bethesda, Maryland 20817, and its
telephone number is (301) 468-1010.

19
<PAGE> 20

USE OF PROCEEDS

The net proceeds to be received by the Company from the Offerings are
estimated to be approximately $62.2 million, based on the initial public
offering price of $17.00 per share. The Company will not receive any proceeds
from the sale of the shares of Common Stock by the Selling Stockholders
(including any shares sold pursuant to the Underwriters' over-allotment
options). See "Principal and Selling Stockholders."

The Company intends to use approximately $7.1 million of the net proceeds
of the Offerings to repay in full the Company's Debentures, including accrued
and unpaid interest thereon, as of June 30, 1996, which were issued to the 1995
Investors on May 18, 1995, mature on December 31, 2001 and bear interest at a
fixed rate of 12.25% per annum. As of June 30, 1996, the outstanding principal
amount of the Debentures was $6.0 million, and accrued and unpaid interest
totaled $183,750. During the year ending May 18, 1997, the terms of the
Debentures permit prepayment of the principal at 115% of face value, plus
accrued and unpaid interest. The balance of the net proceeds will be used for
working capital and general corporate purposes, which may include expansion of
the Company's facilities, including the expansion of the Company's call centers
in Bethesda, Maryland, the establishment of the Company's call center in the
United Kingdom, the establishment of an executive office in the United Kingdom
and the establishment of additional field sales offices, expansion of the
Company's sales and marketing personnel, capital expenditures, and strategic
acquisitions of complementary businesses. The Company has not entered into any
agreements or understandings nor is it currently engaged in any negotiations or
discussions with respect to any acquisitions. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources" and "Business -- Growth Strategy."

Pending application of the net proceeds as described above, the Company
intends to invest the net proceeds in short-term, interest-bearing investment
grade securities.

DIVIDEND POLICY

The Company currently intends to retain future earnings to finance its
growth and development and therefore does not anticipate paying any cash
dividends in the foreseeable future. Payment of any future dividends will depend
upon the future earnings and capital requirements of the Company and other
factors which the Board of Directors considers appropriate.

20
<PAGE> 21

CAPITALIZATION

The following table sets forth the combined capitalization of the Company
(i) at June 30, 1996, (ii) at June 30, 1996 after giving pro forma effect to the
Reorganization and the Distribution and (iii) at June 30, 1996 as further
adjusted to reflect the issuance of and the use of the estimated net proceeds
from the sale of the 4,038,162 shares of Common Stock offered by the Company
hereby (at the initial public offering price of $17.00 per share and after
deduction of underwriting discounts and estimated offering expenses). See "Use
of Proceeds." This table should be read in conjunction with the Company's
Combined Financial Statements and notes thereto appearing elsewhere in this
Prospectus.

<TABLE>
<CAPTION>
AT JUNE 30, 1996
-----------------------------------
PRO FORMA,
ACTUAL PRO FORMA AS ADJUSTED
------- --------- -----------
(IN THOUSANDS)
<S> <C> <C> <C>
Current portion of notes payable and obligations under capital
leases...................................................... $ 401 $ 401 $ 401
======= ======= =======
Long-term debt, less current maturities(a).................... $ 5,906 $ 5,906 $ 678
Equity:
Preferred stock, none authorized, actual; $.001 par value
per share, 5 million shares authorized, none issued and
outstanding, pro forma and pro forma as adjusted....... -- -- --
Common stock, no stated par value, 3,000 shares
authorized, actual; $.001 par value per share, 120
million shares authorized, pro forma and pro forma as
adjusted; 2,000 shares issued and outstanding, actual;
29,458,400 shares issued and outstanding, pro forma;
and 33,496,562 shares issued and outstanding, pro forma
as adjusted(b)......................................... 1 30 34
Additional paid-in capital(c)............................ 1,360 (6,711) 55,451
Retained earnings (deficit)(c)(d)........................ (4,829) -- (1,269)
Limited partners' (deficit)(c)........................... (2,068) -- --
------- ------- -------
Total equity (deficit).............................. (5,536) (6,681) 54,216
------- ------- -------
Total capitalization (deficit)................. $ 370 $ (775) $54,894
======= ======= =======
</TABLE>

- ---------------
(a) Represents obligations under capital leases and the Debentures.

(b) Does not include approximately 3.0 million shares of Common Stock reserved
for issuance upon exercise of outstanding options. See "Management -- Stock
Option Plan."

(c) In connection with the Reorganization, the retained earnings and limited
partners' deficit balances will be reclassified to additional paid-in
capital. The pro forma additional paid-in capital balance also reflects the
planned Distribution by the Partnership of its cash balance to its existing
partners prior to the Offerings. The Company's cash balance at June 30,
1996 was $1.3 million. The amount of the Distribution by the Partnership
between July 1, 1996 and the date of the Offerings is not expected to
exceed $10.0 million. See "The Company."

(d) Pro forma, as adjusted retained earnings represents the after-tax effect of
prepayment penalties ($0.5 million) and the write-off of unamortized
discount and issuance costs ($0.8 million) associated with the repayment of
the Debentures. See "Use of Proceeds."

21
<PAGE> 22

DILUTION

The net tangible book value (deficit) of the Company at June 30, 1996,
after giving effect to the Reorganization but prior to the Distribution, was
approximately $(6.1 million), or $(0.21) per share of Common Stock. Net tangible
book value per share represents the amount of total tangible assets less total
liabilities, divided by the number of shares of Common Stock outstanding. After
giving effect to the Reorganization and the Distribution, the pro forma net
tangible book value (deficit) of the Company at June 30, 1996 would have been
approximately $(7.4 million) or $(0.25) per share of Common Stock.

Net tangible book value dilution per share represents the difference
between the amount paid by purchasers of shares of Common Stock in the Offerings
and the pro forma net tangible book value per share of Common Stock immediately
after completion of the Offerings. After giving effect to the sale of the shares
of Common Stock offered by the Company hereby, and the application by the
Company of the estimated net proceeds to the Company therefrom, the pro forma
net tangible book value of the Company as of June 30, 1996 would have been
approximately $53.5 million or $1.60 per share. This represents an immediate
increase in pro forma net tangible book value of $1.85 per share to existing
stockholders and an immediate dilution of $15.40 per share to new stockholders
purchasing shares of Common Stock in the Offerings. The following table
illustrates this dilution:

<TABLE>
<S> <C> <C>
Initial public offering price per share...................... $17.00
Net tangible book value per share at June 30, 1996 after
giving effect to the Reorganization, but prior to the
Distribution.......................................... (0.21)
Decrease per share attributable to the Distribution..... (0.04)
Increase per share attributable to new stockholders..... 1.85
-----
Pro forma as adjusted net tangible book value per share after
the Offerings.............................................. 1.60
------
Net tangible book value per share dilution to new
stockholders............................................... $15.40
======
</TABLE>

The following table sets forth, on a pro forma basis after giving effect to
the Reorganization and assuming completion of the Offerings, the number of
shares of Common Stock purchased from the Company, the total cash consideration
paid for such shares and the average consideration paid per share by the
officers, directors, director nominees or beneficial owners of 10% or greater of
the outstanding Common Stock of the Company and by new investors. The following
computations are based on the initial public offering price of $17.00 per share,
before deducting the underwriting discount and estimated offering expenses.

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
--------------------- ----------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
---------- ------- ------------ ------- -------------
<S> <C> <C> <C> <C> <C>
Officers, directors, director nominees
and 10% beneficial owners(a).......... 24,248,535 75.66% $ 288,842 0.2% $ 0.01
New investors........................... 7,800,000 24.34 132,600,000 99.8 17.00
---------- ----- ------------ ----- -------
Total(b)...................... 32,048,535 100.0% $132,888,842 100.0%
========== ===== ============ =====
</TABLE>

- ---------------
(a) Officers, directors, director nominees and 10% beneficial owners own, in the
aggregate, 95.1% of the outstanding shares of Common Stock prior to the
Offerings.

(b) Does not include shares of Common Stock purchased by existing stockholders
who are not officers, directors, director nominees or beneficial owners of
10% or greater of the outstanding Common Stock of the Company or options to
acquire 300,000 shares of Common Stock which are vested and currently
exercisable with an exercise price equal to the initial public offering
price. See "Management -- Stock Option Plan."

22
<PAGE> 23

SELECTED FINANCIAL AND OPERATING DATA
(IN THOUSANDS, EXCEPT PER SHARE AND OPERATING DATA)

The following table sets forth selected financial and operating data as of
and for each of the years in the five-year period ended December 31, 1995, and
for the six months ended June 30, 1995 and 1996. The table also sets forth pro
forma income statement data for the year ended December 31, 1995 and the six
month periods ended June 30, 1995 and 1996 after giving effect to Federal and
state income taxes and the elimination in 1995 of certain non-recurring
compensation expense. The historical income statement data and balance sheet
data for and as of each of the years in the three-year period ended December 31,
1995, are derived from the audited Combined Financial Statements of the Company.
The income statement and balance sheet data for and as of each of the years in
the two-year period ended December 31, 1992 and each of the six month periods
ended June 30, 1995 and June 30, 1996, are derived from the unaudited Combined
Financial Statements of the Company and in the opinion of Management include all
adjustments (consisting of normal and recurring adjustments) which are necessary
to present fairly the results of operation and financial position of the Company
for the periods and at the dates presented. The selected financial and operating
data for the six months ended June 30, 1996 are not necessarily indicative of
the results to be expected for the full year. The following selected financial
and operating data should be read in conjunction with "Capitalization,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," the Combined Financial Statements and notes thereto included
elsewhere in this Prospectus.

<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED JUNE 30,
------------------------------------------------------- --------------------------
1991 1992 1993 1994 1995 1995 1996
------- ------- ------- ------- ----------- ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues................................. $ 2,747 $ 4,056 $ 9,043 $11,740 $ 42,892 $ 13,981 $ 34,861
Operating expenses (excluding
compensation to SMS stockholders)(a)... 2,564 3,424 8,458 9,989 34,694 11,816 30,205
Compensation to SMS stockholders(a)...... -- -- -- -- 4,424 -- --
------- ------- ------- ------- ----------- ----------- -----------
Income from operations................... 183 632 585 1,751 3,774 2,165 4,656
Interest expense--substantially all to
related parties........................ (330) (407) (314) (296) (784) (215) (552)
Interest income.......................... 5 5 7 20 198 12 97
------- ------- ------- ------- ----------- ----------- -----------
Income (loss) before taxes............... (142) 230 278 1,475 3,188 1,962 4,201
SMS income tax provision (benefit)....... -- -- 15 85 (245) 383 58
------- ------- ------- ------- ----------- ----------- -----------
Net income (loss)........................ $ (142) $ 230 $ 263 $ 1,390 $ 3,433 $ 1,579 $ 4,143
======= ======= ======= ======= =========== =========== ===========
Pro forma income data (unaudited):
Historical income before income taxes as
reported............................... $ 3,188 $ 1,962 $ 4,201
Pro forma adjustment for compensation to
SMS stockholders(a).................... 4,424 -- --
----------- ----------- -----------
Pro forma income before income taxes..... 7,612 1,962 4,201
Pro forma income tax provision(b)........ 3,021 779 1,681
----------- ----------- -----------
Pro forma net income(a)(b)............... $ 4,591 $ 1,183 $ 2,520
=========== =========== ===========
Pro forma net income per share(c)........ $ 0.15 $ 0.04 $ 0.08
=========== =========== ===========
Pro forma weighted average number of
shares outstanding(c).................. 30,118,980 30,118,980 30,118,980
</TABLE>

<TABLE>
<CAPTION>
AS OF DECEMBER 31,
--------------------------------------------------- AS OF
1991 1992 1993 1994 1995 JUNE 30, 1996
------- ------- ------- ------- ------- -------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital (deficit).......................... $(2,146) $(1,214) $(1,802) $(1,509) $(1,564) $ (5,680)
Total assets....................................... 798 1,402 2,320 3,673 13,027 12,300
Long-term debt, less current maturities............ 2,426 3,234 2,638 2,057 5,460 5,906
Equity (deficit)................................... (3,983) (3,422) (3,235) (1,866) (1,050) (5,537)
</TABLE>

See Notes to Selected Financial and Operating Data

23
<PAGE> 24

<TABLE>
<CAPTION>
AS OF DECEMBER 31,
-------------------------------- AS OF
1993 1994 1995 JUNE 30, 1996
------ ------ ------ -------------
<S> <C> <C> <C> <C>
SELECTED OPERATING DATA (UNAUDITED):
Number of field sales offices............... -- 25 55 58
Number of call stations..................... -- -- 90 326
Number of teleservices associates........... -- -- 177 445
Number of WallBoard(R) programs............. 6 8 9 11
Number of sampling packs distributed (in
millions)................................. 2.6(d) 2.6(d) 3.8(d) (e)
Number of sampling pack locations (in
thousands)................................ 13.1 14.8 20.0 (e)
Number of sampling pack programs............ 2 2 4 6
Number of WallBoard(R) and sampling pack
sponsors(f)............................... 25 32 68 64
</TABLE>

- ---------------
(a) Certain employees of the Company also served as officers of SMS, the
corporate general partner of the Partnership, for which such employees
received compensation from SMS in 1995, which is treated as non-recurring.
The pro forma adjustment gives effect to the elimination in 1995 of this
non-recurring compensation based on compensation levels for the Company,
as approved by its Board of Directors. Following consummation of the
Reorganization, such officers will not be required to perform any
comparable duties or responsibilities for SMS. Further, other costs are
not likely to be incurred which would offset the impact of this pro forma
adjustment. Therefore, such compensation is treated as non-recurring. See
Note 12 to the Company's Combined Financial Statements.

(b) Prior to the Offerings, the Company's principal operations were not subject
to Federal or state corporate income taxes. The income statement data
for the year ended December 31, 1995 and the six-month periods ended June
30, 1995 and 1996 reflects a pro forma provision for income taxes as if
all operations of the Company were subject to Federal and state corporate
income taxes. The pro forma provision for income taxes represents an
effective combined Federal and state tax rate of approximately 39.7% for
the year ending December 31, 1995 and the six months ended June 30, 1995,
and 40.0% for the six months ended June 30, 1996. See "The Company" and
Notes 6 and 12 to the Company's Combined Financial Statements.

(c) Prior to the Reorganization, the Partnership intends to distribute to its
partners, including SMS, its then cash balance in one or more
distributions, and SMS intends to distribute to its stockholders its then
cash balance in one or more distributions. The amount of the Distribution
by the Partnership between July 1, 1996 and the date of the Offerings is
not expected to exceed $10.0 million in the aggregate. Pro forma net income
per share information assumes that 660,580 of the shares being offered by
the Company hereby were outstanding during the periods indicated. This
represents the approximate number of shares of Common Stock that the
Company would need to issue (at the initial public offering price of $17.00
per share) to fund the payment of the Distribution in excess of earnings to
the Partnership's existing partners. See "The Company" and Note 2 to the
Combined Financial Statements.

(d) Represents sampling packs distributed during the years ended December 31,
1993, 1994 and 1995, respectively.

(e) As of June 30, 1996, the Company had contracts with clients to distribute
approximately 4.5 million sampling packs during 1996. As of the same date,
the Company had contracts with approximately 24,000 locations to distribute
such packs.

(f) A number of the Company's clients participate in both the WallBoard(R) and
sampling pack programs.

24
<PAGE> 25

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

The following discussion of the Company's historical results of operations
and of its liquidity and capital resources should be read in conjunction with
the Selected Financial and Operating Data of the Company and the Combined
Financial Statements of the Company and related notes thereto included elsewhere
in this Prospectus.

The Company was established in 1988 as a limited partnership between SMS,
as the general partner, and the Original Limited Partner. See "The Company." The
Company's primary business in 1988 was its WallBoard(R) programs. In 1991, the
Company began to develop sampling pack programs for target markets, and in 1993
initiated its field sales services in its Consumer Markets division. In late
1994, the Company began its Business Markets division utilizing, first, field
sales and, soon thereafter, teleservices. Teleservices were added to its
Consumer Markets division in the second quarter of 1996.

The Company's revenues have grown from $2.7 million in 1991 to $42.9
million in 1995. Virtually all of the growth in the Company's revenues during
such period and during the six months ended June 30, 1996, is attributable to
internal growth in the volume of services provided, rather than price increases
or acquisitions. In 1995, revenues from field sales in the Company's Consumer
Markets division contributed more than half of the Company's total revenues.
Revenues from the Company's Business Markets division contributed less than ten
percent of total revenues in 1995, although revenues in this new division grew
successively in each quarter of 1995 and continued their substantial growth into
1996. In 1995 revenues from the Company's WallBoard(R) programs were slightly
higher than revenues from its sampling pack programs, but the growth in revenues
from sampling programs during 1995 was greater than the growth in WallBoard(R)
revenues.

The Company's growth through 1992 was attributable to the introduction,
development and expansion of new WallBoard(R) and sampling pack programs in its
Marketing Services division. This business grew significantly in 1993 and
continued to grow in subsequent years, modestly in 1994 and more substantially
in 1995.

The Company's rapid growth in 1995 and the first six months of 1996 is
primarily the result of the Company's expansion into field sales. The Company
provided targeted field sales services on a modest scale in 1993 and the
beginning of 1994. In the latter part of 1994, the Company entered into a
contract with AT&T under which the Company provided field sales services,
selling telecommunications services to residential customers in selected
multi-cultural markets and general markets. As a result of AT&T's satisfaction
with the Company's services, this client expanded the scope of the Company's
efforts in 1995. Revenues from services provided to AT&T increased from $1.7
million in 1994 to $25.0 million in 1995, and from $6.6 million in the first six
months of 1995 to $19.7 million in the first six months of 1996. In late 1994
and in 1995, the Company established a significant field sales force in its
Consumer Markets division and opened 29 offices by the end of 1995. The Company
has continued in 1996 to add staff, including more field sales supervisors and
senior executives, to improve the quality of the field sales force, training
programs and support systems to allow for the continued expansion of its
existing services and the possible introduction of additional clients in the
Consumer Markets Division. These increases, especially the addition of a
significant number of field sales supervisors, have increased the cost of
services and have adversely affected operating margins in recent periods. The
Company anticipates that its continued build-up of infrastructure to accommodate
anticipated growth may adversely affect operating margins in future periods. See
"-- Quarterly Results." In the second quarter of 1996, the Company added
outbound teleservices in its Consumer Markets division.

In the latter half of 1994, the Company also began to market
business-to-business telecommunications services on behalf of MCI by developing
separate field sales and teleservices in its Business Markets division. As in
its Consumer Markets division, the Company has, to date, added new staff,
locations and systems to allow for the expansion of services to MCI and the
introduction of new clients. Outbound teleservices were added in the Business
Markets division in the second quarter of 1995. Both the field sales and
teleservices components of the Business Markets division grew continuously
throughout 1995 and through June 30, 1996.

25
<PAGE> 26

RESULTS OF OPERATIONS

In its Consumer Markets and Business Markets divisions, the Company
currently receives revenues from clients to which it provides field and
teleservices sales and marketing services based on both the number of accepted
subscribers and the type of services sold. The Company typically receives a
fixed dollar amount per subscriber. Revenues related to such sales are
recognized on the date that the application for service is accepted by the
Company's telecommunications clients. Commencing in January 1997, in its
Business Markets Division, the Company will earn revenues from its
telecommunications client based on a percentage of revenues generated for the
client by the subscribers obtained by the Company rather than a fixed amount per
subscriber. In its Marketing Services division, the Company is paid by sponsors
in its WallBoard(R) and product sampling programs in installments, generally
quarterly or semi-annually, over the term of the contract under which services
are rendered, which is generally one year.

Cost of services consists of all costs specifically associated with client
programs, such as salary, commissions and benefits paid to personnel, including
senior executive officers associated with specific divisions, inventory,
payments to third-party vendors and systems and other support facilities
specifically associated with client programs.

Selling, general and administrative expense is primarily comprised of costs
associated with the Company's centralized staff functions, such as financial,
accounting, human resources and personnel costs of senior executive officers not
specifically associated with any single division.

Prior to the Reorganization, the Company's principal operations have not
been subject to entity level Federal or state corporate income taxes. Further,
in addition to compensation paid by the Partnership to Mr. Daniel M. Snyder, Ms.
Michele D. Snyder and Mr. Gerald S. Snyder, SMS, the corporate general partner
of the Partnership, paid compensation to the same three individuals for services
performed for that entity. Because the financial statements of SMS and the
Partnership are combined, the compensation paid in 1995 by SMS is included in
the Combined Financial Statements of the Company even though no such
compensation will be paid in 1996 or in the future following the Reorganization
and the Offerings. Accordingly, such amount is separately set forth in the
Combined Financial Statements of the Company as "Compensation to stockholders of
SMS" and is characterized as a non-recurring charge. Pro forma net income for
the year ended December 31, 1995 and for the six-month periods ended June 30,
1995 and 1996 is adjusted for income taxes as if the Company had been treated as
a C corporation and reflects the elimination in 1995 of the non-recurring charge
of $4.4 million related to compensation paid to certain stockholders of SMS. The
Company expects to recognize a net deferred income tax asset of $137,000 at the
time of the Reorganization which will increase net income by that amount in that
period. In addition, the Company intends to use a portion of the net proceeds
from the Offerings to repay all amounts due under the Debentures. See "Use of
Proceeds." Early retirement of the Debentures will result in an extraordinary
charge to income estimated to be $2.1 million ($1.3 million net of income
taxes), determined as of June 30, 1996, representing prepayment penalties plus
the write-off of unamortized discount and debt issuance costs.

26
<PAGE> 27

The following sets forth, for the periods indicated, certain components of
the Company's operating statement data, including such data as a percentage of
revenues.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
---------------------------------------------------- ----------------------------------
1993 1994 1995 1995 1996
-------------- --------------- --------------- --------------- ---------------
(DOLLARS IN THOUSANDS) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues..................... $9,043 100.0% $11,740 100.0% $42,892 100.0% $13,981 100.0% $34,861 100.0%
Operating expenses:
Cost of services......... 5,455 60.3 6,464 55.1 27,480 64.1 9,046 64.7 23,634 67.8
Selling, general and
administrative
expenses............... 3,003 33.2 3,525 30.0 7,214 16.8 2,770 19.8 6,571 18.8
Compensation to SMS
stockholders............... -- -- 4,424 10.3 -- --
------ ----- ------- ----- ------- ----- ------- ----- ------- -----
Income from operations....... 585 6.5 1,751 14.9 3,774 8.8 2,165 15.5 4,656 13.4
Interest expense............. (314) (3.5) (296) (2.5) (784) (1.8) (215) (1.5) (552) (1.6)
Interest income.............. 7 0.1 20 0.2 198 0.5 12 0.1 97 0.3
------ ------- ------- ------- -------
Income before taxes.......... 278 3.1 1,475 12.6 3,188 7.4 1,962 14.0 4,201 12.1
SMS income tax provision
(benefit).................. 15 0.2 85 0.7 (245) (0.6) 383 2.7 58 0.2
------ ------- ------- ------- -------
Net income................... $ 263 2.9% $ 1,390 11.8% $ 3,433 8.0% $ 1,579 11.3% $ 4,143 11.9%
====== ======== ======== ======== ========
Pro forma income data
(unaudited):
Historical income before
income taxes as
reported............... $ 3,188 7.4% $ 1,962 14.0% $ 4,201 12.1%
Pro forma adjustment for
compensation to SMS
stockholders........... 4,424 10.3 -- --
Pro forma provision for
income taxes............... (3,021) (7.0) (779) (5.6) (1,681) (4.8)
------- ------- -------
Pro forma net income......... $ 4,591 10.7% $ 1,183 8.5% $ 2,520 7.2%
======== ======== ========
</TABLE>

Six Months Ended June 30, 1996 Compared to Six Months Ended June 30, 1995

Revenues. Revenues increased $20.9 million, or 149.3%, from $14.0 million
in the first six months of 1995 to $34.9 million in the first six months of
1996. Of such increase, approximately 63% was attributable to significantly
higher revenues in the Consumer Markets division, predominantly from increased
field sales of long distance telecommunications services to residential
customers, and approximately 39% was attributable to higher revenues in the
Business Markets division, as a result of increased revenues from both field
sales and teleservices sales of long distance telecommunications services to
business customers under contracts that were in the early stages of
implementation in the beginning of 1995. The increased revenues in the Consumer
Markets and Business Markets divisions were offset by a slight decline in
revenues in the Marketing Services division. In the Business Markets division,
field sales revenues grew more rapidly than teleservices revenues, reflecting
the later introduction of teleservices. Services provided under these contracts
increased throughout 1995 and the six months ended June 30, 1996. This increase
in revenues corresponded to the buildup during 1995 in sales offices and the
number of field sales personnel in both the Consumer Markets and Business
Markets divisions. Revenues in the Marketing Services division declined slightly
primarily as a result of a decline in revenues from sampling pack programs,
offset by growth in revenues from the WallBoard(R) programs. The decline in
sampling pack program revenues was due to fewer products being included in
sampling packs in the 1996 programs.

Cost of Services. Cost of services increased $14.6 million from $9.0
million in the first six months of 1995 to $23.6 million in the first six months
of 1996 due to the growth in services performed for clients. Cost of services as
a percentage of revenues increased from 64.7% to 67.8%. This increase in the
cost of services as a percentage of revenues resulted from an increase in the
cost of services as a percentage of revenues in the

27
<PAGE> 28

Consumer Markets division offset in part by a decrease in the cost of services
as a percentage of revenues in the Business Markets and Marketing Services
divisions.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $3.8 million from $2.8 million in the first
six months of 1995 to $6.6 million in the first six months of 1996. Selling,
general and administrative expense as a percentage of revenues decreased from
19.8% in the first six months of 1995 to 18.8% in the first six months of 1996,
reflecting a moderately increased corporate overhead expense being spread over a
larger base of revenues.

Interest Expense. Interest expense increased $.4 million from $.2 million
in the first six months of 1995 to $.6 million in the first six months of 1996
due primarily to interest expense related to the Debentures issued in May 1995.

Pro Forma Net Income. Pro forma net income increased $1.3 million from
$1.2 million in the first six months of 1995 to $2.5 million in the first six
months of 1996, primarily due to growth in revenues.

1995 Compared to 1994

Revenues. Revenues increased $31.2 million, or 265.3%, from $11.7 million
in 1994 to $42.9 million in 1995. Of such increase, approximately 75% was
attributable to higher revenues in the Consumer Markets division generated by
increased field sales of long distance services to residential customers,
approximately 8% was attributable to increased sales of long distance services
to business customers in the Business Markets division, and approximately 17%
was attributable to increased revenues in the Marketing Services division,
principally increased revenues from the Company's sampling pack programs. The
increase in revenues in the Consumer Markets division was predominantly due to
the rapid growth of sales of long distance services to residential customers in
certain multi-cultural markets under the contract with AT&T which commenced in
the fourth quarter of 1994 and the expansion of services in 1995 to include all
domestic markets. The increase in revenues in the Business Markets division was
attributable to the commencement of a contract with MCI to sell
business-to-business long distance services in the first quarter of 1995.
Marketing services revenues also increased, principally as a result of new
sampling pack programs initiated in 1995 and the addition of new clients to
existing programs.

Cost of Services. Cost of services increased $21.0 million from $6.5
million in 1994 to $27.5 million in 1995. Cost of services, as a percentage of
revenues, increased from 55.1% in 1994 to 64.1% in 1995 primarily reflecting
increased staffing at the divisional level to support the significant growth and
potential future growth in the Consumer Markets and Business Markets divisions.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $3.7 million, from $3.5 million in 1994 to
$7.2 million in 1995 due primarily to additional administrative personnel and
related corporate expenses associated with the Company's growth. Selling,
general and administrative expenses, as a percentage of revenues, decreased from
30.0% in 1994 to 16.8% in 1995, reflecting a moderately increased corporate
overhead expense being spread over a much larger base of revenues.

Interest Expense. Interest expense increased from $0.3 million in 1994 to
$0.8 million in 1995 due to interest expense related to the Debentures which
were issued in May 1995.

Net Income. Net income increased $2.0 million from $1.4 million in 1994 to
$3.4 million in 1995 as a result of the combination of significantly increased
revenues from the development of the Consumer Markets and Business Markets
divisions and controlled overhead expenditures.

1994 Compared to 1993

Revenues. Revenues increased $2.7 million, or 29.8%, from $9.0 million in
1993 to $11.7 million in 1994. Approximately 62% of such increase resulted from
additional revenues in the Consumer Markets division relating to increased field
sales of long distance services to residential customers. Revenues increased in
the Consumer Markets division because the Company began developing, in late
1993, a field sales force to

28
<PAGE> 29

sell long-distance services to customers in certain multi-cultural market
segments. Approximately 21% of such increase resulted from higher revenues in
the Business Markets division as a result of the commencement of field sales of
telecommunications services and paging services to business customers.
Approximately 17% of such increase was attributable to higher revenues in the
Marketing Services division, as a result of a significant increase in revenues
from sampling pack programs, which was offset in part by lower revenues from
WallBoard(R) programs.

Cost of Services. Cost of services increased $1.0 million from $5.5
million in 1993 to $6.5 million in 1994. Cost of services as a percentage of
revenues decreased from 60.3% in 1993 to 55.1% in 1994. This decrease was
primarily due to start-up costs incurred in 1993 associated with the Company's
Consumer Markets division, which were not offset by a corresponding increase in
revenues during the period.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $0.5 million from $3.0 million in 1993 to $3.5
million in 1994. Selling, general and administrative expenses as a percentage of
net revenues decreased from 33.2% in 1993 to 30.0% in 1994 as overhead costs
increased more slowly than revenues.

Interest Expense. Interest expense remained constant at $0.3 million in
1993 and 1994.

Net Income. Net income increased $1.1 million from $0.3 million in 1993 to
$1.4 million in 1994, due to improved operating margins in the Marketing
Services division and additional revenues from the Consumer Markets division.

QUARTERLY RESULTS

The Company has experienced, and in the future may experience, quarterly
variations in revenue due to a number of factors, many of which are outside of
the Company's control, including: the timing of new contracts, the timing of
clients' promotional campaigns and the seasonal patterns of certain businesses
serviced by the Company. Certain costs incurred by the Company may be recognized
in periods prior to the recognition of revenue under existing contracts.
Historically, seasonal variations in the Company's business have been
overshadowed by the Company's growth. The Company expects that in the future its
sales will reflect seasonal effects in the first and third quarters due to
weather related impact on the field sales force and the impact in the Company's
teleservices operations of the decreased ability to reach potential consumers as
a result of summer vacations.

29
<PAGE> 30

The following table sets forth the unaudited quarterly results of
operations for each of the four quarters in 1995 and the first two quarters in
1996. In Management's opinion, this unaudited quarterly information includes all
adjustments which are necessary for a fair presentation of the information for
the quarters presented. The operating results in any quarter are not necessarily
indicative of the results which may be expected for any other interim period or
for the year ending December 31, 1996.

<TABLE>
<CAPTION>
QUARTER ENDED
-------------------------------------------------------------------------------
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31, MARCH 31, JUNE 30,
1995 1995 1995 1995 1996 1996
--------- -------- ------------- ------------ --------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Revenues........................ $ 6,127 $7,853 $11,937 $ 16,974 $17,360 $ 17,501
Operating expenses:
Cost of services........... 3,823 5,223 7,523 10,910 11,665 11,969
Selling, general and
administrative
expenses................. 1,123 1,647 1,935 2,509 3,005 3,566
Compensation to SMS
stockholders............. -- -- -- 4,424 -- --
--------- -------- ------------- ------------ --------- --------
Income (loss) from operations... 1,181 983 2,479 (869) 2,690 1,966
Interest
expense -- substantially all
to related parties............ (64) (151) (279) (289) (274) (279)
Interest income................. 4 8 69 116 69 29
--------- -------- ------------- ------------ --------- --------
Income (loss) before taxes...... 1,121 840 2,269 (1,042) 2,485 1,716
Pro forma adjustment for
compensation to SMS
stockholders.................. -- -- -- 4,424 -- --
--------- -------- ------------- ------------ --------- --------
Pro forma income before taxes... $ 1,121 $ 840 $ 2,269 $ 3,382 $ 2,485 $ 1,716
</TABLE>

As discussed above, the rapid increase in revenues and corresponding
increase in expenses during the six quarters ended June 30, 1996 were
predominantly attributable to the Company's commencement of services with AT&T
in its Consumer Markets division in late 1994 and with MCI in its Business
Markets division in early 1995. Services performed for these clients increased
in each quarter during the six-quarter period. Revenues in the Marketing
Services division fluctuated modestly on a quarter-to-quarter basis during this
six-quarter period.

The Company's operating margins (income from operations before compensation
to SMS stockholders divided by revenues) increased during the third and fourth
quarters of 1995 compared to the second quarter of 1995, as the growth in the
Company's revenues outpaced the build-up of infrastructure to accommodate the
rapid growth in revenues during the third and fourth quarters of 1995. Operating
margins decreased in the first and second quarters of 1996 compared to the prior
two quarters. The Company expects that operating margins in future periods will
be lower than those reported in the third and fourth quarters of 1995 as the
Company continues to build-up infrastructure to accommodate anticipated growth.
The Company's operating margins in the first and second quarters of 1996 were
influenced by several factors. Beginning in 1996, the Company accelerated its
infrastructure development to accommodate both its current growth and
anticipated growth and began to put in place the capability to expand its
services to additional categories of customers. Expenses relating to the
build-up of infrastructure, including training programs, additional supervisory
personnel, quality assurance programs, salaries associated with additional
marketing staff and additional executive personnel, were greater in the first
and second quarters of 1996 than in prior periods. In addition, in 1996 the
Company expanded the number of programs in its Marketing Services division,
which programs are expected to become revenue generating in 1997. To market the
additional capacity in its Marketing Services division, as well as to exploit
unutilized capacity in its existing programs, the Company significantly expanded
the sales force in this division in the second quarter of 1996. Accordingly, the
sales expense associated with the Marketing Services division increased
significantly in the second quarter of 1996, although any increase in revenue
from the expansion of the sales staff and the additional number of programs is
expected to be realized almost entirely in

30
<PAGE> 31

1997. As a result of this combination of actions, the Company believes it is
more capable to accommodate additional growth successfully.

The Company has experienced, and in the future expects that it will
experience, quarterly variations in its operating margins due to a number of
factors, certain of which are outside the Company's control, including: the
timing of new contracts, the timing of clients' promotional campaigns, the
seasonal patterns of certain businesses serviced by the Company, and the timing
of costs associated with the build-up in the Company's infrastructure to
accommodate anticipated future growth or new services.

LIQUIDITY AND CAPITAL RESOURCES

The following table sets forth selected cash flow information for the
periods indicated.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
--------------------------- ------------------
1993 1994 1995 1995 1996
------ ------ ------- ------- -------
(IN THOUSANDS) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net cash provided by operating activities... $1,247 $1,443 $ 8,118 $ 3,372 $ 4,656
Net cash (used) by investing activities..... (691) (536) (3,903) (3,126) (1,250)
Net cash (used) by financing activities..... (424) (661) (931) 1,804 (6,006)
</TABLE>

The Company's primary source of funding has been, and continues to be, cash
flow from operations. For the years 1993, 1994 and 1995 and the first six months
of 1996, the Company generated an aggregate of $15.5 million in cash from
operating activities.

The Company's accounts receivable turnover ratio (revenues for the period
divided by average accounts receivable for the period) (annualized) was 13.51
for 1993, compared to 10.96 for 1994, and 19.68 for 1995. The Company's accounts
receivable turnover ratio (annualized) was 12.71 for the six months ended June
30, 1995, compared to 17.62 for the six months ended June 30, 1996. The
improvement in the accounts receivable turnover ratio is primarily attributable
to the significant increase over the periods presented of the Company's sales to
one telecommunications client and the resulting cash flows from its invoice
payment schedule.

Cash used in investing activities has been primarily to fund the purchase
of wallboard frames, computer equipment and other capital to support the
expansion of the Company's marketing services business and data processing and
network capabilities. Cash used in investing activities for 1995 includes $2.8
million in advances to SMS stockholders.

Cash flows from financing activities include the effect of the May 1995
issuance of the Debentures ($6.0 million face amount), the proceeds of which
were used in part to repay a note to the Original Limited Partner in the amount
of $2.6 million and to make special cash distributions to the existing limited
partners of $1.1 million. Additional cash distributions to the limited partners
during the period from January 1, 1993 through June 30, 1996 totaled $6.2
million. These distributions included amounts necessary to cover the limited
partners' tax liability related to the income of the Partnership.

During the periods covered, the Company financed certain equipment
purchases through capital leases with various leasing companies. The leases are
secured by the related equipment. Total leases outstanding as of June 30, 1996
are $1.1 million. These leases are payable in varying installments through
fiscal 1999 with a weighted average interest rate of 11.9%.

During 1995, SMS advanced to a stockholder $2.7 million, evidenced by a
non-interest-bearing loan secured by all of such stockholder's stock in SMS. SMS
distributed the obligation, in-kind, to the stockholders of SMS, pro rata on
June 30, 1996. See "Certain Transactions."

Prior to the Reorganization, the Partnership intends to distribute to its
partners, including SMS, its then cash balance in one or more distributions, and
SMS intends to distribute to its stockholders its then cash balance in one or
more distributions. The Company's cash balance at June 30, 1996 was $1.3
million. The Company's cash balance is expected to increase prior to the
consummation of the Reorganization and the Offerings primarily as a result of
collection of receivables, recovery of certain deposits, the completion of

31
<PAGE> 32

pending equipment financings and improved management of other working capital
balances. The amount of the Distribution by the Partnership between July 1, 1996
and the date of the Offerings is not expected to exceed $10.0 million in the
aggregate. The Partnership distributed approximately $3.9 million in the
aggregate to its limited partners and, through SMS, to the SMS stockholders in
1995 and approximately $8.6 million in 1996 (of which approximately $2.7 million
was a non-cash distribution), as a return on their respective investments and to
allow them to pay their income tax liability. The Partnership's partners and the
SMS stockholders are liable for the income tax payable with respect to the
Company's operations for periods through the date of the Reorganization.

The Company expects to use a portion of the net proceeds from the Offerings
to fund its anticipated growth, including expansion of the Company's facilities,
expansion of the Company's call centers in Bethesda, Maryland, the establishment
of the Company's call center in the United Kingdom and the establishment of an
executive office in the United Kingdom. The Company currently estimates that it
will commit between $13 million to $18 million for capital expenditures relating
to such expansion during the twelve-month period ending June 30, 1997.

The Company believes that the proceeds from the Offerings, together with
cash generated from operations and cash available to the Company through future
borrowing arrangements, will be sufficient to finance the Company's current
operations, planned capital expenditures and future growth.

32
<PAGE> 33

BUSINESS

GENERAL

Snyder Communications is a rapidly growing provider of innovative and high
value-added outsourced marketing services. The Company designs and implements
marketing programs for its clients utilizing a range of complementary marketing
resources, including field sales, teleservices, WallBoards(R) and product
sampling. The Company's clients are primarily Fortune 500 companies with large
annual marketing expenditures facing significant competitive pressures to retain
or expand market share. Based on 1995 revenues, the ten largest clients of the
Company, listed alphabetically, were AT&T Communications, Inc., Eastman Kodak
Company, Gerber Products Company, Kellogg U.S.A., Inc., The Proctor & Gamble
Distributing Company, Lehn & Fink Products (now a unit of Reckitt & Colman,
Inc.), MCI Telecommunications Corporation, Nestle Beverage Company, The
Prudential Insurance Company of America and Reckitt & Colman, Inc.

INDUSTRY OVERVIEW

33
<PAGE> 34

general population in the United States would grow approximately 13% by 2010.
Similarly, at that time, the Census Bureau projected, based in part on 1990
census data, that the 50 years or older population in the United States was
comprised of approximately 68.3 million people in 1995, and would grow
approximately 41% by 2010. The Company believes that many of its programs in its
Marketing Services division are in locations that are often used by people who
are 50 years or older.

The Company focuses, in part, on identifying industries and markets in
which companies are under strong competitive pressure to enhance or retain
market share. The Company believes that prospective clients in these areas will
more fully recognize the value of using an outsourced marketing services firm to
gain such market share. The Company then identifies market segments that
prospective clients may perceive will include high-value customers, and designs
and implements marketing strategies designed to reach such customers. In
developing its field sales force and marketing services capabilities, the
Company has focused on the telecommunications industry as a source of clients,
because the competitive effects that have and will continue to occur as barriers
to competition are being removed and the number of telecommunications companies
providing various types of services is rising dramatically. In establishing
relationships with its telecommunications clients, the Company developed a
strategy to target markets, such as those in multi-cultural communities, that
its clients believe contain high-value customers.

The Company believes that other industries such as managed health care,
package delivery and on line services, will face increased competition for
customers in the future as a result of the dramatic changes in their respective
industries. Accordingly, the Company is actively pursuing opportunities with
such organizations.

The industry in which the Company operates tends to be highly fragmented
and characterized by a large number of in-house and independently owned
organizations. Most of the companies operating in the industry offer a limited
number of services within a limited geographic area. The Company believes that
consolidation within the industry will provide significant opportunities to
increase market share through strategic acquisitions. See "-- Competition."

GROWTH STRATEGY

The Company's commitment to continued growth through internal expansion and
complementary acquisitions is evidenced by the following:

Consumer Markets

- The Company is adding approximately 80 call stations, which it expects
will be operating by late 1996, to its existing 300 call stations in this
division.

- In June 1996, the Company expanded its relationship with AT&T by entering
into a new agreement with AT&T (U.K.), to market long-distance
telecommunications services to residential customers

34
<PAGE> 35

based in the United Kingdom. As part of this expansion, the Company
intends to add one call center and one or more field sales offices in the
United Kingdom in 1997.

- The Company entered into a contract with Prodigy in June 1996, to provide
marketing and sales services for Prodigy's online service to residential
customers, using the Company's field sales, including event marketing,
and other marketing services.

Business Markets

- In August 1996, the Company entered into an agreement with Lucent to
market and sell certain Lucent telecommunications equipment, and in
September 1996, the Company entered into a contract with DHL Airways,
Inc. for overnight delivery services. In both cases, the products will be
marketed to business customers throughout the United States using the
Company's field sales, inbound and outbound teleservices and other
marketing services.

- The Company also seeks to add additional inbound telephone-based sales in
its Business Markets division.

Marketing Services

- The Company increased the number of sales managers and executives in this
division from five as of December 31, 1993 to approximately 20 as of June
30, 1996, to take advantage of opportunities to expand the services
offered to existing clients and to develop new lines of business.

- The Company has recently developed, in conjunction with Hoechst Marion
Roussel, its Allergy Health WallBoard(R), of which Hoechst Marion Roussel
is the exclusive client sponsor under a three-year contract with the
Company. The Company currently has contracts with approximately 600
allergists' and otolaryngologists' offices in which the Allergy Health
WallBoard(R) will be located beginning in the fourth quarter of 1996.

SERVICES

The Company offers a range of complementary marketing services through its
Consumer Markets, Business Markets and Marketing Services divisions. In the
Consumer Markets and Business Markets

35
<PAGE> 36

divisions, the Company currently focuses on marketing and selling long-distance
telecommunications services, with a particular emphasis on multi-cultural
markets. The Marketing Services division is responsible for the Company's
WallBoard(R) and sampling pack programs. The following describes the services
offered by the Company.

CONSUMER MARKETS

In its Consumer Markets division, established in 1993, the Company provides
outsourced marketing services to AT&T. Using face-to-face field sales, including
event marketing, and teleservices, the Company markets AT&T long-distance
telecommunications services to residential customers. The Company began
marketing AT&T services using its field sales force in February 1994. The
Company expanded this relationship to add teleservices capabilities in the
second quarter of 1996. The revenues generated by AT&T have grown from $1.7
million in 1994 to $25.0 million in 1995. See "Risk Factors -- Reliance on
AT&T."

The Company, jointly with AT&T, develops sales and marketing programs
designed to enroll residential long-distance telecommunications customers for
AT&T. The Company provides AT&T with turn-key programs. The Company develops
lists of potential customers to be contacted; creates marketing materials,
including customer applications; hires, trains and supervises its sales
representatives and teleservices associates to market AT&T services; and
monitors the effectiveness of its programs. The Company's turn-key approach
differentiates it from other marketing services firms, which generally merely
implement a client's marketing strategy using contact lists provided by the
client.

The Company targets multi-cultural markets, particularly the Hispanic and
Asian markets, as well as general consumer markets throughout the United States,
seeking in particular to secure customers who AT&T believes would be high-value
subscribers. To reach multi-cultural markets, the Company develops demographic
databases identifying potential customers in such communities and employs field
sales representatives and teleservices associates who are capable of marketing
services in a prospective customer's native language as well as in English. The
Company's Consumer Markets division currently markets telecommunications
products and services in 15 foreign languages, including Spanish, Mandarin,
Cantonese, Vietnamese, Korean and Russian. The Company estimates that over sixty
percent of the field sales associates in the Consumer Markets division are
bilingual; all of the Company's teleservices associates in the Consumer Markets
division are bilingual. The Company also develops and distributes sales
literature and collateral documents in each of these languages. The Company
believes that the ability of its personnel to speak with and provide materials
to a prospective customer in either English or the customer's native language
helps the prospective customer to have a clearer understanding of the services
being offered, which the Company believes increases its ability to attract
customers for AT&T. In addition, in marketing services to these multi-cultural
communities, the Company has developed databases of information on specialized
demographic segments, which the Company intends to use in the future to market
products and services for additional clients.

FIELD SALES. The Company has provided outsourced field sales to AT&T
through its Consumer Markets division since 1994. AT&T was initially a client in
one of the Company's WallBoard(R) programs. See "-- Marketing Services." As of
June 30, 1996, the Company employed in its Consumer Markets division
approximately 550 field sales representatives, 65 field supervisors, 26 district
managers and five regional managers, located in 32 offices in 28 cities
throughout the United States. The Company's field sales representatives are
full-time employees with benefits. The Company's field sales force is supported
by the administrative and executive personnel in the division, as well as the
Company's corporate staff. The Company has established a management structure
designed to provide appropriate supervision of, and support for, its field sales
representatives. Each of the five regional managers is responsible for five to
seven districts. Each district is managed by a district manager, who oversees
from two to seven field supervisors. Field supervisors in turn manage from five
to 20 field sales representatives. All field sales representatives are trained
in appropriate sales and marketing procedures as well as the specific services
being marketed by AT&T. See "-- Hiring and Training."

In addition, the Company also offers event marketing in its Consumer
Markets division. Within each sales district, district managers and field
supervisors identify fairs, festivals and other events that they believe

36
<PAGE> 37

present an opportunity through which the Company will be able to reach a
multi-cultural market or the general market. The Company works with the event
coordinator, leasing times during which the Company's field sales
representatives market products and services from a booth set up by the Company
on the premises. Under the Company's contract with AT&T, AT&T has the right to
determine which events will be available to the Company and often chooses to
handle larger events through AT&T's own internal sales force. The Company also
conducts event marketing at shopping malls. Most of the Company's event
marketing is conducted by bilingual sales representatives at community
festivals.

Through June 30, 1996, the Company's field sales operations in its Consumer
Markets division have generated a significantly greater percentage of revenues
than the division's teleservices operations.

TELESERVICES. Beginning in 1996, the Company began to perform teleservices
in its Consumer Markets division for AT&T, to provide another avenue through
which to market AT&T long distance telecommunications services. Teleservices
associates contact prospective customers by telephone, utilizing a computerized
call management system that provides the associate with a script from which to
market selected client products and services. As soon as the teleservices
associate begins to speak, the call management system provides the associate
with information regarding the prospective customer, including name and address.
The Company also recently installed a predictive dialing system, which enhances
the number of contacts a teleservices associate can make per hour by
automatically bypassing busy signals, telephone answering machines and voice
mail boxes.

In the Consumer Markets division, the Company conducts its teleservices
marketing activities from two call centers located in Bethesda, Maryland, which
had 300 call stations as of June 30, 1996. The Company is in the process of
expanding to approximately 380 the number of call stations in its Consumer
Markets division. As of June 30, 1996, the Consumer Markets division employed,
in addition to two directors and two line managers, approximately 390
teleservices associates and 18 supervisors. All of the Company's teleservices
associates are part-time employees who are trained upon hiring and periodically
throughout their employment in appropriate marketing techniques. See "-- Hiring
and Training." Teleservices associates are paid on an hourly basis and are
eligible to earn commissions based on customer sales. See "-- Employees."

CONTRACTUAL RELATIONSHIP WITH AT&T. Under its contract with AT&T, the
Company currently markets a wide range of AT&T long-distance telecommunications
services to U.S.-based residential customers, seeking to identify and access
customers in multi-cultural communities in which the Company has developed an
expertise, as well as the general population in the United States. The services
that the Company currently provides to AT&T include field sales and teleservices
for the Foreign-Origin Consumer Market, and field sales for the Domestic
Consumer Market. The Company's contract with AT&T, which relates to the Foreign-
Origin Consumer Market, runs through December 1997, subject to AT&T's right to
seek to renew the contract upon terms mutually agreeable to AT&T and the
Company.

AT&T enjoys certain exclusivity rights under its contract with respect to
the Foreign-Origin Consumer Market. During the term of the contract, the Company
cannot, for any other long-distance telecommunications company, target the
Foreign-Origin Consumer Market by (i) creating or distributing customized
application brochures to be inserted in the publications in which such brochures
are placed by the Company on behalf of AT&T, or (ii) offering programs similar
to those offered to AT&T under the contract. In addition, during the term of the
contract, if the Company wishes to institute any other marketing program that
involves long-distance telecommunications services targeted to the
Foreign-Origin Consumer Market, AT&T has an exclusive 45-day period in which to
negotiate with the Company with respect to such program. Until 30 days following
termination of the contract, the Company can neither provide, nor enter into
negotiations or discussions to provide, customer acquisition services for
long-distance telecommunications services targeted to the Foreign-Origin
Consumer Market for any other telecommunications company.

The Company's arrangement with AT&T relating to field sales marketing
services performed by the Company for AT&T with respect to the Domestic Consumer
Market is not reflected in a formal contract. The Company has provided such
services to AT&T since September 1995, initially through a program that expired
in December 1995. Since the expiration of that program, the Company has
continued to provide such services to AT&T. The Company anticipates that this
arrangement will continue through December 1996. In the first

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<PAGE> 38

six months of 1996, services performed by the Company for AT&T in the Domestic
Consumer Market accounted for approximately 21% of the Company's total revenues.

Consistent with the Company's focus on providing turn-key marketing
programs, AT&T compensates the Company based on the type of customers enrolled
by the Company. In addition, under certain circumstances these rates are
adjusted if performance goals are not met. The contract with AT&T does not
establish a maximum amount the Company can earn for its services, although the
Company is subject to an informal cap on total sales in the AT&T Domestic
Consumer Market for the remainder of 1996. The Company believes that this
pricing system is attractive to AT&T, because AT&T pays only for quantifiable
results.

The Company has recently expanded its relationship with AT&T by signing a
contract with AT&T (U.K.), an affiliate of AT&T, to provide targeted marketing
services for U.K.-based long-distance residential customers. The contract
commences October 1, 1996 and expires on September 30, 1998. Under the contract,
the Company will provide field sales and teleservices for AT&T (U.K.) to sell
long-distance calling services to all residential consumers in the United
Kingdom, including customers in certain multi-cultural markets. Because of the
time associated with developing a field sales and teleservices force in the
United Kingdom, the Company does not expect to generate significant revenues
under this contract until 1997.

CLIENT EXPANSION. The Company seeks to expand the number of clients and
industries served by the Consumer Markets division, relying primarily upon its
existing infrastructure. In June 1996, the Company entered into an agreement
with Prodigy to provide marketing and sell subscriptions to the Prodigy online
service to persons using a variety of marketing techniques and strategies. The
Company currently intends to market and sell the Prodigy service relying on its
existing infrastructure through field sales, including event marketing, and
other marketing services. Prodigy will compensate the Company based on the
number of new subscribers generated by the Company's marketing efforts. The
marketing arrangement commenced on June 1, 1996 and will continue for a
three-year term, unless terminated earlier. Either Prodigy or the Company may
terminate the contract for any reason upon 90 days' written notice. The Company
does not currently anticipate that the Prodigy agreement will generate any
revenues for the Company until early 1997.

In August 1996, the Company entered into two separate agreements with
Foundation Health to market and sell memberships in certain managed health care
plans that Foundation Health operates. Foundation Health will compensate the
Company based on the number of new members generated by the Company's marketing
efforts. The marketing arrangement commences on October 1, 1996 and will
continue until December 31, 1999, unless terminated earlier. Either Foundation
Health or the Company may terminate the agreements upon 90 days' written notice
if certain annual subscription targets are not met.

The Company believes that the capabilities and infrastructure that it has
developed in the Consumer Markets division are adaptable to other companies,
including companies marketing products and services outside of the
telecommunication industry, as illustrated by its recent arrangements with
Prodigy and Foundation Health. The Company believes that its existing
infrastructure of offices, management, supervisory and training personnel and
communications can accommodate additional clients in the Consumer Markets
division, although it may be necessary to hire and train separate field sales
representatives, who may be compensated on a different basis, to market more
complex products and services.

BUSINESS MARKETS

In its Business Markets division, established in late 1994, the Company
provides marketing and sales services to MCI, targeting small business customers
in general and multi-cultural markets throughout the United States. Using both
field sales and teleservices, the Company seeks to enroll long-distance business
customers for MCI. As in the Consumer Markets division, the Company offers MCI
turn-key marketing initiatives and is principally responsible for the
implementation of such initiatives. The Company's marketing efforts for MCI are
enhanced by the electronic computer link between MCI and each of the field sales
offices in the Company's Business Markets division, through which the Company's
field sales representatives are able to directly access and print up-to-date
product information, pricing information and marketing materials. The Company
began providing marketing services to MCI in late 1994. See "Risk
Factors -- Reliance on Other Major Clients."

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<PAGE> 39

Consistent with the Company's overall strategy, the Company designs
programs for MCI that access both specialized demographic market segments,
particularly the Asian and Hispanic communities, as well as the general markets,
in the United States. The Company currently is capable of conducting marketing
services in the Business Markets division in nine foreign languages including
Cantonese, Mandarin, Korean, Vietnamese and Spanish as well as in English. The
Company estimates that approximately one-third of the field sales associates in
the Business Markets division are bilingual and are able to converse with a
prospective customer in either English or the customer's native language. All of
the Company's teleservices associates in the Business Markets division are
bilingual.

Through June 30, 1996, the field sales operations have generated a
significantly greater portion of revenue in the Business Markets division than
teleservices, but the Company plans to place greater emphasis on teleservices.

FIELD SALES. As of June 30, 1996, in its Business Markets division, the
Company employed approximately 350 field sales representatives, 26 district
managers and three regional managers, who were located in 26 offices in 23
cities throughout the United States. The Company's field sales force is
supported by the administrative and executive personnel in the division, as well
as the Company's corporate staff. Each of the three regional managers is
responsible for six to ten districts. Each district is managed by a district
manager who oversees from five to ten field sales representatives. Certain
districts also employ field sales supervisors who report to the district
managers and oversee a team of three to eight field sales representatives. The
field sales personnel are trained in appropriate sales and marketing procedures,
as well as the specific products and services being marketed. See "-- Hiring and
Training."

TELESERVICES. The Company also provides MCI with a full range of
teleservices in its Business Markets division. Teleservices associates contact
prospective customers by telephone, marketing specific products and services.
Teleservices personnel utilize a proprietary computerized lead management and
order entry system which separates leads by language and routes these to the
appropriate teleservices personnel. The Company's teleservices associates are
trained in appropriate marketing techniques. See "-- Hiring and Training."

The Business Markets' division call center, which began operating in April
1995, is located in Bethesda, Maryland. The Business Markets division had 26
call stations as of June 30, 1996. As of that same date, the Business Markets
division employed approximately 50 teleservices associates, four supervisors,
two managers and two directors.

CONTRACTUAL RELATIONSHIP WITH MCI. The Company's current agreement with
MCI is comprised of five consecutive one-year terms through 2001, subject in
each year to non-renewal upon 90 days' notice prior to the end of the calendar
year. MCI currently has the right to terminate the contract upon 90 days' notice
to the Company. Commencing January 1, 1997, both MCI and the Company can
terminate on 30 days' notice to the other party. MCI also has the right to
terminate the agreement immediately if certain performance criteria are not
maintained. Under this agreement, MCI enjoys product exclusivity, and the
Company cannot promote or sell competing services to commercial customers during
the term of the contract. In addition, the Company cannot offer services similar
to those offered under the MCI contract to any current MCI commercial customer
until at least 90 days after termination of the contract. Finally, for three
years following termination of the agreement, the Company cannot use or reveal
any confidential material furnished by MCI or any MCI customer lists.

Currently, MCI pays the Company an established rate per customer enrolled.
The rate paid varies depending on the MCI service to which the customer
subscribes. MCI has the right to adjust payments made under the contract if
certain performance criteria are not met. Commencing January 1, 1997, the
Company will earn revenues based on a percentage of revenues generated for MCI
by the subscribers obtained by the Company. The contract with MCI does not
establish a maximum amount that the Company can earn for its services. The
amount paid to the Company per subscriber is expected to be lower under the new
pricing

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<PAGE> 40

formula than under the current pricing formula and therefore could result in
lower gross revenues being generated under this contract. However, the Company
believes that, through increased reliance on teleservices and certain
operational changes, the results from its business with MCI will continue to be
acceptable. In addition, certain field sales resources currently utilized
exclusively for the MCI contract will also be used to sell products of the
Company's new clients.

CLIENT EXPANSION. The Company believes that the turn-key marketing
services that it offers in its Business Markets division and the multi-cultural
distribution channels that it has developed are adaptable to serve clients
seeking to reach business customers in other industries. The Company believes
that its existing infrastructure of offices, management, supervisory and
training personnel and telecommunications capabilities are adequate to
accommodate additional clients or expansion of its business with MCI. In the
future, the Company also anticipates that it will use the databases it has
compiled to implement targeted marketing efforts for other clients.

In August 1996, the Company entered into an agreement with Lucent to market
and sell certain telecommunications equipment manufactured by Lucent to business
customers throughout the United States. Lucent will compensate the Company based
on the volume of telecommunications equipment sold and installed as a result of
the Company's marketing efforts. The marketing arrangement commenced on the date
of signing and continues for a three-year period. The Company anticipates that
it will begin performing marketing services for Lucent pursuant to the agreement
in the fourth quarter of 1996.

In September 1996, the Company entered into a contract with DHL Airways,
Inc. for overnight delivery services. The Company also seeks to add inbound
telephone-based sales to the services offered through its Business Markets
division and believes that it currently has the capability of adding this
service for a relatively small additional investment in equipment.

MARKETING SERVICES

The Marketing Services division, established in 1988, specializes in two
services that provide the Company's clients with targeted channels of
distribution: WallBoards(R), which are sponsored information centers mounted on
a wall and encased in a 42" x 30" or 57" x 30" oak or mahogany frame presenting
educational, editorial and product information, and sampling packs, which are
colorful boxes that contain a variety of nationally recognized sample products
and coupons. The Company's internal graphics department produces product
information booklets for customers that are distributed with the sampling packs,
or are available on information racks attached to a WallBoard(R). Most of the
Company's WallBoards(R) and sampling packs are implemented in cooperation with
industry associations with which the Company has established alliances. These
associations designate representatives to become members of an editorial
advisory board established by the Company for a particular market, providing a
quality check upon the information included in the WallBoard(R) or sampling
pack. A program is a WallBoard(R) or sampling pack that targets certain
demographic segments. Several of the WallBoard(R) and sampling pack programs
work in tandem to provide the Company's clients with multiple channels to reach
targeted, high-value potential customers.

The Company evaluates potential opportunities to expand existing or new
WallBoard(R) and sampling pack programs into new market segments. To do this,
the Company first researches new demographic segments containing potentially
high-value customers that can be reached through the Company's programs. For
example, the Company recently identified a demographic segment in new home
buyers that could provide sponsors with high-value customers through a
WallBoard(R) program. The Company then commenced its search for locations by
targeting prominent real estate brokerage companies in leading markets
throughout the United States. The Company's field operations department mails
marketing materials describing the proposed WallBoard(R) and follows up with
telephone calls to the prospective locations. The Company believes that its
method of analysis in identifying new demographic segments will allow it to
expand the number of locations through which its Marketing Services' programs
are distributed and to expand its programs to encompass new targeted channels of
distribution. Participation in the programs is provided free of charge to the
participating locations. Simultaneously, the Company began to approach sponsors
who market products or services typically associated with new home buyers.

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The following table shows the growth of the programs in the Marketing
Services division:

<TABLE>
<CAPTION>
AS OF DECEMBER 31,
---------------------- AS OF
1993 1994 1995 JUNE 30, 1996
---- ---- ---- -------------
<S> <C> <C> <C> <C>
Number of WallBoard(R) programs.................. 6 8 9 11
Number of sampling packs distributed (in
millions)...................................... 2.6(a) 2.6(a) 3.8(a) (b)
Number of sampling pack locations (in
thousands)..................................... 13.1 14.8 20.0 (b)
Number of sampling pack programs................. 2 2 4 6
Number of WallBoard(R) and sampling
pack sponsors(c)............................... 25 32 68 64
</TABLE>

- ---------------
(a) Represents sampling packs distributed during the years ended December 31,
1993, 1994 and 1995, respectively.
(b) As of June 30, 1996, the Company had contracts with clients to distribute
approximately 4.5 million sampling packs during 1996. As of the same date,
the Company had contracts with approximately 24,000 locations to distribute
such packs.
(c) A number of the Company's clients participate in both the WallBoard(R) and
sampling pack programs.

THE WALLBOARD(R) PROGRAMS. As of June 30, 1996, the Company had 11
different WallBoard(R) programs targeted at specific markets. Each WallBoard(R)
location is available only to the Company under a two- or three-year exclusive
agreement, with automatic renewal provisions. A WallBoard(R) presents
educational, editorial and product information targeted to a specific,
high-value audience and is developed by the Company's editorial staff in
conjunction with an editorial advisory board established by the Company. All of
the editorial material is reviewed by the relevant editorial advisory board
prior to publication. Each WallBoard(R) has an exclusive sponsor, and
information is published on the WallBoard(R) about the sponsor's products that
address the needs of the targeted audience. The Company had 44 sponsors of its
WallBoards(R) at June 30, 1996, including, listed alphabetically, Gerber
Products Company, Hoechst Marion Roussel, Kellogg U.S.A., Inc., Kraft Foods,
Inc., The Prudential Insurance Company of America, Quaker Oats Company, Reckitt
& Colman, Inc., Ross Products Division/Abbot Laboratories, and Sandoz
Pharmaceuticals Corporation. Each of these sponsors has "category exclusivity"
for their product in their program. Accordingly, no other product in the same
category is permitted to be a WallBoard(R) sponsor in the relevant market
segment.

The Company's graphics team produces, as a complement to the WallBoards(R),
customer marketing publications or "take-one" booklets, mounted on or near the
WallBoard(R). These publications contain further information for the targeted
audience concerning the sponsor's products relevant to the targeted audiences'
needs. The Company believes that these booklets provide additional effective
avenues for sponsors' information to reach the target audience.

To enhance the editorial quality of its WallBoards(R), the Company has also
established alliances with associations that specialize in the targeted areas.
The Company enters into multiple-year contracts (typically for three years) with
these associations which in turn supply informational brochures, license the use
of their trademarked logos, or review the editorial information on the
WallBoard(R). For instance, the Your Kids WallBoard(R), which targets
dual-income parents of toddlers and pre-schoolers through approximately 12,000
child care centers with a "parent information center," provides editorial on
quality parenting issues such as teaching behavior and stimulating early
learning development. The Company has established an alliance with the National
Child Care Association, which is a member of its editorial advisory board, for
the Your Kids WallBoard(R) and provides an endorsement to the target audience
which the Company believes helps its sponsors to reach more customers and to
gain credibility with these customers. The Company typically renders a
compensating service to the associates, such as including membership information
to customers or paying a royalty or an agreed upon donation.

Each WallBoard(R) program, such as the Your Kids WallBoard(R), has multiple
sponsors, but only one sponsor is shown at a given location. To accomplish this,
the Company creates several different versions of wallboards for each program,
each with a different sponsor and different editorial information. These
wallboards are rotated quarterly to different locations in the program to
reflect different sponsor or editorial information, the number of which varies
from sponsor to sponsor depending on each sponsor's level of

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participation. The Company's two principal market networks for the WallBoard(R)
programs are family markets and medical markets.

In the family markets network, the Company has identified three different
audiences that it can target on behalf of its sponsors. The New Baby
WallBoard(R) and the Beginning Care WallBoard(R), which the Company has produced
since 1990, aim to reach expectant parents in hospital-based childbirth or
obstetrics training classrooms during a six-week class in the last trimester of
pregnancy and are currently located in approximately 430 locations. The
editorial material focuses on childbirth education, with tips on labor and
delivery. The Your Baby WallBoard(R), which the Company also produces in Spanish
as the Su Bebe WallBoard(R), targets new mothers and new fathers at the "point
of birth" in hospital maternity wards. The editorial includes information on new
baby care and development and features current immunization guidelines. These
three WallBoards(R) have seven sponsors, including Eastman Kodak Company and The
Prudential Insurance Company of America.

The Company also determined that medical markets would provide high-value
customers to many potential sponsors. The Company's medical market WallBoards(R)
target various patient audiences, such as diabetics and patients with heart
conditions. The Diabetes Health WallBoard(R), which has four sponsors, reaches
patients with diabetes in the waiting rooms of more than 600 endocrinologists
and diabetes educators. The Heart Health WallBoard(R), in an alliance with the
American Heart Association, reaches patients with cardiovascular disease in over
1,200 cardiologists' offices or cardiology rehabilitation centers. The editorial
material focuses on living with heart disease and includes tips on exercise and
diet.

Recently introduced medical markets WallBoards(R)include: the Arthritis
Health WallBoard(R) which will be located in approximately 700 rheumatologists'
and orthopedists' offices nationwide and, effective January 1, 1997, the Allergy
Health WallBoard(R) which will be located in allergists' and otolaryngologists'
offices, the Women's Wellness WallBoard(R) which will be located in obstetrics'
and gynecologists' offices and the Caring WallBoard(R) which will be located in
oncologists' offices and oncology treatment centers.

In developing WallBoard(R) products for other market segments, the Company
conducts research on under-served markets. For instance, the U.S. News & World
Report WallBoard(R) targets executives traveling through over 1,000 airports for
corporate and private aircraft. The editorial is compiled from U.S. News & World
Report and focuses on current business issues. The Company is also reaching out
to new immigrant markets with the Welcome/Bienvenido WallBoard(R) in over 300
locations to reach newcomers in their native languages, including Spanish,
Chinese, Vietnamese and Korean. The editorial information focuses on the
naturalization process and such issues as finding an English language course and
other educational opportunities.

The success of the Company's WallBoard(R) programs in reaching the target
markets is measured through research studies, currently conducted by The Gallup
Organization, Market Facts and Audits & Surveys, which help to assess product
awareness, editorial recall and increased sponsor awareness. In the WallBoard(R)
programs, these companies generally conduct face to face interviews with people
exiting from the WallBoard(R) location. The interviewer asks several questions
to elicit information regarding both the sponsors' products and the editorial
information which generate conclusions regarding the efficacy of the marketing
technique. These companies also use methods to determine the number of persons
who approach the WallBoard(R). The Company believes that there are numerous
untapped target markets in which WallBoards(R) could be used and believes there
are growth opportunities for the expansion of the program.

THE SAMPLING PROGRAMS. Following the start-up of its WallBoard(R)
programs, the Company established its sampling pack programs which are designed
to provide a targeted distribution of sponsors' product samples, coupons and
literature to potentially high-value customers. During 1995, the Company
distributed approximately 3.8 million sampling packs at approximately 20,000
locations. Participating locations sign a two- or three-year exclusive agreement
stating that the pack will be the only sampling pack program allowed at the
location during that time. As with the WallBoard(R) programs, the Company's
graphics team also produces customer marketing publications to be included in
the sampling packs. Each sampling pack contains an average of 12 product
samples, coupons or pieces of literature. Sponsors of the sampling packs
include, alphabetically, Bayer Corporation, Kellogg U.S.A., Inc., The Nutrasweet
Company/Equal and Reckitt & Colman Inc., among others. The Company has 37
sponsors for its six sampling packs. Each sponsor has

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<PAGE> 43

"category exclusivity" within the sampling pack, as with the WallBoard(R)
sponsors, such that there are no competing products in the pack.

Additionally, as with its WallBoard(R) programs, the Company is able to
leverage its alliances with leading associations in the various fields to
provide the sampling packs with market-specific quality oversight, association
logos and informational brochures. Certain of the Company's contracts with such
associations provide that they will not endorse another sampling pack during the
period of the contract without at least six months' notification to the Company.
For instance, the American Diabetes Association (the "ADA") has permitted the
Company to print the ADA logo on the outside of the Diabetes Pack(TM) and the
Arthritis Foundation has permitted the Company to print its logo on the
Arthritis Pack(TM).

The Company's sampling packs target several different audiences at a time
when those audiences are most likely to use the products included in the packs.
For instance, in 1995, the Company shipped more than two million Your Kids
Parents Pack(TM) for distribution to parents at 12,000 day care centers
nationwide. The products inside the pack include samples of cereal, soap, snack
foods, and cleaning products. The Company ships annually approximately 600,000
of each of the Heart Pack(TM), Arthritis Pack(TM) and the Diabetes Packs(TM) for
distribution to newly diagnosed patients at more than 6,500 doctors' offices and
other locations nationwide.

As part of its growth strategy, the Company intends to pursue acquisitions
that offer complementary services to those of the Company. In May 1996, the
Company acquired from RD Publications, Inc., an affiliate of Readers Digest
Association Incorporated, for $250,000 cash, a "new member" health club sampling
pack program through which it expects to distribute more than 735,000 health
club member kits, which include such products as deodorants, razors and
nutritional supplements, at approximately 1,000 health and fitness clubs during
the remainder of 1996. The Company believes that the demographic segment reached
through these packs is complementary to the other populations that it has
targeted. Several of the Company's current sponsors of other sampling pack
programs may provide product samples for the newly acquired health club program.
The Company anticipates that it will identify more markets into which the
sampling pack programs can be expanded successfully through acquisitions and
through its own research efforts.

To maintain an even flow in the sampling pack distribution during the
course of a year, the Company monitors the flow of persons in each of the
sampling pack locations in order to determine the times during which a type of
location, such as an endocrinologist's office, is likely to distribute more or
fewer sampling packs and adjusts the delivery of the number of sampling packs
during the year accordingly. For instance, the Heart Pack(TM), with an overall
annual distribution of 600,000, is currently distributed to its locations three
times during each year in increments of 200,000.

To monitor the effectiveness of its sampling pack programs, the Company
currently employs The Gallup Organization, as well as its own independent
auditor, to conduct quality control checks on the assembly of the products for
the sampling packs, the information in the sampling packs and the impact of the
sponsors' products on the recipients of the sampling packs. Telephone interviews
are conducted by The Gallup Organization to determine the product usage or
purchases among the recipients of the sampling packs. The Company also places
customer response cards in the sampling packs from which the Company is able to
follow up with those sampling pack recipients who respond and measure the impact
of the sampling packs on their product usage or purchase. Additionally, these
customer response cards permit the Company to compile a database of persons
receiving the sampling packs which the Company could then use in cross-selling
other products through the Business Markets and Consumer Markets divisions. See
"-- Consumer Markets" and "-- Business Markets."

WALLBOARD(R) AND SAMPLING PACK TRACKING SYSTEM. The Company searches for
ways to streamline its operations and communications within its infrastructure.
In Marketing Services, the Company strives to increase its efficiency in
tracking the WallBoard(R) and sampling pack programs. A database tracking system
keeps track of the numbers of WallBoards(R), the various locations,
installations, the scheduled rotation of the WallBoards(R), comments about the
locations and information about the WallBoards(R).

To administer the WallBoard(R) and sampling pack locations, the Company
uses approximately 500 field representatives, who are hired as independent
contractors, from temporary placement agencies or outsourced

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personnel companies to monitor WallBoard(R) locations. WallBoard(R) information
is changed by the Company's field sales representatives, generally quarterly, to
reflect different sponsors or editorial material. These representatives complete
a "call-report" on the site and transmit that report to the Bethesda
headquarters for processing. The Company has purchased an optical character
recognition system that automatically scans the "call reports" into the system,
eliminating human data entry, reducing human error and increasing the efficiency
in processing the field call reports. For its sampling programs, the Company
uses two outsourced distribution and fulfillment centers located on the Eastern
Shore of Maryland and in Los Angeles, California. For its WallBoard(R) programs,
the Company uses an outsourced distribution and fulfillment center located on
the Eastern Shore of Maryland, separate from the center used by its sampling
programs.

The Company is developing a postal distribution efficiency system, which
will evaluate the cost of shipping sampling packs from the two facilities on the
Eastern Shore of Maryland and in Los Angeles, California to the sampling packs'
various destinations. The new program will evaluate the various modes of
transport available and the destination to which the products are bound in order
to determine the least expensive rate for timely delivery. The Company
periodically evaluates the efficiency of its infrastructure and potential
additions to the existing infrastructure.

HIRING AND TRAINING

The Company believes a key component of its success is the quality of its
employees. Therefore, the Company seeks to refine its systematic approach to
hiring, training and managing qualified personnel for its sales force. The
Company recruits from within communities individuals who can help penetrate
specific target markets on behalf of the Company's clients. For example, the
Company recruits personnel who speak and write Spanish to market products and
services to Hispanic communities, and personnel who speak and write Cantonese or
Mandarin to market products and services to Chinese-Americans.

Hiring and training of field sales representatives is conducted separately
in the Consumer Markets and the Business Markets divisions. Each business line
determines its hiring needs and requests approval for those positions from the
Company's Human Resources department.

After an employee is hired, the field sales representative enters a period
of formal training, conducted both in a classroom and in the field to learn
appropriate selling techniques. The Company's initial training for its field
sales representatives takes from two to four weeks and includes classroom
settings during which the representatives receive training on the Company and
its operations, the competitive environment in which the Company's clients
operate, and the products and services the representatives will be marketing, as
well as field sales experience supervised by district managers or supervisors.
Field sales representatives frequently meet with supervisors or district
managers to discuss new services or promotions, and to obtain follow-up training
in sales techniques and skills. In addition, the field sales representatives
participate in periodic retraining programs. During the training period,
employees are paid a training salary to provide an opportunity for the employee
to acclimate to the sales environment before being paid on a commission basis.

In its teleservices operations, new teleservices associates attend a
multi-day formal training program, during which associates are provided
information on the Company and its operations, the competitive environment in
which the Company's clients operate, and the products and services the
associates will be marketing. In addition, these training programs make use of
simulated selling situations and other methods to teach the associates
appropriate sales techniques and skills. During the initial training period,
each teleservices associate also is teamed with either a supervisor or an
experienced sales associate who participates in actual telemarketing service
calls. The Company periodically provides its teleservices sales associates with
additional training, including frequent meetings to discuss any new products,
promotions and services and to sharpen selling skills, as well as through
periodic retraining programs. In addition, teleservices supervisors monitor
calls made by each teleservices associate and provide feedback on selling
techniques and skills. See "Risk Factors -- Dependence on Labor Force."

GOVERNMENT REGULATION

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past five years. The Federal Communications Commission's (the "FCC") rules under
the Federal Telephone Consumer Protection Act of 1991 limit the hours during
which telemarketers may call consumers and prohibit the use of automated
telephone dialing equipment to call certain telephone numbers. The Federal
Telemarketing and Consumer Fraud and Abuse Prevention Act of 1994 (the "TCFAPA")
broadly authorizes the Federal Trade Commission (the "FTC") to issue regulations
prohibiting misrepresentation in telephone sales.

In August 1995, the FTC issued regulations under the TCFAPA which, among
other things, require telemarketers to make certain disclosures when soliciting
sales. The Company believes its operating procedures comply with the telephone
solicitation rules of the FCC and FTC. However, there can be no assurance that
additional Federal or state legislation, or changes in regulatory
implementation, would not limit the activities of the Company or its clients in
the future or significantly increase the cost of regulatory compliance.

In addition, on June 21, 1996 MCI and the FCC entered into a consent decree
under which MCI agreed to institute third-party verification procedures for most
small-business customer marketing not currently covered by third-party
verification, including field sales marketing of small-business customers. The
Company provides field sales marketing services to small-business customers on
behalf of MCI, and became subject to third-party verification of switches
obtained by the Company's field sales force for MCI effective August 1, 1996.
The Company expects that the implementation of third-party verification will
increase the Company's costs to some extent, but does not expect that
implementation of third-party verification with respect to field sales for MCI
will have a material adverse effect on the Company's operations.

A number of states have enacted or are considering enacting legislation to
regulate telephone solicitations. For example, telephone sales in certain states
cannot be final unless a written contract is delivered to and signed by the
buyer and may be canceled within three business days.

The industries served by the Company are also subject to varying degrees of
government regulation. The Company has never been held responsible for
regulatory noncompliance by a client. See "Risk Factors -- Government
Regulation."

COMPETITION

The Company competes with providers of other forms of advertising and
marketing media, such as direct mail, television, radio and other advertising
media for the marketing expenditures of its clients and prospective clients. The
Company also competes with the internal marketing capabilities of clients and
prospective clients. The Company's largest clients, AT&T and MCI, have
significant internal teleservices and field sales marketing capabilities and
also contract for these services from competitors of the Company. Although the
Company believes that its clients and prospective clients find it advantageous
to outsource at least a portion of their marketing services, certain clients may
choose to conduct all or a more significant portion of their marketing efforts
internally.

The Company competes as well with a number of outsourced marketing services
firms. The industry for marketing services is very competitive and highly
fragmented. Many of the companies offer a limited number of services within a
limited geographic area. The Company believes that no one participant or small
number of participants is dominant in the industry, although there are several
participants in the industry whose business, like that of the Company, tends to
be national and offer a broad array of marketing services, such as Sitel
Corporation, APAC TeleServices, Inc. and CUC International, Inc. Management
believes that there are certain competitors which have the capabilities and
resources comparable to and in certain respects greater than those of the
Company.

Management believes that it competes primarily on the basis of demonstrated
ability to attract customers, reputation for quality, price, geographic presence
(in the case of field sales and the WallBoard(R) programs),

45
<PAGE> 46

technological expertise, and the ability to promptly provide clients with
customized solutions to their sales and marketing needs.

The Company believes that its competitive strengths are its targeted
marketing channels of distribution, its client relationships with major
companies and strategic alliances with consumer associations, and its existing
national infrastructure.

EMPLOYEES

As of June 30, 1996, the Company employed 1,196 full-time and 452 part-time
personnel. In addition, the Company retained approximately 500 independent
contractors who work with the Company on a part-time basis in its WallBoard(R)
Program. The following table shows the number of the Company's full-time and
part-time employees broken down by area of operation as of June 30, 1996:

<TABLE>
<CAPTION>
NUMBER OF NUMBER OF NUMBER OF
DISCIPLINE FULL-TIME EMPLOYEES PART-TIME EMPLOYEES TOTAL EMPLOYEES
----------------------------------- ------------------- ------------------- ---------------
<S> <C> <C> <C>
Teleservices....................... 42 445 487
Field Sales........................ 1,061 7 1,068
Marketing Services................. 53 -- 53
Executive & Administrative......... 40 -- 40
------ --- ------
Total......................... 1,196 452 1,648
====== === ======
</TABLE>

Of the total number of employees, approximately 600 are located in the
Company's Bethesda, Maryland facilities and the remainder of the employees are
located among the various field sales offices. None of the Company's employees
is subject to a collective bargaining agreement. The Company considers its
relations with its employees to be good.

FACILITIES

The Company's corporate headquarters are located in Bethesda, Maryland in
leased facilities consisting of approximately 29,600 square feet of office
space. The Company also leases additional space located in two office buildings
in Bethesda, Maryland, at which its three call centers are located, consisting
of 300 work stations located in 20,800 square feet of office space for the
Consumer Markets call center, and 26 work stations located in 2,100 square feet
of office space for the Business Markets call center. The term of the lease, as
amended, expires in June 1997 with respect to substantially all of the space,
with an option to renew for an additional five-year term. The Company is
currently negotiating new lease arrangements and, based on current market
conditions, believes that it will be able to re-lease its existing headquarters
office space upon substantially the same terms and conditions as the existing
lease. The Company currently anticipates that it will relocate its call centers
to a less-expensive location in Bethesda, Maryland and based on current market
conditions believes that it be able to secure a lease for comparable office
space at a slight cost savings to the Company.

The Company also leases the facilities for its field sales offices at June
30, 1996. The leases for the Company's sales offices generally have terms
ranging from a month-to-month basis to two years and generally have renewal
options.

The Company believes that its current facilities are adequate for its
current operations. The Company intends to open one or more field sales offices
and one call center in the United Kingdom in early 1997 to support continued
growth and expansion.

LEGAL PROCEEDINGS

From time to time, the Company is involved in litigation incident to its
business. In the opinion of the Company, no such litigation has had or is likely
to have a material adverse effect on the Company's results of operations,
financial condition or liquidity.

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<PAGE> 47

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The following table sets forth certain information regarding the executive
officers, directors and director nominees of the Company. Each of the executive
officers will perform for the Company duties corresponding to the duties
previously performed for the Partnership.

<TABLE>
<CAPTION>
NAME AGE POSITION
-------------------------------------- --- --------------------------------------
<S> <C> <C>
Daniel M. Snyder...................... 31 Chairman of the Board of Directors,
President and Chief Executive Officer
Michele D. Snyder..................... 34 Vice Chairman, Chief Operating
Officer, and Director
Brian Benhaim......................... 39 Senior Vice President of Corporate
Development and Director
Shaun P. Gilmore...................... 42 President -- Direct Sales
A. Clayton Perfall.................... 37 Chief Financial Officer and Director
Nominee
Mortimer B. Zuckerman................. 59 Director Nominee
Fred Drasner.......................... 53 Director Nominee
Stephen T. Baldacci................... 35 Senior Vice President of Business
Development
Noel Barnard.......................... 42 Senior Vice President of Business
Development
Terry Bateman......................... 40 Senior Vice President of Marketing
Mitchell N. Gershman.................. 38 Senior Vice President of Operations
Gary T. Griffin....................... 46 Senior Vice President of Sales
Susan L. Marentis..................... 39 Senior Vice President of Account
Management
David B. Pauken....................... 34 Chief Accounting Officer
Bruce T. Wagner....................... 46 Senior Vice President of Sales
Alfred G. Wise........................ 33 Senior Vice President of Operations
</TABLE>

Daniel M. Snyder, Chairman of the Board and a founder of the Company, has
served as the President and Chief Executive Officer of Snyder Communications and
its predecessors since the Company was founded in 1987.

Michele D. Snyder, a founder of the Company, has been with the Company
since its inception, and currently serves as the Vice Chairman, Chief Operating
Officer and a director of the Company. Ms. Snyder is responsible for the
day-to-day operations of the Company, including personnel, executive management,
contract negotiations and research and development of new programs.

Brian Benhaim, a director of the Company, has served as the Senior Vice
President of Corporate Development since May 1996. Previously, he served as Vice
President of Direct Sales of the Company. Prior to joining the Company in July
1993, he served from 1991 to 1993 as the President of Advanced Sensor
Technologies, Inc., a company he founded to develop new products for
safety-related weather instrumentation and early warning systems. From 1989 to
1991, he served as the Vice President of Marketing and Sales of Belfort
Instruments, a division of TransTechnology Corporation, where he was responsible
for the turnaround sales efforts of that corporation. From 1987 to 1989, Mr.
Benhaim was a management consultant with Bain & Company, a management consulting
firm, where he was responsible for strategic planning and acquisitions for
Fortune 500 clients.

Shaun P. Gilmore joined the Company in August 1996 as President -- Direct
Sales and is responsible for all aspects of the Consumer and Business Markets
including international expansion. Prior to joining the Company, Mr. Gilmore
spent 16 years at AT&T where from January 1, 1996 to August 1996, he was
President -- Northeast States with responsibility for AT&T's Consumer & Small
Business Markets in New York and New England. In addition, Mr. Gilmore
represented all of AT&T in matters of strategy and

47
<PAGE> 48

external communications for the region. From October 1993 to January 1, 1996,
Mr. Gilmore was Vice President -- Global Consumer Communications Services with
responsibility for all aspects of AT&T's Global Consumer Long Distance business.
From 1980 to 1993, Mr. Gilmore held a variety of positions in Marketing,
Finance, Operations, Field Sales, Personnel and Strategic Planning for AT&T's
Business Markets division.

A. Clayton Perfall became Chief Financial Officer of the Company as of
September 10, 1996 and has been nominated to serve as a director of the Company.
Prior to joining the Company, Mr. Perfall spent fifteen years with Arthur
Andersen LLP. During his tenure as a partner with Arthur Andersen LLP, Mr.
Perfall had a wide range of responsibilities within the Washington, D.C.,
Baltimore, Maryland and Richmond, Virginia marketplaces, including
responsibility for the firm's Structured Finance and Financial Products tax
practice and responsibility for its Business Valuation Services Group. Mr.
Perfall was a key participant in the development of Arthur Andersen's business
strategies, the hiring of its professional staff and the development and
marketing of its services.

Mortimer B. Zuckerman, who has been nominated to serve as a director of the
Company, has been the Chairman of Boston Properties Inc., a national real estate
development and management company, since 1970. He has been the Chairman of U.S.
News & World Report, L.P. and Editor-in-Chief of U.S. News & World Report since
1985, Chairman of Daily News, L.P. and Co-Publisher of the New York Daily News
since 1993, Chairman of The Atlantic Monthly Company since 1980 and Chairman of
the Board of Directors of Applied Graphics Technologies, Inc. since April 1996.

Fred Drasner, who has been nominated to serve as a director of the Company,
has been the Chief Executive Officer of Daily News, L.P. and Co-Publisher of the
New York Daily News since 1993, the President and Chief Executive Officer of
U.S. News & World Report, L.P. since 1985, the Chairman and Chief Executive
Officer of Applied Graphics Technologies, Inc. since April 1996, the Chief
Executive Officer of Applied Printing Technologies, L.P. since 1986, and the
Vice-Chairman and Chief Executive Officer of The Atlantic Monthly Company since
1986.

Stephen T. Baldacci has served as the Senior Vice President of Business
Development since December 1995. Previously, he was the Vice President of
Marketing of the Company from June 1992 to December 1995, where he was
responsible for oversight, development and sales of marketing programs for the
Company. Prior to joining the Company, he was the Sales Development Director for
Entertainment Weekly, a Time, Inc. publication, from November 1991 to June 1992,
where he was primarily responsible for the nationwide sales strategies for the
publication. From December 1990 to November 1991, Mr. Baldacci served as the
Market Development Manager for People Weekly, a Time, Inc. publication, where he
also oversaw the nationwide sales strategy.

Noel Barnard joined the Company in July 1996 as Senior Vice President,
Business Development -- Teleservices and is responsible for directing the
business development for teleservices within the Direct Sales Division. Prior to
joining the Company, from September 1993 to July 1996, Ms. Barnard served in
various capacities at AMR Corporation, parent to American Airlines, most
recently as Senior Vice President, Sales and Customer Service of the TeleService
Resources division where she was responsible for sales, marketing, customer
service and call center operations for telemarketing and reservation service
facilities. From January 1991 to September 1993, Ms. Noel served as Regional
Sales Manager of Software Spectrum, a software reseller. During the period from
1977 to January 1991, Ms. Noel worked in various positions with International
Business Machines Corporation including Manager of Services Marketing and
Programs, Marketing Manager, Program Manager, Account Manager and Sales
Representative.

Terry Bateman has served as the Senior Vice President of Marketing of the
Company since November 1995. Previously, he was the Vice President of Business
Development of the Company from July 1995 to November 1995 where he was
primarily responsible for developing new media programs and supervising
marketing personnel. Prior to joining the Company, he served as a Vice President
of Marketing for Times Mirror corporation from 1994 to July 1995, where he was
responsible for marketing the on-line medical service initiative of Times
Mirror, and was Executive Vice President of the Medical News Network of Whittle
Communications from June 1993 to 1994 where he was responsible for expanding the
Medical News Network into the managed care arena. From June 1991 to June 1993,
Mr. Bateman served as Executive Vice President

48
<PAGE> 49

of the Special Report Network of Whittle Communications where he oversaw the
sales effort of the network. From March 1989 to June 1991, he served as
President of Bateman & Associates, a marketing concern.

Gary T. Griffin joined the Company in July 1996 as Senior Vice President of
Sales in Direct Sales -- Consumer Markets and is responsible for directing the
operations of the Direct Sales Division. Prior to joining the Company, Mr.
Griffin spent 28 years at Electrolux Corporation, a direct seller of floor care
products, where from January 1991 to July 1996 he served as Senior Vice
President of Sales and Marketing, North America with overall responsibility for
directing sales and marketing in North America. From February 1989 to December
1990, Mr. Griffin served as Vice President, Western Sales Area and from May 1988
to January 1989 as Vice President, Southeast Sales Area. From 1968 to 1988, Mr.
Griffin held a variety of positions at Electrolux including Midwest Area Vice
President, Division Manager, Branch Manager and Sales Representative.

Mitchell N. Gershman joined the Company in April 1996 as a Senior Vice
President of Operations. Mr. Gershman is responsible for the field operations
within the Consumer Markets division and oversees the operation and
distributions of the Company's marketing services in that division. Prior to
joining the Company, from September 1993 to March 1996, Mr. Gershman served as a
Vice President of Sprint International, a division of Sprint Communications
Corporation, where he was responsible for expanding Sprint's efforts in the
residential and small business markets outside of the United States. From
February 1991 to August 1993, he served as Vice President of the Consumer
Marketing Division for Sprint where he was responsible for developing marketing
partnerships and outsourcing relationships, including field sales forces to
expand distribution. He also served in several capacities with MCI
Telecommunications Corporation from 1980 to 1986.

Susan L. Marentis has served as the Senior Vice President of Account
Management for the Company since March 1996. She previously was the Vice
President of Marketing of the Company from July 1993 to February 1996, where she
was responsible for the oversight and development of sales and marketing
programs. Prior to joining the Company, from October 1991 to June 1993, Ms.
Marentis was the Vice President of Sales for POP Radio at Actmedia Corporation
where she managed the POP Radio product sales, creating a network in
supermarkets, toy stores, and drug stores. From October 1990 to October 1991,
she served as Group Sales Manager for several of Actmedia's programs where she
was primarily responsible for developing new accounts.

David B. Pauken joined the Company in August 1996 as the Chief Accounting
Officer. Prior to joining the Company, from July 1984 to August 1996, Mr. Pauken
served in various capacities at Arthur Andersen LLP, most recently as a Senior
Manager in the Washington, D.C. office. At Arthur Andersen LLP, he was primarily
responsible for management of financial statement audits of publicly traded
companies, including Fortune 500 companies, as well as operational and financial
consulting to various entities.

Bruce T. Wagner joined the Company in April 1996 as a Senior Vice President
of Sales. Mr. Wagner is responsible for the field operations within the Business
Markets division, overseeing the operations of that division. Prior to joining
the Company, Mr. Wagner served as Senior Vice President of Sales and Marketing
for Oncor Communications, Inc. from 1994 to 1996, where he was responsible for
the sales of the alternate operator service division and oversaw the three
national sales divisions. From 1992 to 1993, he was the Vice President of Sales
for the Eastern Region with Oncor Communications, where he was responsible for
the region's sales of multiple product lines focused on the operator service
market. As Southeast Regional Sales Manager, from 1990 to 1991, Mr. Wagner
managed the long distance and operator service sales divisions for an eight
state region.

Alfred G. Wise has served as a Senior Vice President of Operations of the
Company since 1993. Mr. Wise joined the Company in 1989 as Vice President of
Field Operations, where he was responsible for all field operations activity.
Since 1993, Mr. Wise has been responsible for the field operations within the
Marketing Services division and oversees the operation and distributions for the
Wallboard(R) and sampling packs programs. Prior to joining the Company, from
July 1988 to June 1989, Mr. Wise worked at the New York Times Company Magazine
Group for publications such as Family Circle, Child and McCall's where he was
responsible for the development of circulation management programs and the
analysis of potential acquisitions.

49
<PAGE> 50

Directors of the Company are elected at the annual meeting of stockholders
and serve until their successors are duly elected and qualified, or until their
earlier resignation or removal. Executive officers are elected annually by the
Board of Directors and serve until their successors are duly elected and
qualified, or until their earlier resignation or removal. It is anticipated that
Messrs. Zuckerman, Drasner and Perfall will become directors of the Company
immediately following the completion of the Offerings. Ms. Michele D. Snyder is
Mr. Daniel M. Snyder's sister.

COMMITTEES OF THE BOARD

The Board has standing Audit and Compensation Committees. It is anticipated
that, immediately following the completion of the Offerings, two directors will
be elected who will be independent directors not affiliated with the Company
and, following the Offerings, will be appointed to serve on the Audit Committee
of the Board of Directors. The Audit Committee will make recommendations
concerning the engagement of independent public accountants, will review with
the independent public accountants the plans and results of the audit
engagement, will review the independence of the independent public accountants,
will consider the range of audit and non-audit fees and will review the adequacy
of the Company's internal controls. It is anticipated that, after the completion
of the Offerings, two outside, non-employee directors will be appointed to serve
on the Compensation Committee. The Compensation Committee is responsible for
establishing salaries, bonuses, and other compensation for the Company's
officers and administering the Company's stock option plans.

EXECUTIVE COMPENSATION

The following table summarizes the compensation paid by the Partnership to
the Company's Chief Executive Officer and to each of the other most highly
compensated executive officers of the Company (collectively, the "Named
Executive Officers") with respect to the year ended December 31, 1995. The
Partnership did not have any pension plan or a long-term incentive plan, did not
issue any restricted stock awards and did not grant any stock options during
1995.

<TABLE>
<CAPTION>
ANNUAL
COMPENSATION(a)
--------------------
SALARY BONUS
NAME AND PRINCIPAL POSITION ($) ($)
---------------------------------------------------------------- -------- --------
<S> <C> <C>
Daniel M. Snyder................................................ $301,784 $ --(b)
Chairman, President and Chief Executive Officer
Michele D. Snyder............................................... 99,043 304,050(c)
Vice Chairman and Chief Operating Officer
Stephen T. Baldacci............................................. 94,327 58,547(d)
Senior Vice President of Business Development
Susan L. Marentis............................................... 86,923 117,846(e)
Senior Vice President of Account Management
Alfred G. Wise.................................................. 83,548 --(f)
Senior Vice President of Operations
</TABLE>

- ---------------
(a) The above compensation table excludes an executive officer of the
Partnership who is no longer with the Partnership and who will not be an
executive officer of the Company.

(b) Excludes $2,871,078 paid in 1995 by SMS, the corporate general partner of
the Partnership, for services provided to SMS. Similar compensation will
not be paid following the Reorganization and the Offerings.

(c) Excludes $1,107,134 paid in 1995 by SMS, the corporate general partner of
the Partnership, for services provided to SMS. Similar compensation will
not be paid following the Reorganization and the Offerings.

(d) Excludes $19,155 paid in 1996, and $8,206 paid in 1995, by SMS, the
corporate general partner of the Partnership, for services provided.

(e) Excludes bonus of $50,000 paid in 1996 for the attainment of performance
criteria during the fourth quarter of 1995.

(f) Excludes $76,620 paid in 1996, and $34,145 paid in 1995, by SMS, the
corporate general partner of the Partnership, for services provided.

50
<PAGE> 51

EMPLOYMENT AGREEMENTS

The Company has entered into employment agreements with each of its Named
Executive Officers. The Company's employment agreements with each of Mr.
Baldacci, Ms. Marentis and Mr. Wise provide that the Company will employ each
such executive officer on an "at will" basis. The base salary for each such
executive officer for 1996 is: Mr. Baldacci -- $150,000, Ms.
Marentis -- $150,000 and Mr. Wise -- $100,000. The employment agreements between
the Company and Mr. Baldacci, Ms. Marentis and Mr. Wise also provide for
incentive bonuses based on attaining specific performance criteria. These
agreements also include a non-competition commitment during the term of the
agreement and for a period of 18 months after termination of the agreement and
contain confidentiality commitments, non-solicitation of employee provisions,
and assignment of work product agreements. In addition, the Company agreed to
grant to each such executive officer nonqualified stock options to acquire
Common Stock. See "-- Stock Option Plan."

The Company also has entered into employment agreements with Mr. Snyder and
Ms. Snyder, which are effective as of the effective time of the Offerings and
are for a term of three years, unless sooner terminated as provided in the
agreements. The agreements provide that the 1996 base salaries for Mr. Snyder
and for Ms. Snyder are $300,000 and $200,000 per year, respectively. The
agreements with Mr. Snyder and Ms. Snyder also provide for incentive bonuses
based on attaining performance criteria to be established by the Compensation
Committee or the Board of Directors, and include a non-competition commitment
during the term of the agreement, confidentiality commitments, non-solicitation
of employee provisions, and assignment of work product agreements.

The Company also has entered into employment agreements with each of its
other executive officers. These agreements generally include certain
non-competition agreements, confidentiality commitments, non-solicitation of
employee provisions and assignment of work product agreements.

STOCK OPTION PLAN

In September 1996, the Board of Directors of the Company adopted and the
stockholders of the Company approved the 1996 Stock Incentive Plan (the "Stock
Option Plan"). The Stock Option Plan, which terminates in 2006, on the tenth
anniversary of the effective date of the plan, is intended to promote the long-
term growth of the Company by rewarding its officers, key employees and
consultants with a proprietary interest in the Company for outstanding long-term
performance and to attract, motivate and retain capable management employees.
The Stock Option Plan is administered by the Compensation Committee of the
Board, which is required to be composed of at least two directors, or by the
Board of Directors of the Company if no Compensation Committee is appointed. The
Stock Option Plan authorizes the grant of incentive stock options (as defined in
Section 422 of the Internal Revenue Code of 1986, as amended), non-qualified
stock options, restricted stock awards and stock appreciation rights ("SARs"),
or any combination thereof, at the discretion of the Compensation Committee.
Subject to adjustment in certain circumstances, the aggregate number of shares
of Common Stock which may be issued under the Stock Option Plan upon exercise of
options, SARs or in the form of restricted stock may not exceed five million
shares.

The exercise price of options granted under the Stock Option Plan may not
be less than 100% (110% in the case of an optionee who is a 10% stockholder) of
the fair market value per share of Common Stock on the date of the option grant.
The vesting and other provisions of the options will be determined by the
Compensation Committee.

Options may not be exercised after ten years from the option grant date
(five years in the case of an incentive stock option granted to a 10%
stockholder). In the case of any incentive stock option, the option shall
terminate on the date that is three months (one year, in the event that the
termination of employment is by reason of death or disability) after the date on
which the optionee terminates employment or, if earlier, the date specified in
the agreement relating to the option grant.

Awards under the Stock Option Plan also may be made in the form of
restricted stock, at the discretion of the Compensation Committee. The
Compensation Committee has the authority to determine the terms and conditions
of any restricted stock awards.

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<PAGE> 52

SARs may be granted in conjunction with all or a part of an option granted
under the Stock Option Plan, either at the time of initial grant of the option
or a subsequent time prior to the expiration of the option, except that SARs may
not be granted in connection with a prior option without the consent of the
option holder. Upon the exercise of a SAR, the participant is entitled to the
difference between the fair market value of one share of Common Stock and the
option price per share in the related option, multiplied by the number of shares
in respect of which the SAR has been exercised. The Compensation Committee has
the discretion to determine the form in which the payment will be made, which
may be in cash, shares of Common Stock, or a combination thereof.

The Board of Directors of the Company has approved the grant of
nonqualified options to or for the benefit of certain officers, key employees
and consultants of the Company to purchase approximately 3.0 million shares of
Common Stock in the aggregate, and the Company anticipates that it will grant
options in the near future with respect to a significant portion of the shares
reserved for issuance under the Stock Option Plan. Of such options,
approximately 2.7 million were granted at an exercise price equal to the initial
public offering price (but not less than the fair market value on the date of
grant) and become exercisable at periods ranging from six months following the
date of grant to four years following the effective date of the Offerings. The
remaining options to purchase 300,000 shares of Common Stock were granted at an
exercise price equal to the initial public offering price (but not less than the
fair market value on the date of grant), and vested and became immediately
exercisable on the grant date.

LIMITATION OF LIABILITY AND INDEMNIFICATION

The Certificate of Incorporation of the Company provides that no director
shall be liable to the Company or its stockholders for monetary charges for a
breach of fiduciary duty to the fullest extent permissible under Delaware law.
The Company's Bylaws provide that the Company shall, to the fullest extent
permissible under Delaware law, indemnify its directors and officers against any
damages arising out of their actions as directors or officers of the Company.
The Company also intends to obtain officer and director liability insurance with
respect to liabilities arising out of certain matters, including matters arising
under the Securities Act of 1933, as amended.

At present, there is no pending litigation or proceeding involving any
director, officer, employee or agent of the Company with respect to which
indemnification would be required or permitted. The Company is not aware of any
threatened litigation or proceeding which may result in a claim for such
indemnification.

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<PAGE> 53

CERTAIN TRANSACTIONS

INVESTMENT IN THE PARTNERSHIP. On May 18, 1995, the Partnership Agreement
was amended to admit the 1995 Investors as limited partners. Concurrently with
the amendment, the Partnership entered into the Debenture and Partnership
Interest Purchase Agreement, and issued to the 1995 Investors the Debentures
(face amount $6.0 million). At that date, the 1995 Investors purchased an
aggregate 3% interest in the Partnership and, concurrently, the Original Limited
Partner purchased an additional 3.15% interest in the Partnership from SMS. A
portion of the proceeds from the issuance of the Debentures was distributed to
the Original Limited Partner to repay its capital contributions in the amount of
$297,773 and to repay a note to the Original Limited Partner in the amount of
$2,606,151. Another portion of the proceeds of such issuance was distributed to
SMS and to the Original Limited Partner in a special cash distribution in the
amount of $1,450,000 and $1,050,000, respectively. The remaining proceeds were
used for general corporate purposes.

RELATED PARTY LENDING. At December 31, 1995, the Company was owed $45,426
by certain stockholders of SMS. These loans were non-interest bearing and were
repaid in June 1996. During the three-year period ended December 31, 1995, the
largest aggregate amount of such indebtedness outstanding was $45,426.

During 1995, SMS advanced to Gerald S. Snyder $2,725,000, evidenced by a
non-interest-bearing loan secured by all of Gerald S. Snyder's stock in SMS. SMS
distributed the obligation, in-kind, to the stockholders of SMS, pro rata on
June 30, 1996.

SERVICES. The Company produces a WallBoard(R) sponsored by U.S. News &
World Report, a publication beneficially owned by Mortimer B. Zuckerman and Fred
Drasner, both of whom also own partnership interests of the Original Limited
Partner of the Partnership. The agreement between the Original Limited Partner
and the Company provides that the Original Limited Partner will provide the
Company with the use of editorial content from U.S. News & World Report, in
WallBoards(R) at airports for private aircraft nationwide, in exchange for U.S.
News & World Report being included as one of the sponsors in this program. The
arrangement is terminable by either party upon 30 days notice. This WallBoard(R)
program commenced in July 1995. Revenues earned by the Company from sponsors of
this WallBoard(R)program other than U.S. News & World Report were approximately
$850,000 during 1995 and $1,448,649 for the six months ended June 30, 1996.

RELATED PARTY LEASES. The Company leases its Bethesda, Maryland location
from Boston Properties, a company beneficially owned by Mortimer B. Zuckerman, a
director of the Company. The amounts paid to Boston Properties during 1993, 1994
and 1995 and through the six months ended June 30, 1996 were $223,666, $355,483,
$771,855 and $423,678, respectively. Such space is used as the corporate
headquarters as well as for two teleservices centers for the Business Markets
and Consumer Markets divisions. The Company believes that the terms of the lease
at the time the lease was entered into were no less favorable to the Company
than those that could be obtained from another lessor. See Note 10 to the
Combined Financial Statements.

53
<PAGE> 54

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth certain information known to the Company
regarding the beneficial ownership of shares of Common Stock immediately
following the Reorganization and certain related transactions, and as adjusted
to reflect the sale of the shares of Common Stock in the Offerings, assuming no
exercise of the over-allotment options, by (a) all persons who beneficially own
5% or more of the outstanding stock, (b) each of the Company's directors and
director nominees, (c) each of the Named Executive Officers and (d) all
directors, director nominees and executive officers as a group. If the
over-allotment options are exercised, it is currently expected that Daniel M.
Snyder, Michele D. Snyder, the limited partnership of which Mortimer B.
Zuckerman and Fred Drasner are the beneficial owners and each of the 1995
Investors will participate as Over-Allotment Selling Stockholders on a pro-rata
basis.

<TABLE>
<CAPTION>
NUMBER OF SHARES OF NUMBER OF SHARES OF
COMMON STOCK COMMON STOCK
BENEFICIALLY OWNED BENEFICIALLY OWNED
PRIOR TO THE AFTER THE
OFFERINGS(a) NUMBER OF OFFERINGS(a)
NAME OF --------------------- SHARES BEING ---------------------
BENEFICIAL OWNER NUMBER PERCENT OFFERED NUMBER PERCENT
- ------------------------------------------ ---------- ------- ------------ ---------- -------
<S> <C> <C> <C> <C> <C>
Daniel M. Snyder(b)....................... 10,721,237 36.39% -- 10,721,237 32.01%
Mortimer B. Zuckerman and
MBZ Trust of 1996(b)(c)(d).............. 6,835,822 23.21 -- 6,835,822 20.41
Michele D. Snyder(b)...................... 3,761,838 12.77 -- 3,761,838 11.23
Gerald S. Snyder(e)....................... 3,761,838 12.77 3,761,838 -- --
Fred Drasner(b)(c)(f)..................... 2,929,638 9.95 -- 2,929,638 8.75
All directors, director nominees and
executive officers as a group (16
persons)................................ 28,010,373 95.09% 24,248,535 72.40%
</TABLE>

- ---------------
(a) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. To the Company's knowledge, except as
set forth in the footnotes to this table and subject to applicable community
property laws, each person named in the table will have sole voting and
investment power with respect to the shares set forth opposite such person's
name. Unless otherwise specified in the footnotes to this table, the address
of each person set forth in the above table is Two Democracy Center, 6903
Rockledge Drive, 15th Floor, Bethesda, Maryland 20817.

(b) Assumes that the over-allotment options granted to the Underwriters by the
Over-Allotment Selling Stockholders are not exercised.

(c) The shares held by such persons are held in a limited partnership in which a
corporation is a 70% general partner and Fred Drasner is a 30% limited
partner. One third of the shares of such corporate general partner is owned
by Mortimer B. Zuckerman and two thirds of the shares of such corporation
are owned by the MBZ Trust of 1996 of which an outside person acts as the
trustee. The address of the trust is c/o Boston Properties, 8 Arlington
Street, Boston, MA 02116.

(d) Mr. Zuckerman's address is 599 Lexington Avenue, Suite 1300, New York, N.Y.
10022.

(e) Mr. Gerald S. Snyder has never been a senior executive officer of the
Company and retired at age 63 in August 1996.

(f) Mr. Drasner's address is 450 West 33rd Street, New York, N.Y. 10001.

54
<PAGE> 55

The following table sets forth certain information regarding the beneficial
ownership of shares of Common Stock by the 1995 Investors immediately following
the Reorganization, and as adjusted to reflect the sale of the shares of Common
Stock in the Offerings, assuming no exercise of the over-allotment options
granted to the Underwriters by each of the 1995 Investors.

<TABLE>
<CAPTION>
NUMBER OF SHARES OF
COMMON STOCK NUMBER OF SHARES OF
BENEFICIALLY OWNED COMMON STOCK
PRIOR TO THE BENEFICIALLY OWNED
OFFERINGS AFTER THE OFFERINGS
------------------- -------------------
NAME OF BENEFICIAL OWNER NUMBER PERCENT NUMBER PERCENT
- ------------------------------------------------------ ------- ------- ------- -------
<S> <C> <C> <C> <C>
Allen & Company Incorporated.......................... 261,443 0.88% 259,234 0.79%
Susan K. Allen........................................ 132,563 0.45 132,563 0.40
Susan Strauss Breen................................... 14,729 0.05 14,729 0.04
Barry Diller.......................................... 88,375 0.30 88,375 0.27
Paul Gould............................................ 128,881 0.44 129,617 0.38
HAGC Partners, L.P. .................................. 132,563 0.45 132,563 0.40
Dan Lufkin............................................ 44,188 0.15 44,188 0.13
Dan Lufkin, Trustee for the Robert Brendan Marston
1995 Trust.......................................... 36,823 0.13 38,296 0.11
Robert A. Strauss..................................... 14,729 0.05 14,729 0.04
Robert S. Strauss..................................... 14,729 0.05 14,729 0.04
Robert S. Strauss, Trustee for the Helen J. Strauss
Trust............................................... 14,729 0.05 14,729 0.04
------- ------- ------- -------
883,752 3.00% 883,752 2.64%
</TABLE>

The only other stockholder of the Company is Dr. Anthony O. Roberts who
owns 1.91% of the outstanding shares of Common Stock prior to the Offerings.

55
<PAGE> 56

DESCRIPTION OF CAPITAL STOCK

COMMON STOCK

The Certificate of Incorporation of the Company authorizes the issuance of
up to 120,000,000 shares of Common Stock, par value of $.001 per share. Upon
completion of the Offerings, there will be 33,496,562 shares of Common Stock
issued and outstanding. As of the date of this Prospectus, and after giving
effect to the Reorganization, there are 29,458,400 shares of Common Stock
outstanding. To date, there has been no public market for the Common Stock.

Holders of Common Stock ("Holders") are entitled to one vote per share for
each share held of record on all matters submitted to a vote of the
stockholders. Holders are entitled to receive ratably such dividends as may be
declared by the Board of Directors on the Common Stock out of funds legally
available therefor. The Holders have no preemptive rights, cumulative voting
rights, or rights to convert shares of Common Stock into any other securities,
and are not subject to future calls or assessments by the Company. All shares of
Common Stock of the Company issued in connection with the Offerings will be
fully paid and nonassessable.

PREFERRED STOCK

The Certificate of Incorporation authorizes the Board of Directors to issue
up to an aggregate of 5,000,000 shares of preferred stock (the "Preferred
Stock"), to establish one or more series of Preferred Stock and to determine,
with respect to each such series, the preferences, rights and other terms
thereof. Upon completion of the Offerings, no shares of Preferred Stock will be
outstanding and the Board of Directors has no present plans to issue any such
shares.

CERTAIN CHARTER PROVISIONS

Preferred Stock. The Certificate of Incorporation authorizes the Board of
Directors to establish one or more series of Preferred Stock and to determine,
with respect to any series of Preferred Stock, the preferences, rights and other
terms of such series. See "Description of Capital Stock -- Preferred Stock." The
Company believes that the ability of the Board of Directors to issue one or more
series of Preferred Stock will provide the Company with increased flexibility in
structuring possible future financings and acquisitions and in meeting other
corporate needs. The authorized shares of Preferred Stock, as well as shares of
Common Stock, would be available for issuance without further action by the
Company's stockholders, unless such action is required by applicable law or the
rules of any stock exchange or automated quotation system on which the Company's
securities may be listed or traded. Although the Board of Directors has no
present intention to do so, it could, in the future, issue a series of Preferred
Stock which, due to its terms, could impede a merger, tender offer or other
transaction that some, or a majority, of the Company's stockholders might
believe to be in their best interests.

Section 203 of the Delaware General Corporation Law. The Company is
subject to the provisions of Section 203 of the General Corporation Law of the
State of Delaware (the "Antitakeover Law") regulating corporate takeovers. The
Antitakeover Law prevents certain Delaware corporations, including those whose
securities are listed on the New York Stock Exchange, from engaging, under
certain circumstances, in a "business combination" (which includes a merger or
sale of more than 10% of the corporation's assets) with any "interested
stockholder" (a stockholder who acquired 15% or more of the corporation's
outstanding voting stock without the prior approval of the corporation's Board
of Directors) for three years following the date that such stockholder became an
"interested stockholder." A Delaware corporation may "opt out" of the
Antitakeover Law with an express provision in its original certificate of
incorporation, or an express provision in its certificate of incorporation or
bylaws resulting from a stockholders' amendment approved by at least a majority
of the outstanding voting shares. The Company has not "opted out" of the
application of the Antitakeover Law.

Certain Other Provisions. The Company's Certificate of Incorporation does
not provide for cumulative voting in the election of directors. The Company's
Bylaws provide that stockholders holding, in the aggregate, not less than
twenty-five percent of the Common Stock are permitted to call a special meeting
of the stockholders.

56
<PAGE> 57

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Stock is American Stock
Transfer & Trust Company.

LISTING

The Common Stock has been approved for listing on the New York Stock
Exchange, subject to notice of issuance, under the trading symbol "SNC."

57
<PAGE> 58

SHARES ELIGIBLE FOR FUTURE SALE

GENERAL

Upon completion of the Offerings, there will be 33,496,562 outstanding
shares of Common Stock. Of the outstanding shares, all of the 7,800,000 shares
sold in the Offerings (8,970,000 if the Underwriters' over-allotment options are
exercised in full) will be eligible for sale in the public market without
restriction under the Securities Act, except that any shares purchased by an
"affiliate" of the Company (as that term is defined in Rule 144 adopted under
the Securities Act) will be subject to the resale limitations of Rule 144. The
remaining 25,696,562 issued and outstanding shares of Common Stock were issued
by the Company in reliance on an exemption from the registration provisions of
the Securities Act. These shares of Common Stock are "restricted securities"
within the meaning of Rule 144 and may not be sold other than pursuant to an
effective registration statement under the Securities Act or pursuant to an
exemption from such registration requirement.

In general, Rule 144 provides that any person (or persons whose shares are
aggregated) to whom Rule 144 is applicable, including an affiliate, who has
beneficially owned shares for at least a two-year period (as computed under Rule
144) is entitled to sell within any three-month period the number of shares that
does not exceed the greater of (i) 1% of the then outstanding shares of the
Common Stock (approximately 334,966 shares after giving effect to the Offerings)
and (ii) the reported average weekly trading volume of the then outstanding
shares of Common Stock during the four calendar weeks immediately preceding the
date on which the notice of sale is filed with the Securities and Exchange
Commission. Sales under Rule 144 also are subject to certain provisions relating
to the manner and notice of sale and the availability of current public
information about the Company. A person (or persons whose shares are aggregated)
who is not deemed an affiliate of the Company at any time during the 90 days
immediately preceding a sale, and who has beneficially owned shares for at least
a three-year period (as computed under Rule 144), would be entitled to sell such
shares under Rule 144(k) without regard to the volume limitation and other
conditions described above. All of the current stockholders other than the 1995
Investors, who in the aggregate will own 24,812,810 shares upon completion of
the Offerings, will satisfy the two-year holding period under Rule 144 and will
be eligible to sell shares in accordance with the Rule 144 limitations. The 1995
Investors, who in the aggregate will own 883,752 shares upon completion of the
Offerings will satisfy the two-year holding period as of May 18, 1997.

All current stockholders have agreed, subject to exceptions for certain
pledges and, in the case of the Company, the grant of employee stock options,
not to, directly or indirectly, sell, offer to sell, grant any option for the
sale of or otherwise dispose of any capital stock of the Company or any security
convertible or exchangeable into, or exercisable for, such capital stock or, in
the case of the Company, file any registration statement with respect to any of
the foregoing (other than a registration statement on Form S-8 to register
shares issuable upon exercise of employee stock options or a registration
statement on Form S-4 to register shares issuable in connection with an
acquisition), for a period of 180 days after the date of this Prospectus (the
"Lock-Up Period") without the prior written consent of Merrill Lynch & Co. Upon
expiration of the Lock-Up Period, the shares held by such persons will be
eligible for sale in the public market, subject to the conditions and
restrictions of Rule 144, as described above.

Prior to the date of this Prospectus, there has been no public market for
the Common Stock. Trading of the Common Stock is expected to commence following
the completion of the Offerings. No prediction can be made as to the effect, if
any, that future sales of shares, or the availability of shares for future sale,
will have on the market price prevailing from time to time. Sales of substantial
amounts of Common Stock, or the perception that such sales could occur, could
adversely affect prevailing market prices of the Common Stock and the Company's
ability to raise capital in the future through the sale of additional
securities.

REGISTRATION RIGHTS

The Company has granted to Mr. Daniel M. Snyder and the 1995 Investors, as
a group, certain "demand" and "piggyback" registration rights and to Ms. Snyder
and the Original Limited Partner certain "piggyback" registration rights
(collectively, the "Registration Rights") in connection with the shares of

58
<PAGE> 59

Common Stock that will be held by each of them at the conclusion of the
Offerings (the "Registrable Shares"). See "Principal and Selling Stockholders."
Subject to certain conditions and limitations, the Registration Rights grant to
Mr. Snyder and his assignees and the 1995 Investors as a group the opportunity
to register all or any portion of their Registrable Shares and grant to all of
the stockholders named above the right to have their Registrable Shares
registered in connection with any registration by the Company of shares of
Common Stock or other securities substantially similar to the Common Stock. The
1995 Investors, as a group, may exercise their demand registration rights only
once, and Mr. Snyder may exercise his demand registration rights no more than
five times in total. The Registration Rights will be transferable in connection
with any private sale of Registrable Shares. The Company will bear all expenses
incident to its registration obligations upon exercise of the Registration
Rights, except that it will not bear any underwriting discounts or commissions,
Federal or state securities registration fees or transfer taxes relating to
registration of the Registrable Shares.

59
<PAGE> 60

CERTAIN UNITED STATES FEDERAL TAX CONSEQUENCES
TO NON-UNITED STATES HOLDERS

The following is a general discussion of certain U.S. Federal income and
estate tax consequences of the ownership and disposition of Common Stock
applicable to Non-U.S. Holders. In general, a "Non-U.S. Holder" is any holder
other than (i) a citizen or resident of the United States, (ii) a corporation or
partnership created or organized in the United States or under the laws of the
United States or of any state, or (iii) an estate or trust, the income of which
is includable in gross income for U.S. Federal income tax purposes regardless of
its source. This discussion is based on current law and is for general
information only. This discussion does not address aspects of U.S. Federal
taxation other than income and estate taxation and does not address all aspects
of income and estate taxation, nor does it consider any specific facts or
circumstances that may apply to a particular Non-U.S. Holder. ACCORDINGLY,
PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR TAX ADVISERS REGARDING THE U.S.
FEDERAL, STATE, LOCAL AND NON-UNITED STATES INCOME AND OTHER TAX CONSEQUENCES OF
HOLDING AND DISPOSING OF SHARES OF COMMON STOCK.

EFFECTIVELY CONNECTED INCOME

In general, if the income earned by a Non-U.S. Holder with respect to the
Common Stock (i.e., dividends payable with respect to the stock or gains from
the disposition of such stock) is effectively connected with a trade or business
carried on by the Non-U.S. Holder within the United States, such income will be
subject to U.S. Federal income tax on a "net income" basis in the same manner as
if the Non-U.S. Holder were a resident of the United States. If certain tax
treaties apply, taxation on a net income basis applies only if the income is
attributable to a U.S. permanent establishment of the Non-U.S. Holder. A
Non-U.S. Holder who is taxable on a net income basis with respect to dividend
income can avoid having U.S. tax withheld on the dividend payment by filing
certain forms, including Internal Revenue Service Form 4224.

In addition to the regular U.S. Federal income tax on the Non-U.S. Holder's
U.S. net income, a Non-U.S. Holder that is a corporation may be subject to the
U.S. branch profits tax at a rate of 30% (or such lower rate as may be specified
by an applicable treaty) on the repatriation from the United States of its
"effectively connected earnings and profits attributable to its income that is
effectively connected with a U.S. trade or business," subject to certain
adjustments.

The remainder of this section discusses the U.S. Federal income tax
consequences of income earned with respect to the Common Stock held by a
Non-U.S. Holder assuming that such income is not effectively connected with the
conduct of a U.S. trade or business (or, where an applicable tax treaty so
provides, not attributable to a U.S. permanent establishment).

DIVIDENDS NOT EFFECTIVELY CONNECTED

In general, dividends paid on the Common Stock to a Non-U.S. Holder will be
subject to United States withholding tax at a 30% rate, or a lower rate
prescribed by an applicable tax treaty. To determine the applicability of a tax
treaty providing for a lower rate of withholding, dividends paid to an address
in a foreign country are presumed to be paid to a resident of that country
absent knowledge to the contrary. Proposed Treasury regulations that have not
been finally adopted, (the "1996 Proposed Regulations"), however, would require
Non-U.S. Holders to file certain forms to obtain the benefit of any applicable
tax treaty providing for a lower rate of withholding tax on dividends. Such
forms would contain the Non-U.S. Holders' name and address and certain other
information. The 1996 Proposed Regulations would generally apply to dividends
paid on Common Stock after December 31, 1997. A Non-U.S. Holder that is eligible
for a reduced rate of U.S. withholding tax pursuant to a tax treaty may obtain a
refund of any excess amounts withheld by filing an appropriate claim for refund
with the Internal Revenue Service.

SALE OF COMMON STOCK NOT EFFECTIVELY CONNECTED

In general, a Non-U.S. Holder will not be subject to United States Federal
income tax on any gain realized upon the disposition of such holder's shares of
Common Stock unless (i) in the case of a Non-

60
<PAGE> 61

U.S. Holder who is an individual and holds shares of Common Stock as a capital
asset and is present in the United States for 183 days or more in the taxable
year of disposition (subject to certain other conditions and limitations), (ii)
the Non-U.S. Holder is subject to tax pursuant to the provisions of United
States tax law applicable to certain United States expatriates whose loss of
United States citizenship had as one of its principal purposes the avoidance of
United States taxes; or (iii) the Company is or has been a United States real
property holding corporation (a "USRPHC") for United States federal income tax
purposes at any time within the shorter of the five year period preceding such
disposition or such Non-U.S. Holder's holding period. The Company believes that
it is not, it has not been, and it is not likely to become, a USRPHC. If the
Company were or were to become a USRPHC, gains realized upon a disposition of
Common Stock by a Non-U.S. Holder which did not directly or indirectly own more
than 5% of the Common Stock during the shorter of the periods described above,
generally would not be subject to United States Federal income tax, provided
that the Common Stock is "regularly traded" on an established securities market.
If the Company Common Stock is listed on the New York Stock Exchange, the
Company believes that the Common Stock will be "regularly traded" on an
established market.

ESTATE TAX

Common Stock owned or treated as owned by an individual who is not a
citizen or resident (as defined for United States Federal estate tax purposes)
of the United States at the time of death will be includable in the individual's
gross estate for United States Federal estate tax purposes (unless an applicable
estate tax treaty provides otherwise), and therefore may be subject to United
States Federal estate tax.

BACKUP WITHHOLDING, INFORMATION REPORTING AND OTHER REPORTING REQUIREMENTS

The Company must report annually to the Internal Revenue Service and to
each Non-U.S. Holder the amount of dividends paid to and the tax withheld with
respect to each Non-U.S. Holder. These reporting requirements apply regardless
of whether withholding was reduced or eliminated by an applicable tax treaty.
Copies of this information also may be made available under the provisions of a
specific treaty or agreement with the tax authorities in the country in which
the Non-U.S. Holder resides or is established.

Under current Treasury Regulations, generally, dividends paid on Common
Stock to a Non-U.S. Holder at an address outside the United States will be
exempt from U.S. Federal backup withholding tax and U.S. information reporting
requirements (other than the reporting of dividend payments described above).
Under the 1996 Proposed Regulations, generally, dividends paid on Common Stock
will be exempt from such backup withholding and information reporting
requirements only if the Non-U.S. Holder provides certain certifications.

The payment of proceeds from the disposition of Common Stock by a Non-U.S.
Holder to or through a United States office of a broker will be subject to
information reporting and backup withholding unless such Non-U.S. Holder, under
penalties of perjury, certifies, among other things, its status as a Non-U.S.
Holder or otherwise establishes an exemption. The payment of proceeds from the
disposition of Common Stock to or through a non-U.S. office of a non-U.S. broker
generally will not be subject to backup withholding and information reporting,
except as noted below. In the case of proceeds from a disposition of Common
Stock paid to or through a non-United States office of a broker that is (i) a
United States person, (ii) a "controlled foreign corporation" for United States
federal income tax purposes or (iii) a foreign person 50% or more of whose gross
income from certain periods is effectively connected with a United States trade
or business, (a) backup withholding will not apply unless such broker has actual
knowledge that the owner is not a Non-U.S. Holder, and (b) information reporting
will apply unless the broker has documentary evidence in its files that the
owner is a Non-U.S. Holder (and the broker has no actual knowledge to the
contrary).

Backup withholding is not an additional tax. Any amounts withheld under the
backup withholding rules from a payment to a Non-U.S. Holder will be refunded or
credited against the Non-U.S. Holder's United States Federal income tax
liability, if any, provided that the required information is furnished to the
Internal Revenue Service.

61
<PAGE> 62

UNDERWRITING

Subject to the terms and conditions set forth in the U.S. purchase
agreement (the "U.S. Purchase Agreement") among the Company, SMS, the
Partnership, the Selling Stockholders and each of the underwriters named below
(the "U.S. Underwriters"), and concurrently with the sale of 1,560,000 shares of
Common Stock to the International Managers (as defined below), the Company and
the Selling Stockholder have agreed to sell to the U.S. Underwriters, and each
of the U.S. Underwriters severally has agreed to purchase from the Company and
the Selling Stockholder, the number of shares of Common Stock set forth opposite
its name below at the initial public offering price less the underwriting
discount set forth on the cover page of this Prospectus.

<TABLE>
<CAPTION>
NUMBER OF
U.S. UNDERWRITERS SHARES
-------------------------------------------------------------------------- ----------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated................................................. 972,500
Donaldson, Lufkin & Jenrette Securities Corporation....................... 972,500
Allen & Company Incorporated.............................................. 972,500
Montgomery Securities..................................................... 972,500
Bear, Stearns & Co. Inc. ................................................. 100,000
Alex. Brown & Sons Incorporated........................................... 100,000
CS First Boston Corporation............................................... 100,000
Dean Witter Reynolds Inc. ................................................ 100,000
Goldman, Sachs & Co. ..................................................... 100,000
Hambrecht & Quist LLC..................................................... 100,000
Lehman Brothers Inc. ..................................................... 100,000
Morgan Stanley & Co. Incorporated......................................... 100,000
Oppenheimer & Co., Inc. .................................................. 100,000
Robertson, Stephens & Company LLC......................................... 100,000
Salomon Brothers Inc...................................................... 100,000
Smith Barney Inc. ........................................................ 100,000
Wasserstein Perella Securities, Inc. ..................................... 100,000
Robert W. Baird & Co. Incorporated........................................ 50,000
William Blair & Company, L.L.C. .......................................... 50,000
J.C. Bradford & Co. ...................................................... 50,000
The Chicago Corporation................................................... 50,000
Cleary Gull Reiland & McDevitt Inc. ...................................... 50,000
Cowen & Company........................................................... 50,000
Dominick & Dominick, Incorporated......................................... 50,000
Equitable Securities Corporation.......................................... 50,000
Furman Selz LLC........................................................... 50,000
Gerard Klauer Mattison & Co. LLC.......................................... 50,000
Janney Montgomery Scott Inc. ............................................. 50,000
Jefferies & Company, Inc. ................................................ 50,000
Legg Mason Wood Walker, Incorporated...................................... 50,000
Mesirow Financial, Inc. .................................................. 50,000
Needham & Company, Inc. .................................................. 50,000
Ormes Capital Markets, Inc. .............................................. 50,000
Rauscher Pierce Refsnes, Inc. ............................................ 50,000
The Robinson-Humphrey Company, Inc. ...................................... 50,000
Unterberg Harris.......................................................... 50,000
Utendahl Capital Partners, L.P. .......................................... 50,000
Wheat, First Securities, Inc. ............................................ 50,000
----------
Total........................................................ 6,240,000
==========
</TABLE>

62
<PAGE> 63

Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"),
Donaldson, Lufkin & Jenrette Securities Corporation, Allen & Company
Incorporated and Montgomery Securities are acting as representatives (the "U.S.
Representatives") of the U.S. Underwriters.

The Company, SMS, the Partnership and the Selling Stockholders have also
entered into the international purchase agreement (the "International Purchase
Agreement") with certain underwriters outside the United States and Canada (the
"International Managers" and, together with the U.S. Underwriters, the
"Underwriters") for whom Merrill Lynch International, Donaldson, Lufkin &
Jenrette Securities Corporation, Allen & Company Incorporated and Montgomery
Securities are acting as representatives (the "International Representatives"
and, together with the U.S. Representatives, the "Representatives"). Subject to
the terms and conditions set forth in the International Purchase Agreement, and
concurrently with the sale of 6,240,000 shares of Common Stock to the U.S.
Underwriters pursuant to the U.S. Purchase Agreement, the Company and the
Selling Stockholder have agreed to sell to the International Managers, and the
International Managers severally have agreed to purchase from the Company and
the Selling Stockholder, an aggregate of 1,560,000 shares of Common Stock. The
initial public offering price per share and the total underwriting discount per
share of Common Stock are identical under the U.S. Purchase Agreement and the
International Purchase Agreement.

In the U.S. Purchase Agreement and the International Purchase Agreement,
the several U.S. Underwriters and the several International Managers,
respectively, have agreed, subject to the terms and conditions set forth
therein, to purchase all of the shares of Common Stock being sold pursuant to
each such agreement if any of the shares of Common Stock being sold pursuant to
each such agreement are purchased. Under certain circumstances, the commitments
of non-defaulting U.S. Underwriters or International Managers, as the case may
be, may be increased. The closings with respect to the sale of shares of Common
Stock to be purchased by the U.S. Underwriters and the International Managers
are conditioned upon one another.

The U.S. Underwriters and the International Managers have entered into an
intersyndicate agreement (the "Intersyndicate Agreement") that provides for the
coordination of their activities. Pursuant to the Intersyndicate Agreement, the
U.S. Underwriters and the International Managers are permitted to sell shares of
Common Stock to each other for purposes of resale at the initial public offering
price, less an amount not greater than the selling concession. Under the terms
of the Intersyndicate Agreement, the U.S. Underwriters and any dealer to whom
they sell shares of Common Stock will not offer to sell or sell shares of Common
Stock to persons who are non-United States or non-Canadian persons or to persons
they believe intend to resell to persons who are non-United States or
non-Canadian persons, and the International Managers and any dealer to whom they
sell shares of Common Stock will not offer to sell or sell shares of Common
Stock to persons who are United States or Canadian persons or to persons they
believe intend to resell to persons who are United States or Canadian persons,
except in each case for transactions pursuant to the Intersyndicate Agreement.

The U.S. Representatives have advised the Company and the Selling
Stockholder that the U.S. Underwriters propose initially to offer the shares of
Common Stock offered hereby to the public at the initial public offering price
set forth on the cover page of this Prospectus, and to certain dealers at such
price less a concession not in excess of $.65 per share of Common Stock. The
U.S. Underwriters may allow, and such dealers may reallow, a discount not in
excess of $.10 per share of Common Stock on sales to certain other dealers.
After the initial public offering, the public offering price, concession and
discount may be changed.

The Over-Allotment Selling Stockholders have granted an option to the U.S.
Underwriters, exercisable during the 30-day period after the date of this
Prospectus, to purchase up to an aggregate of 936,000 additional shares of
Common Stock at the initial public offering price set forth on the cover page of
this Prospectus, less the underwriting discount. The U.S. Underwriters may
exercise this option only to cover over-allotments, if any, made on the sale of
the Common Stock offered hereby. To the extent that the U.S. Underwriters
exercise this option, each U.S. Underwriter will be obligated, subject to
certain conditions, to purchase a number of additional shares of Common Stock
proportionate to such U.S. Underwriter's initial amount reflected in the
foregoing table. The Over-Allotment Selling Stockholders also have granted an
option to the International Managers, exercisable during the 30-day period after
the date of this Prospectus, to purchase up to an

63
<PAGE> 64

aggregate of 234,000 additional shares of Common Stock to cover over-allotments,
if any, on terms similar to those granted to the U.S. Underwriters.

At the request of the Company, the U.S. Underwriters have reserved up to
468,000 shares of Common Stock for sale at the initial public offering price to
certain employees of the Company and other persons. The number of shares of
Common Stock available for sale to the general public will be reduced to the
extent such persons purchase such reserved shares. Any reserved shares not so
purchased will be offered by the U.S. Underwriters to the general public on the
same basis as the other shares offered hereby. Certain individuals purchasing
reserved shares may be required to agree not to sell, offer or otherwise dispose
of any shares of Common Stock for a period of three months after the date of
this Prospectus.

The Company, the Selling Stockholders and the Company's other existing
stockholders have agreed, subject to exceptions for certain pledges and, in the
case of the Company, the grant of employee stock options, not to, directly or
indirectly, sell, offer to sell, grant any option for the sale of, or otherwise
dispose of, any capital stock of the Company or any security convertible or
exchangeable into, or exercisable for, such capital stock, or, in the case of
the Company, file any registration statement with respect to the foregoing
(other than a registration statement on Form S-8 to register shares issuable
upon exercise of employee stock options or a registration statement on Form S-4
to register shares issuable in connection with an acquisition), for a period of
180 days after the date of this Prospectus, without the prior written consent of
Merrill Lynch. See "Shares Eligible for Future Sale."

Prior to the Offerings, there has been no public market for the Common
Stock. The initial public offering price has been determined by negotiations
among the Company, the Selling Stockholder and the Representatives. Among the
factors considered in determining the initial public offering price, were an
assessment of the Company's recent results of operations, the future prospects
of the Company and the industry in general, the price-earnings ratios and market
prices of securities of other companies engaged in activities similar to the
Company, prevailing conditions in the securities market and other factors deemed
relevant. There can be no assurance that an active trading market will develop
for the Common Stock or that the Common Stock will trade in the public market
subsequent to the Offerings at or above the initial public offering price.

The Common Stock has been approved for listing on the New York Stock
Exchange, subject to notice of issuance, under the symbol "SNC." In order to
meet the requirements for listing of the Common Stock on that exchange, the U.S.
Underwriters have undertaken to sell lots of 100 or more shares to a minimum of
2,000 beneficial owners.

The Underwriters do not intend to confirm sales of shares of Common Stock
offered hereby to any accounts over which they exercise discretionary authority.

The Company, SMS, the Partnership and the Selling Stockholders have agreed
to indemnify the U.S. Underwriters and the International Managers against
certain liabilities, including liabilities under the Securities Act, or to
contribute to payments made in respect thereof.

More than 10% in aggregate principal amount of the Debentures, which
constitute all of the outstanding subordinated debt of the Company, is owned by
Allen & Company Incorporated and certain officers and related persons thereof.
See "The Company" and "Certain Transactions." Consequently, the Offerings are
being made pursuant to the provisions of Section 2720 of the Conduct Rules of
the National Association of Securities Dealers, Inc. Pursuant to such
provisions, the public offering price of an equity security can be no higher
than the price recommended by a "qualified independent underwriter" meeting
certain standards. In accordance with this requirement, Merrill Lynch will serve
in such role, and the price of the Common Stock will be no higher than that
recommended by Merrill Lynch in its capacity as the qualified independent
underwriter. In such capacity and in its capacity as one of the Underwriters,
Merrill Lynch has participated in the preparation of the Registration Statement
of which this Prospectus is a part and has performed due diligence with respect
thereto. The Company, SMS, the Partnership and the Selling Stockholders have
agreed to indemnify Merrill Lynch, in its capacity as the qualified independent
underwriter, against certain liabilities, including liabilities under the
Securities Act.

64
<PAGE> 65

Allen & Company Incorporated, together with certain officers and related
persons thereof, own 2.37% of the shares of Common Stock prior to the Offerings.
See "The Company," "Principal and Selling Stockholders" and "Certain
Transactions." In addition, a portion of the proceeds of the Offerings is
expected to be used to repay amounts owed under the Debentures to such
investors. See "Use of Proceeds."

Merrill Lynch has provided certain financial advisory services to the
Company for which it will receive customary fees.

LEGAL MATTERS

The validity of the Common Stock offered hereby will be passed upon for the
Company by Shaw, Pittman, Potts & Trowbridge, Washington, D.C., a partnership
including professional corporations. Debevoise & Plimpton, New York, New York,
has acted as counsel for the Underwriters with respect to certain legal matters
in connection with the Offerings.

EXPERTS

The Combined Financial Statements of Snyder Communications (as defined in
Note 1 to the Combined Financial Statements) as of December 31, 1994 and 1995
and for each of the three years in the period ended December 31, 1995 included
in this Prospectus have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report with respect thereto, and are included
herein in reliance upon the authority of said firm as experts in giving said
reports.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission"), Washington, D.C., a Registration Statement on Form S-1 (together
with all amendments, schedules and exhibits thereto, the "Registration
Statement") under the Securities Act with respect to the shares of Common Stock
offered hereby. This Prospectus, which constitutes a part of the Registration
Statement, does not contain all of the information set forth in the Registration
Statement, certain items of which are omitted in accordance with the rules and
regulations of the Commission. For further information with respect to the
Company and the Common Stock, reference is made to the Registration Statement,
which may be inspected, without charge, at the public reference facilities
maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549; Seven World Trade Center, 13th Floor, New York, New York
10048; and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies
of such materials may be obtained from the public reference section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
The Registration Statement is also publicly available through the Commission's
web site located at http://www.sec.gov.

The Company intends to furnish its stockholders with annual reports
containing audited financial statements certified by its independent auditors
and quarterly reports containing unaudited financial information for the first
three quarters of each fiscal year.

65
<PAGE> 66

[This page intentionally left blank]
<PAGE> 67

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<S> <C>
Report of Independent Public Accountants...................................... F-2
Combined Balance Sheets as of December 31, 1994 and 1995, and June 30, 1996
(unaudited) and Pro Forma as of June 30, 1996 (unaudited).................... F-3
Combined Statements of Income, including pro forma data for the years ending
December 31, 1993, 1994 and 1995 and the six months ended June 30, 1995
(unaudited) and 1996 (unaudited)............................................. F-4
Combined Statements of Equity for the years ending December 31, 1993, 1994,
1995 and June 30, 1996 (unaudited)........................................... F-5
Combined Statements of Cash Flows for the years ending December 31, 1993, 1994
and 1995 and the six months ended June 30, 1995 and 1996 (unaudited)......... F-6
Notes to Combined Financial Statements........................................ F-7
</TABLE>

F-1
<PAGE> 68

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Snyder Marketing Services, Inc. and
Snyder Communications, L.P.:

We have audited the accompanying combined balance sheets of Snyder
Communications (as defined in Note 1) as of December 31, 1994 and 1995, and the
related combined statements of income, equity and cash flows for each of the
three years in the period ended December 31, 1995. These financial statements
are the responsibility of Snyder Communications' management. Our responsibility
is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Snyder Communications as of
December 31, 1994 and 1995, and the results of their operations and their cash
flows for each of the three years in the period ended December 31, 1995, in
conformity with generally accepted accounting principles.

ARTHUR ANDERSEN LLP
Washington, D.C.,
July 1, 1996

F-2
<PAGE> 69

SNYDER COMMUNICATIONS
(SEE NOTE 1)

COMBINED BALANCE SHEETS

ASSETS

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
-------------------------- --------------------------
1994 1995 1996 1996
----------- ----------- ----------- -----------
(UNAUDITED) (PRO FORMA,
UNAUDITED)
<S> <C> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents................. $ 596,977 $ 3,881,512 $ 1,281,154 $ --
Accounts receivable, net of allowance for
doubtful accounts of $50,000, $100,000
and $200,000 at December 31, 1994 and
1995, and June 30, 1996 (unaudited),
respectively........................... 1,313,279 3,046,460 4,868,929 4,868,929
Prepaid expenses and other assets......... 62,776 124,837 100,380 100,380
----------- ----------- ----------- -----------
Total current assets................. 1,973,032 7,052,809 6,250,463 4,969,309
NOTE AND ADVANCES TO STOCKHOLDERS............. 5,657 2,770,426 -- --
PROPERTY AND EQUIPMENT, NET................... 1,505,702 2,336,254 3,742,546 3,742,546
DEFERRED FINANCING COSTS, NET................. -- 496,001 443,847 443,847
DEFERRED TAX ASSET............................ 118,000 58,000 -- 137,000
DEPOSITS...................................... 54,081 313,025 1,051,529 1,051,529
OTHER ASSETS.................................. 16,320 -- 811,488 811,488
----------- ----------- ----------- -----------
Total assets......................... $ 3,672,792 $13,026,515 $12,299,873 $11,155,719
=========== =========== =========== ===========
<CAPTION>
LIABILITIES AND EQUITY
<S> <C> <C> <C> <C>
CURRENT LIABILITIES:
Current portion of notes payable and
obligations under capital leases....... $ 804,757 $ 204,047 $ 400,931 $ 400,931
Accrued payroll........................... 306,195 2,854,630 4,407,392 4,407,392
Accounts payable.......................... 1,047,486 3,348,051 4,651,835 4,651,835
Unearned revenue.......................... 1,323,139 2,209,809 2,470,403 2,470,403
----------- ----------- ----------- -----------
Total current liabilities............ 3,481,577 8,616,537 11,930,561 11,930,561
OBLIGATIONS UNDER CAPITAL LEASES.............. 135,353 334,418 677,519 677,519
NOTE PAYABLE TO LIMITED PARTNER............... 1,921,397 -- -- --
SUBORDINATED DEBENTURES DUE TO LIMITED
PARTNERS.................................... -- 5,125,821 5,228,748 5,228,748
----------- ----------- ----------- -----------
Total liabilities.................... 5,538,327 14,076,776 17,836,828 17,836,828
COMMITMENTS AND CONTINGENCIES
EQUITY:
Common stock, no stated par value, 3,000
shares authorized; ($.001 par value,
120,000,000 shares authorized on a pro
forma basis) 2,000 shares issued and
outstanding at December 31, 1994, 1995,
and June 30, 1996; (29,458,400 shares
issued and outstanding on a pro forma
basis)................................. 500 500 500 29,458
Additional paid-in capital................ 138,342 1,359,703 1,359,703 (6,710,567)
Retained earnings (deficit)............... (593,897) (960,134) (4,828,995) --
Limited partners' (deficit) equity........ (1,410,480) (1,450,330) (2,068,163) --
----------- ----------- ----------- -----------
Total (deficit) equity............... (1,865,535) (1,050,261) (5,536,955) (6,681,109)
----------- ----------- ----------- -----------
Total liabilities and equity......... $ 3,672,792 $13,026,515 $12,299,873 $11,155,719
=========== =========== =========== ===========
</TABLE>

The accompanying notes are an integral part of these combined balance sheets.

F-3
<PAGE> 70

SNYDER COMMUNICATIONS
(SEE NOTE 1)

COMBINED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31,
----------------------------------------
1993 1994 1995
---------- ----------- -----------
<S> <C> <C> <C>
REVENUES......................................................... $9,042,523 $11,740,235 $42,891,561
OPERATING EXPENSES:
Cost of services............................................. 5,455,345 6,463,703 27,479,690
Selling, general and administrative expenses................. 3,003,096 3,525,363 7,214,074
Compensation to SMS stockholders............................. -- -- 4,423,868
---------- ----------- -----------
8,458,441 9,989,066 39,117,632
INCOME FROM OPERATIONS........................................... 584,082 1,751,169 3,773,929
INTEREST EXPENSE--SUBSTANTIALLY ALL TO RELATED PARTIES........... (313,649) (295,774) (783,441)
INTEREST INCOME.................................................. 7,401 19,600 197,954
---------- ----------- -----------
INCOME BEFORE TAXES.............................................. 277,834 1,474,995 3,188,442
SMS INCOME TAX PROVISION (BENEFIT)............................... 15,000 85,000 (245,000)
---------- ----------- -----------
NET INCOME....................................................... $ 262,834 $ 1,389,995 $ 3,433,442
========== =========== ===========
PRO FORMA INCOME DATA (UNAUDITED):
Historical income before income taxes as reported............ $ 3,188,442
Pro forma adjustment for compensation to SMS stockholders.... 4,423,868
-----------
Pro forma income before income taxes......................... 7,612,310
-----------
Pro forma provision for income taxes......................... 3,021,088
-----------
Pro forma net income.................................... $ 4,591,222
===========
Pro forma net income per share.......................... $ 0.15
===========
Pro forma weighted average number of shares
outstanding........................................... 30,118,980
===========
</TABLE>

<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED JUNE 30,
--------------------------
1995 1996
----------- -----------
(UNAUDITED)
<S> <C> <C>
REVENUES.................................................................... $13,980,843 $34,861,276
OPERATING EXPENSES:
Cost of services........................................................ 9,046,169 23,633,694
Selling, general and administrative expenses............................ 2,769,616 6,571,484
----------- -----------
11,815,785 30,205,178
----------- -----------
INCOME FROM OPERATIONS...................................................... 2,165,058 4,656,098
INTEREST EXPENSE--SUBSTANTIALLY ALL TO RELATED PARTIES...................... (215,261) (552,404)
INTEREST INCOME............................................................. 12,477 96,837
----------- -----------
INCOME BEFORE TAXES......................................................... 1,962,274 4,200,531
SMS INCOME TAX PROVISION.................................................... 383,000 58,000
----------- -----------
NET INCOME.................................................................. $ 1,579,274 $ 4,142,531
=========== ===========
PRO FORMA INCOME DATA (UNAUDITED):
Historical income before income taxes as reported....................... $ 1,962,274 $ 4,200,531
Pro forma provision for income taxes.................................... 779,023 1,680,212
----------- -----------
Pro forma net income............................................... $ 1,183,251 $ 2,520,319
=========== ===========
Pro forma net income per share..................................... $ 0.04 $ 0.08
=========== ===========
Pro forma weighted average number of shares outstanding............ 30,118,980 30,118,980
=========== ===========
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F-4
<PAGE> 71

SNYDER COMMUNICATIONS
(SEE NOTE 1)

COMBINED STATEMENTS OF EQUITY

<TABLE>
<CAPTION>
ADDITIONAL RETAINED LIMITED
COMMON PAID-IN EARNINGS PARTNERS'
STOCK CAPITAL (DEFICIT) DEFICIT TOTAL
------ ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
BALANCE, December 31, 1992......... $500 $ 138,342 $ (641,295) $(2,919,358) $(3,421,811)
Distributions to SMS
stockholders................ -- -- (76,425) -- (76,425)
Net income.................... 23,897 238,937 262,834
------ ---------- ----------- ----------- -----------
BALANCE, December 31, 1993......... 500 138,342 (693,823) (2,680,421) (3,235,402)
Distributions to SMS
stockholders................ -- -- (20,128) -- (20,128)
Net income.................... 120,054 1,269,941 1,389,995
------ ---------- ----------- ----------- -----------
BALANCE, December 31, 1994......... 500 138,342 (593,897) (1,410,480) (1,865,535)
Proceeds from sale of
partnership interest, net of
income taxes of $815,000.... -- 1,221,361 -- 13,639 1,235,000
Distributions to limited
partners.................... -- -- -- (3,853,168) (3,853,168)
Net income (loss)............. -- (366,237) 3,799,679 3,433,442
------ ---------- ----------- ----------- -----------
BALANCE, December 31, 1995......... 500 1,359,703 (960,134) (1,450,330) (1,050,261)
Net income (unaudited)........ 2,591,364 1,551,167 4,142,531
Distributions (unaudited)..... -- -- (6,460,225) (2,169,000) (8,629,225)
------ ---------- ----------- ----------- -----------
BALANCE, June 30, 1996
(unaudited)...................... $500 $1,359,703 $(4,828,995) $(2,068,163) $(5,536,955)
====== ========= ========== ========== ==========
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F-5
<PAGE> 72

SNYDER COMMUNICATIONS
(SEE NOTE 1)

COMBINED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
FOR THE YEAR ENDED FOR THE SIX MONTHS
DECEMBER 31, ENDED JUNE 30,
------------------------------------- --------------------------
1993 1994 1995 1995 1996
---------- ---------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income............................. $ 262,834 $1,389,995 $ 3,433,442 $ 1,579,274 $ 4,142,531
Adjustments to reconcile net income to
net cash provided by operating
activities--
Depreciation and amortization..... 237,167 389,037 595,759 242,876 436,236
Loss on disposal of assets........ 141,540 -- 152,490 (20,207) --
Deferred tax provision............ 15,000 83,000 60,000 42,000 58,000
Changes in assets and liabilities--
Accounts receivable............... (319,360) (490,274) (1,733,181) (1,672,057) (1,822,469)
Deposits and other assets......... 1,600 (38,601) (242,624) (122,407) (1,299,992)
Prepaid expenses and other
assets.......................... 90,661 (50,164) (62,061) (13,262) 24,457
Accounts payable and other
liabilities..................... 817,791 160,267 5,914,670 3,336,278 3,117,140
---------- ---------- ----------- ----------- -----------
Net cash provided by operating
activities.................. 1,247,233 1,443,260 8,118,495 3,372,495 4,655,903
---------- ---------- ----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment.... (938,040) (530,506) (1,137,827) (401,007) (1,295,554)
Note and net advances to SMS
stockholders......................... 246,676 (5,657) (2,764,769) (2,725,000) 45,426
---------- ---------- ----------- ----------- -----------
Net cash used in investing
activities.................. (691,364) (536,163) (3,902,596) (3,126,007) (1,250,128)
---------- ---------- ----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of notes payable to limited
partner.............................. (181,330) (465,300) (2,606,151) (2,606,151) --
Repayment of note payable.............. (166,370) (126,813) (35,817) (35,817) --
Proceeds from issuance of subordinated
debentures due to limited partners... -- -- 5,000,000 5,000,000 --
Proceeds from sale of partnership
interest............................. -- -- 2,050,000 2,050,000 --
Tax effect of equity transaction....... -- -- (815,000) (815,000) --
Debt issuance costs.................... -- -- (557,000) (557,000) --
Distributions to SMS stockholders...... (76,425) (20,128) -- -- (3,735,225)
Distributions to limited partners...... -- -- (3,853,168) (1,200,000) (2,169,000)
Payments on capital lease
obligations.......................... -- (49,060) (114,228) (31,876) (101,908)
---------- ---------- ----------- ----------- -----------
Net cash (used in) provided by
financing activities........ (424,125) (661,301) (931,364) 1,804,156 (6,006,133)
---------- ---------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS.............................. 131,744 245,796 3,284,535 2,050,644 (2,600,358)
CASH AND CASH EQUIVALENTS, beginning of
year..................................... 219,437 351,181 596,977 596,977 3,881,512
---------- ---------- ----------- ----------- -----------
CASH AND CASH EQUIVALENTS, end of year..... $ 351,181 $ 596,977 $ 3,881,512 $ 2,647,621 $ 1,281,154
========== ========== ============ ============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid during the period for
interest............................. $ 293,512 $ 247,339 $ 529,108 $ 245,158 $ 491,158
SUPPLEMENTAL DISCLOSURE OF NONCASH
ACTIVITIES:
Equipment purchased during the period
under capital leases................. $ -- $ 268,599 $ 433,154 $ 90,492 $ 641,893
Distribution of note receivable from
stockholder to SMS stockholders...... -- -- -- -- 2,725,000
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F-6
<PAGE> 73

SNYDER COMMUNICATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS
(INFORMATION AS OF JUNE 30, 1995 AND 1996, AND FOR THE SIX MONTHS ENDED
JUNE 30, 1995 AND 1996 IS UNAUDITED)

1. ORGANIZATION, BASIS OF PRESENTATION AND BUSINESS:

On October 19, 1988, Collegiate Marketing and Communications, Inc., a
Delaware corporation (the "General Partner"), and a Delaware limited partnership
beneficially owned by Mortimer B. Zuckerman and Fred Drasner (the "Original
Limited Partner") entered into a partnership agreement (the "Partnership
Agreement") pursuant to the provisions of the Delaware Act, under the name
Collegiate Marketing and Communications, L.P. (the "Partnership"). On September
1, 1989, the name of the Partnership was changed to Snyder Communications, L.P.,
and the name of the General Partner was changed to Snyder Communications, Inc.
On May 18, 1995, the Partnership Agreement was amended to admit several new
limited partners into the Partnership. On June 25, 1996, the name of the General
Partner was changed to Snyder Marketing Services, Inc. ("SMS").

Snyder Communications, Inc., a Delaware corporation, was incorporated on
June 25, 1996, to continue the business operations of the Partnership. Snyder
Communications, Inc., in conjunction with all of the existing partners in the
Partnership, intends to reorganize (the "Reorganization"), on or prior to the
effectiveness of the initial public offering of its common stock (the
"Offerings").

Prior to the Reorganization, SMS owns 63.85 percent of the partnership and
the limited partners own the remaining 36.15 percent. The Reorganization will
result in the stockholders of SMS exchanging 100 percent of their SMS stock for
stock of Snyder Communications, Inc. simultaneously with the limited partners
exchanging their limited partnership interests in the partnership for common
stock of Snyder Communications, Inc. After consummation of the Reorganization,
Snyder Communications, Inc. will own 100 percent of the stock of SMS and,
directly and indirectly (through its ownership of SMS), 100 percent of the
interests in the Partnership.

Because of the continuity of ownership, the Reorganization will be
accounted for by combining the assets, liabilities and operations of SMS, the
Partnership and Snyder Communications, Inc., at their historical cost basis.
Accordingly, for all periods presented, the accompanying combined financial
statements include a combination of the accounts of SMS and the Partnership (the
combined entity will be referred to herein as the "Company" or "Snyder
Communications") after elimination of all significant intercompany transactions.

Snyder Communications provides outsourced marketing services. The Company
designs and implements marketing programs for its customers utilizing field
sales, teleservices, sponsored wallboards, and product sampling. The Company's
operations are conducted throughout the United States with planned expansion to
the United Kingdom.

There are important risks associated with the Company's business and
financial results. These risks include (i) the Company's current reliance on one
significant customer, which constituted 59% of its 1995 revenues, and on other
major clients (see Note 3); (ii) the Company's ability to sustain and manage
future growth; (iii) the Company's dependence on industry trends toward
outsourcing of marketing services; (iv) the risks associated with the Company's
contracts; and (v) the dependence of the Company's success on its executive
officers and other key employees, in particular, its President, Chief Executive
Officer and Chairman of the Board of Directors.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

CASH AND CASH EQUIVALENTS

Cash and cash equivalents are comprised principally of amounts in operating
accounts and other money market investments, stated at cost which approximates
market value, with original maturities of three months or less.

F-7
<PAGE> 74

SNYDER COMMUNICATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

DEFERRED FINANCING COSTS

Deferred financing costs, which were incurred in connection with the
issuance of the subordinated debentures (see Note 5), are charged to expense as
additional interest expense over the life of the subordinated debentures using
the interest method.

PROPERTY AND EQUIPMENT

Property and equipment is stated at cost. The Company depreciates
furniture, fixtures, and office and telephone equipment on a straight-line basis
over 3 to 10 years. Custom wood cases used to display wallboards are placed in
locations targeted at specific advertising markets. The original cost of these
cases is capitalized and amortized over 5 years.

When assets are retired or sold, the cost and related accumulated
depreciation and amortization are removed from the accounts, and any gain or
loss is reflected in income.

REVENUE RECOGNITION

FIELD SALES AND TELESERVICES REVENUE -- The Company provides field sales
and teleservices sales and marketing of telecommunication services to clients
under contracts which provide for payments based on accepted subscribers and the
type of service purchased by the subscriber. Revenues related to these sales are
recognized on the date the application for service installment is accepted by
the Company's telecommunication clients. At this point, the Company has no
further performance obligation related to the submitted subscriber and is
contractually entitled to payment. One of the Company's contracts provides the
client with the right to seek a return of previously paid commissions if the
subscribers submitted by the Company do not meet certain defined characteristics
and performance standards. These relate to the telecommunication client's
ability to successfully install and provide service to the subscriber, the bad
debt experience of the subscriber base submitted by the Company and certain
minimum usage and life measures of the subscriber base. At the point of revenue
recognition, an allowance is recorded by the Company based on an estimate for
these returned commissions. The allowance is estimated based on the Company's
historical experience and periodically reviewed by the Company and adjusted when
necessary.

WALLBOARD REVENUE -- The Company contracts with sponsors to display
sponsored information in mounted wall units at target market locations.
Wallboard revenue is recognized over the life of the contract as services are
rendered which is generally one year. Unearned revenue is recorded for billings
prior to the earning of such revenue.

PRODUCT SAMPLING -- The Company contracts with sponsors to produce and
distribute product samples, coupons and pieces of literature to target markets.
Sampling revenue is recognized over the contract term of the sampling program as
services are rendered which generally extends for one year.

INCOME TAXES

The accompanying combined financial statements reflect no provision for
Federal or state income taxes related to income earned by the Partnership since
each of the partners of the Partnership reflected their share of the
Partnership's net income on their respective tax returns. Prior to January 1,
1996, SMS was taxed as a C corporation and accordingly a provision (benefit) for
taxes of SMS is reflected in the accompanying statements of income for each of
the three years in the period ended December 31, 1995, and the six months ended
June 30, 1995. During this period, SMS accounted for income taxes in accordance
with Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes." Effective January 1, 1996, SMS

F-8
<PAGE> 75

SNYDER COMMUNICATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

elected to be taxed as an S corporation under the Internal Revenue Code. In lieu
of corporate taxes, the stockholders of an S corporation are taxed on their
proportionate share of the Company's taxable income.

After the Reorganization, the Company will be subject to Federal and state
corporate income taxes. Accordingly, the accompanying combined statements of
income for the year ended December 31, 1995 and the six month periods ended June
30, 1995 and 1996 include unaudited pro forma adjustments for income tax
expense, which would have been recorded had all of the income generated by the
Company been subject to Federal and state corporate income taxes based on the
tax laws in effect during those periods (see Note 6).

ESTIMATES AND ASSUMPTIONS

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

CONCENTRATION OF CREDIT RISK

Concentration of credit risk is limited to trade accounts receivable and is
subject to the financial conditions of certain major clients as described in
Note 3. The Company's receivables are concentrated with customers in the
telecommunications industry. The Company does not require collateral or other
security to support clients' receivables.

PRO FORMA NET INCOME PER SHARE

Pro forma net income per share has been computed by dividing pro forma net
income by the pro forma weighted average number of shares outstanding during
each period. The pro forma weighted-average number of shares outstanding has
been adjusted for the estimated number of shares (660,580) that the Company
would need to issue (at the initial public offering price of $17.00 per share)
to fund distributions in excess of earnings of approximately $11.2 million to
the Company's existing stockholders and limited partners (see Note 12).

ACCOUNTING FOR STOCK OPTIONS

Statement of Financial Accounting Standard No. 123 (SFAS 123) establishes a
fair value based method of accounting for stock-based compensation plans. It
encourages entities to adopt that method in place of the provisions of APB
Opinion No. 25, "Accounting for Stock Issued to Employees" (APB 25), for all
arrangements under which employees receive shares of stock or other equity
instruments of the employer. The Company will follow APB 25 and will comply with
the specific provision of SFAS 123 that requires pro forma disclosures
concerning compensation expense in the notes to the financial statements.

INTERIM FINANCIAL STATEMENTS

The combined financial statements of Snyder Communications as of and for
the six months ending June 30, 1995 and 1996, presented herein have been
prepared by the Company without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. The financial statements reflect all
adjustments (consisting of only normal recurring adjustments) which, in the
opinion of management, are necessary to present fairly the combined financial
position, results of operations and cash flows of the Company as of June 30,
1995 and 1996, and for the quarters then ended. The results for the interim
periods are not necessarily indicative of the results to be obtained for the
full year due to the seasonal nature of the Company's business.

F-9
<PAGE> 76

SNYDER COMMUNICATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

3. SIGNIFICANT CLIENTS:

The Company had one client which represented 59, 17 and 3 percent of the
Company's revenues for the years ended December 31, 1995, 1994 and 1993,
respectively. The loss of this client would have a material adverse effect on
the Company's business. The Company's principal contract with this client
extends through December 1997.

In addition, the Company had three and four clients that each accounted for
more than ten percent of the Company's revenues for the years ended December 31,
1994 and 1993, respectively. For the year ended December 31, 1994, these three
clients accounted for 17, 12 and 11 percent of the Company's revenues,
respectively. For the year ended December 31, 1993, these four clients accounted
for 19, 15, 10 and 10 percent of the Company's revenues, respectively.

The Company had two telecommunications clients that accounted for more than
10 percent of the Company's revenues for the six months ended June 30, 1996. For
this period, these two clients accounted for 56 and 25 percent of the Company's
revenues, respectively.

4. PROPERTY AND EQUIPMENT:

Property and equipment consists of the following.

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------- JUNE 30,
1994 1995 1996
---------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Wallboards..................................... $1,503,159 $ 1,829,398 $ 2,028,330
Office and telephone equipment................. 687,848 1,415,795 2,158,677
Furniture and fixtures......................... 101,415 166,919 952,428
Leasehold improvements......................... 61,030 166,614 250,251
---------- ----------- -----------
2,353,452 3,578,726 5,389,686
Accumulated depreciation....................... (847,750) (1,242,472) (1,647,140)
---------- ----------- -----------
$1,505,702 $ 2,336,254 $ 3,742,546
========= ========== ==========
</TABLE>

5. DEBT:

SUBORDINATED DEBENTURES

On May 18, 1995, the Partnership issued $6,000,000 (face value) of
subordinated debentures (the "Debentures") with a stated interest rate of 12.25
percent (effective interest rate to maturity of approximately 17 percent), due
December 31, 2001, to a group consisting of certain limited partners in the
Partnership for $5,000,000 in cash. The difference between the cash proceeds
received and the face amount of the Debentures has been accounted for as an
original issue discount. This discount is being amortized as additional interest
expense over the life of the Debentures using the interest method. The
Debentures require annual principal payments of $1,200,000 beginning on December
31, 1997 and continuing through December 31, 2000 and contain penalties for
prepayment. The remaining unpaid principal balance will be due on December 31,
2001. The Debentures are subordinate to future borrowings, if any (not to exceed
$2,000,000), made under any working capital facility that may be secured by the
Company and contain covenants that restrict distributions (other than those
required for the partners to make tax payments) unless certain liquidity ratios,
as defined, are met. Interest is due semi-annually in April and October of each
year. At December 31, 1995, the fair value of the Debentures approximated their
carrying value.

The Company intends to use a portion of the proceeds from the Offerings to
repay all amounts due under the Debentures. Extinguishment of the Debentures as
of June 30, 1996, would result in an extraordinary

F-10
<PAGE> 77

SNYDER COMMUNICATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

5. DEBT (CONTINUED)

charge to income of approximately $2.1 million ($1.3 million net of income
taxes) representing prepayment penalties plus the write off of unamortized
discount and debt issuance costs.

NOTES PAYABLE

Notes payable consisted of the following at December 31, 1994:

<TABLE>
<S> <C>
Notes payable to a limited partner.............................. $2,606,151
Note payable.................................................... 35,817
----------
2,641,968
Less--Current portion........................................... (720,571)
----------
$1,921,397
=========
</TABLE>

Concurrent with the formation of the Partnership, the Original Limited
Partner loaned the Partnership $350,000 as evidenced by a promissory note. On
May 10, 1989, the Partnership entered into another promissory note agreement
with the Original Limited Partner to repay the principal amount of advances
previously made by the Original Limited Partner to the Partnership. Effective
January 1, 1993, all prior notes payable and the related accrued interest to the
Original Limited Partner were combined into one note totaling $3,252,781. This
note bore interest of 8 percent per annum. This note was paid in full in May of
1995 with a portion of the proceeds from the Debentures.

In November 1992, a settlement agreement was reached between the Company
and an independent contractor hired by the Company whereby the Company was
required to pay the contractor $499,000. Under the settlement agreement, the
Company paid $170,000 to the independent contractor at the date of settlement,
with the remaining $329,000 plus interest at 15 percent per annum paid in
installments through March 1995. This obligation was fully satisfied in 1995.

6. INCOME TAXES:

Prior to January 1, 1996, SMS was taxed as a C corporation for Federal and
state corporate income tax purposes. Effective January 1, 1996, SMS elected to
be taxed as an S corporation and accordingly, SMS's income was taxable to its
stockholders rather than to SMS for the three months ended March 31, 1996. Upon
conversion to an S corporation on January 1, 1996, the deferred tax asset
balance of $58,000 was written off and is reflected as a SMS income tax
provision in the accompanying combined financial statements. The SMS income tax
provision (benefit) for periods when it operated as a C corporation includes the
following components.

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------
1993 1994 1995
------- ------- ---------
<S> <C> <C> <C>
Current................................................ $ -- $ 2,000 $ 510,000
Tax effect of equity transaction....................... -- -- (815,000)
Deferred............................................... 15,000 83,000 60,000
------- ------- ---------
SMS income tax provision (benefit)................ $15,000 $85,000 $(245,000)
======= ======= =========
</TABLE>

F-11
<PAGE> 78

SNYDER COMMUNICATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

6. INCOME TAXES (CONTINUED)

A reconciliation of taxes at the U.S. Federal income tax rate to the
Company's actual income taxes is as follows.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------
1993 1994 1995
-------- --------- -----------
<S> <C> <C> <C>
Taxes at U.S. Federal income tax rate............. $ 97,000 $ 516,000 $ 1,116,000
Income taxed directly to limited partners......... (84,000) (445,000) (1,330,000)
State taxes (benefit), net of Federal and
permanent differences........................... 2,000 14,000 (31,000)
-------- --------- -----------
Total income taxes........................... $ 15,000 $ 85,000 $ (245,000)
======== ========= ==========
</TABLE>

At December 31, 1995 and 1994, the Company had recorded net deferred tax
assets of $58,000 and $118,000, respectively, related to differences in SMS's
book and tax earnings generated from its general partnership interest in the
Partnership.

Upon the successful completion of the Offerings and the related
Reorganization, a net deferred tax asset will be recorded with an associated
credit to the provision for income taxes. If the effective date of the Offerings
and the Reorganization had been June 30, 1996, a net deferred tax asset of
approximately $137,000 would have been recorded. As of June 30, 1996, the net
deferred tax asset would have consisted of the following:

<TABLE>
<S> <C>
Reserves and other liabilities........................................... $ 122,000
Allowance for doubtful accounts.......................................... 60,000
Property and equipment................................................... (124,000)
Other.................................................................... 79,000
---------
$ 137,000
=========
</TABLE>

7. LEASES:

The Company leases certain facilities, office equipment and other assets.
The following is a schedule of future minimum lease payments for capital leases
and for operating leases (with initial or remaining terms in excess of one year
at December 31, 1995).

<TABLE>
<CAPTION>
YEAR ENDING CAPITAL OPERATING
DECEMBER 31, LEASES LEASES
----------------- --------- ----------
<S> <C> <C>
1996.................................................... $ 257,186 $1,362,364
1997.................................................... 230,868 1,077,808
1998.................................................... 133,648 444,144
1999.................................................... 6,163 444,144
2000.................................................... -- 444,144
Thereafter.............................................. -- 629,204
--------- ----------
Total minimum lease payments....................... 627,865 $4,401,808
=========
Less--Amount representing interest........................... (89,400)
---------
Total obligation under capital leases.............. 538,465
Less--Current portion........................................ (204,047)
---------
Long-term portion............................................ $ 334,418
=========
</TABLE>

F-12
<PAGE> 79

SNYDER COMMUNICATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

7. LEASES (CONTINUED)

Subsequent to December 31, 1995, the Company amended its headquarters and
office lease agreement to lease additional office space in order to house an
expanded call-center adjacent to its existing space and to extend the term of
the lease agreement for approximately six years under similar terms. The total
additional future minimum lease payments under this amendment will approximate
$1.6 million.

Property and equipment, net on the balance sheet includes $219,563,
$538,798 and $1,076,331 for equipment purchased under capital leases as of
December 31, 1994, 1995 and June 30, 1996 (unaudited), respectively.

Rental expense for all operating leases was approximately $271,000,
$434,000 and $1,201,000 for the years ended December 31, 1993, 1994 and 1995,
respectively and approximately $417,215, and $1,097,533 for the six months ended
June 30, 1995 (unaudited) and 1996 (unaudited), respectively.

8. CAPITAL STOCK:

In May 1995, SMS sold a 6.15 percent interest in the Partnership for
$2,050,000 in cash proceeds. These proceeds are reflected (net of associated
income taxes of $815,000 and SMS's basis in the equity interest) as a
contribution to additional paid-in capital in the accompanying combined
financial statements.

9. OPTIONS:

In September 1996, the Board of Directors of the Company adopted and the
stockholders of the Company approved the 1996 Stock Incentive Plan (the "Stock
Option Plan"). The Stock Option Plan, which terminates in 2006, on the tenth
anniversary of the effective date of the plan, is to be administered by the
Compensation Committee, which is required to be composed of at least two
directors, or by the Board of Directors of the Company if no Compensation
Committee is appointed. Following the Offerings, the directors serving on the
Compensation Committee must constitute "non-employee directors" as defined under
Rule 16b-3 under the Securities Exchange Act of 1934, as amended. The Stock
Option Plan authorizes the granting of incentive stock options, non-qualified
stock options, restricted stock awards and stock appreciation rights ("SARs"),
or any combination thereof, at the discretion of the Compensation Committee of
the Board of Directors. Subject to adjustment in certain circumstances, the
aggregate number of shares of Common Stock which may be issued under the Stock
Option Plan upon exercise of options, SARs or in the form of restricted stock
may not exceed five million shares.

The exercise price of options granted under the Stock Option Plan may not
be less than 100 percent (110 percent in the case of an optionee who is a 10
percent stockholder) of the fair market value per share of Common Stock on the
date of the option grant. The vesting and other provisions of the options will
be determined by the Compensation Committee.

In the case of any incentive stock option, the option shall terminate on
the date that is three months (one year, in the event that the termination of
employment is by reason of death or disability) after the date on which the
optionee terminates employment or, if earlier, the date specified in the
agreement relating to the option grant.

As of June 30, 1996, no options had been issued under the Stock Option
Plan, although the Company anticipates issuing approximately 3.0 million options
prior to the Offerings with exercise prices equal to the price of shares offered
to the public.

10. RELATED PARTIES:

At December 31, 1995 and June 30, 1996, the Company was owed $45,426 and
$17,536, respectively, by certain stockholders of SMS. These advances were
non-interest bearing and were repaid in June, 1996.

F-13
<PAGE> 80

SNYDER COMMUNICATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

10. RELATED PARTIES (CONTINUED)

The Company's headquarters office space is leased from a third party, in
which one of the limited partners has an ownership interest. Rent paid under
this lease was $223,666, $355,483, $771,855 and $423,678 in 1993, 1994, 1995,
and June 30, 1996 (unaudited), respectively.

The Company produces a wallboard for which a publication beneficially owned
by the Original Limited Partner is one of the sponsors. Such publication
participates as a sponsor in exchange for the use by the Company of its
editorial information. Because it is not practicable to estimate the benefit
received by or provided to the Company and the Original Limited Partner, no
accounting recognition has been provided for this transaction in the
accompanying combined financial statements.

During 1995, the Company advanced $2,725,000 to a stockholder of SMS as
evidenced by a promissory note. The note was non-interest bearing and secured by
SMS stock. This note was distributed to the SMS stockholders, pro rata, on June
30, 1996.

11. COMMITMENTS AND CONTINGENCIES:

The Company is subject to lawsuits, investigations and claims arising out
of the conduct of its business, including those related to commercial
transactions, contracts, government regulation and employment matters. Certain
claims, suits and complaints have been filed or are pending against the Company.
In the opinion of management, and based on all known facts, all matters are
without merit or are of such kind, or involve such amounts, as would not have a
material effect on the financial position or results of operations of the
Company if disposed of unfavorably.

12. PRO FORMA DATA (UNAUDITED):

The unaudited pro forma combined balance sheet is presented as if the
Reorganization had occurred on June 30, 1996. As explained in Note 1, the
Reorganization will entail the limited partners exchanging their limited
partnership interests in the Partnership, and the stockholders of SMS exchanging
their stock in SMS for common stock in Snyder Communications, Inc. The SMS
retained earnings and limited partners' deficit balances will be reclassified to
additional paid-in capital. The Company will be taxed as a C corporation
resulting in the recording of a net deferred tax asset of $137,000, as discussed
in Note 6. Prior to consummation of the Offerings, the Company intends to make a
distribution of its cash balance existing at the date of the distribution (not
expected to exceed $10.0 million between July 1, 1996 and the date of the
Offerings) to its existing shareholders and limited partners. The unaudited pro
forma combined balance sheet gives effect to these items.

The pro forma net income and net income per share amounts for the year
ended December 31, 1995 and the six month periods ended June 30, 1995 and 1996
include a provision for Federal and state income taxes as if the combined
Company had been a C corporation for all the periods presented. The effective
income tax rate reflects the combined Federal and state income taxes of
approximately 39.7 percent for the year ending December 31, 1995, and the six
months ending June 30, 1995, and 40.0 percent for the six months ended June 30,
1996. The difference between the pro forma income tax rate and the Federal
statutory rate of 34% relates primarily to the impact of state income taxes.
Certain stockholders of the Company served as officers of SMS for which such
officers received compensation from SMS in 1995. The unaudited pro forma
combined income statement data includes an adjustment which reflects the
elimination in 1995 of this non-recurring compensation based on compensation
levels for the Company, as approved by its Board of Directors. Following
consummation of the Reorganization, such officers will not be required to
perform any comparable duties or responsibilities for SMS. Further, other costs
are not likely to be incurred which would offset the impact of this pro forma
adjustment. Therefore, such compensation is treated as non-recurring. The
unaudited pro forma combined statement of income data gives effect to these
items.

F-14
<PAGE> 81

SNYDER COMMUNICATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

12. PRO FORMA DATA (UNAUDITED) (CONTINUED)

A portion of the net proceeds from the Offerings is to be used to repay all
amounts due under the Debentures. If the Debentures had been repaid on January
1, 1995 or January 1, 1996, the unaudited pro forma net income per share (as
adjusted for the number of shares the Company would need to issue, at the
initial public offering price of $17.00 per share, to repay the Debentures)
would have been $0.17 and $0.09 for the year ended December 31, 1995, and the
six months ended June 30, 1996, respectively.

The unaudited pro forma combined financial statements and data are not
necessarily indicative of what the actual results of operations or financial
position would have been assuming such transactions had been completed on the
specified dates and they do not purport to represent the future results of
operation or financial position of the Company.

F-15
<PAGE> 82

[This page intentionally left blank]
<PAGE> 83

INSIDE BACK COVER OF PROSPECTUS:

This inside back cover is a multi-color map, in a landscape orientation, of
the United States showing the locations of the Company's Consumer Markets
district offices, marked by squares; Business Markets district offices, marked
by triangles; and Marketing Services offices, marked by circles.

The map also shows an inset of the Company's planned offices in the United
Kingdom.
<PAGE> 84

- ------------------------------------------------------
- ------------------------------------------------------

NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY, THE SELLING STOCKHOLDER OR THE UNDERWRITERS. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE
COMMON STOCK IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR
IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.

------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................... 3
Risk Factors.......................... 11
The Company........................... 18
Use of Proceeds....................... 20
Dividend Policy....................... 20
Capitalization........................ 21
Dilution.............................. 22
Selected Financial and Operating
Data................................ 23
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 25
Business.............................. 33
Management............................ 47
Certain Transactions.................. 53
Principal and Selling Stockholders.... 54
Description of Capital Stock.......... 56
Shares Eligible for Future Sale....... 58
Certain United States Federal Tax
Consequences to Non-United States
Holders............................. 60
Underwriting.......................... 62
Legal Matters......................... 65
Experts............................... 65
Additional Information................ 65
Index to Financial Statements......... F-1
UNTIL OCTOBER 19, 1996, (25 DAYS AFTER
THE DATE OF THIS PROSPECTUS), ALL DEALERS
EFFECTING TRANSACTIONS IN THE COMMON STOCK,
WHETHER OR NOT PARTICIPATING IN THIS
DISTRIBUTION, MAY BE REQUIRED TO DELIVER A
PROSPECTUS. THIS DELIVERY REQUIREMENT IS IN
ADDITION TO THE OBLIGATION OF DEALERS TO
DELIVER A PROSPECTUS WHEN ACTING AS
UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.
- ------------------------------------------------------
- ------------------------------------------------------
</TABLE>

- ------------------------------------------------------
- ------------------------------------------------------

7,800,000 SHARES
[SNYDER COMMUNICATIONS, INC. LOGO]
COMMON STOCK
---------------------
PROSPECTUS
---------------------
MERRILL LYNCH & CO.

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION

ALLEN & COMPANY
INCORPORATED

MONTGOMERY SECURITIES
SEPTEMBER 24, 1996

- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 85

PROSPECTUS
7,800,000 SHARES
SNYDER COMMUNICATIONS, INC. LOGO
COMMON STOCK
------------------------

Of the 7,800,000 shares of Common Stock offered hereby, 1,560,000 are being
offered initially outside the United States and Canada by the International
Managers and 6,240,000 shares are being offered initially in the United States
and Canada by the U.S. Underwriters. The initial public offering price and the
underwriting discount per share are identical for both Offerings. See
"Underwriting."

Prior to the Offerings, there has been no public market for the Common
Stock. See "Underwriting" for a discussion of certain factors considered in
determining the initial public offering price.

The Common Stock has been approved for listing on the New York Stock
Exchange, subject to notice of issuance, under the trading symbol "SNC."

SEE "RISK FACTORS" BEGINNING ON PAGE 11 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE SHARES OF COMMON
STOCK OFFERED HEREBY.
------------------------

(2) Before deducting expenses of the Offerings payable by the Company, estimated
at $2,000,000.

(3) The Over-Allotment Selling Stockholders have granted to the International
Managers and the U.S. Underwriters options, exercisable within 30 days after
the date of this Prospectus, to purchase up to 234,000 and 936,000
additional shares of Common Stock, respectively, solely to cover
over-allotments, if any. If such options are exercised in full, the total
Price to Public, Underwriting Discount, Proceeds to Company and Proceeds to
Selling Stockholders will be $152,490,000, $9,956,700, $64,166,394 and
$78,366,906, respectively. See "Underwriting."
------------------------

MERRILL LYNCH INTERNATIONAL
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
ALLEN & COMPANY
INCORPORATED
MONTGOMERY SECURITIES

ING BARINGS NATWEST SECURITIES LIMITED NOMURA INTERNATIONAL UBS LIMITED
------------------------

The date of this Prospectus is September 24, 1996.
<PAGE> 86

INSIDE FRONT COVER OF PROSPECTUS:

GATEFOLD

2
<PAGE> 87

PROSPECTUS SUMMARY

THE COMPANY

Consumer Markets

3
<PAGE> 88

Company expanded this relationship to add teleservices capabilities in the
second quarter of 1996. The revenues generated by AT&T have grown from $1.7
million in 1994 to $25.0 million in 1995.

Business Markets

4
<PAGE> 89

Marketing Services

RISK FACTORS

5
<PAGE> 90

prospective investors should consider carefully all of the information set forth
in this Prospectus including, in particular, the information set forth under
"Risk Factors."

OUTSOURCING AND DEMOGRAPHIC TRENDS

GROWTH STRATEGY

The Company's commitment to continued growth through internal expansion and
complementary acquisitions is evidenced by the following:

Consumer Markets

- The Company is adding approximately 80 call stations, which it expects
will be operating by late 1996, to its existing 300 call stations in
this division.

6
<PAGE> 91

Business Markets

- The Company also seeks to add additional inbound telephone-based sales
in its Business Markets division.

Marketing Services

7
<PAGE> 92

BACKGROUND OF THE COMPANY

THE OFFERINGS

Common Stock offered by:

8
<PAGE> 93

SUMMARY FINANCIAL AND OPERATING DATA
(IN THOUSANDS, EXCEPT PER SHARE AND OPERATING DATA)

Continued on next page

9
<PAGE> 94

(h) Represents sampling packs distributed during the years ended December 31,
1993, 1994 and 1995, respectively.

(j) A number of the Company's clients participate in both the WallBoard(R) and
sampling pack programs.

10
<PAGE> 95

RISK FACTORS

RELIANCE ON AT&T

RELIANCE ON OTHER MAJOR CLIENTS

11
<PAGE> 96

MANAGEMENT OF GROWTH

GROWTH THROUGH ACQUISITIONS; INTERNATIONAL EXPANSION

DEPENDENCE ON TREND TOWARD OUTSOURCING

RISKS ASSOCIATED WITH THE COMPANY'S CONTRACTS

12
<PAGE> 97

COMPETITIVE AND FRAGMENTED INDUSTRY; POTENTIAL CONSUMER SATURATION

DEPENDENCE ON LABOR FORCE

13
<PAGE> 98

RELIANCE ON TECHNOLOGY; RISK OF BUSINESS INTERRUPTION

DEPENDENCE ON KEY PERSONNEL

GOVERNMENT REGULATION

14
<PAGE> 99

POTENTIAL FLUCTUATIONS IN QUARTERLY OPERATING RESULTS; SEASONALITY

15
<PAGE> 100

NO PRIOR PUBLIC MARKET; POTENTIAL VOLATILITY OF STOCK PRICE

SHARES ELIGIBLE FOR FUTURE SALE; REGISTRATION RIGHTS

16
<PAGE> 101

CONTROL BY PRINCIPAL STOCKHOLDERS

EFFECT OF CERTAIN CHARTER AND BYLAW PROVISIONS

DILUTION

17
<PAGE> 102

THE COMPANY

Snyder Communications is a rapidly growing provider of innovative and high
value-added outsourced marketing services. The Company designs and implements
marketing programs for its clients utilizing a range of complementary marketing
resources, including field sales, teleservices, WallBoards(R) and product
sampling. The Company's clients are primarily Fortune 500 companies with large
annual marketing expenditures facing significant competitive pressures to retain
or expand market share. Based on 1995 revenues, the ten largest clients of the
Company, listed alphabetically, were AT&T Communications, Inc., Eastman Kodak
Company, Gerber Products Company, Kellogg U.S.A., Inc., The Proctor & Gamble
Distributing Company, Lehn & Fink Products (now a unit of Reckitt & Colman,
Inc.), MCI Telecommunications Corporation, Nestle Beverage Company, The
Prudential Insurance Company of America and Reckitt & Colman, Inc.

The Company's revenues increased from $11.7 million in 1994 to $42.9
million in 1995, and from $14.0 million in the first six months of 1995 to $34.9
million in the first six months of 1996. Net income, as adjusted to reflect a
pro forma provision for income taxes, as if the Company were subject to
corporate income taxes, and to eliminate certain non-recurring compensation in
1995, grew from $1.2 million in the first six months of 1995 to $2.5 million in
the first six months of 1996.

18
<PAGE> 103

The Company's principal executive office is located at Two Democracy
Center, 6903 Rockledge Drive, Fifteenth Floor, Bethesda, Maryland 20817, and its
telephone number is (301) 468-1010.

19
<PAGE> 104

USE OF PROCEEDS

Pending application of the net proceeds as described above, the Company
intends to invest the net proceeds in short-term, interest-bearing investment
grade securities.

DIVIDEND POLICY

20
<PAGE> 105

CAPITALIZATION

- ---------------
(a) Represents obligations under capital leases and the Debentures.

(b) Does not include approximately 3.0 million shares of Common Stock reserved
for issuance upon exercise of outstanding options. See "Management -- Stock
Option Plan."

21
<PAGE> 106

DILUTION

- ---------------
(a) Officers, directors, director nominees and 10% beneficial owners own, in the
aggregate, 95.1% of the outstanding shares of Common Stock prior to the
Offerings.

22
<PAGE> 107

SELECTED FINANCIAL AND OPERATING DATA
(IN THOUSANDS, EXCEPT PER SHARE AND OPERATING DATA)

See Notes to Selected Financial and Operating Data

23
<PAGE> 108

- ---------------
(a) Certain employees of the Company also served as officers of SMS, the
corporate general partner of the Partnership, for which such employees
received compensation from SMS in 1995, which is treated as non-recurring.
The pro forma adjustment gives effect to the elimination in 1995 of this
non-recurring compensation based on compensation levels for the Company,
as approved by its Board of Directors. Following consummation of the
Reorganization, such officers will not be required to perform any
comparable duties or responsibilities for SMS. Further, other costs are
not likely to be incurred which would offset the impact of this pro forma
adjustment. Therefore, such compensation is treated as non-recurring. See
Note 12 to the Company's Combined Financial Statements.

(b) Prior to the Offerings, the Company's principal operations were not subject
to Federal or state corporate income taxes. The income statement data
for the year ended December 31, 1995 and the six-month periods ended June
30, 1995 and 1996 reflects a pro forma provision for income taxes as if
all operations of the Company were subject to Federal and state corporate
income taxes. The pro forma provision for income taxes represents an
effective combined Federal and state tax rate of approximately 39.7% for
the year ending December 31, 1995 and the six months ended June 30, 1995,
and 40.0% for the six months ended June 30, 1996. See "The Company" and
Notes 6 and 12 to the Company's Combined Financial Statements.

(c) Prior to the Reorganization, the Partnership intends to distribute to its
partners, including SMS, its then cash balance in one or more
distributions, and SMS intends to distribute to its stockholders its then
cash balance in one or more distributions. The amount of the Distribution
by the Partnership between July 1, 1996 and the date of the Offerings is
not expected to exceed $10.0 million in the aggregate. Pro forma net income
per share information assumes that 660,580 of the shares being offered by
the Company hereby were outstanding during the periods indicated. This
represents the approximate number of shares of Common Stock that the
Company would need to issue (at the initial public offering price of $17.00
per share) to fund the payment of the Distribution in excess of earnings to
the Partnership's existing partners. See "The Company" and Note 2 to the
Combined Financial Statements.

(d) Represents sampling packs distributed during the years ended December 31,
1993, 1994 and 1995, respectively.

(f) A number of the Company's clients participate in both the WallBoard(R) and
sampling pack programs.

24
<PAGE> 109

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

25
<PAGE> 110

RESULTS OF OPERATIONS

26
<PAGE> 111

The following sets forth, for the periods indicated, certain components of
the Company's operating statement data, including such data as a percentage of
revenues.

Six Months Ended June 30, 1996 Compared to Six Months Ended June 30, 1995

27
<PAGE> 112

Consumer Markets division offset in part by a decrease in the cost of services
as a percentage of revenues in the Business Markets and Marketing Services
divisions.

1995 Compared to 1994

Interest Expense. Interest expense increased from $0.3 million in 1994 to
$0.8 million in 1995 due to interest expense related to the Debentures which
were issued in May 1995.

1994 Compared to 1993

28
<PAGE> 113

Interest Expense. Interest expense remained constant at $0.3 million in
1993 and 1994.

QUARTERLY RESULTS

29
<PAGE> 114

30
<PAGE> 115

1997. As a result of this combination of actions, the Company believes it is
more capable to accommodate additional growth successfully.

LIQUIDITY AND CAPITAL RESOURCES

The following table sets forth selected cash flow information for the
periods indicated.

Prior to the Reorganization, the Partnership intends to distribute to its
partners, including SMS, its then cash balance in one or more distributions, and
SMS intends to distribute to its stockholders its then cash balance in one or
more distributions. The Company's cash balance at June 30, 1996 was $1.3
million. The Company's cash balance is expected to increase prior to the
consummation of the Reorganization and the Offerings primarily as a result of
collection of receivables, recovery of certain deposits, the completion of

31
<PAGE> 116

32
<PAGE> 117

BUSINESS

GENERAL

Snyder Communications is a rapidly growing provider of innovative and high
value-added outsourced marketing services. The Company designs and implements
marketing programs for its clients utilizing a range of complementary marketing
resources, including field sales, teleservices, WallBoards(R) and product
sampling. The Company's clients are primarily Fortune 500 companies with large
annual marketing expenditures facing significant competitive pressures to retain
or expand market share. Based on 1995 revenues, the ten largest clients of the
Company, listed alphabetically, were AT&T Communications, Inc., Eastman Kodak
Company, Gerber Products Company, Kellogg U.S.A., Inc., The Proctor & Gamble
Distributing Company, Lehn & Fink Products (now a unit of Reckitt & Colman,
Inc.), MCI Telecommunications Corporation, Nestle Beverage Company, The
Prudential Insurance Company of America and Reckitt & Colman, Inc.

INDUSTRY OVERVIEW

33
<PAGE> 118

GROWTH STRATEGY

The Company's commitment to continued growth through internal expansion and
complementary acquisitions is evidenced by the following:

Consumer Markets

- The Company is adding approximately 80 call stations, which it expects
will be operating by late 1996, to its existing 300 call stations in this
division.

- In June 1996, the Company expanded its relationship with AT&T by entering
into a new agreement with AT&T (U.K.), to market long-distance
telecommunications services to residential customers

34
<PAGE> 119

based in the United Kingdom. As part of this expansion, the Company
intends to add one call center and one or more field sales offices in the
United Kingdom in 1997.

- The Company entered into a contract with Prodigy in June 1996, to provide
marketing and sales services for Prodigy's online service to residential
customers, using the Company's field sales, including event marketing,
and other marketing services.

Business Markets

- In August 1996, the Company entered into an agreement with Lucent to
market and sell certain Lucent telecommunications equipment, and in
September 1996, the Company entered into a contract with DHL Airways,
Inc. for overnight delivery services. In both cases, the products will be
marketed to business customers throughout the United States using the
Company's field sales, inbound and outbound teleservices and other
marketing services.

- The Company also seeks to add additional inbound telephone-based sales in
its Business Markets division.

Marketing Services

- The Company increased the number of sales managers and executives in this
division from five as of December 31, 1993 to approximately 20 as of June
30, 1996, to take advantage of opportunities to expand the services
offered to existing clients and to develop new lines of business.

SERVICES

The Company offers a range of complementary marketing services through its
Consumer Markets, Business Markets and Marketing Services divisions. In the
Consumer Markets and Business Markets

35
<PAGE> 120

CONSUMER MARKETS

36
<PAGE> 121

Through June 30, 1996, the Company's field sales operations in its Consumer
Markets division have generated a significantly greater percentage of revenues
than the division's teleservices operations.

37
<PAGE> 122

six months of 1996, services performed by the Company for AT&T in the Domestic
Consumer Market accounted for approximately 21% of the Company's total revenues.

BUSINESS MARKETS

38
<PAGE> 123

39
<PAGE> 124

MARKETING SERVICES

40
<PAGE> 125

The following table shows the growth of the programs in the Marketing
Services division:

41
<PAGE> 126

participation. The Company's two principal market networks for the WallBoard(R)
programs are family markets and medical markets.

42
<PAGE> 127

"category exclusivity" within the sampling pack, as with the WallBoard(R)
sponsors, such that there are no competing products in the pack.

43
<PAGE> 128

HIRING AND TRAINING

GOVERNMENT REGULATION

44
<PAGE> 129

COMPETITION

45
<PAGE> 130

technological expertise, and the ability to promptly provide clients with
customized solutions to their sales and marketing needs.

EMPLOYEES

FACILITIES

LEGAL PROCEEDINGS

46
<PAGE> 131

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

47
<PAGE> 132

48
<PAGE> 133

49
<PAGE> 134

COMMITTEES OF THE BOARD

EXECUTIVE COMPENSATION

- ---------------
(a) The above compensation table excludes an executive officer of the
Partnership who is no longer with the Partnership and who will not be an
executive officer of the Company.

(d) Excludes $19,155 paid in 1996, and $8,206 paid in 1995, by SMS, the
corporate general partner of the Partnership, for services provided.

(e) Excludes bonus of $50,000 paid in 1996 for the attainment of performance
criteria during the fourth quarter of 1995.

(f) Excludes $76,620 paid in 1996, and $34,145 paid in 1995, by SMS, the
corporate general partner of the Partnership, for services provided.

50
<PAGE> 135

EMPLOYMENT AGREEMENTS

STOCK OPTION PLAN

51
<PAGE> 136

LIMITATION OF LIABILITY AND INDEMNIFICATION

52
<PAGE> 137

CERTAIN TRANSACTIONS

53
<PAGE> 138

PRINCIPAL AND SELLING STOCKHOLDERS

(b) Assumes that the over-allotment options granted to the Underwriters by the
Over-Allotment Selling Stockholders are not exercised.

(d) Mr. Zuckerman's address is 599 Lexington Avenue, Suite 1300, New York, N.Y.
10022.

(e) Mr. Gerald S. Snyder has never been a senior executive officer of the
Company and retired at age 63 in August 1996.

(f) Mr. Drasner's address is 450 West 33rd Street, New York, N.Y. 10001.

54
<PAGE> 139

The only other stockholder of the Company is Dr. Anthony O. Roberts who
owns 1.91% of the outstanding shares of Common Stock prior to the Offerings.

55
<PAGE> 140

DESCRIPTION OF CAPITAL STOCK

COMMON STOCK

PREFERRED STOCK

CERTAIN CHARTER PROVISIONS

56
<PAGE> 141

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Stock is American Stock
Transfer & Trust Company.

LISTING

The Common Stock has been approved for listing on the New York Stock
Exchange, subject to notice of issuance, under the trading symbol "SNC."

57
<PAGE> 142

SHARES ELIGIBLE FOR FUTURE SALE

GENERAL

REGISTRATION RIGHTS

58
<PAGE> 143

59
<PAGE> 144

CERTAIN UNITED STATES FEDERAL TAX CONSEQUENCES
TO NON-UNITED STATES HOLDERS

EFFECTIVELY CONNECTED INCOME

DIVIDENDS NOT EFFECTIVELY CONNECTED

SALE OF COMMON STOCK NOT EFFECTIVELY CONNECTED

60
<PAGE> 145

ESTATE TAX

BACKUP WITHHOLDING, INFORMATION REPORTING AND OTHER REPORTING REQUIREMENTS

61
<PAGE> 146

UNDERWRITING

Subject to the terms and conditions set forth in the international purchase
agreement (the "International Purchase Agreement") among the Company, SMS, the
Partnership, the Selling Stockholders and each of the underwriters named below
(the "International Managers"), and concurrently with the sale of 6,240,000
shares of Common Stock to the U.S. Underwriters (as defined below), the Company
and the Selling Stockholder have agreed to sell to the International Managers,
and each of the International Managers severally has agreed to purchase from the
Company and the Selling Stockholder, the number of shares of Common Stock set
forth opposite its name below at the initial public offering price less the
underwriting discount set forth on the cover page of this Prospectus.

<TABLE>
<CAPTION>
NUMBER OF
INTERNATIONAL MANAGERS SHARES
----------
<S> <C>
Merrill Lynch International............................................... 312,000
Donaldson, Lufkin & Jenrette Securities Corporation....................... 312,000
Allen & Company Incorporated.............................................. 312,000
Montgomery Securities..................................................... 312,000
ING Bank N.V. ............................................................ 78,000
NatWest Securities Limited................................................ 78,000
Nomura International plc.................................................. 78,000
UBS Limited............................................................... 78,000
----------
Total........................................................ 1,560,000
----------
----------
</TABLE>

Merrill Lynch International, Donaldson, Lufkin & Jenrette Securities
Corporation, Allen & Company Incorporated and Montgomery Securities are acting
as representatives (the "International Representatives") of the International
Managers.

The Company, SMS, the Partnership and the Selling Stockholders have also
entered into the U.S. purchase agreement (the "U.S. Purchase Agreement") with
certain underwriters in the United States and Canada (the "U.S. Underwriters"
and, together with the International Managers, the "Underwriters") for whom
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), Donaldson,
Lufkin Jenrette Securities Corporation, Allen & Company Incorporated and
Montgomery Securities are acting as representatives (the "U.S. Representatives"
and, together with the International Representatives, the "Representatives").
Subject to the terms and conditions set forth in the U.S. Purchase Agreement,
and concurrently with the sale of 1,560,000 shares of Common Stock to the
International Managers pursuant to the International Purchase Agreement, the
Company and the Selling Stockholder have agreed to sell to the U.S.
Underwriters, and the U.S. Underwriters severally have agreed to purchase from
the Company and the Selling Stockholder, an aggregate of 6,240,000 shares of
Common Stock. The initial public offering price per share and the total
underwriting discount per share of Common Stock are identical under the
International Purchase Agreement and the U.S. Purchase Agreement.

In the International Purchase Agreement and the U.S. Purchase Agreement,
the several International Managers and the several U.S. Underwriters,
respectively, have agreed, subject to the terms and conditions set forth
therein, to purchase all of the shares of Common Stock being sold pursuant to
each such agreement if any of the shares of Common Stock being sold pursuant to
each such agreement are purchased. Under certain circumstances, the commitments
of nondefaulting International Managers or U.S. Underwriters, as the case may
be, may be increased. The closings with respect to the sale of shares of Common
Stock to be purchased by the International Managers and the U.S. Underwriters
are conditioned upon one another.

The International Managers and the U.S. Underwriters have entered into an
intersyndicate agreement (the "Intersyndicate Agreement") that provides for the
coordination of their activities. Pursuant to the Intersyndicate Agreement, the
International Managers and the U.S. Underwriters are permitted to sell shares of
Common Stock to each other for purposes of resale at the initial public offering
price, less an amount not greater than the selling concession. Under the terms
of the Intersyndicate Agreement, the International

62
<PAGE> 147

Managers and any dealer to whom they sell shares of Common Stock will not offer
to sell or sell shares of Common Stock to persons who are United States or
Canadian persons or to persons they believe intend to resell to persons who are
United States or Canadian persons, and the U.S. Underwriters and any dealer to
whom they sell shares of Common Stock will not offer to sell or sell shares of
Common Stock to persons who are non-United States or non-Canadian persons or to
persons they believe intend to resell to persons who are non-United States or
non-Canadian persons, except in each case for transactions pursuant to the
Intersyndicate Agreement.

The International Representatives have advised the Company and the Selling
Stockholder that the International Managers propose initially to offer the
shares of Common Stock offered hereby to the public at the initial public
offering price set forth on the cover page of this Prospectus, and to certain
dealers at such price less a concession not in excess of $.65 per share of
Common Stock. The International Managers may allow, and such dealers may
reallow, a discount not in excess of $.10 per share of Common Stock on sales to
certain other dealers. After the initial public offering, the public offering
price, concession and discount may be changed.

The Over-Allotment Selling Stockholders have granted an option to the
International Managers, exercisable during the 30-day period after the date of
this Prospectus, to purchase up to an aggregate of 234,000 additional shares of
Common Stock at the initial public offering price set forth on the cover page of
this Prospectus, less the underwriting discount. The International Managers may
exercise this option only to cover aver-allotments, if any, made on the sale of
the Common Stock offered hereby. To the extent that the International Managers
exercise this option, each International Manager will be obligated, subject to
certain conditions, to purchase a number of additional shares of Common Stock
proportionate to such International Manager's initial amount reflected in the
foregoing table. The Over-Allotment Selling Stockholders also have granted an
option to the U.S. Underwriters, exercisable during the 30-day period after the
date of this Prospectus, to purchase up to an aggregate of 936,000 additional
shares of Common Stock to cover over-allotments, if any, on terms similar to
those granted to the International Managers.

At the request of the Company, the U.S. Underwriters have reserved up to
468,000 shares of Common Stock for sale at the initial public offering price to
certain employees of the Company and other persons. The number of shares of
Common Stock available for sale to the general public will be reduced to the
extent such persons purchase such reserved shares. Any reserved shares which are
not so purchased will be offered by the U.S. Underwriters to the general public
on the same basis as the other shares offered hereby. Certain individuals
purchasing reserved shares may be required to agree not to sell, offer or
otherwise dispose of any shares of Common Stock for a period of three months
after the date of this Prospectus.

The Company, the Selling Stockholders and the Company's other existing
stockholders have agreed, subject to exceptions for certain pledges and, in the
case of the Company, the grant of employee stock options, not to, directly or
indirectly, sell, offer to sell, grant any option for the sale of, or otherwise
dispose of, any capital stock of the Company, or any security convertible or
exchangeable into, or exercisable for, such capital stock, or in the case of the
Company, file any registration statement with respect to the foregoing (other
than a registration statement on Form S-8 to register shares issuable upon
exercise of employee stock options or a registration statement on Form S-4 to
register shares issuable in connection with an acquisition), for a period of 180
days after the date of this Prospectus, without the prior written consent of
Merrill Lynch. See "Shares Eligible for Future Sale."

63
<PAGE> 148

Each International Manager has agreed that (i) it has not offered or sold
and, for a period of six months following consummation of the Offerings, will
not offer or sell any shares of Common Stock to persons in the United Kingdom,
except to persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for the purposes of
their businesses or otherwise in circumstances which do not constitute an offer
to the public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995; (ii) it has complied and will comply with all
applicable provisions of the Financial Services Act 1986 with respect to
anything done by it in relation to the Common Stock in, from or otherwise
involving the United Kingdom; and (iii) it has only issued or passed on and will
only issue or pass on in the United Kingdom any document received by it in
connection with the issuance of Common Stock to a person who is of a kind
described in Article 11(3) of the Financial Services Act 1986 (Investment
Advertisement)(Exemptions) Order 1995, as amended, or is a person to whom such
document may otherwise lawfully be issued or passed on.

No action has been or will be taken in any jurisdiction (except in the
United States) that would permit a public offering of the shares of Common
Stock, or the possession, circulation or distribution of this Prospectus or any
other material relating to the Company, the Selling Stockholders or shares of
Common Stock in any jurisdiction where action for that purpose is required.
Accordingly, the shares of Common Stock may not be offered or sold, directly or
indirectly, and neither this Prospectus nor any other offering material or
advertisements in connection with the shares of Common Stock may be distributed
or published, in or from any country or jurisdiction except in compliance with
any applicable rules and regulations of any such country or jurisdiction.

Purchasers of the shares offered hereby may be required to pay stamp taxes
and other charges in accordance with the laws and practices of the country of
purchase in addition to the offering price set forth on the cover page hereof.

The Company, SMS, the Partnership and the Selling Stockholders have agreed
to indemnify the International Managers and the U.S. Underwriters against
certain liabilities, including liabilities under the Securities Act, or to
contribute to payments made in respect thereof.

Allen & Company Incorporated, together with certain officers and related
persons thereof, owns 2.37% of the shares of Common Stock prior to the
Offerings. See "The Company," "Principal and Selling Stockholders" and "Certain
Transactions." In addition, a portion of the proceeds of the Offerings is
expected to be used to repay the amounts owed under the Debentures to such
investors. See "Use of Proceeds."

Merrill Lynch has provided certain financial advisory services to the
Company for which it will receive customary fees.

64
<PAGE> 149

LEGAL MATTERS

EXPERTS

ADDITIONAL INFORMATION

65
<PAGE> 150

[This page intentionally left blank]
<PAGE> 151

INDEX TO FINANCIAL STATEMENTS

F-1
<PAGE> 152

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Snyder Marketing Services, Inc. and
Snyder Communications, L.P.:

ARTHUR ANDERSEN LLP
Washington, D.C.,
July 1, 1996

F-2
<PAGE> 153

SNYDER COMMUNICATIONS
(SEE NOTE 1)

COMBINED BALANCE SHEETS

ASSETS

The accompanying notes are an integral part of these combined balance sheets.

F-3
<PAGE> 154

SNYDER COMMUNICATIONS
(SEE NOTE 1)

COMBINED STATEMENTS OF INCOME

The accompanying notes are an integral part of these combined financial
statements.

F-4
<PAGE> 155

SNYDER COMMUNICATIONS
(SEE NOTE 1)

COMBINED STATEMENTS OF EQUITY

The accompanying notes are an integral part of these combined financial
statements.

F-5
<PAGE> 156

SNYDER COMMUNICATIONS
(SEE NOTE 1)

COMBINED STATEMENTS OF CASH FLOWS

The accompanying notes are an integral part of these combined financial
statements.

F-6
<PAGE> 157

SNYDER COMMUNICATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS
(INFORMATION AS OF JUNE 30, 1995 AND 1996, AND FOR THE SIX MONTHS ENDED
JUNE 30, 1995 AND 1996 IS UNAUDITED)

1. ORGANIZATION, BASIS OF PRESENTATION AND BUSINESS:

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

CASH AND CASH EQUIVALENTS

F-7
<PAGE> 158

SNYDER COMMUNICATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

DEFERRED FINANCING COSTS

PROPERTY AND EQUIPMENT

When assets are retired or sold, the cost and related accumulated
depreciation and amortization are removed from the accounts, and any gain or
loss is reflected in income.

REVENUE RECOGNITION

INCOME TAXES

F-8
<PAGE> 159

SNYDER COMMUNICATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

ESTIMATES AND ASSUMPTIONS

CONCENTRATION OF CREDIT RISK

PRO FORMA NET INCOME PER SHARE

ACCOUNTING FOR STOCK OPTIONS

INTERIM FINANCIAL STATEMENTS

F-9
<PAGE> 160

SNYDER COMMUNICATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

3. SIGNIFICANT CLIENTS:

4. PROPERTY AND EQUIPMENT:

Property and equipment consists of the following.

5. DEBT:

SUBORDINATED DEBENTURES

F-10
<PAGE> 161

SNYDER COMMUNICATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

5. DEBT (CONTINUED)

charge to income of approximately $2.1 million ($1.3 million net of income
taxes) representing prepayment penalties plus the write off of unamortized
discount and debt issuance costs.

NOTES PAYABLE

Notes payable consisted of the following at December 31, 1994:

6. INCOME TAXES:

F-11
<PAGE> 162

SNYDER COMMUNICATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

6. INCOME TAXES (CONTINUED)

A reconciliation of taxes at the U.S. Federal income tax rate to the
Company's actual income taxes is as follows.

7. LEASES:

F-12
<PAGE> 163

SNYDER COMMUNICATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

7. LEASES (CONTINUED)

8. CAPITAL STOCK:

9. OPTIONS:

In September 1996, the Board of Directors of the Company adopted and the
stockholders of the Company approved the 1996 Stock Incentive Plan (the "Stock
Option Plan"). The Stock Option Plan, which terminates in 2006, on the tenth
anniversary of the effective date of the plan, is to be administered by the
Compensation Committee, which is required to be composed of at least two
directors, or by the Board of Directors of the Company if no Compensation
Committee is appointed. Following the Offerings, the directors serving on the
Compensation Committee must constitute "non-employee directors" as defined under
Rule 16b-3 under the Securities Exchange Act of 1934, as amended. The Stock
Option Plan authorizes the granting of incentive stock options, non-qualified
stock options, restricted stock awards and stock appreciation rights ("SARs"),
or any combination thereof, at the discretion of the Compensation Committee of
the Board of Directors. Subject to adjustment in certain circumstances, the
aggregate number of shares of Common Stock which may be issued under the Stock
Option Plan upon exercise of options, SARs or in the form of restricted stock
may not exceed five million shares.

10. RELATED PARTIES:

At December 31, 1995 and June 30, 1996, the Company was owed $45,426 and
$17,536, respectively, by certain stockholders of SMS. These advances were
non-interest bearing and were repaid in June, 1996.

F-13
<PAGE> 164

SNYDER COMMUNICATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

10. RELATED PARTIES (CONTINUED)

11. COMMITMENTS AND CONTINGENCIES:

12. PRO FORMA DATA (UNAUDITED):

F-14
<PAGE> 165

SNYDER COMMUNICATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

12. PRO FORMA DATA (UNAUDITED) (CONTINUED)

F-15
<PAGE> 166

[This page intentionally left blank]
<PAGE> 167

INSIDE BACK COVER OF PROSPECTUS:

The map also shows an inset of the Company's planned offices in the United
Kingdom.
<PAGE> 168

- ------------------------------------------------------
- ------------------------------------------------------

NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY, THE SELLING STOCKHOLDER OR THE UNDERWRITERS. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE
COMMON STOCK IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR
IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.

THERE ARE RESTRICTIONS ON THE OFFER AND SALE OF THE COMMON STOCK OFFERED
HEREBY IN THE UNITED KINGDOM. ALL APPLICABLE PROVISIONS OF THE FINANCIAL
SERVICES ACT 1986 AND THE PUBLIC OFFERS OF SECURITIES REGULATIONS 1995 WITH
RESPECT TO ANYTHING DONE BY ANY PERSONS IN RELATION TO THE COMMON STOCK IN, FROM
OR OTHERWISE INVOLVING THE UNITED KINGDOM MUST BE COMPLIED WITH. SEE
"UNDERWRITING."

IN THE PROSPECTUS, REFERENCES TO "DOLLARS" AND "$" ARE TO UNITED STATES
DOLLARS.

------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary................... 3
Risk Factors......................... 11
The Company.......................... 18
Use of Proceeds...................... 20
Dividend Policy...................... 20
Capitalization....................... 21
Dilution............................. 22
Selected Financial and Operating 23
Data...............................
Management's Discussion and Analysis 25
of Financial Condition and Results
of Operations......................
Business............................. 33
Management........................... 47
Certain Transactions................. 53
Principal and Selling Stockholders... 54
Description of Capital Stock......... 56
Shares Eligible for Future Sale...... 58
Certain United States Federal Tax 60
Consequences to Non-United States
Holders............................
Underwriting......................... 62
Legal Matters........................ 65
Experts.............................. 65
Additional Information............... 65
Index to Financial Statements........ F-1
UNTIL OCTOBER 19, 1996, (25 DAYS AFTER
THE DATE OF THIS PROSPECTUS), ALL DEALERS
EFFECTING TRANSACTIONS IN THE COMMON STOCK,
WHETHER OR NOT PARTICIPATING IN THIS
DISTRIBUTION, MAY BE REQUIRED TO DELIVER A
PROSPECTUS. THIS DELIVERY REQUIREMENT IS IN
ADDITION TO THE OBLIGATION OF DEALERS TO
DELIVER A PROSPECTUS WHEN ACTING AS
UNDERWRITERS AND WITH RESPECT TO THEIR
UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
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</TABLE>

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7,800,000 SHARES
[SNYDER COMMUNICATIONS, INC. LOGO]
COMMON STOCK
---------------------
PROSPECTUS
---------------------
MERRILL LYNCH INTERNATIONAL

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION

ALLEN & COMPANY
INCORPORATED
MONTGOMERY SECURITIES
ING BARINGS
NATWEST SECURITIES LIMITED
NOMURA INTERNATIONAL
UBS LIMITED

SEPTEMBER 24, 1996

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