As Filed with the Securities and Exchange Commission on July 31, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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|
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CALCULATION OF REGISTRATION FEE
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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 199,002 $47.0625 $9,365,532 $2,763
================================== ======================= ====================== ====================== =====================
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(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 July 29, 1998.
(2) The registration fee for the Snyder Common Stock registered hereby, $2,763,
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)
$47.0625, the average of the high and low sale prices per share of Snyder
Common Stock as reported on the NYSE Composite Tape on July 29, 1998 and
(y) 199,002.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
NYFS01...:\07\74807\0003\1819\REG7228L.29D
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
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Subject to Completion, Dated July 31, 1998
PROSPECTUS
SNYDER COMMUNICATIONS, INC.
199,002 Shares of Common Stock
($.001 Par Value)
This Prospectus relates to the offer and sale of up to 199,002 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). 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 7 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 July 29, 1998 was $46.25 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 OR ANY SELLING
STOCKHOLDER. 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-3 (Registration No. 333-50929), as amended; (ii) the Company's Annual
Report on Form 10-K for its fiscal year ended December 31, 1997, filed by the
Company with the Commission on March 31, 1998; (iii) the Company's Quarterly
Report on Form 10-Q for its fiscal quarter ended March 31, 1998, filed by the
Company with the Commission on May 16, 1998; (iv) the Company's Current Report
on Form 8-K dated November 25, 1997, filed by the Company with the Commission on
January 21, 1998; (v) the Company's Current Report on Form 8-K dated December
31, 1997, filed by the Company with the Commission on February 18, 1998; (vi)
the Company's Current Report on Form 8-K dated February 28, 1997, filed by the
Company with the Commission on March 31, 1998; (vii) the Company's Current
Report on Form 8-K dated March 25, 1998, filed by the Company with the
Commission on April 3, 1998, as amended; (viii) the Company's Current Report on
Form 8-K dated March 31, 1998, filed by the Company with the Commission on May
5, 1998; (ix) the Company's Current Report on Form 8-K dated April 30, 1998,
filed by the Company with the Commission on May 20, 1998; (x) the Company's
Current Report on Form 8-K dated April 30, 1998, filed by the Company with the
Commission on May 21, 1998; and (xi) 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 each
of the entities acquired by the Company through a pooling of interests
transaction was a wholly-owned subsidiary of the Company. As used herein, the
"Company" means Snyder Communications, Inc., including the acquisitions and its
other directly and indirectly owned subsidiaries.
THE COMPANY
The Company is a rapidly growing international provider of complete
marketing solutions primarily to Fortune 500 size companies. The Company
integrates its various capabilities, including its proprietary distribution
channels, producing value-added marketing solutions. The Company identifies high
value market segments; designs and implements marketing programs to reach them;
initiates and closes sales on behalf of its clients; and provides customer care,
retention and loyalty marketing services. The Company's resources include
proprietary databases of targeted consumers and small businesses, database
management services, pharmaceutical detailing services, pharmaceutical
consulting, medical educational communications, proprietary product sampling
programs and publications, sponsored information displays in proprietary
locations, marketing program consultants, creative services, field sales and
marketing representatives, customer service representatives, interactive
services and direct mail and fulfillment capabilities. By expanding the range of
its capabilities, its specialized distribution channels and its geographic
presence, the Company seeks to provide a single source for its clients'
outsourced sales and marketing needs.
The Company's consolidated revenues, restated to include revenues from all
acquisitions accounted for as pooling of interests transactions for all reported
periods, increased from $334.1 million in 1995 to $428.9 million in 1996, and to
$520.0 million in 1997, and from $118.6 million in the first three months of
1997 to $146.9 million in the first three months of 1998. Through 1997,
substantially all of the Company's operations (excluding operations of 1998
acquisitions) were located in the United States and the United Kingdom. In 1998,
the Company established operations in continental Europe principally through two
acquisitions in France.
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 pharmaceuticals, consumer packaged goods, financial services,
telecommunications and gas and electric utilities. The Company's ten largest
current clients based on 1997 revenues, listed alphabetically, are Astra
Pharmaceuticals, Bell Atlantic, Bristol Myers Squibb, IBM, McDonald's, Novartis
Consumer Health, Pharmacia & Upjohn, Procter & Gamble, Volkswagen of America and
Wyeth-Ayerst. Several of these clients use the services of more than one of the
Company's service groups.
Since completing its initial public offering in September 1996, the
Company has significantly expanded the range of marketing and sales services it
is able to offer its clients. This expansion has been accomplished both by
building and initiating new programs or service offerings and by acquiring
businesses that offer complementary services. The service offerings of acquired
companies have been combined with those previously offered by the Company to
create four service groups: Medical Services; Media and Sampling Services;
Communications Services; and Data Delivery Services. Utilizing the service
offerings of its four service groups, the Company's goal is to provide complete
marketing solutions for its clients. The Medical Services group specializes in
establishing and monitoring marketing plans as well as face-to-face interaction
with physicians or other healthcare providers to market clients' pharmaceutical
products. The programs offered by the Media and Sampling Services group are
designed to stimulate and create brand awareness for the clients' products. The
Communications Services group's offerings are designed to establish brand
awareness for clients' products and to provide targeted customer acquisition and
customer care, retention and loyalty marketing. The Data Delivery Services group
provides services that enable the Company's clients to target the right
customers for their products and services.
4
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During 1997 and 1998, the Company made strategic acquisitions to broaden
the range of services it provides to clients, to expand the geographic reach of
its services and to enhance its clients' access to strategic consumer groups. To
complement and supplement its existing management depth, the Company retained
key members of management of each of the acquired companies.
GROWTH STRATEGY
The Company believes that it is well positioned to capitalize on increased
demand for marketing services due to the outsourcing of marketing and sales
functions, changes in the regulatory environment and increased demand for
marketing services in Europe by providing its clients with integrated global
marketing solutions and the capability to reach strategic consumer groups,
including aging baby-boomers, multicultural populations and young consumers. In
order to capitalize on this increased demand and its existing resources and to
continue its growth, the Company plans to broaden the range of services offered
to existing and future clients, expand its global presence, increase the scale
of its services and pursue strategic acquisitions.
Leverage Client Base and Broaden Range of Services. The Company intends to
continue its growth by providing a broader range of services to its existing
clients. Through its recent acquisitions and internal growth, the Company has
significantly increased the types of services and the range of targeted
marketing channels that the Company can offer its clients. The Company is
actively leveraging its demonstrated success on behalf of existing clients by
offering such clients additional Company services. The Company also believes it
can more successfully attract new clients as a result of its increased
capabilities.
Expand Global Presence. The Company intends to continue expanding the
geographic markets in which it provides services. Many of the Company's existing
and potential clients are large companies that market products globally.
Developing an expanded geographic market reach will enable the Company to offer
singlesource solutions for its clients' global outsourced sales and marketing
needs. In furtherance of this strategy, the Company's recent acquisitions have
given the Company marketing capabilities in continental Europe and have
significantly enhanced the Company's presence in the U.K. The Company expects
that its further geographic expansion will be accomplished by performing
services for existing clients in new geographic markets and by acquiring
companies that perform services in new geographic markets similar to those
already provided by the Company.
Increase Scale of Services. The Company intends to continue to increase
the scale of services it can offer to clients. Many of the Company's current and
prospective clients, particularly those served by the Communications Services
and Medical Services groups, have an increasing need for global, comprehensive,
large-scale marketing solutions. By expanding its capacity to perform large
projects, the Company intends to enhance its ability to provide single-source
marketing solutions to its clients.
Pursue Strategic Acquisitions. The Company intends to continue to
supplement its growth through strategic acquisitions. The Company expects to
pursue acquisition opportunities that give the Company additional proprietary
channels of distribution to important demographic segments, offer complementary
services or replicate the Company's existing marketing capabilities in unserved
geographic markets. The Company believes that the fragmentation in the marketing
services industry provides opportunities for the Company to selectively pursue
complementary domestic and international acquisitions. Although there are no
definitive agreements, understandings or arrangements at this time, the Company
is currently and expects to continue evaluating acquisition opportunities.
The Company's corporate headquarters are located at Two Democracy Center,
6903 Rockledge Drive, Bethesda, Maryland, 20817, and its telephone number is
(301) 468-1010.
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5
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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."
6
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RISK FACTORS
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. Certain statements in this Prospectus and in documents
incorporated herein by reference are forward-looking and are identified by the
use of forward-looking words or phrases such as "intended," "will be
positioned," "expects," is or are "expected," "anticipates," and "anticipated."
These forward-looking statements are based on the Company's current
expectations. To the extent any of the information contained or incorporated by
reference in this Prospectus constitutes a "forward-looking statement" as
defined in Section 27A(i)(1) of the Securities Act, the risk factors set forth
below are cautionary statements identifying important factors that could cause
actual results to differ materially from those in the forward-looking statement.
RELIANCE ON SIGNIFICANT CLIENTS
The Company's ten largest current clients, based on 1997 revenues, listed
alphabetically, are Astra Pharmaceuticals, Bell Atlantic, Bristol Myers Squibb,
IBM, McDonald's, Novartis Consumer Health, Pharmacia & Upjohn, Procter & Gamble,
Volkswagen of America and Wyeth-Ayerst. These clients accounted for 27.6% of the
Company's 1997 revenues. In January 1998, the Company elected not to renew its
then-existing contract with AT&T, which provided 12.1% of the Company's 1997
revenues, and began providing similar services to another national
telecommunications client under a three-year contract. The Company provides
services to many of its most significant clients pursuant to multi-year
contracts. As is typical in the industry, the Company's multi-year contracts 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 supplement its growth through acquisitions
of complementary businesses. Since the beginning of 1998, the Company has
completed several strategic acquisitions. In most instances, the Company has
issued shares of Common Stock as consideration. The Company is currently
evaluating several additional acquisitions and expects to continue to consider
growth opportunities through additional acquisitions that 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 or that its Common Stock will remain
an attractive acquisition currency. 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.
INTEGRATION OF ACQUISITIONS
Since its initial public offering in September 1996, the Company has
completed numerous acquisitions of complementary businesses. The services
provided by the acquired companies, although complementary, differ in varying
degrees from the services offered by the Company prior to making the
acquisitions. There can be no assurance that the anticipated benefits with
respect to the clients and targeted markets of these acquisitions will be
achieved. Prior to its initial public offering, the Company had limited
experience in acquiring businesses. Thus, the Company has not yet demonstrated
the long-term ability to successfully integrate and manage a large number of
acquired businesses. 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.
7
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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 will also require the implementation of enhanced operational and
financial systems and additional management 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
In March 1997, the Company made its first international acquisition. The
Company has since acquired a number of companies in the United Kingdom and
continental Europe. 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, integrate acquired companies or
successfully introduce new services into these markets in order 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 a number of acquisitions in the United Kingdom and
continental Europe, approximately 32.6% of the Company's revenues in 1997 were
from outside of the United States, the majority of which were denominated in
British pounds and French francs. 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 or French franc
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.
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 pharmaceutical or telecommunications industries 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 sales and
marketing media, such as direct mail, television, radio and other 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
certain capabilities and resources equal to, or greater than, the Company's.
There can be no assurance that, as the
8
<PAGE>
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
providers. 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 and
independent contractors in the pharmaceutical detailing business and those
employees who market services and products in languages other than English.
Growth in the Company's business will require it to recruit and train qualified
personnel at an accelerated rate from time to time. The labor markets for
quality personnel are competitive, and 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
computer and telecommunications 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.
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.
9
<PAGE>
GOVERNMENT REGULATION
Several of the industries in which the Company's clients operate are
subject to varying degrees of governmental regulation, particularly the
pharmaceutical, healthcare and telecommunications industries. Generally,
compliance with these regulations is the responsibility of the Company's
clients. However, the Company could be subject to a variety of enforcement or
private actions for its failure or the failure of its clients to comply with
such regulations.
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, France and the European Union. Pharmaceutical
manufacturers and the health care industry in general are subject to significant
U.S. federal and state, U.K., French and European Union 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.
The Company's physician education services are also subject to a variety of
federal and state regulations relating to both the education of medical
professionals and sales of pharmaceuticals. Any changes in such regulations or
their application could have a material adverse effect on the Medical Services
group.
From time to time state and federal legislation is proposed with regard to
the use of proprietary databases of consumer and health groups. 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 have a material adverse affect on
the Data Delivery Services group.
The Communications Services group is subject to a large number of federal
and state regulations. The Federal Communications Commission (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 Protection Act of 1994 broadly
authorizes the Federal Trade Commission to issue regulations prohibiting
misrepresentation in telephone sales.
One of the significant regulations of the FCC applicable to long distance
carriers, including the Company's telecommunication clients, prohibits the
unauthorized switching of subscribers' long distance carriers. A fine of up to
$100,000 may be imposed by the FCC for each instance of unauthorized switching.
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. Third-party verification generally
is not required for switches obtained in person, such as those obtained by
members of the Company's Communications 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 possible that employees may in some instances engage in
unauthorized activities, including unauthorized switching. To the Company's
knowledge, no formal FCC complaint has been brought against the Company or any
of its clients as a result of the Company's services. If any complaints were
brought, the Company's clients might assert that such complaints constituted a
breach of its agreement with the Company and, if material, seek to terminate the
contract. Legislation currently pending in Congress would increase penalties
against carriers that engage in unauthorized switching of subscribers' long
distance carriers and would impose additional procedural safeguards to ensure
against such unauthorized switches. If such proposed legislation is enacted,
compliance with the additional procedural safeguards could result in increased
costs associated with the Communications Services group's marketing efforts on
behalf of its telecommunications clients.
10
<PAGE>
The services offered by the Company outside the United States may be
subject to certain regulations of the United Kingdom, France 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 Company operates a small U.K. printing
facility which is subject to certain environmental regulations regarding the
storage and disposal of certain chemicals involved in the printing process. The
Company believes that its operations outside the United States are substantially
in compliance with applicable regulations. There can be no assurance, however,
that additional U.K., French or European Union legislation, or changes in the
regulatory implementation, would not limit the Company's international
activities 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.
SHARES ELIGIBLE FOR FUTURE SALE AND REGISTRATION RIGHTS
As of July 29, 1998, The Company had outstanding an aggregate of 62,162,525
shares of Common Stock. Of the outstanding shares, 32,031,190 shares are freely
transferable without restriction or further registration under the Securities
Act, 199,002 shares owned by the Selling Stockholders are offered for resale
pursuant hereto and 29,932,333 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, each entered into a forward purchase contract (the
"Contracts") with the Snyder STRYPES Trust, a Delaware business trust. Pursuant
to the Contracts, such stockholders are obligated to deliver to the Snyder
STRYPES 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 Contracts. Prior to any such delivery, such stockholders will retain
voting and dividend rights with respect to the shares that are the subject of
the Contracts.
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.
11
<PAGE>
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 15.5% and 5.4%, 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 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 July 29, 1998, the market price of Common
Stock has traded at a high of $54.19 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
that have particularly affected the market price for many emerging growth
companies that 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.
YEAR 2000
The Company is undergoing an assessment of its current systems and
equipment and is in the process of making the modifications necessary to address
the issues presented by the Year 2000 issue. The Company expects to incur no
more than $3.0 million in capital expenditures in 1998 with respect to system
upgrades which are designed in part to address specific Year 2000 requirements.
The Company does not expect expenditures incurred after 1998 for Year 2000
compliance to be material. To the extent that additional acquisitions are
consummated,
12
<PAGE>
the Company will need to evaluate how the Year 2000 issue will impact its future
acquirees. If such expenditures exceed expectations or if a future acquiree
requires substantial expenditures to address its Year 2000 issues, the Company's
financial results could be adversely affected. There can be no assurance that
the Company's systems or the systems of other companies on which the Company's
systems rely will be timely installed or converted. Although the impact on the
Company caused by the failure of the Company's significant customers or vendors
to achieve Year 2000 compliance in a timely or effective manner is uncertain,
the Company's business and results of operations could be materially affected by
such failure.
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."
13
<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 January 29, 1998
in connection with an acquisition by the Company (the "Registration Rights
Agreement"). Pursuant to the 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 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 January
29, 1999, the first anniversary of the closing date of the acquisition.
The table below sets forth certain information regarding the
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."
<TABLE>
<CAPTION>
Ownership at Number of Ownership
July 29, 1998(1) Shares After Offering
Covered
Number Percent by this Number Percent
Selling Stockholders of Shares of Class Prospectus of Shares of Class
- -------------------- --------- -------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C>
Goldman, Sachs & Co. 127,701 * 99,501 28,200 *
Merrill Lynch, Pierce, 114,501 * 99,501 15,000 *
Fenner & Smith
Incorporated
</TABLE>
- -----------------------------------------------------------------------
* Less than 1.0%
(1) Based upon 62,162,525 shares of Common Stock outstanding as of July 29,
1998.
14
<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). 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 Registration Rights Agreement, Snyder is required to file the
reports required to be filed by it under the Securities Act and the Exchange Act
in a timely manner and to take such further action as any holder of securities
covered by the Registration Rights Agreement shall reasonably request to enable
such holder to sell such securities without registration, including making
publicly available the information necessary to permit sales of their securities
pursuant to Rule 144 under the Securities Act.
Pursuant to the 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.
15
<PAGE>
EXPERTS
The consolidated financial statements of the Company as of December 31,
1997 and 1996 and for each of the three years in the period ended December 31,
1997 and the related schedule included in the Company's Registration Statement
on Form S-3 (Registration No. 333-50929) and incorporated by reference in this
Prospectus and elsewhere in the Registration Statement, have been audited by
Arthur Andersen LLP, independent public accountants, as set forth in their
reports dated April 15,1998. In those reports, that firm states that with
respect to the operations of Brann Holdings Limited and its subsidiaries and
American List Corporation and its subsidiaries as of December 31, 1996 and for
the years ended December 31, 1995 and 1996, their opinions are based on the
reports of other independent public accountants, namely Price Waterhouse,
Chartered Accountants and Registered Auditors and Grant Thornton LLP. The
financial statements and related schedule as of December 31, 1996 and for the
years ended December 31, 1995 and 1996 referred to above have been incorporated
by reference herein in reliance upon the authority of those firms as experts in
auditing and accounting.
The consolidated financial statements of Brann Holdings Limited and its
subsidiaries as of and for the three years 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 Corporation and its
subsidiaries as of February 28, 1997 and for each of the years in the two-year
period then ended, have been audited by Grant Thornton LLP, independent
certified public accountants, as set forth in its report thereon incorporated by
reference herein.
16
<PAGE>
================================== ==================================
NO PERSON HAS BEEN AUTHORIZED TO SNYDER COMMUNICATIONS, INC.
GIVE 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 199,002 SHARES
RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. THIS
PROSPECTUS DOES NOT CONSTITUTE
AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY
ANY SECURITY OTHER THAN THE COMMON STOCK
SHARES OF COMMON STOCK OFFERED
HEREBY, NOR DOES IT CONSTITUTE
AN OFFER TO SELL OR A
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 PROSPECTUS
IT IS UNLAWFUL TO MAKE SUCH ----------
OFFER OR SOLICITATION. NEITHER
THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT , 1998
INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF.
================================== ==================================
TABLE OF CONTENTS
PAGE
----
Available Information.................... 2
Incorporation of Certain Information
by Reference........................... 3
Summary.................................. 4
Risk Factors............................. 7
Use of Proceeds..........................13
Selling Stockholders.....................14
Plan of Distribution.....................15
Legal Matters............................15
Experts..................................16
<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...... $ 2,763
Accounting fees and expenses................................ 7,500
Legal fees and expenses..................................... 10,000
Miscellaneous............................................... $ 4,737
--------
Total....................................................... $ 25,000
========
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 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.
II-1
<PAGE>
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)
2.4 Share Sale and Purchase Agreement among the Registrant and the
shareholders of Bounty Group Limited, dated as of July 13, 1997.(3)
2.5 Agreement and Plan of Merger among the Registrant, Snyder
Acquisition Corp. and Sampling Corporation of America, dated as of
July 14, 1998.(4)
2.6 Agreement and Plan of Merger among the Registrant, Snyder AR
Acquisition, LLC, Arnold Communications, Inc. and the stockholders
of Arnold Communications, Inc., dated as of March 25, 1998.(5)
3.1 Certificate of Incorporation of the Registrant, as amended.(6)
3.2 By-laws of the Registrant.(7)
4.1 Instruments defining the rights of securityholders: Reference is
made to exhibits 3.1 and 3.2.
5 Opinion of Weil, Gotshal & Manges LLP as to the legality of the
Common Stock.
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 Current Report on Form
8-K, dated July 13, 1997, and incorporated herein by reference.
(4) Previously filed as an exhibit to the Registrant's Current Report on Form
8-K, dated July 14, 1997, and incorporated herein by reference.
(5) Previously filed as an exhibit to the Registrant's Current Report on Form
8-K, dated March 25, 1998, and incorporated herein by reference.
(6) Previously filed as an exhibit to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1998, and incorporated herein by
reference.
(7) Previously filed as an exhibit to the Registrant's Registration Statement
on Form S-1, as amended (Registration No. 333-7495), and incorporated
herein by reference.
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-2
<PAGE>
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement.
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.
(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-3
<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 31st day of
July, 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.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Daniel M. Snyder Chairman of the Board of Directors July 31, 1998
- ------------------------- and Chief Executive Officer
Daniel M. Snyder
/s/ Michele D. Snyder Vice Chairman, President, Chief July 31, 1998
- ------------------------- Operating Officer and Director
Michele D. Snyder
/s/ A. Clayton Perfall Chief Financial Officer July 31, 1998
- ------------------------- and Director
A. Clayton Perfall
/s/ David B. Pauken Chief Accounting Officer and July 31, 1998
- ------------------------- Secretary
David B. Pauken
/s/ Mortimer B. Zuckerman Director July 31, 1998
- -------------------------
Mortimer B. Zuckerman
II-4
<PAGE>
/s/ Fred Drasner Director July 31, 1998
- -------------------------
Fred Drasner
/s/ Philip Guarascio Director July 31, 1998
- -------------------------
Philip Guarascio
/s/ Mark E. Jennings Director July 31, 1998
- -------------------------
Mark E. Jennings
II-5
<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)
2.4 Share Sale and Purchase Agreement among the Registrant and the
shareholders of Bounty Group Limited, dated as of July 13, 1997.(3)
2.5 Agreement and Plan of Merger among the Registrant, Snyder
Acquisition Corp. and Sampling Corporation of America, dated as of
July 14, 1998.(4)
2.6 Agreement and Plan of Merger among the Registrant, Snyder AR
Acquisition, LLC, Arnold Communications, Inc. and the stockholders
of Arnold Communications, Inc., dated as of March 25, 1998.(5)
3.1 Certificate of Incorporation of the Registrant, as amended.(6)
3.2 By-laws of the Registrant.(7)
4.1 Instruments defining the rights of securityholders: Reference is
made to exhibits 3.1 and 3.2.
5 Opinion of Weil, Gotshal & Manges LLP as to the legality of the
Common Stock.
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 Current Report on Form
8-K, dated July 13, 1997, and incorporated herein by reference.
(4) Previously filed as an exhibit to the Registrant's Current Report on Form
8-K, dated July 14, 1997, and incorporated herein by reference.
(5) Previously filed as an exhibit to the Registrant's Current Report on Form
8-K, dated March 25, 1998, and incorporated herein by reference.
(6) Previously filed as an exhibit to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1998, and incorporated herein by
reference.
(7) Previously filed as an exhibit to the Registrant's Registration Statement
on Form S-1, as amended (Registration No. 333-7495), and incorporated
herein by reference.
II-6
EXHIBIT 5
WEIL, GOTSHAL & MANGES LLP
767 Fifth Avenue
New York, NY 10153
(212) 310-8000
Fax (212) 310-8007
July 31, 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 Goldman, Sachs & Co. 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 199,002 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 authenticity of all
documents submitted to us as originals, the
NYFS01...:\07\74807\0003\1819\OPN7238W.200
<PAGE>
Snyder Communications, Inc.
July 31, 1998
Page 2
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.
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
NYFS01...:\07\74807\0003\1819\OPN7238W.200
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 April 15, 1998
included in Snyder Communications, Inc.'s registration statement on Form S-3
(333-50929) and to all references to our Firm included in this registration
statement.
/s/ Arthur Andersen LLP
Washington, D.C.
July 30, 1998
NYFS01...:\07\74807\0003\1819\CON7278J.470
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, which report
appears in Snyder Communications, Inc.'s registration statement on Form S-3
(File No. 333-50929) (the consolidated financial statements of American List
Corporation are not presented separately therein), which is incorporated by
reference in this Registration Statement of Snyder Communications, Inc. 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
July 30, 1998
NYFS01...:\07\74807\0003\1819\CON7278J.560
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 (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 and (iv) on page F-39 of the Prospectus constituting part of
the Registration Statement on Form S-3 (Registration No. 333-50929) of Snyder
Communications, Inc. dated May 19, 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
July 31, 1998
NYFS01...:\07\74807\0003\1819\CON7278K.000
