AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 21, 1998
REGISTRATION NO. 333-_____
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________________________________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SNYDER COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 7389 52-1983617
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Number) Identification Number)
</TABLE>
TWO DEMOCRACY CENTER
6903 ROCKLEDGE DRIVE, 15TH FLOOR
BETHESDA, MARYLAND 20817
(301) 468-1010
(Address, including ZIP code, and telephone number, including area code, of
registrant's principal executive offices)
A. CLAYTON PERFALL
CHIEF FINANCIAL OFFICER
TWO DEMOCRACY CENTER
6903 ROCKLEDGE DRIVE, 15TH FLOOR
BETHESDA, MARYLAND 20817
(301) 468-1010
(Name, address, including ZIP code, and telephone number, including area
code, of agent for service)
COPY TO:
NORMAN D. CHIRITE, ESQ.
WEIL, GOTSHAL & MANGES LLP
767 FIFTH AVENUE
NEW YORK, NEW YORK 10153
(212) 310-8000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after this Registration Statement becomes effective.
If the securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box: [ ]
If the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, please check the following box: [X]
-----------------------
CALCULATION OF REGISTRATION FEE
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<CAPTION>
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PROPOSED
AMOUNT PROPOSED MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE(1) REGISTRATION FEE(2)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.001 par value 105,000 $37.188 $3,904,740 $1,152
===============================================================================================================
</TABLE>
(1) Calculated solely for the purpose of determining the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933, as amended (the
"Securities Act"), based on the average high and low sale prices of the
common stock, par value $0.001 per share, of Snyder Communications, Inc.
(the "Snyder Common Stock") as reported on the New York Stock Exchange,
Inc. (the "NYSE") Composite Tape on January 20, 1998.
(2) The registration fee for the Snyder Common Stock registered hereby,
$1,152, has been calculated pursuant to Section 6(b) of, and Rule
457(c) under, the Securities Act, as follows: 0.000295, multiplied by the
product of: (x) $37.188, the average of the high and low sale prices per
share of Snyder Common Stock as reported on the NYSE Composite Tape on
January 20, 1998 and (y) 105,000.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
Subject to Completion, Dated January 21, 1998
PROSPECTUS
SNYDER COMMUNICATIONS, INC.
105,000 Shares of Common Stock
($.001 Par Value)
This Prospectus relates to the offer and sale of up to 105,000 shares
(the "Shares") of the common stock, $.001 par value (the "Common Stock"), of
Snyder Communications, Inc., a Delaware corporation ("Snyder" or the "Company").
The Shares may be sold by certain stockholders of the Company or by their
transferees, pledgees, donees or their successors (the "Selling Stockholders")
from time to time in transactions effected on The New York Stock Exchange, Inc.
(the "NYSE") or through the facilities of any national securities exchange or
U.S. automated inter-dealer quotation system of a registered national securities
association, on which the Shares are then listed, admitted to unlisted trading
privileges or included for quotation, in privately negotiated transactions, or
in a combination of such methods of sale. Such methods of sale may be conducted
at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Selling Stockholders may
effect such transactions directly, or indirectly through underwriters,
broker-dealers or agents acting on their behalf, and in connection with such
sales, such broker-dealers or agents may receive compensation in the form of
commissions, concessions, allowances or discounts from the Selling Stockholders
and/or the purchasers of the Shares for whom they may act as agent or to whom
they sell Shares as principal or both (which commissions, concessions,
allowances or discounts might be in excess of customary amounts thereof). To the
extent required, the names of any agents, broker-dealers or underwriters and
applicable commissions, concessions, allowances or discounts and any other
required information with respect to any particular offer of the Shares by the
Selling Stockholders, will be set forth in a Prospectus Supplement. See "Selling
Stockholders" and "Plan of Distribution." Certain restrictions on the ability of
the Selling Stockholders to sell Shares owned by them are described under
"Selling Stockholders."
None of the proceeds from the sale of the Shares by the Selling
Stockholders will be received by the Company. The Company has agreed to bear all
expenses of registration of the Shares under federal or state securities laws
and to indemnify the Selling Stockholders against certain liabilities, including
liabilities under the Securities Act of 1933, as amended (the "Securities Act").
The Selling Stockholders and any underwriters, dealers or agents which
participate in the distribution of the Shares may be deemed to be "underwriters"
within the meaning of the Securities Act, and any commission received by them
and any profit realized on the resale of the Shares purchased by them may be
deemed to constitute underwriting commissions, concessions, allowances or
discounts under the Securities Act. See "Plan of Distribution."
SEE "RISK FACTORS" BEGINNING ON PAGE 6 OF THIS PROSPECTUS FOR A
DISCUSSION OF CERTAIN MATERIAL RISKS THAT SHOULD BE CONSIDERED IN CONNECTION
WITH AN INVESTMENT IN THE SHARES OFFERED HEREBY.
The Shares offered for resale by the Selling Stockholders are being
offered pursuant to a registration rights agreement. See "Selling Stockholders."
The Common Stock is traded on the NYSE under the symbol "SNC." The last
reported sale price of the Common Stock as reported on the NYSE Composite Tape
on January 20, 1998 was $37.313 per share.
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.
The date of this Prospectus is , 1998.
<PAGE>
NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN AS CONTAINED IN
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, ANY SELLING
STOCKHOLDER OR ANY UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SHARES OFFERED HEREBY TO
ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE ANY SUCH OFFER OR
SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL UNDER ANY CIRCUMSTANCE IMPLY THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
AVAILABLE INFORMATION
The Company is subject to the information reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as applicable
to U.S. private issuers with securities registered thereunder, and, in
accordance therewith, files reports and other information with the Securities
and Exchange Commission (the "Commission"). Copies of reports, proxy statements,
information statements and other information filed by the Company with the
Commission can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, and also are available for inspection at the Commission's regional
offices located at Citicorp Center, 500 West Madison, Suite 1400, Chicago,
Illinois 60661 and 7 World Trade Center, Suite 1300, New York, New York 10048,
and at the Commission's Web site at (http://www.sec.gov). Copies of such
material also can be obtained at prescribed rates from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549.
Such reports, proxy statements, information statements and other information may
also be inspected at the offices of the NYSE at 20 Broad Street, New York, New
York 10005. Materials that the Company files electronically with the Commission
are available at the Commission's website (http://www.sec.gov), which contains
reports, proxy statements, information statements and other information
regarding issuers that file electronically with the Commission.
The Company has filed with the Commission a Registration Statement on
Form S-3 (together with all amendments thereto, the "Registration Statement")
under the Securities Act with respect to the Shares. This Prospectus does not
contain all of the information set forth in the Registration Statement, certain
parts of which are omitted in accordance with the rules and regulations of the
Commission. Statements made in this Prospectus as to the contents of any
contract, agreement or other document referred to are not necessarily complete
and, with respect to each such contract, agreement or other document filed as an
exhibit to the Registration Statement, reference is made to the exhibit for a
more complete description of the matter involved, and each such statement is
deemed qualified in its entirety by such reference.
2
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INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the Commission
pursuant to the Securities Act and the Exchange Act (File No. 1-12145) are
incorporated by reference in this Prospectus: (i) the Company's Registration
Statement on Form S-1 (Registration No. 333-33691); (ii) the Company's Annual
Report on Form 10-K for its fiscal year ended December 31, 1996, filed by the
Company with the Commission on March 21, 1997; (iii) the Company's Quarterly
Report on Form 10-Q for its fiscal quarter ended March 31, 1997, filed by the
Company with the Commission on May 15, 1997; (iv) the Company's Quarterly Report
on Form 10-Q for its fiscal quarter ended June 30, 1997, filed by the Company
with the Commission on August 14, 1997; (v) the Company's Quarterly Report on
Form 10-Q for its fiscal quarter ended September 30, 1997, filed by the Company
with the Commission on November 14, 1997; (vi) the Company's Current Report on
Form 8-K dated January 6, 1996, filed by the Company with the Commission on
January 17, 1997, as amended; (vii) the Company's Current Report on Form 8-K
dated January 17, 1997, filed by the Company with the Commission on January 31,
1997; (viii) the Company's Current Report on Form 8-K dated March 18, 1997,
filed by the Company with the Commission on April 2, 1997, as amended; (ix) the
Company's Current Report on Form 8-K dated July 11, 1997, filed by the Company
with the Commission on July 25, 1997; (x) the Company's Current Report on Form
8-K dated July 13, 1997, filed by the Company with the Commission on July 28,
1997; (xi) the Company's Current Report on Form 8-K dated July 31, 1997, filed
by the Company with the Commission on August 25, 1997; (xii) the Company's
Current Report on Form 8-K dated August 28, 1997, filed by the Company with the
Commission on September 12, 1997; (xiii) the Company's Current Report on Form
8-K dated August 31, 1997, filed by the Company with the Commission on September
18, 1997; (xiv) the Company's Current Report on Form 8-K dated November 25,
1997, filed by the Company with the Commission on January 21, 1998 and (xv) the
description of the Company's Common Stock contained in the Company's
Registration Statement on Form 8-A, filed with the Commission on September 9,
1996, including any amendment or report filed for the purposes of updating such
description.
All reports and other documents filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of this Prospectus and prior to the termination of the
offering of the Shares made by this Prospectus shall be deemed to be
incorporated herein by reference and to be a part hereof on and from the date of
filing of such documents. Any statement contained in a document incorporated or
deemed to be incorporated by reference in this Prospectus shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or incorporated herein by reference or in any other
subsequently filed document that also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon the written or oral
request of such person, a copy of any and all documents incorporated by
reference in this Prospectus (not including, however, the exhibits to such
documents unless such exhibits are specifically incorporated by reference in
such information). Such requests should be directed to: Snyder Communications,
Inc., Two Democracy Center, 6903 Rockledge Drive, 15th Floor, Bethesda, Maryland
20817; Attention: Secretary, telephone number (301) 468-1010.
3
<PAGE>
SUMMARY
The following description is qualified in its entirety by, and should
be read in conjunction with, the more detailed information and the financial
statements and notes thereto incorporated by reference in this Prospectus.
Unless otherwise indicated, all information in this Prospectus assumes that MMD,
Inc., Brann Holdings Limited ("Brann"), American List Corporation ("American
List"), Sampling Corporation of America, Bounty Group Holdings Limited
("Bounty"), GEM Communications Inc., Rapid Deployment Group Limited
("RDL") and PharmFlex, Inc. (collectively, the "Acquisitions"), because the
acquisition of each such company was accounted for as a pooling of interests,
were all wholly-owned subsidiaries of the Company. As used herein, the "Company"
or "Snyder" means Snyder Communications, Inc., including the Acquisitions and
its other directly and indirectly owned subsidiaries. In this Prospectus,
references to "dollar" and "$" are to United States dollars, and the terms
"United States" and "U.S." mean the United States of America (including the
States and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction. References to "United Kingdom" and "U.K."
refer to the United Kingdom of Great Britain and Northern Ireland.
THE COMPANY
The Company is a rapidly growing international provider of complete
marketing solutions primarily to Fortune 500 size companies that outsource
elements of their global sales and marketing efforts. The Company integrates its
various capabilities, including its proprietary distribution channels, into
innovative, value-added marketing programs that supplement its clients' sales
and marketing activities. The Company identifies high-value consumer segments;
designs and implements marketing programs to reach them; initiates and closes
sales on behalf of its clients; and provides customer care and retention
services. The Company's resources include proprietary databases of targeted
consumers and small businesses, database management services, proprietary
product sampling programs and publications, sponsored information displays in
proprietary locations, marketing program consultants, field sales and marketing
representatives, inbound and outbound teleservice representatives, and direct
mail and fulfillment capabilities. By expanding the range of its capabilities,
its specialized distribution channels and its geographical presence, the Company
seeks to provide a single source for its clients' outsourced sales and marketing
needs.
The Company's revenues, exclusive of acquisitions, in 1995 and 1996
were $42.9 million and $82.8 million, respectively. The Company's consolidated
revenues, restated to include revenues from the Acquisitions for all reported
periods, increased from $187.6 million in 1995 to $266.4 million in 1996, and
from $188.6 million in the first nine months of 1996 to $238.2 million in the
first nine months of 1997. To date, substantially all of the Company's revenues
have been generated from operations in the U.S. and U.K.
The Company's clients primarily are global companies with large annual
sales and marketing expenditures facing significant competitive pressures to
retain or expand market share. The clients operate in various industries,
including telecommunications, pharmaceuticals, consumer packaged goods,
financial services and gas and electric utilities. Based on 1996 revenues, the
ten largest clients of the Company, listed alphabetically, were Astra
Pharmaceuticals, AT&T, Bayer, Bristol Myers Squibb, Hoechst Marion Roussel, MCI,
Novartis Consumer Health, Procter & Gamble, Wyeth-Ayerst and Zurich Municipal.
The Company's marketing programs utilize the resources of one or more
of the Company's four service groups: Direct Services, Media and Sampling
Services, Medical Services and Data Delivery Services. Prior to September 1996
when the Company had its initial public offering of common stock, substantially
all of the Company's capabilities were located in the United States and
consisted of field sales representatives and teleservices associates in its
Direct Services group and information displays and sampling pack programs in its
Media and Sampling Services group.
In order to broaden the range of services it provides to its clients
and to expand geographically, since January 1, 1997, the Company has completed
several acquisitions of companies engaged in the marketing industry
4
<PAGE>
in the U.S., the U.K., Ireland and Hungary, including, among others, the
Acquisitions. To complement and supplement its existing management depth, the
Company retained the key members of management of each of the acquired
companies.
----------------------
For additional information relating to the Company's business,
operations, properties, certain Acquisitions and other matters, see the
documents referred to above under "Incorporation of Certain Information by
Reference."
5
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RISK FACTORS
This Prospectus contains forward-looking statements that involve risks
and uncertainties. Actual results could differ materially from those discussed
in the forward-looking statements as a result of certain factors, including
those set forth below and elsewhere in this Prospectus. The following risk
factors should be considered carefully in addition to the other information in
this prospectus before purchasing the shares of Common Stock offered hereby.
RELIANCE ON SIGNIFICANT CLIENTS
Until recently, AT&T was the Company's largest client, accounting for
$50.4 million, or 18.9%, of the Company's 1996 revenues. The Company provided
direct sales services for certain of AT&T's consumer and commercial products
under several operating agreements through December 1997. Upon expiration of the
Company's consumer contract with AT&T in December 1997, the Company elected not
to renew the contract and began providing similar services to GTE Communications
Corporation ("GTE") under a three-year contract which the Company expects will
generate greater revenues than the expired AT&T contract. The Company currently
continues to provide direct sales services targeting commercial customers for
AT&T, although the Company anticipates that it may in the near future
discontinue its relationship with AT&T and cease providing AT&T with such
services. In such event, the Company expects that it will provide direct sales
services targeting commercial customers to one or more other clients. There can
be no assurance that the provision by the Company of direct sales services in
consumer markets on behalf of GTE will generate revenues or profitability which
are greater than or equal to those that were previously generated as a result of
the Company's provision of similar services to AT&T or that, if the Company
discontinues its commercial customer marketing program with AT&T, the Company
will be able to replace that program with business generating comparable
revenues or profitability.
The Company's ten largest clients accounted for 58.3% of the Company's
1996 revenues. The ten largest clients of the Company, listed alphabetically and
based on 1996 revenues, were Astra Pharmaceuticals, AT&T, Bayer, Bristol Myers
Squibb, Hoechst Marion Roussel, MCI, Novartis Consumer Health, Procter & Gamble,
Wyeth-Ayerst and Zurich Municipal. Certain clients use a significant portion of
the services of one of the Company's service groups, such as Procter & Gamble
for the Media and Sampling Services group. The loss of any of the Company's
significant clients could have a material adverse effect on the Company's
results of operations. As is typical in the industry, the vast majority of the
Company's contracts either are short-term or are cancelable on specified notice
periods by the client. As a result, there can be no assurance that the Company's
most significant clients will continue to do business with the Company over the
long term. If any of the Company's significant clients elect not to renew their
contracts, it could have a material adverse effect on the Company's results of
operations.
GROWTH THROUGH ACQUISITIONS
The Company plans to continue to expand its business through
complementary acquisitions. On December 31, 1997, the Company entered into an
agreement and plan of merger with Blau Marketing Technologies, Inc., a Delaware
corporation ("Blau"). The transaction has been approved by Blau's board of
directors and principal shareholders, but remains subject to the approval of
other shareholders of Blau. The Company is currently evaluating several
additional acquisitions and expects to continue to consider growth opportunities
through additional acquisitions which may involve payments in cash or the
issuance of additional shares of Common Stock, although there are no definitive
arrangements or agreements to do so at this time. There can be no assurance that
the Company will have sufficient capital resources to continue to pursue this
aspect of its growth strategy. Additionally, there can be no assurance that the
Company will successfully identify, complete or integrate additional
acquisitions or that any acquired companies, including its recent acquisitions,
will perform as expected or will contribute significant revenues or profits to
the Company. The Company may also, in the future, face increased competition for
acquisition opportunities, which may inhibit the Company's ability to consummate
suitable acquisitions on terms favorable to the Company.
6
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INTEGRATION OF ACQUISITIONS
Since January 1, 1997, the Company has completed several acquisitions,
including, among others, the Acquisitions. The services provided by the acquired
companies, although complementary, differ in varying degrees from the services
offered by the Company. There can be no assurance that the anticipated benefits
with respect to the clients and targeted markets of these acquisitions will be
achieved. Moreover, the Company had limited experience in acquiring businesses
prior to these acquisitions. Thus, the Company has not yet demonstrated the
long-term ability to successfully manage an acquired business. There can be no
assurance that the Company will be able to manage successfully the new service
areas of the Company, the employees of such service areas or the client bases
supported by such service areas. The inability of the Company to integrate and
manage acquired businesses successfully could have a material adverse effect
upon the Company.
MANAGEMENT OF GROWTH
The Company has experienced rapid growth over the past several years.
Continued growth depends to a significant degree 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 maintain the high quality of the
services it provides to customers and to increase its penetration with existing
customers, recruit, motivate and retain qualified personnel, and train existing
sales representatives or recruit new sales representatives on an economic basis
to sell different categories of services or products. 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.
RISK ASSOCIATED WITH INTERNATIONAL OPERATIONS AND EXPANSION
The Company acquired Brann in March 1997, Bounty in July 1997, Halliday
Jones Sales Limited ("Halliday Jones") in August 1997 and RDL in November 1997,
its first international acquisitions. A key component of the Company's growth
strategy is continued international expansion. There can be no assurance that
the Company will be able to successfully acquire companies, or integrate
acquired companies to expand its international operations. In addition, there
are certain risks inherent in conducting international business, including
exposure to currency fluctuations, difficulties in complying with a variety of
foreign laws, unexpected changes in regulatory requirements, difficulties in
staffing and managing foreign operations, and potentially adverse tax
consequences. There can be no assurance that one or more of such factors will
not have a material adverse effect on the Company's international operations and
consequently on the Company's business, results of operations or financial
condition.
ADVERSE EFFECT OF FOREIGN EXCHANGE RATES ON RESULTS OF OPERATIONS
As a result of the acquisitions of Brann, Bounty, Halliday Jones and
RDL, approximately 42% of the Company's revenues in the first nine months of
1997 were from outside of the United States, the vast majority of which were
denominated in British pounds. The U.S. dollar value of the Company's revenues
varies with currency exchange rate fluctuations. Significant increases in the
value of the U.S. dollar relative to the British pound could have a material
adverse effect on the Company's results of operations. The Company continually
evaluates its exposure to exchange rate risk but does not currently hedge such
risk.
7
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DEPENDENCE ON TREND TOWARD OUTSOURCING
The Company's business and growth depend in large part on the trend
toward outsourcing of marketing services. 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
generally, or a trend in the telecommunications or pharmaceutical industry not
to use, or to reduce the use of, outsourced marketing services, such as those
provided by the Company, would have a material adverse effect on the Company.
COMPETITIVE AND FRAGMENTED INDUSTRY
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 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. 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. In addition, many of the Company's
initial sources for names in its databases could also be available to a
competitor wishing to develop a data delivery business.
DEPENDENCE ON LABOR FORCE
Many aspects of the Company's business are very labor intensive and
experience high personnel turnover. Many of the Company's employees receive
hourly wages plus commissions, if earned. 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
typically require specially trained persons, such as those employees who market
services and products in languages other than English and those independent
contractors in the pharmaceutical detailing business. 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 persons.
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 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.
8
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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 Daniel M. Snyder, Chairman of the Board of Directors and Chief
Executive Officer. 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 or of 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. Courts, however, are at times reluctant to enforce such
non-competition agreements. In addition, many of the Company's executive
officers and other key personnel either are participants in the Company's 1996
Stock Incentive Plan or hold a significant amount of Common Stock (as is the
case with Mr. Snyder). The Company believes that these interests increase the
incentives such key employees have to remain with the Company. In order to
support its growth, the Company will be required to effectively recruit, 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.
GOVERNMENT REGULATION
The Company's business conducted in the U.S. 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 ("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 such a contract may be canceled within three
business days. Other states require third-party verification for door-to-door
solicitation.
Several of the industries in which the Company's clients operate are
subject to varying degrees of governmental regulation, particularly the
telecommunications, pharmaceuticals and healthcare 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.
One of the significant regulations of the FCC applicable to long
distance carriers, including GTE (a client of the Company), prohibits the
unauthorized switching of subscribers' long distance carriers, 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.
Third-party verification generally is not required for switches obtained
in person, such as those obtained by members of the Company's Direct Services
field sales force. 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
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possible that employees may in some instances engage in unauthorized activities,
including slamming. 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 by GTE 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 connection with the handling and distribution of samples of
pharmaceutical products, the Medical Services group is subject to regulation by
its clients, the Prescription Drug Marketing Act of 1987 and other applicable
federal, state and local laws and regulations in the United States and certain
regulations of the United Kingdom and European Union. Pharmaceutical companies
and the health care industry in general are subject to significant U.S. federal
and state and European regulation. In particular, regulations affecting the
pricing or marketing of pharmaceuticals could make it uneconomic or infeasible
for pharmaceutical companies to market their products through medical marketing
detailers. Other changes in the domestic and international regulation of the
pharmaceutical industry could also have a material adverse effect on the Medical
Services group.
Two bills introduced in the last session of Congress included provisions
requiring parental consent to any sale of lists of names of minors. Though
neither of these bills was reported out of committee, there can be no assurance
that similar legislation will not be passed in the future. In addition, similar
legislative initiatives have occured or are pending in various states, although
to the Company's knowledge no such legislation has become law. Any substantial
legal restriction on the use or sale of marketing lists could have a material
adverse effect on the Company's results of operations.
The uncertainty of the regulatory environment is increased by the fact
that the Company generates and receives data from many sources. As a result,
there are many ways both domestic and foreign governments might attempt to
regulate the Company's use of its data. Any such restriction could materially
adversely affect the Company's financial condition and results of operations.
The services offered by the Direct Services group may be subject to
certain regulations of the U.K. and the European Union, including regulations
relating to inbound and outbound teleservices, advertising content, promotions
of financial products, activities requiring customers to send money with mail
orders and the maintenance and use of customer data held on databases. In
addition, the printing facility utilized by the Direct Services group is also
subject to certain environmental regulations regarding the storage and disposal
of certain chemicals involved in the printing process. The Company believes that
the Direct Services group is substantially in compliance with applicable
regulations. There can be no assurance, however, that additional U.K. or
European Union legislation, or changes in the regulatory implementation, would
not limit the activities of the Direct Services group or significantly increase
the cost of regulatory compliance.
POTENTIAL FLUCTUATIONS IN QUARTERLY OPERATING RESULTS
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 revenue shortfall below such forecast in any quarter
would be likely to affect adversely the Company's operating results for that
quarter.
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SHARES ELIGIBLE FOR FUTURE SALE AND REGISTRATION RIGHTS
The Company has outstanding an aggregate of 52,102,940 shares of Common
Stock. Of the 52,102,940 shares, 24,549,249 shares are freely transferable
without restriction or further registration under the Securities Act, 105,000
shares owned by the Selling Stockholders may be offered for resale pursuant
hereto and 27,448,691 shares are "restricted securities" within the meaning of
Rule 144 under the Securities Act and will not be able to be sold other than
pursuant to an effective registration statement under the Securities Act,
pursuant to an exemption from the registration requirements of the Securities
Act, or subject to the volume limitations of Rule 144 under the Securities Act.
In addition, shares of Common Stock to be issued upon the exercise of certain
options will be freely transferable upon such exercise.
On September 24, 1997, D.M.S. Endowment, LLC, a limited liability
company of which Daniel M. Snyder and Michele D. Snyder are the beneficial
owners, F.D. Sutton, LLC, a limited liability company of which Fred Drasner is
the beneficial owner, USN College Marketing, L.P., a limited partnership of
which Mortimer B. Zuckerman, the MBZ Trust of 1996 and Fred Drasner are the
beneficial owners, and A.O. Roberts, LLC, a limited liability company of which
Dr. A.O. Roberts is the beneficial owner, entered into a forward purchase
contract (the "Contract") with the Snyder STRYPES Trust, a Delaware business
trust (the "Trust"). Pursuant to the Contract, such stockholders are obligated
to deliver to the Trust an aggregate of up to 5,175,000 shares of Common Stock
owned by such stockholders, or cash equal to the value thereof, three years from
the date of the Contract. Prior to any such delivery, such stockholders will
retain voting and dividend rights with respect to the shares that are the
subject of the Contract.
Pursuant to agreements, Mr. 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, 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.
Future sales of substantial amounts of Common Stock in the public market
could adversely affect the market price of the Common Stock and the ability of
the Company to raise additional capital or engage in business combinations
through sales of additional shares of Common Stock.
CONTROL BY PRINCIPAL STOCKHOLDERS
Daniel M. Snyder, the Chairman of the Board of Directors and Chief
Executive Officer of the Company, and Michele D. Snyder, Vice Chairman,
President, Chief Operating Officer and a director of the Company, beneficially
own approximately 19.3% and 6.4%, respectively, of the outstanding shares of
Common Stock. As a result, Mr. Snyder individually, and he and Ms. Snyder if
they act in concert, 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.
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 stockholder nominations of candidates
for the Board of Directors of the Company (the "Board") and for new business to
be conducted at any meeting of the stockholders. In addition, the Certificate of
Incorporation allows the Board to issue up to 5,000,000 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
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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 Corporation Law, which could have the effect of discouraging, delaying
or preventing a change of control of the Company.
VOLATILITY OF STOCK PRICE AND ABSENCE OF DIVIDENDS
The public trading market for Common Stock was first established after
the Company's initial public offering in September 1996. Between the date of the
Company's initial public offering and January 20, 1998, the market price of
Common Stock has traded at a high of $38.94 per share and a low of $17.75 per
share.
Future announcements concerning the Company or its competitors,
including quarterly results, innovations, new product introductions,
governmental regulation, litigation or changes in earnings estimates published
by analysts may cause the market price of Common Stock to fluctuate
significantly. The stock market has from time to time experienced extreme price
and volume fluctuations which have particularly affected the market price for
many emerging growth companies which often have been unrelated to the operating
performance or prospects of these companies. These fluctuations, as well as
general economic, political and market conditions, such as recessions or
international currency fluctuations, may adversely affect the market price of
Common Stock. There can be no assurance that the market price of Common Stock
will not decline below its present market price. The market price of Common
Stock is based upon anticipated future earnings growth. Furthermore, the Company
is reliant on a core group of key customers. Any loss of any of these customers
could be detrimental to the market price of Common Stock. See "-Reliance on
Significant Clients." The future market price of Common Stock will depend on
delivering results anticipated by public investors. Any failure to meet specific
expectations may have an adverse effect on the market price of Common Stock.
USE OF PROCEEDS
The Shares are being offered hereby solely for the accounts of the
Selling Stockholders pursuant to a registration rights agreement. The Company
will not receive any proceeds from the sale of the Shares. See "Selling
Stockholders."
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<PAGE>
SELLING STOCKHOLDERS
Each of the Selling Stockholders listed below is a party to a shelf
registration rights agreement with the Company entered into on November 28, 1997
in connection with the acquisition by the Company of RDL (the "RDL Registration
Rights Agreement"). Pursuant to the RDL Registration Rights Agreement, Snyder
has filed the Registration Statement of which this Prospectus forms a part and
has also agreed to bear certain expenses related thereto and to indemnify each
Selling Stockholder against certain liabilities, including liabilities arising
under the federal securities laws.
Snyder has filed with the Commission the Registration Statement of which
this Prospectus forms a part with respect to the sale by the Selling
Stockholders of the Shares from time to time on the NYSE or through the
facilities of any national securities exchange or U.S. automated inter-dealer
quotation system of a registered national securities association, on which the
Shares are then listed, admitted to unlisted trading privileges or included for
quotation, in privately negotiated transactions or otherwise, as more fully
described below under "Plan of Distribution." Pursuant to the RDL Registration
Rights Agreement, the Company has agreed to use its best efforts to keep the
Registration Statement continuously effective (subject to the Company's right to
require Selling Stockholders to suspend their use of this Prospectus under
certain circumstances), until the earlier of such time as all of the securities
covered by the Registration Statement have been sold pursuant thereto or the
first anniversary of the closing date of the RDL acquisition.
The table below sets forth certain information regarding the
beneficial ownership of the Shares by each Selling Stockholder prior to the
offering and as adjusted to give effect to the sale of all of the Shares offered
hereby. The Shares are being registered to permit public secondary trading of
the Shares and the Selling Stockholders may offer the Shares for sale from time
to time. See "Plan of Distribution."
Beneficial Ownership Number of Beneficial Ownership
at January 20, 1998(1) Shares After Offering
Covered by
Number Percent by this Number Percent
Selling Stockholders of Shares of Class Prospectus of Shares of Class
- -------------------- --------- -------- ---------- --------- --------
Bear, Stearns & Co. Inc. 52,500 * 52,500 - -
Merrill Lynch, Pierce, 52,500 * 52,500 - -
Fenner & Smith
Incorporated
- ------------------------------------------------------
* Less than 1.0%
(1) Based upon 52,102,940 shares of Common Stock outstanding as of January
20, 1998.
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<PAGE>
PLAN OF DISTRIBUTION
The Selling Stockholders have advised the Company that the Shares may
be sold from time to time by the Selling Stockholders in transactions effected
on the NYSE or through the facilities of any national securities exchange or
U.S. automated inter-dealer quotation system of a registered national securities
association, on which any of the Shares are then listed, admitted to unlisted
trading privileges or included for quotation, in privately negotiated
transactions or in a combination of such methods of sale. Such methods of sale
may be conducted at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. The Selling
Stockholders may effect such transactions directly, or indirectly through
underwriters, broker-dealers or agents acting on their behalf, and in connection
with such sales, such broker-dealers or agents may receive compensation in the
form of commissions, concessions, allowances or discounts from the Selling
Stockholders and/or the purchasers of the Shares for whom they may act as agent
or to whom they sell Shares as principal or both (which commissions,
concessions, allowances or discounts might be in excess of customary amounts
thereof). To the extent required, the names of any agents, broker-dealers or
underwriters and applicable commissions, concessions, allowances or discounts
and any other required information with respect to any particular offer of the
Shares by the Selling Stockholders, will be set forth in a Prospectus
Supplement. Sales will be made only through broker-dealers registered as such in
a subject jurisdiction or in transactions exempt from such registration. The
Company has not been advised of any definitive selling arrangement at the date
of this Prospectus between any Selling Stockholder and any broker-dealer or
agent. The Company will not receive any of the proceeds from the sale of the
Shares by the Selling Stockholders.
In connection with the distribution of the Shares, certain of the
Selling Stockholders may enter into hedging transactions with broker-dealers. In
connection with such transactions, broker-dealers may engage in short sales of
the Shares in the course of hedging the positions they assume with the Selling
Stockholders. The Selling Stockholders may also sell the Shares short and
redeliver the Shares to close out the short positions. The Selling Stockholders
may also enter into option or other transactions with broker-dealers which
require the delivery of the Shares to the broker-dealer. The Selling
Stockholders may also loan or pledge the Shares to a broker-dealer and the
broker-dealer may sell the Shares so loaned, or upon a default, the
broker-dealer may effect sales of the pledged shares.
Any broker-dealer participating in any distribution of Shares in
connection with the offering made hereby may be deemed to be an "underwriter"
within the meaning of the Securities Act and may be required to deliver a copy
of this Prospectus, including a Prospectus Supplement, to any person who
purchases any of the Securities from or through such broker-dealer.
Under the RDL Registration Rights Agreement, Snyder is required to use
its best efforts to file the reports required to be filed by it under the
Securities Act and the Exchange Act in a timely manner and, upon the request of
a holder of securities covered by the RDL Registration Rights Agreement, to make
publicly available other information necessary to permit sales of their
securities pursuant to Rules 144 and 144A.
Pursuant to the RDL Registration Rights Agreement, Snyder is required to
bear all fees and expenses incurred in connection with the registration of the
Shares, other than fees and expenses of the Selling Stockholders' counsel. Each
of Snyder and the Selling Stockholders has agreed to indemnify the other against
certain civil liabilities, including certain liabilities arising under the
Securities Act and Exchange Act, or, to the extent such indemnification is
unavailable or otherwise limited, to contribute to the amount paid or payable in
connection therewith.
LEGAL MATTERS
The legality of the securities offered hereby will be passed upon for
the Company by Weil, Gotshal & Manges LLP, New York, New York.
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EXPERTS
The consolidated financial statements of the Company as of December 31,
1996 and 1995 and for each of the three years in the period ended December 31,
1996 and the related schedule included in the Company's Registration Statement
on Form S-1 (Registration No. 333-33691) and incorporated by reference in this
Prospectus and elsewhere in the Registration Statement, as well as the
supplemental consolidated financial statements of the Company as of December 31,
1996 and 1995 and for each of the three years in the period ended December 31,
1996 and the related supplemental schedule included in the Company's Current
Report on Form 8-K, filed with the Commission on January 21, 1998 and
incorporated by reference in this Prospectus and elsewhere in the Registration
Statemet have been audited by Arthur Andersen LLP, independent public
accountants, as set forth in their reports. In those reports, that firm states
that with respect to the operations of Brann and its subsidiaries and American
List and its subsidiaries its opinion is based on the reports of other
independent public accountants, namely Price Waterhouse, Chartered Accountants
and Registered Auditors and Grant Thornton LLP. Insofar as the financial
statements and related schedule referred to above relate to amounts included for
American List or Brann they have been incorporated by reference herein in
reliance upon the authority of those firms as experts in giving said reports.
The consolidated financial statements of Brann and its subsidiaries as
of December 31, 1996 and 1995 and for each of the three years in the period
ended December 31, 1996, have been audited by Price Waterhouse, Chartered
Accountants, as set forth in its report thereon incorporated by reference
herein.
The consolidated financial statements of American List and its
subsidiaries as of February 28, 1997 and February 29, 1996 and for each of the
years in the three-year period ended February 28, 1997, have been audited by
Grant Thornton LLP, independent certified public accountants, as set forth in
its report thereon incorporated by reference herein.
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=========================================== ===================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE SNYDER COMMUNICATIONS, INC.
ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS AND, IF
GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE 105,000 SHARES
COMPANY. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY
SECURITY OTHER THAN THE SHARES OF COMMON
STOCK OFFERED HEREBY, NOR DOES IT
CONSTITUTE AN OFFER TO SELL OR A COMMON STOCK
SOLICITATION OF ANY OFFER TO BUY SHARES
OF COMMON STOCK BY ANYONE IN ANY
JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED, OR IN
WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO,
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 PROSPECTUS
IMPLICATION THAT INFORMATION CONTAINED ----------
HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF.
, 1998
TABLE OF CONTENTS
PAGE
----
Available Information......................2
Incorporation of Certain Information
by Reference.............................3
Summary....................................4
Risk Factors...............................6
Use of Proceeds...........................12
Selling Stockholders......................13
Plan of Distribution......................14
Legal Matters.............................14
Experts...................................15
============================================ ==================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated amounts of the expenses of and related to offering are as
follows:
Registration Fee -- Securities and Exchange Commission.... $ 1,152
Accounting fees and expenses.............................. 300,000
Legal fees and expenses................................... 50,000
Miscellaneous............................................. $ 13,848
Total..................................................... $ 365,000
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of the State of Delaware
(the "DGCL") empowers a Delaware corporation to indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that such person is or was a director, officer, employee or
agent of such corporation or is or was serving at the request of such
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise. Such indemnification may
include expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding, provided that such person acted in good faith
and in a manner such person reasonably believed to be in or not opposed to the
best interests of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe such person's conduct was
unlawful. A Delaware corporation is permitted to indemnify directors, officers,
employees and other agents of such corporation in an action by or in the right
of the corporation under the same conditions, except that no indemnification is
permitted without judicial approval if the person to be indemnified has been
adjudged to be liable to the corporation. Where a director, officer, employee or
agent of the corporation is successful on the merits or otherwise in the defense
of any action, suit or proceeding referred to above or in defense of any claim,
issue or matter therein, the corporation must indemnify such person against the
expenses (including attorneys' fees) which he or she actually and reasonably
incurred in connection therewith.
Snyder's Bylaws provide that Snyder shall indemnify, to the full extent
and under the circumstances permitted by the DGCL in effect from time to time,
any past, present or future director or officer, made or threatened to be made a
party to any threatened, pending or completed action, suit or proceeding, by
reason of the fact that such person is or was a director, officer, employee or
agent, or was serving in such capacities at another entity at the specific
request of Snyder, on the same conditions provided by the DGCL. Snyder's Bylaws
further provide that Snyder shall indemnify any such person in any threatened,
pending or completed action or suit by or on behalf of Snyder under similar
conditions, except that no indemnification is permitted without judicial
approval if the person to be indemnified has been adjudged to be liable to
Snyder. In addition, Snyder's Bylaws provide that
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the Board of Directors may also grant indemnification to any individual other
than an officer or director, as it may determine in its sole discretion.
As permitted by Section 102(b)(7) of the DGCL, Snyder's Certificate of
Incorporation contains a provision eliminating the personal liability of a
director to Snyder or its stockholders for monetary damages for breach of
fiduciary duty as a director, subject to certain exceptions.
Snyder maintains policies insuring its officers and directors against
certain civil liabilities, including liabilities under the Securities Act.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
EXHIBIT NO. DESCRIPTION
---------- -----------
2.1 Agreement and Plan of Merger, dated as of March 18, 1997, among the
Registrant, Snyder G Acquisition, Inc. and American List
Corporation.(1)
2.2 Recommended Offer by the Registrant for Brann Holdings Limited,
dated March 21, 1997.(1)
2.3 Agreement and Plan of Merger among the Registrant, Snyder
Acquisition Corp., MMD, Inc. and the stockholders of MMD, Inc.,
dated as of January 6, 1997.(2)
3.1 Certificate of Incorporation of the Registrant.(3)
3.2 By-laws of the Registrant.(3)
4.1 Instruments defining the rights of securityholders: Reference is
made to exhibits 3.1 and 3.2.
4.2 Form of certificate evidencing shares of Common Stock of the
Registrant.(3)
4.3 Exchange Agreement by and among the Registrant,
Snyder Marketing Services, Inc., each of the stockholders of Snyder
Marketing Services, Inc. and each of the limited partners of Snyder
Communications, L.P., dated September 4, 1996.(3)
4.4 Shelf Registration Rights Agreement, dated as of November 28, 1997,
among the Registrant and the Shareholders listed on the signature
page thereof.
5 Opinion of Weil, Gotshal & Manges LLP as to the legality of
the Common Stock of the Registrant.
23.1 Consent of Weil, Gotshal & Manges LLP (included in Exhibit 5).
23.2 Consent of Arthur Andersen LLP.
23.3 Consent of Grant Thornton LLP.
23.4 Consent of Price Waterhouse, Chartered Accountants and Registered
Auditors.
24 Power of Attorney (included as part of the signature page of this
Registration Statement).
--------------
(1) Previously filed as an exhibit to the Registrant's Current Report on
Form 8-K, dated March 18, 1997, and incorporated herein by reference.
(2) Previously filed as an exhibit to the Registrant's Current Report on
Form 8-K, dated January 6, 1997, and incorporated herein by reference.
(3) Previously filed as an exhibit to the Registrant's Registration
Statement on Form S-1, as amended, dated September 23, 1996, and
incorporated herein by reference.
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<PAGE>
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high and of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3, Form S-8 or Form F-3, and
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
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<PAGE>
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933, as amended, and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933, as amended, and will be
governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Bethesda, State of Maryland, on this 21st day of
January, 1998.
SNYDER COMMUNICATIONS, INC.
By: /s/ Daniel M. Snyder
----------------------------------
Daniel M. Snyder
Chairman of the Board of Directors
and Chief Executive Officer
POWER OF ATTORNEY
KNOWN ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Daniel M. Snyder, Michele D.
Snyder and A. Clayton Perfall, and each and either of them, his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign any
and all amendments (including, without limitation, post-effective amendments) to
this Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities and
on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Daniel M. Snyder January 21, 1998
- ----------------------------------------------- Chairman of the Board of
Daniel M. Snyder Directors and Chief Executive
Officer
/s/ Michele D. Snyder January 21, 1998
- ----------------------------------------------- Vice Chairman, President, Chief
Michele D. Snyder Operating Officer and Director
II-5
<PAGE>
/s/ A. Clayton Perfall
- ----------------------------------------------- Chief Financial Officer and January 21, 1998
A. Clayton Perfall Director
/s/ David B. Pauken
- ----------------------------------------------- Chief Accounting Officer and January 21, 1998
David B. Pauken Secretary
/s/ Mortimer B. Zuckerman
- ----------------------------------------------- Director January 21, 1998
Mortimer B. Zuckerman
/s/ Fred Drasner
- ----------------------------------------------- Director January 21, 1998
Fred Drasner
/s/ Philip Guarascio
- ----------------------------------------------- Director January 21, 1998
Philip Guarascio
/s/ Mark E. Jennings
- ----------------------------------------------- Director January 21, 1998
Mark E. Jennings
</TABLE>
II-6
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
---------- -----------
2.1 Agreement and Plan of Merger, dated as of March 18, 1997, among
the Registrant, Snyder G Acquisition, Inc. and American List
Corporation.(1)
2.2 Recommended Offer by the Registrant for Brann Holdings Limited,
dated March 21, 1997.(1)
2.3 Agreement and Plan of Merger among the Registrant, Snyder
Acquisition Corp., MMD, Inc. and the stockholders of MMD, Inc.,
dated as of January 6, 1997.(2)
3.1 Certificate of Incorporation of the Registrant.(3)
3.2 By-laws of the Registrant.(3)
4.1 Instruments defining the rights of securityholders: Reference is
made to exhibits 3.1 and 3.2.
4.2 Form of certificate evidencing shares of Common Stock of the
Registrant.(3)
4.3 Exchange Agreement by and among the Registrant, Snyder Marketing
Services, Inc., each of the stockholders of Snyder Marketing
Services, Inc. and each of the limited partners of Snyder
Communications, L.P., dated September 4, 1996.(3)
4.4 Shelf Registration Rights Agreement, dated as of November
28, 1997, among the Registrant and the Shareholders listed
on the signature page thereof.
5 Opinion of Weil, Gotshal & Manges LLP as to the legality of
the Common Stock of the Registrant.
23.1 Consent of Weil, Gotshal & Manges LLP (included in Exhibit 5).
23.2 Consent of Arthur Andersen LLP.
23.3 Consent of Grant Thornton LLP.
23.4 Consent of Price Waterhouse, Chartered Accountants and Registered
Auditors.
24 Power of Attorney (included as part of the signature page of this
Registration Statement).
- ----------
(1) Previously filed as an exhibit to the Registrant's Current Report on
Form 8-K, dated March 18, 1997, and incorporated herein by reference.
(2) Previously filed as an exhibit to the Registrant's Current Report on
Form 8-K, dated January 6, 1997, and incorporated herein by reference.
(3) Previously filed as an exhibit to the Registrant's Registration
Statement on Form S-1, as amended, dated September 23, 1996, and
incorporated herein by reference.
II-7
EXHIBIT 4.4
SHELF REGISTRATION RIGHTS AGREEMENT
-----------------------------------
November 28, 1997
To The Purchasers listed on
the signature pages hereof
Gentlemen:
Snyder Communications, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell to Mr. Ian Fogg, Group Plc, Bear,
Stearns & Co., Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated
(collectively, the "Purchasers"), upon the terms set forth in an agreement
of even date herewith for the sale and purchase of all of the issued share
capital of Rapid Deployment Group Limited (the "Purchase Agreement"),
768,726 shares of Common Stock, par value $0.001 per share, of the Company
(the "Common Stock"). Pursuant to the terms of this Agreement, the Company
has agreed to cause a Shelf Registration Statement (as defined below) to
be filed covering 105,000 of the shares of Common Stock issued to the
Purchasers pursuant to the Purchase Agreement (such number of the shares
of Common Stock being referred to herein as the "Securities"). As an
inducement to the Purchasers to enter into the Purchase Agreement and in
accordance with the terms thereof, the Company agrees with the Purchasers,
(i) for the benefit of the Purchasers and (ii) for the benefit of the
holders of the Securities from time to time until such time as such
Securities have been sold pursuant to a Shelf Registration Statement (each
of the foregoing a "Holder" and together the "Holders"), as follows:
1. Shelf Registration. The Company shall take the following
actions:
(a) The Company shall, at its cost, prepare and, as promptly
as practicable, file with the United States Securities and Exchange
Commission (the "Commission") and thereafter shall use its best efforts to
cause to be declared effective as soon as practicable but in any case
within 90 days of the Completion Date under the Purchase Agreement, a
registration statement on Form S-3 (the "Shelf Registration Statement")
covering the offer and sale of the Transfer Restricted Securities (as
defined below) by the Holders thereof from time to time in accordance with
the methods of distribution elected by such Holders and set forth in the
Shelf Registration Statement and Rule 415 under the Securities Act of
R:\74807\0019\1821\LTR0147R.34D
<PAGE>
1933, as amended (the "Securities Act") (hereinafter, the "Shelf
Registration"); provided, however, that no Holder (other than a Purchaser)
shall be entitled to have the Securities held by it covered by such Shelf
Registration Statement unless such Holder agrees in writing to be bound by
all the provisions of this Agreement applicable to such Holder. "Transfer
Restricted Securities" means each Security until (i) the date on which
such Security has been effectively registered under the Securities Act and
disposed of in accordance with the Shelf Registration Statement or (ii)
the date on which such Security is distributed to the public pursuant to
Rule 144 under the Securities Act or is saleable pursuant to Rule 144
under the Securities Act.
(b) The Company shall use its best efforts to keep the Shelf
Registration Statement continuously effective, in order to permit the
prospectus included therein to be lawfully delivered by the Holders of the
relevant Securities, until the earlier of such time as all the Securities
covered by the Shelf Registration Statement have been sold pursuant
thereto or the first anniversary of the Completion Date under the Purchase
Agreement, provided, however, that such period shall be extended beyond
such date by the number of days (if any) use of the prospectus was
suspended during such period pursuant to Section 2(h) (in any case, such
period being called the "Shelf Registration Period"). The Company shall be
deemed not to have used its best efforts to keep the Shelf Registration
Statement effective during the requisite period if it voluntarily takes
any action that would result in Holders of Securities covered thereby not
being able to offer and sell such Securities during that period, unless
(i) such action is required by applicable law or (ii) upon the occurrence
of any event contemplated by paragraph 2(b)(v) below, such action is taken
by the Company in good faith and for valid business reasons (not including
avoidance of the Company's obligations hereunder) and the Company
thereafter complies with the requirements of paragraph 2(h) below.
(c) Notwithstanding any other provisions of this Agreement to
the contrary, the Company shall cause (other than information required to
be supplied by the selling Holders pursuant to this Agreement) (i) the
Shelf Registration Statement and the related prospectus and any amendment
or supplement thereto comply in all material respects with the applicable
requirements of the Securities Act and the rules and regulations of the
Commission thereunder, (ii) the Shelf Registration Statement and any
amendment thereto not to contain, when it becomes effective, an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading and (iii) any prospectus forming a part of the Shelf
Registration Statement, and any amendment or supplement to such
prospectus, not to contain, as of the date of such prospectus or amendment
or supplement, any untrue statement of a material fact or omit to state a
material fact required to be
2
<PAGE>
stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
2. Registration Procedures. In connection with the Shelf
Registration contemplated by Section 1 hereof the following provisions
shall apply:
(a) The Company shall (i) furnish to each Purchaser, prior to
the filing thereof with the Commission, a copy of the Shelf Registration
Statement and each amendment thereof and each amendment or supplement, if
any, to the prospectus included therein and (ii) include the names of the
Holders who propose to sell Securities pursuant to the Shelf Registration
Statement, as selling security holders, and the manner of distribution
they have elected.
(b) The Company shall give written notice to the Purchasers
and the Holders (which notice pursuant to clauses (ii)-(v) hereof shall be
accompanied by an instruction to suspend the use of the prospectus until
the requisite changes have been made):
(i) when the Shelf Registration Statement or any amendment
thereto has been filed with the Commission and when the Shelf
Registration Statement or any post-effective amendment thereto
has become effective;
(ii) of any request by the Commission for amendments or
supplements to the Shelf Registration Statement or the
prospectus included therein or for additional information;
(iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Shelf Registration
Statement or the initiation of any proceedings for that
purpose;
3
<PAGE>
(iv) of the receipt by the Company or its legal counsel of any
notification with respect to the suspension of the
qualification of the Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such
purpose; and
(v) of the happening of any event that requires the Company to
make changes in the Shelf Registration Statement or the
prospectus in order that the Shelf Registration Statement or
the prospectus do not contain an untrue statement of a
material fact nor omit to state a material fact required to be
stated therein or necessary to make the statements therein (in
the case of the prospectus, in light of the circumstances
under which they were made) not misleading, which written
notice need not provide any detail as to the nature of such
event.
(c) The Company shall use best reasonable commercial efforts
to obtain the withdrawal at the earliest possible time, of any order
suspending the effectiveness of the Shelf Registration Statement.
(d) The Company shall furnish to each Holder of Securities
included within the coverage of the Shelf Registration, without charge, at
least one copy of the Shelf Registration Statement and any post-effective
amendment thereto, including financial statements and schedules, and, if
the Holder so requests in writing, all exhibits thereto (including those
incorporated by reference).
(e) The Company shall, during the Shelf Registration Period,
deliver to each Holder of Securities included within the coverage of the
Shelf Registration Statement, without charge, as many copies of the
prospectus (including each preliminary prospectus) included in the Shelf
Registration Statement and any amendment or supplement thereto as such
person may reasonably request. The Company consents, subject to the
provisions of this Agreement, to the use of the prospectus or any
amendment or supplement thereto by each of the selling Holders in
connection with the offering and sale of the Securities covered by the
prospectus, or any amendment or supplement thereto, included in the Shelf
Registration Statement.
(f) Prior to any public offering of the Securities pursuant to
the Shelf Registration Statement, the Company shall register or qualify or
cooperate with the Holders of the Securities included therein and their
respective counsel in connection with the registration or qualification of
such Securities for offer and sale under the securities or "blue sky" laws
of such states of the United States as any such Holder reasonably requests
in writing and do any and all other acts or
4
<PAGE>
things necessary or advisable to enable the offer and sale in such
jurisdictions of the Securities covered by the Shelf Registration
Statement; provided, however, that the Company shall not be required to
(i) qualify generally to do business in any jurisdiction where it is not
then so qualified or (ii) take any action which would subject it to
general service of process or to taxation in any jurisdiction where it is
not then so subject.
(g) The Company, at its own expense, shall cooperate with the
Holders of the Securities to facilitate the timely preparation and
delivery of certificates representing the Securities to be sold pursuant
to the Shelf Registration Statement free of any restrictive legends and in
such denominations and registered in such names as the Holders may request
a reasonable period of time prior to sales of the Securities pursuant to
the Shelf Registration Statement.
(h) Upon the occurrence of any event contemplated by
paragraphs (ii) through (v) of Section 2(b) above during the period for
which the Company is required to maintain an effective Shelf Registration
Statement, the Company shall as promptly as practicable prepare and file a
post-effective amendment to the Shelf Registration Statement or an
amendment or supplement to the related prospectus and any other required
document so that, as thereafter delivered to Holders or purchasers of
Securities, the prospectus will not contain an untrue statement of a
material fact or omit to state any material fact required to be stated
herein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, provided in the
case of paragraph (v) of Section 2(b) the Company's obligations pursuant
to this paragraph (h) may be suspended for one or more periods of up to 30
days in aggregate if the Board of Directors of the Company has determined
in good faith and using reasonable judgment that disclosure of information
sufficient to ensure that the Shelf Registration Statement and related
prospectus contain no such misstatement or omission would be significantly
and materially disadvantageous to the Company's financial condition,
business or prospects. If the Company notifies the Purchasers or the
Holders in accordance with paragraphs (ii) through (v) of Section 2(b)
above to suspend the use of the prospectus until the requisite changes to
the prospectus have been made, then the purchasers and the Holders shall
suspend use of such prospectus.
(i) The Company will comply with all rules and regulations of
the Commission to the extent and so long as they are applicable to the
Shelf Registration and will make generally available to its security
holders (or otherwise provide in accordance with Section 11(a) of the
Securities Act) an earnings statement satisfying the provisions of Section
11(a) of the Securities Act, no later than 45 days after the end of a
12-month period (or 90 days, if such period is a fiscal year) beginning
with the first month of the Company's first fiscal quarter
5
<PAGE>
commencing after the effective date of the Shelf Registration Statement,
which statement shall cover such 12-month period.
(j) The Company may require each Holder of Securities to be
sold pursuant to the Shelf Registration Statement to furnish to the
Company such information regarding the Holder and the distribution of the
Securities as the Company may from time to time reasonably require for
inclusion in the Shelf Registration Statement, and the Company may exclude
from such registration the Securities of any Holder that fails to furnish
such information within a reasonable time after receiving such request.
3. Registration Expenses. The Company shall bear all fees and
expenses incurred in connection with the performance of its obligations
under Sections 1 and 2 hereof, whether or not the Shelf Registration
Statement is filed or becomes effective, provided that the Holders of the
Securities covered by the Shelf Registration shall bear the fees and
disbursements of their counsel.
4.(a) Indemnification. (a) The Company agrees to indemnify and
hold harmless each Holder and each person, if any, who controls such
Holder within the meaning of the Securities Act or the Exchange Act (each
Holder and such controlling persons are referred to collectively as the
"Indemnified Parties") from and against any losses, claims, damages or
liabilities, joint or several, or any actions in respect thereof
(including, but not limited to, any losses, claims, damages, liabilities
or actions relating to purchases and sales of the Securities) to which
each Indemnified Party becomes subject under the Securities Act, the
Exchange Act or otherwise, insofar as such losses, claims, damages,
liabilities or actions arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Shelf
Registration Statement or prospectus or in any amendment or supplement
thereto or in any preliminary prospectus relating to the Shelf
Registration, or arise out of, or are based upon, the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and subject to
subsection (c) below, shall reimburse, as incurred, the Indemnified
Parties for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action in respect thereof; provided, however, that the
Company shall not be liable in any such case to the extent that such loss,
claim, damage or liability arises out of or is based upon (x) the use of
any prospectus in violation of the last sentence of Section 2(h) provided
that the Company is in compliance with its obligations pursuant to such
Section, or (y) any untrue statement or alleged untrue statement or
omission or alleged omission made in the Shelf Registration Statement or
prospectus or in any amendment or supplement thereto or in any preliminary
prospectus relating to the Shelf Registration made in reliance upon and in
6
<PAGE>
conformity with written information pertaining to such Holder and
furnished to the Company by or on behalf of such Holder specifically for
inclusion therein.
(b) Each Holder, severally and not jointly, will indemnify and
hold harmless the Company and each person, if any, who controls the
Company within the meaning of the Securities Act or the Exchange Act from
and against any losses, claims, damages or liabilities or any actions in
respect thereof, to which the Company or any such controlling person
becomes subject under the Securities Act, the Exchange Act or otherwise,
insofar as such losses, claims, damages, liabilities or actions arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in a Shelf Registration Statement or prospectus or
in any amendment or supplement thereto or in any preliminary prospectus
relating to a Shelf Registration, or arise out of or are based upon the
omission or alleged omission to state therein a material fact necessary to
make the statements therein not misleading, but in each case only to the
extent that the untrue statement or omission or alleged untrue statement
or omission was made in reliance upon and in conformity with written
information pertaining to such Holder and furnished to the Company by or
on behalf of such Holder specifically for inclusion therein; and, subject
to the limitation set forth immediately preceding this clause, and to
subsection (c) below, shall reimburse, as incurred, the Company for any
legal or other expenses reasonably incurred by the Company or any such
controlling person in connection with investigating or defending any loss,
claim, damage, liability or action in respect thereof. This indemnity
agreement will be in addition to any liability which such Holder may
otherwise have to the Company or any of its controlling persons.
(c) Promptly after receipt by an indemnified party under this
Section 4 of notice of the commencement of any action or proceeding
(including a governmental investigation), such indemnified party will, if
a claim in respect thereof is to be made against the indemnifying party
under this Section 4, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not, in
any event, relieve the indemnifying party from any obligations to any
indemnified party other than the indemnification obligation provided in
subsections (a) or (b) above. In case any such action is brought against
any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party
(who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party if the representation of both such
parties by the same counsel would constitute a conflict of interest).
Notwithstanding the foregoing, if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall
7
<PAGE>
have reasonably concluded that there exists a conflict of interest between
the indemnifying party and any indemnified party or that there may be
legal defenses available to it and other indemnified parties which are
different from or additional to, and inconsistent or in conflict with,
those available to the indemnifying party, the indemnified party or
parties shall have the right to select separate counsel to assert such
legal defenses and to otherwise participate in the defense of such action
on behalf of such indemnified party or parties. After notice from the
indemnifying party to such indemnified party of its election so to assume
the defense thereof the indemnifying party will not be liable to such
indemnified party under this Section 4 for any legal or other expenses,
other than reasonable costs of investigation, subsequently incurred by
such indemnified party in connection with the defense thereof unless (i)
the indemnified party shall have employed separate counsel in accordance
with the preceding sentence, (ii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action, or (iii) the indemnifying party has authorized
the employment of counsel for the indemnified party at the expense of the
indemnifying party, and except that, if clause (i) or (iii) is applicable,
such liability shall be only in respect of the counsel referred to in such
clause (i) or (iii). No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any
pending or threatened action in respect of which any indemnified party is
or could have been a party and indemnity could have been sought hereunder
by such indemnified party unless such settlement includes an unconditional
release of such indemnified party from all liability on any claims that
are the subject matter of such action.
(d) If the indemnification provided for in this Section 4 is
unavailable or insufficient to hold harmless an indemnified party under
subsections (a) or (b) above, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a
result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to in subsections (a) or (b) above (i) in such
proportion as is appropriate to reflect the relative fault of the
indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions that resulted in
such losses, claims, damages or liabilities (or actions in respect
thereof) as well as any other relevant equitable considerations. The
relative fault of the parties shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates
to information supplied by the Company on the one hand or such Holder or
such other indemnified party, as the case may be, on the other, and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The amount paid by an
indemnified party as a result of the losses, claims, damages or
liabilities referred
8
<PAGE>
to in the first sentence of this subsection (d) shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any action or claim which is
the subject of this subsection (d). Notwithstanding any other provision of
this Section 4(d), the Holders shall not be required to contribute any
amount in excess of the amount by which the net proceeds received by such
Holders from the sale of the Securities pursuant to the Shelf Registration
Statement exceeds the amount of damages which such Holders have otherwise
been required to pay by reason of such untrue or alleged untrue statement
or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. For purposes of this paragraph (d),
each person, if any, who controls such indemnified party within the
meaning of the Securities Act or the Exchange Act shall have the same
rights to contribution as such indemnified party and each person, if any,
who controls the Company within the meaning of the Securities Act or the
Exchange Act shall have the same rights to contribution as the Company.
(e) The agreements contained in this Section 4 shall survive
the sale of the Securities pursuant to the Shelf Registration Statement
and shall remain in full force and effect, regardless of any termination
or cancellation of this Agreement or any investigation made by or on
behalf of any indemnified party.
5. Rules 144 and 144A. The Company shall file the reports
required to be filed by it under the Securities Act and the Exchange Act
in a timely manner and it will, take such further action as any Holder of
Transfer Restricted Securities shall reasonably request to enable such
holder to sell such securities without registration, including, without
limitation, making publicly available the information necessary to permit
sales of their securities pursuant to Rules 144 and 144A. Notwithstanding
the foregoing, nothing in this Section 5 shall be deemed to require the
Company to register any of its securities pursuant to the Exchange Act.
The Company shall upon written request of a Holder of Registrable
Securities deliver to such Holder a written statement as to its compliance
with such request.
6. Miscellaneous. (a) Amendments and Waivers. The provisions
of this Agreement may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be
given, except by the Company and the written consent of the Holders of a
majority affected by such amendment, modification, supplemented, waiver or
consents.
(b) Notices. All notices and other communications provided for
9
<PAGE>
or permitted hereunder shall be made in writing by hand delivery,
first-class mail, facsimile transmission, or air courier which guarantees
overnight delivery:
(1) if to a Holder, at the most current address given by such
Holder to the Company in accordance with the provisions of
this Section 6(b), which address initially is, with respect to
each Purchaser, the address set forth in the Purchase
Agreement.
(2) if to the Company, at its address as follows:
Snyder Communications, Inc.
Two Democracy Center
6903 Rockledge Drive
Bethesda, Maryland 20817
Fax No.: (301) 571-6271
Attn: Chief Financial Officer
with a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
Fax No.: (212) 310-8007
Attention: Norman D. Chirite, Esq.
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered;
three business days after being deposited in the mail, postage prepaid, if
mailed; when receipt is acknowledged by recipient's facsimile machine
operator, if sent by facsimile transmission; and on the day delivered, if
sent by overnight air courier guaranteeing next day delivery.
(c) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties and each Holder's registration rights are transferable to and may
be exercised by any person to whom Transfer Restricted Securities have
been transferred subject to Section 1(a) hereof.
(d) Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
10
<PAGE>
(e) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(f) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
By the execution and delivery of this Agreement, the Company
submits to the nonexclusive jurisdiction of any federal or state court in
the State of New York.
(g) Severability. If any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.
11
<PAGE>
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a
binding agreement among the Purchasers and the Company in accordance with
its terms.
Very truly yours,
SNYDER COMMUNICATIONS, INC.
By: /s/ A. Clayton Perfall
-------------------------------------
Name: A. Clayton Perfall
Title: Chief Financial Officer
12
<PAGE>
The foregoing Shelf Registration Rights Agreement is hereby confirmed and
accepted as of the date first above written.
THE PURCHASERS:
/s/ Ian Fogg
---------------------------------
IAN FOGG
3i GROUP Plc
By: /s/ C.D. Moody
------------------------------
Name: C.D. Moody
Title: Director
BEAR, STEARNS & CO. INC.
By: /s/ Davies B. Beller
------------------------------
Name: Davies B. Beller
Title: Senior Managing Director
MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED
By: /s/ Charles Plohn, Jr.
------------------------------
Name: Charles Plohn, Jr.
Title: Managing Director
13
EXHIBIT 5
WEIL, GOTSHAL & MANGES LLP
767 FIFTH AVENUE
NEW YORK, NY 10153
212-310-8000
(FAX) 212-310-8007
January 21, 1998
Board of Directors
Snyder Communciations, Inc.
6903 Rockledge Drive
15th Floor
Bethesda, Maryland 20817
Ladies and Gentlemen:
We have acted as counsel to Snyder Communications, Inc., a Delaware
corporation (the "Company"), in connection with the preparation and filing by
the Company with the Securities and Exchange Commission of the Registration
Statement on Form S-3 (the "Registration Statement") under the Securities Act of
1933, as amended (the "Securities Act"), relating to the sale, from time to
time, by Bear Stearns & Co. Inc. and Merrill Lynch, Pierce, Fenner & Smith
Incorporated (collectively, the "Selling Stockholders"), in the manner described
in the prospectus (the "Prospectus") which forms a part of the Registration
Statement, of up to an aggregate of 105,000 shares of common stock, par value
$.001 per share, of the Company (the "Common Stock").
In so acting, we have reviewed the Registration Statement, including
the Prospectus contained therein, and the Certificate of Incorporation and the
Bylaws of the Company. In addition, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of such corporate
records, agreements, documents and other instruments, and such certificates or
comparable documents of public officials and of officers and representatives of
the Company, and have made such inquiries of such officers and representatives,
as we have deemed relevant and necessary as a basis for the opinions hereinafter
set forth.
In such examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the
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<PAGE>
Snyder Communications, Inc.
January 21, 1998
Page 2
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as certified, conformed or
photostatic copies and the authenticity of the originals of such latter
documents. As to all questions of fact material to this opinion that have not
been independently established, we have relied upon certificates or comparable
documents of officers and representatives of the Company.
Based on the foregoing, and subject to the qualifications stated
herein, we are of the opinion that the shares of Common Stock to be sold by the
Selling Stockholders in the manner described in the Prospectus under the
captions "Selling Stockholders" and "Plan of Distribution" have been validly
issued and are fully paid and nonassessable.
The opinions expressed herein are limited to the corporate laws of
the State of Delaware and the federal laws of the United States, and we express
no opinion as to the effect on the matters covered by this letter of the laws of
any other jurisdiction.
The opinions expressed herein are rendered solely for your benefit
in connection with the transactions described herein. Those opinions may not be
used or relied upon by any other person, nor may this letter or any copies
thereof be furnished to a third party, filed with a governmental agency, quoted,
cited or otherwise referred to without our prior written consent.
We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement and to the reference to our firm under the caption "Legal
Matters" in the Prospectus, without admitting that we are "experts" under the
Securities Act or the rules and regulations promulgated thereunder with respect
to any part of the Registration Statement or Prospectus contained therein.
Very truly yours,
/s/ Weil, Gotshal & Manges LLP
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our reports dated July 28, 1997
included in Snyder Communications, Inc.'s registration statement on Form S-1
(333-33691) and our reports dated December 24, 1997 included in Snyder
Communications, Inc.'s Current Report on Form 8-K, filed with the Commission on
January 21, 1998 and to all references to our Firm in this registration
statement.
/s/ Arthur Andersen LLP
Washington, D.C.
January 21, 1998
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EXHIBIT 23.3
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated April 11, 1997 accompanying the
consolidated financial statements of American List Corporation, appearing in the
Snyder Communications, Inc. Form 8-K filed on July 25, 1997, which is
incorporated by reference in the Registration Statement of Snyder
Communications, Inc. on Form S-3. We consent to the incorporation by reference
in this Registration Statement of the aforementioned report and to the use of
our name as it appears under the caption "Experts."
/s/ Grant Thornton LLP
Melville, New York
January 21, 1998
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EXHIBIT 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of Snyder
Communications, Inc. of our report dated May 30, 1997 on the financial
statements of Brann Holdings Limited as of and for the three years ended
December 31, 1996 which appears (i) on page 3 of the Snyder Communications, Inc.
amendment to the Current Report on Form 8-K dated March 18, 1997, filed, as
amended, on June 2, 1997; (ii) on page F-28 of the Prospectus constituting part
of the Registration Statement on Form S-1 (Registration No.333-33691) of Snyder
Communications, Inc. dated September 18, 1997 and (iii) on page F-30 of the
Snyder Communications, Inc. Current Report on Form 8-K dated November 25, 1997
filed on January 21, 1998; which is incorporated by reference in this
Prospectus. We also consent to the reference to us under the heading "Experts"
in such Prospectus.
/s/ Price Waterhouse
Price Waterhouse
Chartered Accountants
and Registered Auditors
Bristol, England
January 21, 1998
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